STAMFORD, Conn., Feb. 13,
2020 /PRNewswire/ --
Key Financial Metrics
- Total revenues of $243.7 million
for the fourth quarter of 2019 and $917.9
million for the year
- Net income of $47.3 million, or
$0.62 per diluted common share, for
the fourth quarter and $156.6
million, or $2.06 per diluted
common share, for the year
- Adjusted net income(1) was $66.0 million, or $0.87 per diluted common share, for the fourth
quarter and $196.5 million, or
$2.59 per diluted common share, for
the year
- Adjusted EBITDA(1) was $229.5
million for the fourth quarter and $862.2 million for the year
- Cash ROE(1) of 11.1%; net cash interest
margin(1) of 8.1%
Highlights
- Previously announced acquisition of Aircastle by affiliates of
Marubeni Corporation and Mizuho Leasing Company, Limited is on
track to close in the first half
- Acquired sixteen narrow-body aircraft during the fourth quarter
for $283.6 million and 49 aircraft in
2019 for $1.3 billion
- Committed to acquire seven additional narrow-body aircraft in
2020 for $165.0 million
- Sold eight aircraft during the fourth quarter and twenty
aircraft for the full year; full year gain on sale of $45.5 million represents 12.6% of net proceeds;
2019 sales included two wide-body aircraft
- Placed eleven Embraer E195-E2 aircraft with KLM
- Declared our 55th consecutive quarterly
dividend
- Returned $109.7 million of
capital to shareholders during 2019; $91.3
million in dividends paid and $18.4
million of shares repurchased
(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 fourth quarter 2019 net income of $47.3 million, or $0.62 per diluted common share, and adjusted net
income of $66.0 million, or
$0.87 per diluted common share.
Net income for the year ended December 31, 2019 was
$156.6 million, or $2.06 per diluted common share, and adjusted net
income was $196.5 million, or
$2.59 per diluted common share.
The fourth quarter results included total revenues of $243.7 million versus $292.6 million in the prior year. For the
full year, total revenues were $917.9
million versus $890.4 million
in 2018, an increase of 3.1%.
Commenting on the results, Mike
Inglese, Aircastle's Chief Executive Officer, stated, "Our
professional placement capability and fleet of high-quality,
in-demand aircraft enabled Aircastle to deliver strong financial
results in a shifting market environment throughout 2019.
During the fourth quarter, we continued to execute our strategy
focused on acquiring narrow-body aircraft. We closed a total
of 49 aircraft during the full year 2019 for $1.3 billion. The fourth quarter also saw
fleet utilization average 99.2%, a return to the level that we have
consistently achieved throughout our history, following the
placement of aircraft that were previously on lease with Avianca
Brazil and Jet Airways. I am also pleased to report that
we've made progress on our E2 program. During the fourth
quarter, we placed eleven additional E-Jets, for a total of
fourteen placements out of the twenty-five E2s ordered."
Mr. Inglese concluded, "With the pending acquisition of
Aircastle by affiliates of Marubeni and Mizuho Leasing, we are very
optimistic about Aircastle's future. We expect this strong,
high-quality sponsorship, and our disciplined investment approach,
will enable our company to continue to grow profitably, increase
sustainable cash flow and generate attractive, long-term
returns. Both now and following the anticipated acquisition,
we will remain consistently focused on the responsible stewardship
of investor capital for the benefit of our owners and Aircastle's
fixed income investors."
Financial Results
(In thousands, except
share data)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Total
revenues
|
$
|
243,730
|
|
$
|
292,566
|
|
$
|
917,938
|
|
$
|
890,351
|
Lease rental and
direct financing and sales-type lease revenues
|
$
|
207,643
|
|
$
|
192,711
|
|
$
|
809,698
|
|
$
|
757,826
|
Adjusted
EBITDA(1)
|
$
|
229,531
|
|
$
|
276,830
|
|
$
|
862,161
|
|
$
|
839,831
|
Net income
|
$
|
47,318
|
|
$
|
103,837
|
|
$
|
156,575
|
|
$
|
247,919
|
Per
common share - Diluted
|
$
|
0.62
|
|
$
|
1.35
|
|
$
|
2.06
|
|
$
|
3.17
|
Adjusted net
income(1)
|
$
|
66,002
|
|
$
|
109,883
|
|
$
|
196,547
|
|
$
|
257,237
|
Per
common share - Diluted
|
$
|
0.87
|
|
$
|
1.43
|
|
$
|
2.59
|
|
$
|
3.29
|
_______________
|
(1)
|
Refer to the selected
financial information accompanying this press release for a
reconciliation of GAAP to Non-GAAP numbers.
|
Fourth Quarter Results
Total revenues were $243.7
million, a decrease of $48.8
million, or 16.7%, from the prior year. While lease
rental and direct financing and sales-type lease revenues were up
$14.9 million, total revenues
declined due to a $72.8 million drop
in maintenance revenues. We recognized substantial
maintenance revenue in the fourth quarter of 2018 due to the
termination of the leases on eleven aircraft with Avianca
Brazil.
Lease rental and direct financing and sales-type lease revenues
were $207.6 million, versus
$192.7 million the prior year.
The 7.7% increase was primarily due to net fleet growth. Over
the past two years, Aircastle's aircraft fleet increased by 24.1%,
from 224 aircraft at the beginning of 2018 to 278 aircraft at
year-end 2019.
Net income was $47.3 million, a
decline of $56.5 million, while
adjusted net income fell by $43.9
million to $66.0
million. The decrease was due to lower maintenance
revenues of $72.8 million.
Adjusted EBITDA was $229.5
million, down 17.1%, or $47.3
million. Lower maintenance revenues of $72.8 million were partially offset by higher
lease rental and direct financing and sales-type lease revenues of
$14.9 million and higher gains from
the sale of flight equipment of $11.9
million.
Full Year Results
Total revenues in 2019 were $917.9
million, an increase of $27.6
million, while lease rental and direct financing and
sales-type lease revenues rose $51.9
million to $809.7
million. The increase in total revenues was primarily
driven by higher lease rental and direct financing and sales-type
lease revenues due to fleet growth, along with $8.8 million of higher gains from the sale of
flight equipment. These increases were partially offset by
lower maintenance revenues of $30.8
million. The higher year-over-year gains from the sale
of flight equipment were driven by twenty aircraft sold in 2019,
versus fourteen sold in 2018.
Net income for the full year was $156.6
million, down $91.3 million
year-over-year, while adjusted net income was $196.5 million, a decrease of $60.7 million. Total revenues increased by
$27.6 million as our fleet of owned
aircraft rose to 278 at year-end 2019, versus 224 aircraft at the
beginning of 2018. The revenue increase was offset by higher
depreciation expense of $45.2 million
and higher interest expense of $23.6
million due to fleet growth and larger average debt
balances, while the income tax provision was $17.0 million higher primarily due to an increase
in income earned in Ireland and
the U.S. In addition, maintenance expenses increased by
$15.9 million primarily due to
transitioning aircraft from leases terminated with Avianca Brazil
and Jet Airways, while non-recurring debt extinguishment and merger
related expenses added $22.5 million
of incremental cost.
Adjusted EBITDA for the full year was $862.2 million, up $22.3
million versus 2018. Lease rental and direct financing
and sales-type lease revenues rose $51.9
million, and gains from the sale of flight equipment
increased by $8.8 million.
These increases were partially offset by lower maintenance revenues
of $30.8 million and higher
maintenance expenses of $15.9
million.
Aviation Assets
During the fourth quarter, we acquired sixteen aircraft for
$283.6 million and for the year we
acquired 49 aircraft for $1.3
billion. Full year acquisitions consisted entirely of
narrow-body aircraft and included four Airbus A320-200neos.
At the end of 2019, Aircastle's owned fleet of 278 aircraft had a
weighted average age of 9.9 years and a weighted average remaining
lease term of 4.8 years.
During the fourth quarter of 2019, we sold eight aircraft for
total sales proceeds of $132.7
million and a gain on sale of $20.1
million. This represents a 15.1% margin on net sales
proceeds. Our fourth quarter sales included one Boeing
777-200ER and one Airbus A330-200 wide-body aircraft.
During the year ended 2019, we sold a total of twenty aircraft
for proceeds of $361.7 million and a
gain on sale of $45.5 million.
The average age of the aircraft sold was 14.6 years with an average
remaining lease term of 2.4 years.
Our fleet utilization for the fourth quarter was 99.2% and 96.4%
for the full year 2019. As of December 31, 2019,
Aircastle owned 278 aircraft having a net book value of
$7.8 billion. We also managed nine
aircraft with a net book value of $327.8
million on behalf of our joint venture with Mizuho
Leasing.
Owned
Aircraft
|
As
of
December
31,
2019(1)
|
|
As
of
December
31,
2018(1)
|
Net Book Value of
Flight Equipment ($ mils.)
|
$
|
7,794
|
|
|
$
|
7,405
|
|
Net Book Value of
Unencumbered Flight Equipment ($ mils.)
|
$
|
5,979
|
|
|
$
|
6,055
|
|
Number of
Aircraft
|
278
|
|
|
248
|
|
Number of
Unencumbered Aircraft
|
237
|
|
|
217
|
|
Weighted Average
Fleet Age (years)(2)
|
9.9
|
|
|
9.1
|
|
Weighted Average
Remaining Lease Term (years)(2)
|
4.8
|
|
|
4.5
|
|
Weighted Average
Fleet Utilization for the fourth quarter(3)
|
99.2
|
%
|
|
97.0
|
%
|
Weighted Average
Fleet Utilization for the year ended(3)
|
96.4
|
%
|
|
99.6
|
%
|
Portfolio Yield for
the fourth quarter(2)(4)
|
11.2
|
%
|
|
11.2
|
%
|
Net Cash Interest
Margin(5) for the fourth quarter
|
8.1
|
%
|
|
7.8
|
%
|
|
|
|
|
Managed Aircraft
on behalf of Joint Ventures
|
|
|
|
Net Book Value of
Flight Equipment ($ mils.)
|
$
|
328
|
|
|
$
|
602
|
|
Number of
Aircraft
|
9
|
|
|
13
|
|
________________
|
(1)
|
Calculated using net
book value of flight equipment held for lease and net investment in
finance leases at period end.
|
(2)
|
Weighted by 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,
interest income and cash collections on our net investment in
finance and sales-type leases for the period as a percent of the
average net book value for the period; quarterly information is
annualized. Based on the growing level of finance and
sales-type lease revenue management revised the calculation of
portfolio yield 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 leases in lease rentals.
|
(5)
|
Net Cash Interest
Margin = Lease rental yield plus finance lease revenue and
collections 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.
|
2019 Financing Activity
At the end of the fourth quarter of 2019, the undrawn available
balance under our committed credit facilities totaled $950 million. Borrowings under our credit
facilities totaled $150 million at
the end of 2019.
During 2019, the Company issued $650
million of unsecured Senior Notes due 2026 bearing a coupon
of 4.25%, and we raised an additional $480
million of fixed rate, secured bank financing for eleven
Airbus A320neo aircraft and two Boeing 737-800 aircraft. We
also increased the size of one of our unsecured revolving credit
facilities to $300 million from
$250 million.
Lastly, during the year we entered into an unsecured
$215 million floating rate loan
commitment with Development Bank of Japan Inc., and certain other
banks.
Common Dividend
On February 10, 2020, Aircastle's
Board of Directors declared a first quarter 2020 cash dividend on
its common shares of $0.32 per share,
payable on March 6, 2020, to
shareholders of record on February
28, 2020. This is our 55th consecutive
quarterly dividend. Since going public in 2006, the Company
has paid total dividends of $948.7
million.
Share Repurchases
In 2019, the Company acquired 973,528 shares at an average price
of $18.88 per share. Since
2011, the Company repurchased 19.0 million shares at an average
cost of $14.72 per share, for
approximately $279.9 million.
Merger Agreement with Affiliates of Marubeni and Mizuho
Leasing
On November 6, 2019, the Company
announced that it entered into a definitive agreement to be
acquired by a newly formed entity controlled by affiliates
of Marubeni Corporation ("Marubeni") and Mizuho
Leasing Company, Limited. Under the terms of the merger
agreement, Aircastle shareholders will
receive $32.00 in cash for each common share
of Aircastle (other than shares already owned
by Marubeni and its affiliates), representing a total
valuation of approximately $2.4 billion, or
approximately $7.4 billion including debt obligations to
be assumed or refinanced net of cash.
The cash consideration of $32.00 per share represented
a 34% premium over Aircastle's closing stock price
on October 23, 2019, the last trading day prior
to Aircastle's public announcement
that Aircastle was evaluating strategic alternatives, and
a 41% premium over the volume weighted average share price during
the 20 trading days ended October 23, 2019.
The transaction is subject to customary closing conditions,
including approval by Aircastle's shareholders and
receipt of certain regulatory approvals, and is expected to close
in the first half of 2020. Marubeni has agreed to vote
the common shares
of Aircastle that Marubeni and its affiliates
beneficially own in favor of the transaction.
Conference Call
In connection with this earnings release, management will host
an earnings conference call on Thursday,
February 13, 2020, at 11:00 A.M.
Eastern time. All interested parties are welcome to
participate on the live call. The conference call can be
accessed by dialing (866) 575-6539 (from within the U.S. and
Canada) or (720) 543-0214 (from
outside of the U.S. and Canada)
ten minutes prior to the scheduled start and referencing the
passcode "2629280".
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. 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 14, 2020, 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 "2629280".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet
aircraft to airlines throughout the world. As of
December 31, 2019, Aircastle owned and managed on behalf of
its joint ventures 287 aircraft leased to 85 customers located in
49 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 disclosed under "Risk
Factors" in Item 1A of Aircastle's 2018 and 2019 Annual Report on
Form 10-K and in our Form 10-Q for the quarterly period ended
September 30, 2019. 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)
|
|
|
December 31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
140,882
|
|
$
|
152,719
|
Restricted cash and
cash equivalents
|
14,561
|
|
15,134
|
Accounts
receivable
|
18,006
|
|
15,091
|
Flight equipment held
for lease, net of accumulated depreciation of $1,501,664 and
$1,221,985, respectively
|
7,375,018
|
|
6,935,585
|
Net investment in
finance and sales-type leases
|
419,396
|
|
469,180
|
Unconsolidated equity
method investment
|
32,974
|
|
69,111
|
Other
assets
|
201,209
|
|
214,361
|
Total
assets
|
$
|
8,202,046
|
|
$
|
7,871,181
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
LIABILITIES
|
|
|
|
Borrowings from
secured financings, net of debt issuance costs
|
$
|
1,129,345
|
|
$
|
798,457
|
Borrowings from
unsecured financings, net of debt issuance costs
|
3,932,491
|
|
3,962,896
|
Accounts payable,
accrued expenses and other liabilities
|
172,114
|
|
153,341
|
Lease rentals
received in advance
|
108,060
|
|
87,772
|
Security
deposits
|
124,954
|
|
120,962
|
Maintenance
payments
|
682,398
|
|
739,072
|
Total
liabilities
|
6,149,362
|
|
5,862,500
|
|
|
|
|
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,
75,122,129 shares issued and outstanding at December 31, 2019;
and 75,454,511 shares issued and outstanding at
December 31, 2018
|
751
|
|
754
|
Additional paid-in
capital
|
1,446,664
|
|
1,468,779
|
Retained
earnings
|
605,269
|
|
539,332
|
Accumulated other
comprehensive loss
|
—
|
|
(184)
|
Total shareholders'
equity
|
2,052,684
|
|
2,008,681
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
8,202,046
|
|
$
|
7,871,181
|
Aircastle Limited
and Subsidiaries
|
Consolidated
Statements of Income
|
(Dollars in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Lease rental
revenue
|
$
|
200,341
|
|
$
|
184,682
|
|
$
|
777,403
|
|
$
|
722,694
|
Direct financing and
sales-type lease revenue
|
7,302
|
|
8,029
|
|
32,295
|
|
35,132
|
Amortization of lease
premiums, discounts and incentives
|
(5,685)
|
|
(4,563)
|
|
(22,636)
|
|
(15,269)
|
Maintenance
revenue
|
20,924
|
|
93,747
|
|
74,987
|
|
105,738
|
Total lease
revenue
|
222,882
|
|
281,895
|
|
862,049
|
|
848,295
|
Gain on sale of flight
equipment
|
20,101
|
|
8,180
|
|
45,532
|
|
36,766
|
Other
revenue
|
747
|
|
2,491
|
|
10,357
|
|
5,290
|
Total
revenues
|
243,730
|
|
292,566
|
|
917,938
|
|
890,351
|
Operating
expenses:
|
|
|
|
|
|
|
|
Depreciation
|
90,711
|
|
81,608
|
|
356,021
|
|
310,850
|
Interest,
net
|
62,969
|
|
62,867
|
|
258,070
|
|
234,504
|
Selling, general and
administrative (including non-cash share-based payment expense of
$6,627 and $3,236 for the three months ended, and $15,830 and
$11,488 for the years ended December 31, 2019 and 2018,
respectively)
|
22,761
|
|
21,301
|
|
77,034
|
|
76,025
|
Impairment of flight
equipment
|
—
|
|
—
|
|
7,404
|
|
—
|
Maintenance and other
costs
|
4,961
|
|
4,233
|
|
24,828
|
|
8,961
|
Total operating
expenses
|
181,402
|
|
170,009
|
|
723,357
|
|
630,340
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
(7,577)
|
|
—
|
Other
|
(7,635)
|
|
(2,807)
|
|
(11,864)
|
|
1,636
|
Total other income
(expense)
|
(7,635)
|
|
(2,807)
|
|
(19,441)
|
|
1,636
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes and earnings (loss) of
unconsolidated equity method investments
|
54,693
|
|
119,750
|
|
175,140
|
|
261,647
|
Income tax
provision
|
8,072
|
|
2,118
|
|
22,667
|
|
5,642
|
Earnings (loss) of
unconsolidated equity method investments, net of tax
|
697
|
|
(13,795)
|
|
4,102
|
|
(8,086)
|
Net income
|
$
|
47,318
|
|
$
|
103,837
|
|
$
|
156,575
|
|
$
|
247,919
|
Earnings per common
share — Basic:
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.63
|
|
$
|
1.36
|
|
$
|
2.09
|
|
$
|
3.18
|
Earnings per common
share — Diluted:
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.62
|
|
$
|
1.35
|
|
$
|
2.06
|
|
$
|
3.17
|
Dividends declared
per share
|
$
|
0.32
|
|
$
|
0.30
|
|
$
|
1.22
|
|
$
|
1.14
|
Aircastle Limited
and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
156,575
|
|
$
|
247,919
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
356,021
|
|
310,850
|
Amortization of
deferred financing costs
|
14,578
|
|
14,627
|
Amortization of lease
premiums, discounts and incentives
|
22,636
|
|
15,269
|
Deferred income
taxes
|
20,223
|
|
(496)
|
Non-cash share-based
payment expense
|
15,830
|
|
11,488
|
Cash flow hedges
reclassified into earnings
|
184
|
|
1,166
|
Collections on direct
financing and sales-type leases
|
25,842
|
|
—
|
Security deposits and
maintenance payments included in earnings
|
(49,029)
|
|
(80,628)
|
Gain on the sale of
flight equipment
|
(45,532)
|
|
(36,766)
|
Loss on
extinguishment of debt
|
7,577
|
|
—
|
Impairment of
aircraft
|
7,404
|
|
—
|
Other
|
206
|
|
3,032
|
Changes on certain
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(13,162)
|
|
(12,328)
|
Other
assets
|
2,594
|
|
5,065
|
Accounts payable,
accrued expenses and other liabilities
|
(5,483)
|
|
10,526
|
Lease rentals
received in advance
|
19,954
|
|
32,868
|
Net cash and restricted
cash provided by operating activities
|
536,418
|
|
522,592
|
Cash flows from
investing activities:
|
|
|
|
Acquisition and
improvement of flight equipment
|
(1,172,370)
|
|
(1,317,497)
|
Proceeds from sale of
flight equipment
|
361,747
|
|
338,831
|
Net investment in
direct financing and sales-type leases
|
—
|
|
(15,783)
|
Collections on direct
financing and sales-type leases
|
—
|
|
29,961
|
Aircraft purchase
deposits and progress payments, net of returned deposits and
aircraft sales deposits
|
760
|
|
(15,494)
|
Unconsolidated equity
method investment and associated costs
|
(15,175)
|
|
(3,350)
|
Distributions from
unconsolidated equity method investment in excess of
earnings
|
36,750
|
|
3,900
|
Other
|
4,259
|
|
4,745
|
Net cash and
restricted cash used in investing activities
|
(784,029)
|
|
(974,687)
|
Cash flows from
financing activities:
|
|
|
|
Repurchase of
shares
|
(36,739)
|
|
(71,421)
|
Proceeds from secured
and unsecured debt financings
|
2,116,848
|
|
1,413,901
|
Repayments of secured
and unsecured debt financings
|
(1,817,558)
|
|
(969,139)
|
Deferred financing
costs
|
(13,800)
|
|
(11,642)
|
Debt extinguishment
costs
|
(7,183)
|
|
—
|
Security deposits and
maintenance payments received
|
202,833
|
|
203,925
|
Security deposits and
maintenance payments returned
|
(117,872)
|
|
(90,803)
|
Dividends
paid
|
(91,328)
|
|
(88,730)
|
Net cash and
restricted cash provided by financing activities
|
235,201
|
|
386,091
|
Net decrease
increase in cash and restricted cash
|
(12,410)
|
|
(66,004)
|
Cash and restricted
cash at beginning of year
|
167,853
|
|
233,857
|
Cash and restricted
cash at end of year
|
$
|
155,443
|
|
$
|
167,853
|
Aircastle Limited
and Subsidiaries
|
Supplemental
Financial Information
|
(Amount in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
$
|
243,730
|
|
$
|
292,566
|
|
$
|
917,938
|
|
$
|
890,351
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
$
|
214,755
|
|
$
|
254,993
|
|
$
|
815,969
|
|
$
|
814,184
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
|
229,531
|
|
$
|
276,830
|
|
$
|
862,161
|
|
$
|
839,831
|
|
|
|
|
|
|
|
|
Net income
|
$
|
47,318
|
|
$
|
103,837
|
|
$
|
156,575
|
|
$
|
247,919
|
Net income allocable
to common shares
|
$
|
46,991
|
|
$
|
103,174
|
|
$
|
155,541
|
|
$
|
246,402
|
Per common share -
Basic
|
$
|
0.63
|
|
$
|
1.36
|
|
$
|
2.09
|
|
$
|
3.18
|
Per common share -
Diluted
|
$
|
0.62
|
|
$
|
1.35
|
|
$
|
2.06
|
|
$
|
3.17
|
|
|
|
|
|
|
|
|
Adjusted net
income(1)
|
$
|
66,002
|
|
$
|
109,883
|
|
$
|
196,547
|
|
$
|
257,237
|
Adjusted net income
allocable to common shares
|
$
|
65,546
|
|
$
|
109,182
|
|
$
|
195,249
|
|
$
|
255,663
|
Per common share -
Basic
|
$
|
0.88
|
|
$
|
1.44
|
|
$
|
2.62
|
|
$
|
3.30
|
Per common share -
Diluted
|
$
|
0.87
|
|
$
|
1.43
|
|
$
|
2.59
|
|
$
|
3.29
|
|
|
|
|
|
|
|
|
Basic common shares
outstanding
|
74,232
|
|
75,937
|
|
74,478
|
|
77,447
|
Diluted common shares
outstanding(2)
|
75,525
|
|
76,281
|
|
75,382
|
|
77,749
|
_________________
|
(1)
|
Refer to the selected
information accompanying this press release for a reconciliation of
GAAP to Non-GAAP information.
|
(2)
|
For the three and
twelve months ended December 31, 2019, includes 1,292,798 and
904,417 dilutive shares, respectively. For the three and
twelve months ended December 31, 2018, includes 344,020 and 301,356
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
December 31,
|
|
Year
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
|
$
|
47,318
|
|
103,837
|
|
$
|
156,575
|
|
$
|
247,919
|
Depreciation
|
90,711
|
|
81,608
|
|
356,021
|
|
310,850
|
Amortization of lease
premiums, discounts and incentives
|
5,685
|
|
4,563
|
|
22,636
|
|
15,269
|
Interest,
net
|
62,969
|
|
62,867
|
|
258,070
|
|
234,504
|
Income tax
provision
|
8,072
|
|
2,118
|
|
22,667
|
|
5,642
|
EBITDA
|
214,755
|
|
254,993
|
|
815,969
|
|
814,184
|
Adjustments:
|
|
|
|
|
|
|
|
Impairment of flight
equipment
|
—
|
|
—
|
|
7,404
|
|
—
|
Equity share of joint
venture impairment
|
—
|
|
15,791
|
|
2,724
|
|
15,791
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
7,577
|
|
—
|
Non-cash share-based
payment expense
|
6,627
|
|
3,236
|
|
15,830
|
|
11,488
|
Merger related
expenses(1)
|
7,886
|
|
—
|
|
7,886
|
|
—
|
Loss (gain) on
mark-to-market of interest rate derivative contracts
|
263
|
|
2,810
|
|
4,771
|
|
(1,632)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
229,531
|
|
276,830
|
|
$
|
862,161
|
|
$
|
839,831
|
_____________
|
(1)
|
Includes $7.4 million
in Other income (expense) and $0.5 million in Selling, general and
administrative expenses.
|
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
December 31,
|
|
Year
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
|
$
|
47,318
|
|
$
|
103,837
|
|
$
|
156,575
|
|
$
|
247,919
|
Loss on
extinguishment of debt(1)
|
—
|
|
—
|
|
7,577
|
|
—
|
Loss (gain) on
mark-to-market of interest rate derivative
contracts(1)
|
263
|
|
2,810
|
|
4,771
|
|
(1,632)
|
Loan termination
gain(2)
|
—
|
|
—
|
|
—
|
|
(838)
|
Write-off of deferred
financing fees(2)
|
172
|
|
—
|
|
172
|
|
300
|
Non-cash share-based
payment expense(3)
|
6,627
|
|
3,236
|
|
15,830
|
|
11,488
|
Merger related
expenses and taxes(4)
|
11,622
|
|
—
|
|
11,622
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
66,002
|
|
$
|
109,883
|
|
$
|
196,547
|
|
$
|
257,237
|
_______________
|
(1)
|
Included in Other
income (expense).
|
(2)
|
Included in Interest,
net.
|
(3)
|
Included in Selling,
general and administrative expenses.
|
(4)
|
Includes $7.4 million
in Other income (expense), $3.7 million in Income tax provision and
$0.5 million in Selling, general and administrative
expenses.
|
Management believes that Adjusted Net Income ("ANI"), when
viewed in conjunction with the Company's results under
U.S. GAAP and the above reconciliation, provides useful
information about operating and period-over-period performance and
provides additional information that is useful for evaluating the
underlying operating performance of our business without regard to
periodic reporting elements related to interest rate derivative
accounting, changes related to refinancing activity, merger related
expenses 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)
|
|
Period
|
CFFO and
Collections on
Finance
Leases
|
+
|
Gain on Sale
of Flight
Equipment
|
-
|
Depreciation
|
=
|
Cash
Earnings
|
|
Average
Shareholders
Equity
|
|
Trailing
Twelve
Month Cash
ROE
|
2014
|
$
|
469,098
|
|
$
|
23,146
|
|
$
|
299,365
|
|
$
|
192,879
|
|
$
|
1,661,228
|
|
11.6
|
%
|
2015
|
$
|
535,844
|
|
$
|
58,017
|
|
$
|
318,783
|
|
$
|
275,078
|
|
$
|
1,759,871
|
|
15.6
|
%
|
2016
|
$
|
487,505
|
|
$
|
39,126
|
|
$
|
305,216
|
|
$
|
221,415
|
|
$
|
1,789,256
|
|
12.4
|
%
|
2017
|
$
|
523,055
|
|
$
|
55,167
|
|
$
|
298,664
|
|
$
|
279,558
|
|
$
|
1,861,005
|
|
15.0
|
%
|
2018
|
$
|
552,553
|
|
$
|
36,766
|
|
$
|
310,850
|
|
$
|
278,469
|
|
$
|
1,955,160
|
|
14.2
|
%
|
2019
|
$
|
536,418
|
|
$
|
45,532
|
|
$
|
356,021
|
|
$
|
225,929
|
|
$
|
2,026,823
|
|
11.1
|
%
|
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. To
reflect the expected sale of the assets in one of our joint
ventures and to simplify the presentation of Cash ROE, we are no
longer adjusting for joint venture distributions in excess of/less
than joint venture earnings recorded under the equity method of
investment accounting.
Aircastle Limited
and Subsidiaries
|
Reconciliation of
GAAP to Non-GAAP Measures
|
Net Cash Interest
Margin Calculation
|
(Dollars in
thousands)
|
(Unaudited)
|
|
Period
|
|
Average
NBV
|
|
Quarterly
Rental
Revenue(1)
|
|
Cash
Interest(2)
|
|
Annualized Net
Cash Interest
Margin(1)(2)
|
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
|
%
|
Q4:16
|
|
$
|
6,346,361
|
|
$
|
196,714
|
|
$
|
58,631
|
|
8.7
|
%
|
Q1:17
|
|
$
|
6,505,355
|
|
$
|
200,273
|
|
$
|
58,839
|
|
8.7
|
%
|
Q2:17
|
|
$
|
6,512,100
|
|
$
|
199,522
|
|
$
|
55,871
|
|
8.8
|
%
|
Q3:17
|
|
$
|
5,985,908
|
|
$
|
184,588
|
|
$
|
53,457
|
|
8.8
|
%
|
Q4:17
|
|
$
|
6,247,581
|
|
$
|
187,794
|
|
$
|
53,035
|
|
8.6
|
%
|
Q1:18
|
|
$
|
6,700,223
|
|
$
|
193,418
|
|
$
|
53,978
|
|
8.3
|
%
|
Q2:18
|
|
$
|
6,721,360
|
|
$
|
193,988
|
|
$
|
53,979
|
|
8.3
|
%
|
Q3:18
|
|
$
|
6,787,206
|
|
$
|
200,354
|
|
$
|
54,521
|
|
8.6
|
%
|
Q4:18
|
|
$
|
7,136,627
|
|
$
|
200,027
|
|
$
|
60,348
|
|
7.8
|
%
|
Q1:19
|
|
$
|
7,449,957
|
|
$
|
195,601
|
|
$
|
60,279
|
|
7.3
|
%
|
Q2:19
|
|
$
|
7,729,637
|
|
$
|
206,190
|
|
$
|
63,639
|
|
7.4
|
%
|
Q3:19
|
|
$
|
7,824,911
|
|
$
|
217,524
|
|
$
|
62,203
|
|
7.9
|
%
|
Q4:19
|
|
$
|
7,753,309
|
|
$
|
216,225
|
|
$
|
59,552
|
|
8.1
|
%
|
_____________
|
(1)
|
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. The second
quarter of 2017 excludes a non-recurring, $7.0 million accelerated
collection received from a lessee in connection with a finance
lease.
|
(2)
|
Excludes loan
termination payments of $3.0 million in the second quarter of 2013,
$1.5 million and $3.5 million in the first quarter and fourth
quarter of 2016, respectively, loan termination payments of $1.0
million in both the second and third quarters of 2017 and a loan
termination gain of $0.8 million in the third quarter of
2018.
|
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
|
Book Value per
Share Calculation
|
(Amount in
thousands, except per share amounts)
|
(Unaudited)
|
|
Period
|
|
Shares Issued
and Outstanding
|
|
Shareholders'
Equity
|
|
Book
Value
per
share
|
|
%
Change
|
Q4:15
|
|
80,232
|
|
$1,779,500
|
|
$22.18
|
|
4.4%
|
Q4:16
|
|
78,593
|
|
$1,834,314
|
|
$23.34
|
|
5.2%
|
Q4:17
|
|
78,708
|
|
$1,907,564
|
|
$24.24
|
|
3.8%
|
Q4:18
|
|
75,455
|
|
$2,008,681
|
|
$26.62
|
|
9.8%
|
Q4:19
|
|
75,122
|
|
$2,052,684
|
|
$27.32
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4:15 - Q4:19
CAGR
|
|
5.4%
|
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,
2019
|
|
Year Ended
December 31, 2019
|
Weighted-average
shares:
|
Shares
|
|
Percent
|
|
Shares
|
|
Percent
|
Common shares
outstanding – Basic
|
74,232
|
|
99.31
|
%
|
|
74,478
|
|
99.34
|
%
|
Unvested restricted
common shares
|
517
|
|
0.69
|
%
|
|
495
|
|
0.66
|
%
|
Total
weighted-average shares outstanding
|
74,749
|
|
100.00
|
%
|
|
74,973
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
Common shares
outstanding – Basic
|
74,232
|
|
98.29
|
%
|
|
74,478
|
|
98.80
|
%
|
Effect of dilutive
shares(1)
|
1,293
|
|
1.71
|
%
|
|
904
|
|
1.20
|
%
|
Common shares
outstanding – Diluted
|
75,525
|
|
100.00
|
%
|
|
75,382
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
Net income
|
$
|
47,318
|
|
100.00
|
%
|
|
$
|
156,575
|
|
100.00
|
%
|
Distributed and
undistributed earnings allocated to unvested restricted
shares(2)
|
(327)
|
|
(0.69)
|
%
|
|
(1,034)
|
|
(0.66)
|
%
|
Earnings available to
common shares
|
$
|
46,991
|
|
99.31
|
%
|
|
$
|
155,541
|
|
99.34
|
%
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
66,002
|
|
100.00
|
%
|
|
$
|
196,547
|
|
100.00
|
%
|
Amounts allocated to
unvested restricted shares
|
(456)
|
|
(0.69)
|
%
|
|
(1,298)
|
|
(0.66)
|
%
|
Amounts allocated to
common shares – Basic and Diluted
|
$
|
65,546
|
|
99.31
|
%
|
|
$
|
195,249
|
|
99.34
|
%
|
______________
|
(1)
|
For the three months
and year ended December 31, 2019, distributed and
undistributed earnings to restricted shares were 0.69% and 0.66%,
respectively, of net income and adjusted net income. The amount of
restricted share forfeitures for all periods present is immaterial
to the allocation of distributed and undistributed
earnings.
|
(2)
|
For all periods
presented, dilutive shares represented contingently issuable
shares.
|
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, 2018
|
|
Year Ended
December 31, 2018
|
Weighted-average
shares:
|
Shares
|
|
Percent
|
|
Shares
|
|
Percent
|
Common shares
outstanding – Basic
|
75,937
|
|
99.36
|
%
|
|
77,447
|
|
99.39
|
%
|
Unvested restricted
common shares
|
488
|
|
0.64
|
%
|
|
477
|
|
0.61
|
%
|
Total
weighted-average shares outstanding
|
76,425
|
|
100.00
|
%
|
|
77,924
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
Common shares
outstanding – Basic
|
75,937
|
|
99.55
|
%
|
|
77,447
|
|
99.61
|
%
|
Effect of dilutive
shares(1)
|
344
|
|
0.45
|
%
|
|
301
|
|
0.39
|
%
|
Common shares
outstanding – Diluted
|
76,281
|
|
100.00
|
%
|
|
77,749
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
Net income
|
$
|
103,837
|
|
100.00
|
%
|
|
$
|
247,919
|
|
100.00
|
%
|
Distributed and
undistributed earnings allocated to unvested restricted
shares(2)
|
(663)
|
|
(0.64)
|
%
|
|
(1,517)
|
|
(0.61)
|
%
|
Earnings available to
common shares
|
$
|
103,174
|
|
99.36
|
%
|
|
$
|
246,402
|
|
99.39
|
%
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
109,883
|
|
100.00
|
%
|
|
$
|
257,237
|
|
100.00
|
%
|
Amounts allocated to
unvested restricted shares
|
(701)
|
|
(0.64)
|
%
|
|
(1,574)
|
|
(0.61)
|
%
|
Amounts allocated to
common shares – Basic and Diluted
|
$
|
109,182
|
|
99.36
|
%
|
|
$
|
255,663
|
|
99.39
|
%
|
________________
|
(1)
|
For the three months
and year ended December 31, 2018, distributed and
undistributed earnings to restricted shares were 0.64% and 0.61%,
respectively, of net income and adjusted net income. The
amount of restricted share forfeitures for all periods present is
immaterial to the allocation of distributed and undistributed
earnings.
|
(2)
|
For all periods
presented, dilutive shares represented contingently issuable
shares.
|
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
|
View original
content:http://www.prnewswire.com/news-releases/aircastle-announces-fourth-quarter-and-full-year-2019-results-acquisition-on-track-301004191.html
SOURCE Aircastle Limited