STAMFORD, Conn., Feb. 13,
2018 /PRNewswire/ --
Key Financial Metrics
- Total revenues were $177.4
million for the fourth quarter of 2017 and $796.6 million for the full year
- Net income was $55.1 million, or
$0.70 per diluted common share, for
the fourth quarter and $147.9
million, or $1.87 per diluted
common share, for the full year
- Adjusted net income(1) was $57.0 million, or $0.72 per diluted common share, for the fourth
quarter and $169.6 million, or
$2.15 per diluted common share, for
the full year
- Adjusted EBITDA(1) was $184.6
million for the fourth quarter and $801.6 million for the full year
- Cash ROE(1) was 15.0% in 2017; net cash interest
margin(1) was 8.6%
Highlights
- Placed seven wide-bodies on long-term leases in 2017
- Acquired 40 aircraft during the fourth quarter for $920 million, and a record 68 aircraft for the
full year
- Committed to acquire fourteen additional narrow-body aircraft
in 2018 for more than $540
million
- Sold eight aircraft during the fourth quarter and 37 aircraft
for the full year; full year sales included three wide-bodies, four
freighters, and our last six classic aircraft
- Declared our 47th consecutive quarterly dividend
(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 2017 net income of $55.1 million, or $0.70 per diluted common share, and adjusted net
income of $57.0 million, or
$0.72 per diluted common share.
Net income for the year ended December 31, 2017 was
$147.9 million, or $1.87 per diluted common share, and adjusted net
income was $169.6 million, or
$2.15 per diluted common share.
The fourth quarter results included total revenues of $177.4 million versus $204.7 million in the prior year. For the
full year 2017, total revenues were $796.6
million, an increase of 3.1%, versus $773.0 million in 2016.
Commenting on the results, Mike
Inglese, Aircastle's CEO, stated, "With $148 million of full year net income, Aircastle
had a great 2017 and a strong fourth quarter. Throughout the
year we worked diligently to extend and transition the leases on
seven wide-bodies while selling another three. As a result of
these efforts, we have taken care of essentially all of our 2018
lease placement activity. We also opportunistically sold four
freighters and our last six classics. Aircastle's aircraft
portfolio is in great shape and is well balanced."
Mr. Inglese concluded, "As competitive investment market
conditions are expected to persist into 2018, we believe that
Aircastle will once again benefit from our outstanding team, a
strong balance sheet and a nuanced investment approach that
prioritizes flexibility and disciplined growth, in order to
maximize risk-adjusted returns and increase sustainable earnings
and operating cash flow over time. By continuing to execute
our strategy, we are positioned to continue to grow profitably and
create long-term shareholder value."
|
Financial
Results
|
|
|
(In thousands, except
share data)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Total
revenues
|
$
|
177,402
|
|
|
$
|
204,653
|
|
|
$
|
796,620
|
|
|
$
|
772,958
|
|
|
Lease rental and
finance and sales-type lease revenues
|
$
|
179,284
|
|
|
$
|
191,714
|
|
|
$
|
747,018
|
|
|
$
|
742,410
|
|
|
Adjusted
EBITDA(1)
|
$
|
184,553
|
|
|
$
|
220,493
|
|
|
$
|
801,584
|
|
|
$
|
767,953
|
|
|
Net income
|
$
|
55,120
|
|
|
$
|
67,724
|
|
|
$
|
147,874
|
|
|
$
|
151,453
|
|
|
Per
common share - Diluted
|
$
|
0.70
|
|
|
$
|
0.86
|
|
|
$
|
1.87
|
|
|
$
|
1.92
|
|
|
Adjusted net
income(1)
|
$
|
57,040
|
|
|
$
|
70,525
|
|
|
$
|
169,566
|
|
|
$
|
168,527
|
|
|
Per
common share - Diluted
|
$
|
0.72
|
|
|
$
|
0.90
|
|
|
$
|
2.15
|
|
|
$
|
2.14
|
|
|
|
_______________
|
|
|
(1) Refer to
the selected financial information accompanying this press release
for a reconciliation of GAAP to Non-GAAP numbers.
|
Full Year Results
Total revenues in 2017 were $796.6
million, an increase of $23.7
million, while lease rental and finance and sales-type lease
revenues were $747.0 million, an
increase of $4.6 million. The
increase in total revenues was primarily driven by $22.5 million of higher maintenance revenues and
higher lease rental and finance and sales-type lease revenues
associated with net fleet growth.
Net income for the full year was $147.9
million, down $3.6 million
year-over-year, while adjusted net income was $169.6 million, an increase of $1.0 million. Higher total revenues of
$23.7 million, higher gains from the
sale of flight equipment of $16.0
million, and lower interest expense of $14.4 million offset higher aircraft impairment
charges of $51.8 million.
Adjusted EBITDA for the full year was $801.6 million, up $33.6
million versus 2016, reflecting a $22.5 million increase in maintenance revenue and
higher gains from the sale of flight equipment of $16.0 million, partially offset by higher
SG&A, excluding share based compensation, of $6.5 million, mostly driven by higher personnel
costs and headcount.
Fourth Quarter Results
Total revenues were $177.4
million, a decrease of $27.3
million, or 13.3%, from the prior year. The decrease
was due to a $12.4 million decline in
lease rental and finance and sales-type lease revenues, and a
$12.6 million decrease in maintenance
revenues.
Lease rental and finance and sales-type lease revenues were
$179.3 million versus $191.7 million the prior year. The 6.5%
decrease was driven by lease transition and extension activity,
mostly associated with seven wide-body and one freighter aircraft,
which represented a combined 10.8% of total fleet net book value at
year end.
Net income was $55.1 million, a
decrease of $12.6 million, while
adjusted net income declined by $13.5
million to $57.0
million. Lower total revenues of $27.3 million and a $5.0
million reduction in gains from the sale of flight equipment
were partially offset by an $11.3
million decrease in interest expense and lower depreciation
of $6.1 million.
Adjusted EBITDA was $184.6
million, down 16.3%, or $35.9
million. This was primarily driven by lower
maintenance revenues of $12.6
million, lower total lease rental and finance and sales-type
lease revenues of $12.4 million, and
a $5.0 million decline in gains from
aircraft sales in the fourth quarter of 2017.
Aviation Assets
During the fourth quarter, we acquired 40 aircraft for
$920 million. For the year
ended 2017, we acquired 68 aircraft for $1.6
billion. At the end of 2017, Aircastle's owned fleet
of 224 aircraft had a weighted average age of 9.1 years and a
weighted average remaining lease term of 5.0 years.
During the fourth quarter of 2017, we sold eight aircraft,
including one freighter and our last five classic aircraft, for
total sales proceeds of $68.6 million
and a gain on sale of $19.2
million.
During the year ended 2017, we sold a total of 37 aircraft and
other flight equipment for proceeds of $833.6 million and a gain on sale of $55.2 million. The average age of the 37
aircraft sold was 13.8 years with an average remaining lease term
of 4.2 years.
Our fleet utilization for the fourth quarter was 99.5% and 99.3%
for the full year 2017. As of December 31, 2017,
Aircastle owned 224 aircraft having a net book value of
$6.7 billion. We also manage twelve
aircraft with a net book value of $641
million on behalf of our joint ventures with Ontario
Teachers' Pension Plan and IBJ Leasing of Japan.
|
Owned
Aircraft
|
As
of
December
31,
2017(1)
|
|
As
of
December
31,
2016(1)
|
|
Net Book Value of
Flight Equipment ($ mils.)
|
$
|
6,734
|
|
|
$
|
6,508
|
|
|
Net Book Value of
Unencumbered Flight Equipment ($ mils.)
|
$
|
5,346
|
|
|
$
|
4,614
|
|
|
Number of
Aircraft
|
224
|
|
|
193
|
|
|
Number of
Unencumbered Aircraft
|
195
|
|
|
156
|
|
|
Weighted Average
Fleet Age (years)(2)
|
9.1
|
|
|
7.9
|
|
|
Weighted Average
Remaining Lease Term (years)(2)
|
5.0
|
|
|
5.1
|
|
|
Weighted Average
Fleet Utilization for the year ended(3)
|
99.3
|
%
|
|
98.9
|
%
|
|
Portfolio Yield for
the year ended(2)(4)
|
12.2
|
%
|
|
12.4
|
%
|
|
Net Cash Interest
Margin(5)
|
8.6
|
%
|
|
8.7
|
%
|
|
|
|
|
|
Managed Aircraft on
behalf of Joint Ventures
|
|
|
|
|
Net Book Value of
Flight Equipment ($ mils.)
|
$
|
641
|
|
|
$
|
689
|
|
|
Number of
Aircraft
|
12
|
|
|
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
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.
|
Financing Activity
In 2017, we secured $500 million
of new financing. During the first quarter of 2017, we issued
$500 million in unsecured Senior
Notes due 2024 bearing a coupon of 4.125%. On April 17, 2017, we repaid $500 million of maturing, unsecured Senior Notes
bearing a coupon of 6.75%. The associated annual interest
expense savings is approximately $13.1
million.
Common Dividend
On February 9, 2018, Aircastle's
Board of Directors declared a first quarter 2018 cash dividend on
its common shares of $0.28 per share,
payable on March 15, 2018 to
shareholders of record on February
28, 2018. This is our 47th consecutive
dividend.
Conference Call
In connection with this earnings release, management will host
an earnings conference call on Tuesday,
February 13, 2018 at 10:00 A.M.
Eastern time. All interested parties are welcome to
participate on the live call. The conference call can be
accessed by dialing (800) 239-9838 (from within the U.S. and
Canada) or (323) 794-2551 (from
outside of the U.S. and Canada)
ten minutes prior to the scheduled start and referencing the
passcode "8003549".
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 Thursday, March 15, 2018 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
December 31, 2017, Aircastle owned and managed on behalf of
its joint ventures 236 aircraft leased to 81 customers located in
43 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 2016 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)
|
|
|
|
December 31,
|
|
2017
|
|
2016
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
|
211,922
|
|
|
$
|
455,579
|
|
|
Restricted cash and
cash equivalents
|
21,935
|
|
|
53,238
|
|
|
Accounts
receivable
|
12,815
|
|
|
6,035
|
|
|
Flight equipment held
for lease, net of accumulated depreciation of $1,125,594 and
$1,224,899, respectively
|
6,188,469
|
|
|
6,247,585
|
|
|
Net investment in
finance and sales-type leases
|
545,750
|
|
|
260,853
|
|
|
Unconsolidated equity
method investment
|
76,982
|
|
|
72,977
|
|
|
Other
assets
|
141,210
|
|
|
148,398
|
|
|
Total
assets
|
$
|
7,199,083
|
|
|
$
|
7,244,665
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings from
secured financings, net of debt issuance costs
|
$
|
849,874
|
|
|
$
|
1,219,034
|
|
|
Borrowings from
unsecured financings, net of debt issuance costs
|
3,463,732
|
|
|
3,287,211
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
140,221
|
|
|
127,527
|
|
|
Lease rentals
received in advance
|
57,630
|
|
|
62,225
|
|
|
Security
deposits
|
130,628
|
|
|
122,597
|
|
|
Maintenance
payments
|
649,434
|
|
|
591,757
|
|
|
Total
liabilities
|
5,291,519
|
|
|
5,410,351
|
|
|
|
|
|
|
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,
78,707,963 shares issued
and outstanding at December 31, 2017; and
78,593,133 shares issued and outstanding at
December 31, 2016
|
787
|
|
|
786
|
|
|
Additional paid-in
capital
|
1,527,796
|
|
|
1,521,190
|
|
|
Retained
earnings
|
380,331
|
|
|
315,890
|
|
|
Accumulated other
comprehensive loss
|
(1,350)
|
|
|
(3,552)
|
|
|
Total shareholders'
equity
|
1,907,564
|
|
|
1,834,314
|
|
|
Total liabilities and
shareholders' equity
|
$
|
7,199,083
|
|
|
$
|
7,244,665
|
|
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Lease rental
revenue
|
$
|
169,931
|
|
|
$
|
187,550
|
|
|
$
|
721,302
|
|
|
$
|
725,220
|
|
|
Finance and
sales-type lease revenue
|
9,353
|
|
|
4,164
|
|
|
25,716
|
|
|
17,190
|
|
|
Amortization of lease
premiums, discounts and incentives
|
(2,934)
|
|
|
(4,934)
|
|
|
(11,714)
|
|
|
(10,353)
|
|
|
Maintenance
revenue
|
390
|
|
|
12,987
|
|
|
56,128
|
|
|
33,590
|
|
|
Total lease
revenue
|
176,740
|
|
|
199,767
|
|
|
791,432
|
|
|
765,647
|
|
|
Other
revenue
|
662
|
|
|
4,886
|
|
|
5,188
|
|
|
7,311
|
|
|
Total
revenues
|
177,402
|
|
|
204,653
|
|
|
796,620
|
|
|
772,958
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Depreciation
|
71,218
|
|
|
77,298
|
|
|
298,664
|
|
|
305,216
|
|
|
Interest,
net
|
55,855
|
|
|
67,170
|
|
|
241,231
|
|
|
255,660
|
|
|
Selling, general and
administrative (including non-cash share-based
payment expense of $2,512 and $2,105 for the three months ended,
and
$13,148 and $7,901 for the year ended December 31, 2017 and
2016,
respectively)
|
18,113
|
|
|
14,989
|
|
|
73,604
|
|
|
61,872
|
|
|
Impairment of flight
equipment
|
—
|
|
|
1,400
|
|
|
80,430
|
|
|
28,585
|
|
|
Maintenance and other
costs
|
1,231
|
|
|
2,269
|
|
|
9,077
|
|
|
7,773
|
|
|
Total
expenses
|
146,417
|
|
|
163,126
|
|
|
703,006
|
|
|
659,106
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain on sale of
flight equipment
|
19,241
|
|
|
24,194
|
|
|
55,167
|
|
|
39,126
|
|
|
Other
|
593
|
|
|
3,663
|
|
|
(2,476)
|
|
|
3,527
|
|
|
Total
other income
|
19,834
|
|
|
27,857
|
|
|
52,691
|
|
|
42,653
|
|
|
Income from
continuing operations before income taxes and earnings of
unconsolidated equity method investments
|
50,819
|
|
|
69,384
|
|
|
146,305
|
|
|
156,505
|
|
|
Income tax provision
(benefit)
|
(2,494)
|
|
|
3,525
|
|
|
6,042
|
|
|
12,307
|
|
|
Earnings of
unconsolidated equity method investments, net of tax
|
1,807
|
|
|
1,865
|
|
|
7,611
|
|
|
7,255
|
|
|
Net income
|
$
|
55,120
|
|
|
$
|
67,724
|
|
|
$
|
147,874
|
|
|
$
|
151,453
|
|
|
Earnings per common
share — Basic:
|
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.70
|
|
|
$
|
0.86
|
|
|
$
|
1.88
|
|
|
$
|
1.92
|
|
|
Earnings per common
share — Diluted:
|
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.70
|
|
|
$
|
0.86
|
|
|
$
|
1.87
|
|
|
$
|
1.92
|
|
|
Dividends declared
per share
|
$
|
0.28
|
|
|
$
|
0.26
|
|
|
$
|
1.06
|
|
|
$
|
0.98
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Statements of Cash Flows
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
|
147,874
|
|
|
$
|
151,453
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
298,664
|
|
|
305,216
|
|
|
Amortization of
deferred financing costs
|
19,435
|
|
|
18,508
|
|
|
Amortization of lease
premiums, discounts and incentives
|
11,714
|
|
|
10,353
|
|
|
Deferred income
taxes
|
(8,948)
|
|
|
6,156
|
|
|
Non-cash share-based
payment expense
|
13,148
|
|
|
7,901
|
|
|
Cash flow hedges
reclassified into earnings
|
2,202
|
|
|
9,662
|
|
|
Security deposits and
maintenance payments included in earnings
|
(17,947)
|
|
|
(23,123)
|
|
|
Gain on the sale of
flight equipment
|
(55,167)
|
|
|
(39,126)
|
|
|
Impairment of
aircraft
|
80,430
|
|
|
28,585
|
|
|
Other
|
1,476
|
|
|
(6,867)
|
|
|
Changes on certain
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(6,734)
|
|
|
832
|
|
|
Other
assets
|
(7,655)
|
|
|
(1,089)
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
13,857
|
|
|
(4,014)
|
|
|
Lease rentals
received in advance
|
(1,478)
|
|
|
3,645
|
|
|
Net cash and
restricted cash provided by operating activities
|
490,871
|
|
|
468,092
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition and
improvement of flight equipment
|
(1,038,343)
|
|
|
(1,331,059)
|
|
|
Proceeds from sale of
flight equipment
|
833,576
|
|
|
755,898
|
|
|
Net investment in
finance and sales-type leases
|
(331,721)
|
|
|
(78,892)
|
|
|
Collections on
finance and sales-type leases
|
32,184
|
|
|
19,413
|
|
|
Aircraft purchase
deposits and progress payments, net of returned deposits and
aircraft sales
deposits
|
(7,681)
|
|
|
(9,628)
|
|
|
Unconsolidated equity
method investment and associated costs
|
—
|
|
|
(18,048)
|
|
|
Other
|
(5,122)
|
|
|
(839)
|
|
|
Net cash and
restricted cash used in investing activities
|
(517,107)
|
|
|
(663,155)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repurchase of
shares
|
(4,862)
|
|
|
(37,337)
|
|
|
Proceeds from secured
and unsecured debt financings
|
675,000
|
|
|
1,054,250
|
|
|
Repayments of secured
and unsecured debt financings
|
(878,534)
|
|
|
(588,778)
|
|
|
Deferred financing
costs
|
(8,540)
|
|
|
(18,890)
|
|
|
Restricted secured
liquidity facility collateral
|
—
|
|
|
65,000
|
|
|
Liquidity
facility
|
—
|
|
|
(65,000)
|
|
|
Security deposits and
maintenance payments received
|
192,830
|
|
|
171,672
|
|
|
Security deposits and
maintenance payments returned
|
(141,185)
|
|
|
(51,658)
|
|
|
Dividends
paid
|
(83,433)
|
|
|
(77,137)
|
|
|
Other
|
—
|
|
|
(2,283)
|
|
|
Net cash and
restricted cash (used in) provided by financing
activities
|
(248,724)
|
|
|
449,839
|
|
|
Net (decrease)
increase in cash and restricted cash
|
(274,960)
|
|
|
254,776
|
|
|
Cash and restricted
cash at beginning of year
|
508,817
|
|
|
254,041
|
|
|
Cash and restricted
cash at end of year
|
$
|
233,857
|
|
|
$
|
508,817
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Selected Financial
Guidance Elements for the First Quarter of 2018
|
|
($ in millions,
except for percentages)
|
|
(Unaudited)
|
|
|
Guidance
Item
|
Q1:18
|
|
Lease rental
revenue
|
$173 -
$177
|
|
Finance lease
revenue
|
$9 - $10
|
|
Maintenance
revenue
|
$0 - $1
|
|
Amortization of net
lease discounts and lease incentives
|
$(3) -
$(4)
|
|
SG&A(1)
|
$17 - $18
|
|
Depreciation
|
$74 - $76
|
|
Interest,
net
|
$57 - $58
|
|
Gain on
sale
|
$8 - $18
|
|
Full year effective
tax rate
|
8% - 10%
|
|
|
(1) Includes ~$2.4M 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
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenues
|
$
|
177,402
|
|
|
$
|
204,653
|
|
|
$
|
796,620
|
|
|
$
|
772,958
|
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
$
|
182,633
|
|
|
$
|
220,651
|
|
|
$
|
705,525
|
|
|
$
|
734,989
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
|
184,553
|
|
|
$
|
220,493
|
|
|
$
|
801,584
|
|
|
$
|
767,953
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
55,120
|
|
|
$
|
67,724
|
|
|
$
|
147,874
|
|
|
$
|
151,453
|
|
|
Net income allocable
to common shares
|
$
|
54,757
|
|
|
$
|
67,141
|
|
|
$
|
146,829
|
|
|
$
|
150,196
|
|
|
Per common share -
Basic
|
$
|
0.70
|
|
|
$
|
0.86
|
|
|
$
|
1.88
|
|
|
$
|
1.92
|
|
|
Per common share -
Diluted
|
$
|
0.70
|
|
|
$
|
0.86
|
|
|
$
|
1.87
|
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income(1)
|
$
|
57,040
|
|
|
$
|
70,525
|
|
|
$
|
169,566
|
|
|
$
|
168,527
|
|
|
Adjusted net income
allocable to common shares
|
$
|
56,665
|
|
|
$
|
69,918
|
|
|
$
|
168,368
|
|
|
$
|
167,129
|
|
|
Per common share -
Basic
|
$
|
0.72
|
|
|
$
|
0.90
|
|
|
$
|
2.15
|
|
|
$
|
2.14
|
|
|
Per common share -
Diluted
|
$
|
0.72
|
|
|
$
|
0.90
|
|
|
$
|
2.15
|
|
|
$
|
2.14
|
|
|
|
|
|
|
|
|
|
|
Basic common shares
outstanding
|
78,286
|
|
|
77,957
|
|
|
78,219
|
|
|
78,161
|
|
|
Diluted common shares
outstanding(2)
|
78,393
|
|
|
78,021
|
|
|
78,373
|
|
|
78,204
|
|
|
|
_______________
|
|
|
|
(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, 2017, includes 107,523 and 153,983
dilutive shares, respectively. For the three and twelve
months ended December 31, 2016, includes 63,728 and 42,785 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net income
|
$
|
55,120
|
|
|
67,724
|
|
|
$
|
147,874
|
|
|
$
|
151,453
|
|
|
Depreciation
|
71,218
|
|
|
77,298
|
|
|
298,664
|
|
|
305,216
|
|
|
Amortization of lease
premiums, discounts and incentives
|
2,934
|
|
|
4,934
|
|
|
11,714
|
|
|
10,353
|
|
|
Interest,
net
|
55,855
|
|
|
67,170
|
|
|
241,231
|
|
|
255,660
|
|
|
Income tax
provision
|
(2,494)
|
|
|
3,525
|
|
|
6,042
|
|
|
12,307
|
|
|
EBITDA
|
182,633
|
|
|
220,651
|
|
|
705,525
|
|
|
734,989
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Impairment of flight
equipment
|
—
|
|
|
1,400
|
|
|
80,430
|
|
|
28,585
|
|
|
Non-cash share-based
payment expense
|
2,512
|
|
|
2,105
|
|
|
13,148
|
|
|
7,901
|
|
|
(Gain) loss on
mark-to-market of interest rate derivative contracts
|
(592)
|
|
|
(3,663)
|
|
|
2,481
|
|
|
(3,522)
|
|
|
Adjusted
EBITDA
|
$
|
184,553
|
|
|
220,493
|
|
|
$
|
801,584
|
|
|
$
|
767,953
|
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net income
|
$
|
55,120
|
|
|
$
|
67,724
|
|
|
$
|
147,874
|
|
|
$
|
151,453
|
|
|
Loan termination
fee(1)
|
—
|
|
|
908
|
|
|
2,058
|
|
|
4,960
|
|
|
(Gain) loss on
mark-to-market of interest rate derivative
contracts(2)
|
(592)
|
|
|
(3,663)
|
|
|
2,481
|
|
|
(3,522)
|
|
|
Write-off of deferred
financing fees(1)
|
—
|
|
|
3,451
|
|
|
4,005
|
|
|
2,880
|
|
|
Non-cash share-based
payment expense(3)
|
2,512
|
|
|
2,105
|
|
|
13,148
|
|
|
7,901
|
|
|
Securitization No. 1
hedge loss amortization charges(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,855
|
|
|
Adjusted net
income
|
$
|
57,040
|
|
|
$
|
70,525
|
|
|
$
|
169,566
|
|
|
$
|
168,527
|
|
|
|
_______________
|
|
|
(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 above
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)
|
|
|
Period
|
CFFO
|
|
Finance
Lease
Collections
|
|
Gain on
Sale of
Flight
Equipment
|
|
Deprec.
|
|
Distributions
in excess
(less than)
Equity
Earnings
|
|
Cash
Earnings
|
|
Average
Shareholders
Equity
|
|
Trailing
Twelve
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
|
|
|
$
|
(530)
|
|
|
$
|
274,548
|
|
|
$
|
1,759,871
|
|
|
15.6
|
%
|
|
2016
|
$
|
468,092
|
|
|
$
|
19,413
|
|
|
$
|
39,126
|
|
|
$
|
305,216
|
|
|
$
|
(1,782)
|
|
|
$
|
219,633
|
|
|
$
|
1,789,256
|
|
|
12.3
|
%
|
|
2017
|
$
|
490,871
|
|
|
$
|
32,184
|
|
|
$
|
55,167
|
|
|
$
|
298,664
|
|
|
$
|
(1,011)
|
|
|
$
|
278,547
|
|
|
$
|
1,861,005
|
|
|
15.0
|
%
|
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)
|
|
|
Period
|
|
Average
NBV
|
|
Quarterly
Rental
Revenue(1)
|
|
Cash
Interest(2)
|
|
Annualized Net
Cash Interest
Margin(1)(2)
|
|
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
|
%
|
|
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
|
%
|
|
|
_______________
|
|
|
|
|
(1)
|
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, and loan termination payments of
$1.0 million in both the second and third quarters of
2017.
|
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
|
|
Reconciliation of
Net Income Allocable to Common Shares
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
2017
|
|
Year Ended
December 31, 2017
|
|
Weighted-average
shares:
|
Shares
|
|
Percent
|
|
Shares
|
|
Percent
|
|
Common shares
outstanding – Basic
|
78,286
|
|
|
99.34
|
%
|
|
78,219
|
|
|
99.29
|
%
|
|
Unvested restricted
common shares
|
518
|
|
|
0.66
|
%
|
|
557
|
|
|
0.71
|
%
|
|
Total
weighted-average shares outstanding
|
78,804
|
|
|
100.00
|
%
|
|
78,776
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding – Basic
|
78,286
|
|
|
99.86
|
%
|
|
78,219
|
|
|
99.80
|
%
|
|
Effect of dilutive
shares(1)
|
108
|
|
|
0.14
|
%
|
|
154
|
|
|
0.20
|
%
|
|
Common shares
outstanding – Diluted
|
78,393
|
|
|
100.00
|
%
|
|
78,373
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
Net income
|
$
|
55,120
|
|
|
100.00
|
%
|
|
$
|
147,874
|
|
|
100.00
|
%
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares(2)
|
(363)
|
|
|
(0.66)%
|
|
|
(1,045)
|
|
|
(0.71)%
|
|
|
Earnings available to
common shares
|
$
|
54,757
|
|
|
99.34
|
%
|
|
$
|
146,829
|
|
|
99.29
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
57,040
|
|
|
100.00
|
%
|
|
$
|
169,566
|
|
|
100.00
|
%
|
|
Amounts allocated to
unvested restricted shares
|
(375)
|
|
|
(0.66)%
|
|
|
(1,198)
|
|
|
(0.71)%
|
|
|
Amounts allocated to
common shares – Basic and Diluted
|
$
|
56,665
|
|
|
99.34
|
%
|
|
$
|
168,368
|
|
|
99.29
|
%
|
|
|
_______________
|
|
|
|
|
(1)
|
For the three months
and year ended December 31, 2017, distributed and undistributed
earnings to restricted shares were 0.66% and 0.71%,
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,
2016
|
|
Year Ended
December 31, 2016
|
|
Weighted-average
shares:
|
Shares
|
|
Percent
|
|
Shares
|
|
Percent
|
|
Common shares
outstanding – Basic
|
77,957
|
|
|
99.14
|
%
|
|
78,161
|
|
|
99.17
|
%
|
|
Unvested restricted
common shares
|
677
|
|
|
0.86
|
%
|
|
654
|
|
|
0.83
|
%
|
|
Total
weighted-average shares outstanding
|
78,634
|
|
|
100.00
|
%
|
|
78,815
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding – Basic
|
77,957
|
|
|
99.92
|
%
|
|
78,161
|
|
|
99.95
|
%
|
|
Effect of dilutive
shares(1)
|
64
|
|
|
0.08
|
%
|
|
43
|
|
|
0.05
|
%
|
|
Common shares
outstanding – Diluted
|
78,021
|
|
|
100.00
|
%
|
|
78,204
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
Net income
|
$
|
67,724
|
|
|
100.00
|
%
|
|
$
|
151,453
|
|
|
100.00
|
%
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares(2)
|
(583)
|
|
|
(0.86)%
|
|
|
(1,257)
|
|
|
(0.83)%
|
|
|
Earnings available to
common shares
|
$
|
67,141
|
|
|
99.14
|
%
|
|
$
|
150,196
|
|
|
99.17
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
70,525
|
|
|
100.00
|
%
|
|
$
|
168,527
|
|
|
100.00
|
%
|
|
Amounts allocated to
unvested restricted shares
|
(607)
|
|
|
(0.86)%
|
|
|
(1,398)
|
|
|
(0.83)%
|
|
|
Amounts allocated to
common shares – Basic and Diluted
|
$
|
69,918
|
|
|
99.14
|
%
|
|
$
|
167,129
|
|
|
99.17
|
%
|
|
|
_______________
|
|
|
|
|
(1)
|
For the three months
and year ended December 31, 2016, distributed and undistributed
earnings to restricted shares were 0.86% and 0.83%,
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-2017-results-300597643.html
SOURCE Aircastle Limited