Aircastle Announces Fourth Quarter and Full Year 2016 Results

Dienstag, 14.02.2017 13:35 von PR Newswire

PR Newswire

STAMFORD, Conn., Feb. 14, 2017 /PRNewswire/ --

Key Financial Metrics

  • Total revenues were $204.7 million for the fourth quarter of 2016 and $773.0 million for the full year
  • Total lease rental1 revenues were $191.7 million for the fourth quarter and $742.4 million for the full year
  • Net income was $67.7 million, or $0.86 per diluted common share for the fourth quarter, and $151.5 million, or $1.92 per diluted common share, for the full year
  • Adjusted net income2 was $70.5 million, or $0.90 per diluted common share for the fourth quarter, and $168.5 million, or $2.14 per diluted common share, for the full year
  • Adjusted EBITDA2 was $220.5 million for the fourth quarter and $768.0 million for the full year
  • Cash ROE2 of 12.3% in 2016;  8.7% net cash interest margin

Highlights

  • 206 aircraft owned and managed for joint ventures
  • Acquired 60 aircraft in 2016 for $1.6 billion, including 57 narrow-body aircraft
  • Sold 30 aircraft in 2016 for $755.9 million; sales included seven wide-body and three freighter aircraft; gain on sale was $39.1 million for the full year
  • Strong lease placement progress during the fourth quarter, including three Singapore A330s;  total of two aircraft remaining to place on lease in 2017
  • Raised $1.3 billion in new financing during 2016 from funding sources worldwide
  • Declared our 43rd consecutive quarterly dividend

Includes finance and sales-type lease revenue
Non-GAAP items reconciled in the Appendix

Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported fourth quarter 2016 net income of $67.7 million, or $0.86 per diluted common share and adjusted net income of $70.5 million, or $0.90 per diluted common share.  Net income for the year ended December 31, 2016 was $151.5 million, or $1.92 per diluted common share, and adjusted net income was $168.5 million, or $2.14 per diluted common share.  The fourth quarter results included lease rental revenues of $191.7 million, an increase of 3%, versus $185.7 million in the fourth quarter of 2015.  For the full year 2016, lease rental revenues were $742.4 million, versus $741.1 million in 2015.

"The Board is very pleased with Aircastle's strong 2016 financial performance, and the outstanding effort put forth by the leadership team," said Peter V. Ueberroth, Aircastle's Chairman of the Board, speaking on behalf of the Board of Directors. 

Mr. Ueberroth added, "We are all looking forward to Ron Wainshal's full recovery and to his speedy return to the helm of our organization.  The Company's management is deep and capable, and under the current leadership of Mike Inglese as acting CEO, we are highly confident the team will capably execute Aircastle's business plan." 

Commenting on Aircastle's results, Mike Inglese, Acting Chief Executive Officer, stated, "During the fourth quarter and full year 2016, Aircastle achieved solid earnings growth and generated a strong cash return on equity. At the same time, we seized on opportunities in a dynamic market environment, further expanding the fleet and significantly improving asset quality as we continue to de-risk the business."

Mr. Inglese continued, "Aircastle took important steps to profitably grow the Company in 2016, with an emphasis on capitalizing on attractive narrow-body opportunities.  Specifically, we completed $1.6 billion in aircraft acquisitions during the year, with more than $600 million closing in the fourth quarter.  Profitable sales also remained a priority for Aircastle in 2016, as we sold 30 aircraft and further reduced our exposure to the wide-body and freighter markets."

Mr. Inglese concluded, "We enter 2017 in a strong position with a lot of flexibility.  We have significantly transformed our portfolio to focus on narrow-body aircraft, continued to successfully place aircraft and have limited capital commitments.  Our success raising $1.3 billion in financing during 2016 has also provided Aircastle with significant liquidity to continue to grow the Company and opportunistically provide value-added solutions to potential sellers of aircraft."

Financial Results

(in thousands, except share data)

Three Months Ended

December 31,


Year Ended

December 31,


2016


2015


2016


2015









Total Revenues

$ 204,653


$ 208,267


$ 772,958


$ 819,202









Adjusted EBITDA

$ 220,493


$ 210,972


$ 767,953


$ 832,105









Net income

$   67,724


$   50,641


$  151,453


$  121,729

      Per common share – Diluted

$       0.86


$       0.63


$      1.92


$      1.50









Adjusted net income

$   70,525


$   54,264


$  168,527


$  142,271

      Per common share – Diluted

$       0.90


$       0.67


$      2.14


$      1.75

 

Fourth Quarter Results

Total revenues for the fourth quarter were $204.7 million, a decline of $3.6 million, driven by lower maintenance revenue and lease end termination fees.  Maintenance revenues in the fourth quarter of 2015 were $2.9 million higher versus the current year's fourth quarter due to an unscheduled lease termination with an airline in Russia in the prior year. 

Net income for the quarter was $67.7 million, up $17.1 million year-over-year, while adjusted net income was $70.5 million, an increase of $16.3 million.  The improvement in both was due to a $16.1 million reduction in non-cash impairment charges along with higher gains on the sale of flight equipment of $9.2 million, partially offset by higher interest expense of $7.7 million

Adjusted EBITDA for the fourth quarter was $220.5 million, up $9.5 million, due to $9.2 million of higher gains on sale of flight equipment in 2016 versus 2015.

Full Year Results

Lease rental revenues totaled $742.4 million, an increase of $1.3 million versus the previous year.  Total revenues in 2016 were $773.0 million, a decline of $46.2 million versus the previous year.  The decrease in total revenues was driven by a $37.5 million reduction in maintenance revenues and a $10.4 million decline in lease end termination fees due to a lower number of aircraft that came off lease during 2016 compared to the previous year. 

Net income for the full year was $151.5 million, up $29.7 million year-over-year, while adjusted net income was $168.5 million, an increase of $26.3 million.  The improvements were primarily driven by a $91.3 million reduction in non-cash aircraft impairment charges, partially offset by lower maintenance revenues, lower gain on sale and lower lease termination fees, which declined a combined $66.8 million

Adjusted EBITDA for the full year was $768.0 million, down $64.2 million versus 2015, reflecting a $37.5 million decline in maintenance revenue, lower gains from the sale of flight equipment of $18.9 million, and a $10.4 million decrease in lease termination fees mainly associated with the disposal of freighter aircraft during 2015.

Aviation Assets

During 2016, we acquired 60 aircraft for $1.6 billion, including 28 aircraft for $635.8 million during the fourth quarter.  The average age of the aircraft acquired during 2016 was 7.4 years and the leases had an average remaining term of approximately 5.4 years.  Of the 60 aircraft purchased during the year, 57 aircraft were narrow-bodies. 

We currently have acquired or committed to acquire three aircraft in 2017 for $137.3 million.  Including our order commitment with Embraer for 25 E-2 aircraft, we have commitments to acquire a total of 28 aircraft for $1.1 billion through 2021. 

During 2016, we sold 30 aircraft for net proceeds of $755.9 million, and realized a gain on the sale of flight equipment of $39.1 million.  The average age of the aircraft sold during 2016, excluding sales to our joint ventures, was 15.0 years.

In the fourth quarter of 2016, we completed the sale of eleven aircraft, including two wide-body and one freighter aircraft.  Full year sales included seven wide-body and three freighter aircraft.  Our portfolio sales reduced our freighter exposure to eight aircraft, accounting for 8% of our total fleet net book value.

As of December 31, 2016, Aircastle owned 193 aircraft having a net book value of $6.5 billion. We also managed thirteen aircraft with a net book value of $689 million on behalf of our joint ventures with Ontario Teachers' Pension Plan and IBJ Ltd. of Japan.

Owned Aircraft

As of

December 31, 

2016(1)


As of

December 31, 

2015(1)


As of

December 31, 

2014(1)







Total Flight Equipment Held for Lease ($ mils.)

$

6,508



$

6,068



$

5,686


Unencumbered Flight Equipment Held for Lease ($ mils.)

$

4,614



$

3,928



$

3,341


Number of Aircraft

193



162



148


Number of Unencumbered Aircraft

156



118



95


Weighted Average Fleet Age (years)(2)

7.9



7.5



8.4


Weighted Average Remaining Lease Term (years)(2)

5.1



5.9



5.4


Weighted Average Fleet Utilization for the year ended(3)

98.9%



99.3%



99.6%


Portfolio Yield for the year ended(4)

12.4%



12.7%



13.4%


Net Cash Interest Margin(5)

8.7%



9.2%



10.1%











Managed Aircraft on behalf of  Joint Ventures









Flight Equipment

$    689



$    484



$     505


Number of Aircraft

13



5



5






(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.

 

2016 Financing Activity

We raised $1.3 billion of new financing during 2016.  This included $500 million of Senior Notes due in 2023, $434 million of secured bank financing in Europe and a $135 million unsecured revolving credit facility in the Asian market.  We also raised $120 million of unsecured financing with Japanese banks and increased the size of our existing revolving credit facility by $75 million to $675 million.  The capital raised during the year provides us with an enhanced liquidity profile and significant financial flexibility.

Common Dividend

On February 9, 2017, Aircastle's Board of Directors declared a first quarter 2017 cash dividend on its common shares of $0.26 per share, payable on March 15, 2017 to shareholders of record on February 28, 2017.  Since 2011, Aircastle has increased the dividend seven times for a total increase of 260% over that period.

Conference Call

In connection with this earnings release, management will host an earnings conference call on Tuesday, February 14, 2017 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 (877) 741-4244 (from within the U.S. and Canada) or (719) 325-4834 (from outside of the U.S. and Canada) ten minutes prior to the scheduled start and referencing the passcode "7920472".

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.aircastle.com.  Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.  A replay of the webcast will be available for one month following the call.  In addition to this earnings release an accompanying power point presentation has been posted to the Investor Relations section of Aircastle's website.

For those who are not available to listen to the live call, a replay will be available until 1:00 P.M. Eastern time on Thursday, March 16, 2017 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 "7920472".

About Aircastle Limited

Aircastle Limited acquires, leases and sells commercial jet aircraft to airlines throughout the world.  As of December 31, 2016, Aircastle owned and managed on behalf of its joint ventures 206 aircraft leased to 71 customers located in 36 countries.

Safe Harbor

All statements in this press release, other than characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not necessarily limited to, statements relating to our proposed public offering of notes and our ability to acquire, sell, lease or finance aircraft, raise capital, pay dividends, and increase revenues, earnings, EBITDA, Adjusted EBITDA, Adjusted Net Income, Cash Return on Equity and Net Cash Interest Margin and the global aviation industry and aircraft leasing sector. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "may," "will," "would," "could," "should," "seeks," "estimates" and variations on these words and similar expressions are intended to identify such forward-looking statements. These statements are based on our historical performance and that of our subsidiaries and on our current plans, estimates and expectations and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements; Aircastle can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any such forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this press release. These risks or uncertainties include, but are not limited to, those described from time to time in Aircastle's filings with the SEC and previously disclosed under "Risk Factors" in Item 1A of Aircastle's 2015 Annual Report on Form 10- K.  In addition, new risks and uncertainties emerge from time to time, and it is not possible for Aircastle to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. Aircastle expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.

 

Aircastle Limited and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands, except share data)




December 31,


2016


2015

ASSETS






Cash and cash equivalents

$

455,579



$

155,904


Accounts receivable

6,035



8,566


Restricted cash and cash equivalents

53,238



98,137


Restricted liquidity facility collateral



65,000


Flight equipment held for lease, net of accumulated depreciation of $1,224,899 and $1,306,024,
respectively

6,247,585



5,867,062


Net investment in finance and sales-type leases

260,853



201,211


Unconsolidated equity method investment

72,977



50,377


Other assets

148,398



123,707


Total assets

$

7,244,665



$

6,569,964








LIABILITIES AND SHAREHOLDERS' EQUITY






LIABILITIES






Borrowings from secured financings, net of debt issuance costs

$

1,219,034


$


1,146,238


Borrowings from unsecured financings, net of debt issuance costs

3,287,211



2,894,918


Accounts payable, accrued expenses and other liabilities

127,527



131,058


Lease rentals received in advance

62,225



67,327


Liquidity facility



65,000


Security deposits

122,597



115,642


Maintenance payments

591,757



370,281


Total liabilities

5,410,351



4,790.464








Commitments and Contingencies












SHAREHOLDERS' EQUITY






Preference shares, $.01 par value, 50,000,000 shares authorized, no shares issued and outstanding




Common shares, $.01 par value, 250,000,000 shares authorized, 78,593,133 shares issued and outstanding at December 31, 2016; and 80,232,260 shares issued and outstanding at December 31, 2015

786



802


Additional paid-in capital

1,521,190



1,550,337


Retained earnings

315,890



241,574


Accumulated other comprehensive loss

(3,552)



(13,213)


Total shareholders' equity

1,834,314



1,779,500


Total liabilities and shareholders' equity

$

7,244,665



$

6,569,964


 

 

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,


2016


2015


2016


2015

Revenues:












Lease rental revenue

$

187,550


$


183,394



$

725,220



$

733,417


Finance and sales-type lease revenue

4,164



2,306



17,190



7,658


Amortization of lease premiums, discounts and lease incentives

(4,934)



(376)



(10.353)



(10,664)


Maintenance revenue

12,987



15,901



33,590



71,049


Total lease revenue

199,767



201,225



765,647



801,460


Other revenue

4,886



7,042



7,311



17,742


Total revenues

204,653



208,267



772,958



819,202














Operating expenses:












Depreciation

77,298



81,245



305,216



318,783


Interest, net

67,170



59,514



255,660



243,577


Selling, general and administrative (including non-cash share based
payment expense of $2,105 and $1,556 for the three months ended
and $7,901 and $5,537 for the twelve months ended December 31,
2016 and 2015, respectively)

14,989



13,535



61,872



56,198


Impairment of aircraft

1,400



17,477



28,585



119,835


Maintenance and other costs

2,269



2,376



7,773



11,502


Total expenses

163,126



174,147



659,106



749,895














Other income (expense):












Gain on sale of flight equipment

24,194



14,983



39,126



58,017


Other

3,663



578



3,527



919


Total other income (expense)

27,857



15,561



42,653



58,936














Income from continuing operations before income taxes

69,384



49,681



156,505



128,243


Income tax provision

3,525



734



12,307



12,771


Earnings of unconsolidated equity method investment, net of tax

1,865



1,694



7,255



6,257


Net income

$

67,724



$

50,641



$

151,453



$

121,729














Earnings per common share — Basic:












Net income per share

$

0.86



$

0.63



$

1.92



$

1.50














Earnings per common share — Diluted:












Net income per share

$

0.86



$

0.63



$

1.92



$

1.50














Dividends declared per share

$

0.26



$

0.24



$

0.98



$

0.90



















 

 

Aircastle Limited and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands)


Year Ended December 31,



2016


2015

Cash flows from operating activities:






Net income

$

151,453


$


121,729


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation

305,216



318,783


Amortization of deferred financing costs

18,508



14,878


Amortization of net lease discounts and lease incentives

10,353



10,664


Deferred income taxes

6,156



(6,889)


Non-cash share based payment expense

7,901



5,537


Cash flow hedges reclassified into earnings

9,662



24,023


Security deposits and maintenance payments included in earnings

(23,123)



(35,843)


Gain on the sale of flight equipment

(39,126)



(58,017)


Impairment of aircraft

28,585



119,835


Other

(6,867)



(896)


Changes on certain assets and liabilities:






Accounts receivable

832



(5,406)


Other assets

(1,089)



(5,033)


Accounts payable, accrued expenses and other liabilities

(4,014)



7,255


Lease rentals received in advance

3,645



15,665


Net cash provided by operating activities

468,092



526,285


Cash flows from investing activities:






Acquisition and improvement of flight equipment

(1,331,059)



(1,320,669)


Proceeds from sale of flight equipment

755,898



562,518


Restricted cash and cash equivalents related to sale of flight equipment

17,000



(17,000)


Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits

(9,628)



(6,812)


Net investment in finance leases

(78,892)



(91,648)


Collections on finance leases

19,413



9,559


Unconsolidated equity method investment and associated costs

(18,048)




Other

(839)



(610)


Net cash used in investing activities

(646,155)



(864,662)


Cash flows from financing activities:






Repurchase of shares

(37,337)



(20,881)


Proceeds from secured and unsecured debt financings

1,054,250



975,000


Repayments of secured and unsecured debt financings

(588,778)



(681,393)


Deferred financing costs

(18,890)



(11,881)


Restricted secured liquidity facility collateral

65,000




Liquidity facility

(65,000)




Restricted cash and cash equivalents related to financing activities

27,899



17,747


Security deposits and maintenance payments received

171,672



152,391


Security deposits and maintenance payments returned

(51,658)



(33,398)


Other

(2,283)




Dividends paid

(77,137)



(72,960)


Net cash provided by (used in) financing activities

477,738



324,625


Net increase in cash and cash equivalents

299,675



(13,752)


Cash and cash equivalents at beginning of year

155,904



169,656


Cash and cash equivalents at end of year

$

455,579



$

155,904


 

 

Aircastle Limited and Subsidiaries

Supplemental Financial Information

(Amount in thousands, except per share amounts)

(Unaudited)






Three Months Ended

December 31,


Year Ended

December 31,


2016


2015


2016


2015









Revenues

$ 204,653


$ 208,267


$ 772,958


$ 819,202









EBITDA1

$ 220,651


$ 192,510


$ 734,989


$ 707,524









Adjusted EBITDA1

$ 220,493


$ 210,972


$ 767,953


$ 832,105









Adjusted net income1

$   70,525


$   54,264


$ 168,527


$ 142,271









Adjusted net income allocable to common shares1

$   69,918


$   53,828


$ 167,129


$ 141,191

Per common share – Basic

$       0.90


$       0.67


$       2.14


$       1.75

Per common share – Diluted

$       0.90


$       0.67


$       2.14


$       1.75









Basic common shares outstanding

77,957


80,263


78,161


80,489

Diluted common shares outstanding

78,021


80,263


78,204


80,489

















1 Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information.

 

 

Aircastle Limited and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

EBITDA and Adjusted EBITDA Reconciliation

(Dollars in thousands)

(Unaudited)






Three Months Ended
December 31,


Year Ended

December 31,


2016


2015


2016


2015


(Dollars in thousands)

Net income

$

67,724



$

50,641



$

151,453



$

121,729


Depreciation

77,298



81,245



305,216



318,783


Amortization of net lease discounts and lease incentives

4,934



376



10,353



10,664


Interest, net

67,170



59,514



255,660



243,577


Income tax provision

3,525



734



12,307



12,771


     EBITDA

$

220,651



$

192,510



$

734,989



$

707,524


Adjustments:












  Impairment of aircraft

1,400



17,477



28,585



119,835


  Non-cash share-based payment expense

2,105



1,556



7,901



5,537


  Gain on mark-to-market of interest rate derivative contracts

(3,663)



(571)



(3,522)



(791)


     Adjusted EBITDA

$

220,493



$

210,972



$

767,953



$

832,105


 

We define EBITDA as income (loss) from continuing operations before income taxes, interest expense, and depreciation and amortization. We use EBITDA to assess our consolidated financial and operating performance, and we believe this non-US GAAP measure is helpful in identifying trends in our performance.

This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieving optimal financial performance. It provides an indicator for management to determine if adjustments to current spending decisions are needed.

EBITDA provides us with a measure of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. Accordingly, this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure, or expenses, of the organization. EBITDA is one of the metrics used by senior management and the board of directors to review the consolidated financial performance of our business.

We define Adjusted EBITDA as EBITDA (as defined above) further adjusted to give effect to adjustments required in calculating covenant ratios and compliance as that term is defined in the indenture governing our senior unsecured notes.  Adjusted EBITDA is a material component of these covenants.

 

Aircastle Limited and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Adjusted Net Income Reconciliation

(Dollars in thousands)

(Unaudited)






Three Months Ended
December 31,


Year Ended

December 31,


2016


2015


2016


2015


(Dollars in thousands)

Net income

$

67,724



$

50,641



$

151,453



$

121,729


Ineffective portion and termination of hedges(1)



(54)





455


Gain on mark-to-market of interest rate derivative contracts(2)

(3,663)



(571)



(3,522)



(791)


Loan termination fee(1)

3,451





4,960




Write-off of deferred financing fees(1)

908





2,880




Non-cash share-based payment expense(3)

2,105



1,556



7,901



5,537


        Term Financing No. 1 hedge loss amortization charges(1)







4,401


        Securitization No. 1 hedge loss amortization charges (1)



2,692



4,855



10,940


Adjusted net income

$

70,525



$

54,264



$

168,527



$

142,271






(1)

Included in Interest, net.

(2)

Included in Other income (expense).

(3)

Included 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 and non-cash share-based payment expense.

 

Aircastle Limited and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Cash Return on Equity Calculation

(Dollars in thousands)

(Unaudited)











CFFO

Finance Lease Collections

Gain (Loss) on Sale of Eqt.

Deprec.

Distributions in excess (less than) Equity Earnings

Cash Earnings

Average Shareholders' Equity

12 Month Cash ROE

2011

$359,377


$39,092

$242,103


$156,366

$1,370,513

11.4%

2012

$427,277

$3,852

$5,747

$269,920


$166,956

$1,425,658

11.7%

2013

$424,037

$9,508

$37,220

$284,924


$185,841

$1,513,156

12.3%

2014

$458,786

$10,312

$23,146

$299,365

$667

$193,546

$1,661,228

11.7%

2015

$526,285

$9,559

$58,017

$318,783

($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%










 

Note:  LTM Average Shareholders' Equity is the average of the most recent five quarters period end Shareholders' Equity.  Management believes that the cash return on equity metric (Cash ROE) when viewed in conjunction  with the Company's results under US GAAP and the above reconciliation, provide useful information about operating and period-over-period performance, and provide additional information that is useful for evaluating the underlying operating performance of our business without regard to periodic reporting impacts related to non-cash revenue and expense items and interest rate derivative accounting, while recognizing the depreciating nature of our assets. 

 

Aircastle Limited and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Net Cash Interest Margin Calculation

(Dollars in thousands)

(Unaudited)












Average NBV


Quarterly
Rental
Revenue


Cash Interest(1)


Annualized Net
Cash Interest
Margin(2)

Q1:11


$        4,041,967


$           141,116


$                 41,278


9.9%

Q2:11


$        4,143,446


$           143,356


$                 40,021


10.0%

Q3:11


$        4,222,512


$           145,890


$                 42,066


9.8%

Q4:11


$        4,374,921


$           149,848


$                 43,041


9.8%

Q1:12


$        4,388,008


$           152,242


$                 44,969


9.8%

Q2:12


$        4,542,477


$           156,057


$                 48,798


9.4%

Q3:12


$        4,697,802


$           163,630


$                 41,373


10.4%

Q4:12


$        4,726,457


$           163,820


$                 43,461


10.2%

Q1:13


$        4,740,161


$           162,319


$                 48,591


9.6%

Q2:13


$        4,840,396


$           164,239


$                 44,915


9.9%

Q3:13


$        4,863,444


$           167,876


$                 47,682


9.9%

Q4:13


$        5,118,601


$           176,168


$                 49,080


9.9%

Q1:14


$        5,312,651


$           181,095


$                 51,685


9.7%

Q2:14


$        5,721,521


$           190,574


$                 48,172


10.0%

Q3:14


$        5,483,958


$           182,227


$                 44,820


10.0%

Q4:14


$        5,468,637


$           181,977


$                 44,459


10.1%

Q1:15


$        5,743,035


$           181,027


$                 50,235


9.1%

Q2:15


$        5,967,898


$           189,238


$                 51,413


9.2%

Q3:15


$        6,048,330


$           191,878


$                 51,428


9.3%

Q4:15


$        5,962,874


$           188,491


$                 51,250


9.2%

Q1:16


$        5,988,076


$           186,730


$                 51,815


9.0%

Q2:16


$        5,920,030


$           184,469


$                 55,779


8.7%

Q3:16


$        6,265,175


$           193,909


$                 57,589


8.7%

Q4:16


$        6,346,361


$           196,714


$                 58,631


8.7%










  1. Excludes loan termination payments of $3.2 million and $3.0 million in the second quarter of 2011 and 2013 respectively.  Also excludes loan termination payments of $1.5 million and $3.5 million in the first quarter and fourth quarter of 2016 respectively.
  2. 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.   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.  

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

Selected Financial Guidance Elements for the First Quarter of 2017

($ in millions, except for percentages)

(Unaudited)



Guidance Item

Q1:17

Lease rental revenue

$188 - $192

Finance lease revenue

$4 - $5

Maintenance revenue

$4 - $12

Amortization of net lease discounts and lease incentives

($2) – ($3)

SG&A1

$15 - $16

Depreciation

$77 - $79

Interest, net

$61 - $63

Gain on sale

$7 - $11

Full year effective tax rate

9% - 11%




1. Includes ~$2.4M of non-cash share based payment expense.  

 

 

 

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(1) - Basic:

Shares


Percent(2)


Shares


Percent(2)


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%














Net income allocation












Net income

$ 67,724



100.00%



$151,453



100.00%


Distributed and undistributed earnings allocated to unvested restricted shares

(583)



(0.86%)



(1,257)



(0.83%)


Earnings available to common shares

$ 67,141



99.14%



$150,1966



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

$ 69,918



99.14%



$167,129



99.17%




























(1)

For the three and twelve months ended December 31, 2016, dilutive shares represented contingently issuable shares related to the Company's PSUs. 

(2)

Percentages rounded to two decimal places.

 

 

 


Aircastle Limited and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Reconciliation of Net Income Allocable to Common Shares

(In thousands)

(Unaudited)







Three Months Ended

December 31, 2015


Year Ended

December 31, 2015


Weighted-average shares:

Shares


Percent(1)


Shares


Percent(1)


Common shares outstanding – Basic

80,263



99.20%



80,489



99.24%


Unvested restricted common shares

650



0.80%



616



0.76%


Total weighted-average shares outstanding

80,912



100.00%



81,105



100.00%














Net income allocation












Net income

$50,641



100.00%



$121,729



100.00%


Distributed and undistributed earnings allocated to unvested restricted
shares

(407)



(0.80%)



(924)



(0.76%)


Earnings available to common shares

$50,234



99.20%



$120,805



99.24%














Adjusted net income allocation












Adjusted net income

$54,264



100.00%



$142,271



100.00%


Amounts allocated to unvested restricted shares

(436)



(0.80%)



(1,080)



(0.76%)


Amounts allocated to common shares

$53,828



99.20%



$141,191



99.24%


























(1)     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-fourth-quarter-and-full-year-2016-results-300406689.html

SOURCE Aircastle Limited