Aircastle Announces First Quarter 2010 Results
First Quarter Highlights
- Total revenues of $130.6 million and EBITDA(1) of $121.2 million
- Lease rental revenue of $130.1 million
- Net income of $18.9 million, or $0.24 per diluted common share
- Adjusted net income(1) of $20.6 million, or $0.26 per diluted common share
- Adjusted net income plus depreciation and amortization(1) of $79.6 million or $1.00 per diluted common share
- 98% weighted average fleet utilization
STAMFORD, Conn., May 5 /PRNewswire-FirstCall/ -- Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported first quarter net income of $18.9 million or $0.24 per diluted common share, and adjusted net income of $20.6 million or $0.26 per diluted common share.
Commenting on the results, Ron Wainshal, Aircastle's CEO, stated: "Our fleet of modern aircraft continues to perform well. We achieved 98% fleet utilization again in the first quarter of 2010, generating higher lease rental revenues and cash flow compared to last year. Our strong results allow us to focus on exciting investment opportunities we see today that take advantage of our capital structure, world class origination and servicing capabilities and market knowledge. We are well positioned to convert those opportunities into accretive growth for Aircastle shareholders."
First quarter total revenues were $130.6 million, a decrease of $1.6 million from the first quarter 2009, and reflect higher lease rental revenue of $4.1 million offset by lower end of lease maintenance revenue of $1.3 million and higher non-cash lease incentive amortization of $3.7 million.
Lease rental revenue for the first quarter 2010 was $130.1 million, up 3.3% year over year and includes increases of $3.8 million from aircraft transitions, mainly from aircraft that were out of service during first quarter of 2009, and $3.8 million of revenue from 2009 aircraft acquisitions net of dispositions. These increases were partially offset by the impact of lease extensions and floating rate lease adjustments of $3.5 million.
EBITDA was $121.2 million, up $4.7 million from the first quarter of 2009, due to higher lease rental revenue of $4.1 million and lower maintenance and other costs of $3.6 million which resulted from higher costs incurred in the first quarter of 2009 for repossessed aircraft. These increases to EBITDA were partially offset by lower end of lease maintenance revenue of $1.3 million, higher selling general and administrative expenses of $0.6 million and higher mark to market expense on our undesignated hedges of $0.5 million.
Adjusted net income plus depreciation and amortization for the quarter was $79.6 million, up $5.8 million year over year, due primarily to higher lease rental revenue of $4.1 million, lower maintenance and other expenses of $3.6 million offset by lower end of lease maintenance revenue $1.3 million.
Adjusted net income for the quarter was $20.6 million, down $0.5 million year over year, and reflects lower total revenues of $1.6 million and higher depreciation expense of $2.6 million, partially offset by lower maintenance and other costs of $3.6 million.
Aviation Assets
As of March 31, 2010, Aircastle owned 129 aircraft having a net book value of $3.8 billion.
Owned Aircraft as of March 31, 2010(A) | ||
108 Passenger Aircraft | 71% | |
21 Freighter Aircraft | 29% | |
Number of Lessees | 59 | |
Number of Countries | 33 | |
Weighted Average Remaining Lease Term (years) | 4.8 | |
Percentage of Aircraft Leased Outside U.S. | 91% | |
Percentage of "Latest Generation" Aircraft | 88% | |
Weighted Average Fleet Utilization during Q1 2010 | 98% | |
(A) Percentages calculated using net book value.
Conference Call
In connection with this earnings release, management will host an earnings conference call on Wednesday, May 5, 2010 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 (866) 510-4578 (from within the U.S.) or (706) 634-9537 (from outside of the U.S.) ten minutes prior to the scheduled start and referencing the "Aircastle First Quarter Earnings Call."
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 three months 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 11:59 P.M. Eastern time on Wednesday, May 12, 2010 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference passcode "67163459 ."
About Aircastle Limited
Aircastle Limited is a global company that acquires, leases and sells high-utility commercial jet aircraft to airlines throughout the world. As of March 31, 2010 Aircastle's aircraft portfolio consisted of 129 aircraft and had 59 lessees located in 33 countries.
Safe Harbor
Certain items in this press release and other information we provide from time to time, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not necessarily limited to, statements relating to our ability to acquire, sell and lease aircraft, raise capital, pay dividends, and increase revenues, earnings and EBITDA 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 management's current expectations and beliefs 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 Limited can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. Factors that could have a material adverse effect on our operations and future prospects or that could cause actual results to differ materially from Aircastle Limited's expectations include, but are not limited to, prolonged capital markets disruption and volatility, which may adversely affect our continued ability to obtain additional capital to finance our working capital needs, our pre-delivery payment obligations and other aircraft acquisition commitments, our ability to extend or replace our existing financings, and the demand for and value of aircraft; our exposure to increased bank and counterparty risk caused by credit and capital markets disruptions; volatility in the value of our aircraft or in appraisals thereof, which may, among other things, result in increased principal payments under our term financings and reduce our cash flow available for investment or dividends; general economic conditions and business conditions affecting demand for aircraft and lease rates; our continued ability to obtain favorable tax treatment in Bermuda, Ireland and other jurisdictions; our ability to pay dividends; high or volatile fuel prices, lack of access to capital, reduced load factors and/or reduced yields, operational disruptions caused by volcanic activity and other factors affecting the creditworthiness of our airline customers and their ability to continue to perform their obligations under our leases; termination payments on our interest rate hedges; and other risks detailed from time to time in Aircastle Limited's filings with the SEC, including "Risk Factors" as previously disclosed in Aircastle's 2009 Annual Report on Form 10-K, and in our other filings with the SEC, press releases and other communications. 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 Limited expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
Aircastle Limited and Subsidiaries | |||
Consolidated Balance Sheets | |||
(Dollars in thousands, except share data) | |||
December 31, | March 31, | ||
(unaudited) | |||
ASSETS | |||
Cash and cash equivalents | $ 142,666 | $ 121,600 | |
Accounts receivable | 2,941 | 3,196 | |
Restricted cash and cash equivalents | 207,834 | 230,019 | |
Restricted liquidity facility collateral | 81,000 | 80,000 | |
Flight equipment held for lease, net of accumulated depreciation of $586,537 and $640,544 | 3,812,970 | 3,771,806 | |
Aircraft purchase deposits and progress payments | 141,144 | 176,034 | |
Leasehold improvements, furnishings and equipment, net of accumulated depreciation of $2,455 and $2,556 | 802 | 701 | |
Other assets | 65,155 | 71,111 | |
Total assets | $ 4,454,512 | $ 4,454,467 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
LIABILITIES | |||
Borrowings from securitizations and term debt financings (including borrowings of ACS Ireland VIEs of $331,856 and $327,701, respectively) | $ 2,464,560 | $ 2,426,631 | |
Accounts payable, accrued expenses and other liabilities | 60,392 | 57,422 | |
Dividends payable | 7,955 | 7,951 | |
Lease rentals received in advance | 34,381 | 30,167 | |
Liquidity facility | 81,000 | 80,000 | |
Security deposits | 82,533 | 81,255 | |
Maintenance payments | 253,175 | 285,118 | |
Fair value of derivative liabilities | 179,279 | 189,196 | |
Total liabilities | 3,163,275 | 3,157,740 | |
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, 79,550,421 shares issued and outstanding at December 31, 2009; and 79,503,885 shares issued and outstanding at March 31, 2010 | 796 | 795 | |
Additional paid-in capital | 1,479,995 | 1,480,852 | |
Retained earnings | 70,294 | 81,222 | |
Accumulated other comprehensive loss | (259,848) | (266,142) | |
Total shareholders' equity | 1,291,237 | 1,296,727 | |
Total liabilities and shareholders' equity | $ 4,454,512 | $ 4,454,467 | |
Aircastle Limited and Subsidiaries | |||
Consolidated Statements of Income | |||
(Dollars in thousands, except per share amounts) | |||
(Unaudited) | |||
Three Months Ended | |||
2009 | 2010 | ||
Revenues: | |||
Lease rental revenue | $ 125,994 | $ 130,122 | |
Amortization of net lease discounts and lease incentives | (1,117) | (4,845) | |
Maintenance revenue | 6,603 | 5,254 | |
Total lease rentals | 131,480 | 130,531 | |
Interest income | 633 | — | |
Other revenue | 25 | 30 | |
Total revenues | 132,138 | 130,561 | |
Expenses: | |||
Depreciation | 51,561 | 54,145 | |
Interest, net | 43,411 | 40,959 | |
Selling, general and administrative (including non-cash share based payment expense of $1,658, and $1,782, respectively) | 11,095 | 11,673 | |
Maintenance and other costs | 5,776 | 2,200 | |
Total expenses | 111,843 | 108,977 | |
Other income (expense) | 92 | (370) | |
Total other income (expense) | 92 | (370) | |
Income from continuing operations before income taxes | 20,387 | 21,214 | |
Income tax provision | 1,916 | 2,335 | |
Net income | $ 18,471 | $ 18,879 | |
Earnings per common share - Basic | $ 0.23 | $ 0.24 | |
Earnings per common share - Diluted | $ 0.23 | $ 0.24 | |
Dividends declared per share | $ 0.10 | $ 0.10 | |
Aircastle Limited and Subsidiaries | |||
Consolidated Statements of Cash Flows | |||
(Dollars in thousands) | |||
(Unaudited) | |||
Three Months Ended March 31, | |||
2009 | 2010 | ||
Cash flows from operating activities: | |||
Net income | $ 18,471 | $ 18,879 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 51,561 | 54,145 | |
Amortization of deferred financing costs | 2,533 | 2,804 | |
Amortization of net lease discounts and lease incentives | 1,117 | 4,845 | |
Deferred income taxes | 1,599 | 1,234 | |
Accretion of purchase discounts on debt investments | (158) | — | |
Non-cash share based payment expense | 1,658 | 1,782 | |
Cash flow hedges reclassified into earnings | 4,949 | 2,304 | |
Ineffective portion of cash flow hedges | (129) | 866 | |
Security deposits and maintenance payments included in earnings | (3,451) | (267) | |
Other | (518) | 370 | |
Changes in certain assets and liabilities: | |||
Accounts receivable | (171) | (346) | |
Restricted cash and cash equivalents | 5,086 | (22,185) | |
Other assets | (1,548) | (946) | |
Accounts payable, accrued expenses and other liabilities | (9,951) | (9,309) | |
Lease rentals received in advance | (1,674) | (2,464) | |
Net cash provided by operating activities | 69,374 | 51,712 | |
Cash flows from investing activities: | |||
Improvement of flight equipment and lease incentives | (17,268) | (10,136) | |
Aircraft purchase deposits and progress payments | (7,906) | (39,551) | |
Principal repayments on debt investments | 807 | — | |
Leasehold improvements, furnishings and equipment | (82) | — | |
Net cash used in investing activities | (24,449) | (49,687) | |
Cash flows from financing activities: | |||
Repurchase of shares from directors and employees | (247) | (926) | |
Securitization and term debt financing repayments | (30,131) | (37,929) | |
Deferred financing costs | — | (106) | |
Restricted secured liquidity facility collateral | — | 1,000 | |
Secured liquidity facility collateral | — | (1,000) | |
Security deposits received | 6,950 | 2,413 | |
Security deposits returned | (490) | (3,868) | |
Maintenance payments received | 15,584 | 31,186 | |
Maintenance payments returned | (7,277) | (5,906) | |
Dividends paid | (7,862) | (7,955) | |
Net cash used in financing activities | (23,473) | (23,091) | |
Net increase (decrease) in cash and cash equivalents | 21,452 | (21,066) | |
Cash and cash equivalents at beginning of period | 80,947 | 142,666 | |
Cash and cash equivalents at end of period | $ 102,399 | $ 121,600 | |
Aircastle Limited and Subsidiaries Supplemental Financial Information (Amount in thousands, except per share amounts) (Unaudited) | |||||
Three Months Ended | |||||
2009 | 2010 | ||||
Total Revenues | $132,138 | $130,561 | |||
EBITDA | $116,476 | $121,163 | |||
Adjusted net income | $21,125 | $20,563 | |||
Adjusted net income allocable to common shares | $20,783 | $20,243 | |||
Per common share - Basic | $ 0.27 | $ 0.26 | |||
Per common share - Diluted | $ 0.27 | $ 0.26 | |||
Adjusted net income plus depreciation and amortization | $73,803 | $79,553 | |||
Adjusted net income plus depreciation and amortization allocable to common shares | $72,609 | $78,317 | |||
Per common share - Basic | $ 0.93 | $ 1.00 | |||
Per common share - Diluted | $ 0.93 | $ 1.00 | |||
Basic common shares outstanding | 77,941 | 78,416 | |||
Diluted common shares outstanding | 77,941 | 78,416 | |||
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 Reconciliation | ||||
(Dollars in thousands) | ||||
(Unaudited) | ||||
Three Months Ended March 31, | ||||
2009 | 2010 | |||
Net income | $ 18,471 | $ 18,879 | ||
Depreciation | 51,561 | 54,145 | ||
Amortization of net lease discounts and lease incentives | 1,117 | 4,845 | ||
Interest, net | 43,411 | 40,959 | ||
Income tax provision | 1,916 | 2,335 | ||
EBITDA | $116,476 | $ 121,163 | ||
We define EBITDA as income 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-GAAP measure is helpful in identifying trends in our performance. Using EBITDA assists us in comparing our operating performance on a consistent basis by removing the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results.
Aircastle Limited and Subsidiaries | ||||
Reconciliation of GAAP to Non-GAAP Measures | ||||
Adjusted Net Income plus Depreciation Reconciliation | ||||
(Dollars in thousands) | ||||
(Unaudited) | ||||
Three Months Ended March 31, | ||||
2009 | 2010 | |||
Net income | $ 18,471 | $ 18,879 | ||
Ineffective portion and termination of cash flow hedges(1) | 2,746 | 1,314 | ||
Mark to market adjustment on undesignated derivatives(2) | (92) | 370 | ||
Adjusted net income | $ 21,125 | $ 20,563 | ||
Depreciation | 51,561 | 54,145 | ||
Amortization of net lease discounts and lease incentives | 1,117 | 4,845 | ||
Adjusted net income plus depreciation and amortization | $ 73,803 | $ 79,553 | ||
__________________
(1) Included in Interest, net
(2) Included in Other income (expense)
Management believes that Adjusted Net Income ("ANI") and Adjusted Net Income plus Depreciation and Amortization ("ANIDA"), when viewed in conjunction with the Company's results under 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 elements related to interest rate derivative accounting as well as gains/(losses) related to flight equipment and debt investments. Additionally, management believes that ANIDA provides investors with an additional metric to enhance their understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made, debt is serviced and dividends are paid. However, ANI and ANIDA are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss) or cash flow from operating activities as indicators of operating performance or liquidity.
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 March 31, 2009 | Three Months Ended March 31, 2010 | ||||||||
Shares | Percent(2) | Shares | Percent(2) | ||||||
Weighted average shares | |||||||||
Common shares outstanding – Basic | 77,941 | 98.38% | 78,416 | 98.45% | |||||
Unvested restricted common shares outstanding | 1,282 | 1.62% | 1,238 | 1.55% | |||||
Total weighted average shares outstanding | 79,223 | 100.00% | 79,654 | 100.00% | |||||
Common shares outstanding – Basic | 77,941 | 100.00% | 78,416 | 100.00% | |||||
Effect of dilutive shares(1) | — | — | — | — | |||||
Common shares outstanding - Diluted | 77,941 | 100.00% | 78,416 | 100.00% | |||||
Net income allocation | |||||||||
Net income | $18,471 | 100.00% | $18,879 | 100.00% | |||||
Distributed and undistributed earnings allocated to unvested restricted shares | (299) | (1.62)% | (293) | (1.55)% | |||||
Earnings available to common shares | $18,172 | 98.38% | $18,586 | 98.45% | |||||
Adjusted net income allocation | |||||||||
Adjusted net income | $21,125 | 100.00% | $20,563 | 100.00% | |||||
Amounts allocated to unvested restricted shares | (342) | (1.62)% | (320) | (1.55)% | |||||
Amounts allocated to common shares | $20,783 | 98.38% | $20,243 | 98.45% | |||||
Adjusted net income plus depreciation and amortization allocation | |||||||||
Adjusted net income plus depreciation and amortization | $73,803 | 100.00% | $79,553 | 100.00% | |||||
Amounts allocated to unvested restricted shares | (1,194) | (1.62)% | (1,236) | (1.55)% | |||||
Amounts allocated to common shares | $72,609 | 98.38% | $78,317 | 98.45% | |||||
- The Company had no dilutive common share equivalents for the periods presented.
- Percentages rounded to two decimal places.
SOURCE Aircastle Limited
Share this article