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02/19/15 8:04 AM
Last update: 19/02/2015 7:30:14 am
Aircastle Announces Fourth Quarter and Full Year 2014 Results
Board Declares First Quarter 2015 Dividend of $0.22 per Common Share
PR Newswire
STAMFORD, Conn., Feb. 19, 2015
STAMFORD, Conn., Feb. 19, 2015 /PRNewswire/ --
Key Financial Metrics
-- Total revenues were $238.3 million for the fourth quarter and $818.6
million for the full year, up 24% and 16% year over year, respectively
-- Net income was $72.8 million, or $0.90 per diluted common share for the
fourth quarter, and $100.8 million, or $1.25 per diluted common share,
for the full year
-- Adjusted net income was $80.1 million, or $0.99 per diluted common share
for the fourth quarter, and $167.6 million, or $2.07 per diluted common
share, for the full year
-- Adjusted EBITDA was $233.2 million for the fourth quarter and $792.3
million for the full year, up 19% and 10% year over year, respectively
-- Full year 2014 cash ROE was 11.7% and net cash interest margin was 10.0%
Highlights
-- Upgraded our portfolio during 2014 through $1.8 billion in acquisitions
and the sale of 49 aircraft for $833 million
-- Reduced our average interest cost in 2014 to 4.69% from 5.37% the prior
year
-- 35th consecutive quarterly dividend declared by Aircastle's Board of
Directors
-- Grew our joint venture with Ontario Teachers' to $545 million in assets
at year end
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported fourth quarter 2014 net income of $72.8 million, or $0.90 per diluted common share and adjusted net income of $80.1 million, or $0.99 per diluted common share. Net income for the year ended December 31, 2014 was $100.8 million, or $1.25 per diluted common share, and adjusted net income was $167.6 million, or $2.07 per diluted common share. The fourth quarter results included total revenues of $238.3 million, an increase of 24%, versus $192.0 million in the fourth quarter of 2013. For the full year 2014, total revenues were $818.6 million, up 16% versus $708.6 million in 2013.
Commenting on the results, Ron Wainshal, Aircastle's CEO, stated "2014 was a year full of significant activity in which we solidified Aircastle's position as the leading value investor in the aircraft leasing industry. Aircastle's strategy is differentiated from that of our competitors, and we saw the merits of this approach in the great progress we made over the past year in growing our business and improving our financial metrics while simultaneously improving the quality of our portfolio despite a very competitive and fluid business environment."
Mr. Wainshal continued, "We plan to continue demonstrating the competitive advantages of our leading position as a value investor, supported by our world-class team, our flexible capital structure and our key long term shareholders. We are gratified and energized by the steady progress we are making. We are intent on driving further improvements in our financial performance, and I believe achieving an investment grade credit rating will bring us closer to realizing the company's full potential."
Financial Results
(in thousands, except share Three Months Ended Twelve Months Ended
data) December 31, December 31,
-------------------- ---------------------
2013 2014 2013 2014
--------- --------- ---------- ---------
Total Revenues $ 191,988 $ 238,257 $ 708,645 $ 818,602
Adjusted EBITDA $ 195,965 $ 233,200 $ 717,209 $ 792,283
Net income $ 48,421 $ 72,764 $ 29,781 $ 100,828
Per common share -
Diluted $ 0.60 $ 0.90 $ 0.40 $ 1.25
Adjusted net income $ 54,899 $ 80,145 $ 59,260 $ 167,642
Per common share -
Diluted $ 0.68 $ 0.99 $ 0.80 $ 2.07
Fourth Quarter Results
Total revenues for the fourth quarter were $238.3 million, an increase of $46.3 million, or 24% from the previous year, driven by higher maintenance revenues of $27.6 million reflecting the early return of several aircraft on lease with Russia-based airlines and higher lease rentals of $8.9 million.
Adjusted EBITDA for the fourth quarter was $233.2 million, up $37.2 million, or 19% from the fourth quarter of 2013, due primarily to higher total revenues, excluding amortization of net lease discounts and incentives, of $38.3 million.
Adjusted net income for the quarter was $80.1 million, up $25.2 million or 46%, year over year. The increase was due primarily to higher total revenues of $46.3 million partially offset by higher non-cash impairment charges of $22.0 million primarily related to the early return and exit of aircraft.
Full Year Results
Total revenues for 2014 were $818.6 million, an increase of $110.0 million, up 16% from the previous year. The increase reflects higher lease rental and finance lease revenue of $64.5 million, higher maintenance revenue of $19.7 million and lower amortization of lease premiums, discounts and lease incentive amortization of $26.2 million.
Adjusted EBITDA for the full year was $792.3 million, up $75.1 million or 10% versus 2013, reflecting higher total revenues excluding amortization of net lease discounts and lease incentives of $83.7 million, partially offset by lower gains from the sale of flight equipment of $14.1 million.
Adjusted net income for the full year was $167.6 million compared to $59.3 million in 2013, an increase of $108.4 million. Higher total revenues of $110.0 million and lower adjusted operating expenses of $15.4 million were partially offset by lower gains from the sale of flight equipment of $14.1 million.
Aviation Assets
During 2014, we acquired 35 aircraft for $1.8 billion, including 21 aircraft for $749.2 million during the fourth quarter. Most of our 2014 acquisitions by value were aircraft less than five years old that are on long term leases with relatively strong operators. Additionally, we also acquired $467.4 million in mid-aged narrow-body aircraft, including twelve aircraft through a purchase and lease-back transaction with a major European flag carrier. In many cases, we believe we were successful in winning business due to our ability to move quickly and reliably given our cash reserves and team strengths.
During 2014, we sold 49 aircraft for net proceeds of $833.0 million, resulting in a pre-tax impact of $40.2 million. Three of these aircraft were sold to our joint venture with Ontario Teachers', which grew to $545 million in total assets at year end 2014. We continue to use the joint venture to pursue larger transactions and help us manage exposure concentrations.
The other 46 sold aircraft had an average age of 19 years and consisted of a mix of "exit" and "opportunistic" sales. Exit sales aircraft are generally nearing the end of their economic lives and are, in most cases, older technology models. Consistent with our strategy to reduce exposure to the air cargo market, our sales in this category include five freighter aircraft. Opportunistic sales entail situations where we sought to capture strong market demand and have enabled us to realize gains.
Gain (Loss)
Number Lease on Sale of
of Maintenance Incentive Flight Pre-tax
($ in thousands) Aircraft Revenue Revenue Equipment Impairment Impact
-------- ------------- ----------- ----------- ------------ ----------
Opportunistic
sales 28 $ 3,171 $ -- $ 38,363 $ -- $ 41,534
Exit Sales 19 56,129 776 (15,217) (24,940) 16,748
Total Sales 47 59,300 776 23,146 (24,940) 58,282
Freighters Held
for Sale(1) 2 9,137 $ 3,626 -- (30,877) (18,114)
-------- ------------- ------- ----------- ------------ ----------
Total 49 $ 68,437 $ 4,402 $ 23,146 $ (55,817) $ 40,168
======== === ======== ======= ======= ======== ======
1 Includes two 747-400 converted freighter aircraft which were designated for
sale. One of these aircraft was sold in January, 2015 while the other is
under a consignment contract and is in the process of being parted out.
Given the sharp deterioration of business conditions and a significantly weakened home currency since the start of the fourth quarter, we reduced our passenger aircraft exposure to Russia-based airlines from ten to three aircraft today. One of these aircraft was sold during the fourth quarter for a modest profit and another has been leased. We are in the process of remarketing the other aircraft, which we expect to have on lease by the end of the second quarter of 2015.
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February 19, 2015 07:30 ET (12:30 GMT)
