x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Bermuda
|
98-0444035
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification No.)
|
|
|
c/o Aircastle Advisor LLC
300 First Stamford Place, 5
th
Floor, Stamford, CT
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06902
|
(Address of principal executive offices)
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(Zip Code)
|
Large accelerated filer
|
þ
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
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|
|
Page
No.
|
|
|
|
Item 1.
|
|
|
|
Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014
|
|
|
Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014
|
|
|
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014
|
|
|
Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014
|
|
|
||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3.
|
||
Item 4.
|
||
|
|
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Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
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Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
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2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Lease rental revenue
|
$
|
184,839
|
|
|
$
|
183,231
|
|
|
$
|
361,985
|
|
|
$
|
357,566
|
|
Finance lease revenue
|
1,877
|
|
|
3,897
|
|
|
3,484
|
|
|
7,884
|
|
||||
Amortization of lease premiums, discounts and lease incentives
|
(4,351
|
)
|
|
414
|
|
|
(8,175
|
)
|
|
(6,177
|
)
|
||||
Maintenance revenue
|
21,349
|
|
|
36,182
|
|
|
39,422
|
|
|
39,224
|
|
||||
Total lease revenue
|
203,714
|
|
|
223,724
|
|
|
396,716
|
|
|
398,497
|
|
||||
Other revenue
|
851
|
|
|
2,422
|
|
|
2,145
|
|
|
4,252
|
|
||||
Total revenues
|
204,565
|
|
|
226,146
|
|
|
398,861
|
|
|
402,749
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
77,368
|
|
|
75,784
|
|
|
152,214
|
|
|
149,711
|
|
||||
Interest, net
|
61,551
|
|
|
60,494
|
|
|
123,682
|
|
|
124,757
|
|
||||
Selling, general and administrative (including non-cash share based payment expense of $1,387 and $1,228 for the three months ended and $2,557 and $2,218 for the six months ended June 30, 2015 and 2014, respectively)
|
14,699
|
|
|
14,057
|
|
|
28,631
|
|
|
28,001
|
|
||||
Impairment of Aircraft
|
23,955
|
|
|
28,306
|
|
|
23,955
|
|
|
46,569
|
|
||||
Maintenance and other costs
|
3,663
|
|
|
2,646
|
|
|
6,606
|
|
|
4,509
|
|
||||
Total expenses
|
181,236
|
|
|
181,287
|
|
|
335,088
|
|
|
353,547
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Gain on sale of flight equipment
|
21,102
|
|
|
884
|
|
|
27,355
|
|
|
1,994
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(36,570
|
)
|
|
—
|
|
|
(36,570
|
)
|
||||
Other
|
277
|
|
|
—
|
|
|
271
|
|
|
757
|
|
||||
Total other income (expense)
|
21,379
|
|
|
(35,686
|
)
|
|
27,626
|
|
|
(33,819
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income taxes
|
44,708
|
|
|
9,173
|
|
|
91,399
|
|
|
15,383
|
|
||||
Income tax provision
|
4,465
|
|
|
6,558
|
|
|
9,328
|
|
|
7,441
|
|
||||
Earnings of unconsolidated equity method investment, net of tax
|
1,565
|
|
|
521
|
|
|
3,006
|
|
|
971
|
|
||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
|
$
|
85,077
|
|
|
$
|
8,913
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share — Basic:
|
|
|
|
|
|
|
|
||||||||
Net income per share
|
$
|
0.51
|
|
|
$
|
0.04
|
|
|
$
|
1.05
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share — Diluted:
|
|
|
|
|
|
|
|
||||||||
Net income per share
|
$
|
0.51
|
|
|
$
|
0.04
|
|
|
$
|
1.05
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
$
|
0.44
|
|
|
$
|
0.40
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Net change in fair value of derivatives, net of tax expense of $26 and $0 for the three months ended and tax expense of $23 and $804 for the six months ended June 30, 2015 and 2014, respectively
|
564
|
|
|
12
|
|
|
436
|
|
|
382
|
|
||||
Net derivative loss reclassified into earnings
|
6,110
|
|
|
8,854
|
|
|
14,343
|
|
|
18,181
|
|
||||
Other comprehensive income
|
6,674
|
|
|
8,866
|
|
|
14,779
|
|
|
18,563
|
|
||||
Total comprehensive income
|
$
|
48,482
|
|
|
$
|
12,002
|
|
|
$
|
99,856
|
|
|
$
|
27,476
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
152,214
|
|
|
149,711
|
|
||
Amortization of deferred financing costs
|
7,465
|
|
|
6,987
|
|
||
Amortization of net lease discounts and lease incentives
|
8,175
|
|
|
6,177
|
|
||
Deferred income taxes
|
(1,363
|
)
|
|
3,999
|
|
||
Non-cash share based payment expense
|
2,557
|
|
|
2,218
|
|
||
Cash flow hedges reclassified into earnings
|
14,343
|
|
|
18,181
|
|
||
Security deposits and maintenance payments included in earnings
|
(22,382
|
)
|
|
(40,006
|
)
|
||
Gain on sale of flight equipment
|
(27,355
|
)
|
|
(1,994
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
36,570
|
|
||
Impairment of aircraft
|
23,955
|
|
|
46,569
|
|
||
Other
|
108
|
|
|
(91
|
)
|
||
Changes in certain assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(1,697
|
)
|
|
(3,619
|
)
|
||
Other assets
|
(2,155
|
)
|
|
(1,914
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
7,018
|
|
|
(20,438
|
)
|
||
Lease rentals received in advance
|
3,646
|
|
|
2,742
|
|
||
Net cash provided by operating activities
|
249,606
|
|
|
214,005
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisition and improvement of flight equipment and lease incentives
|
(797,136
|
)
|
|
(834,467
|
)
|
||
Proceeds from sale of flight equipment
|
231,842
|
|
|
246,037
|
|
||
Restricted cash and cash equivalents related to sale of flight equipment
|
(76,433
|
)
|
|
(7,600
|
)
|
||
Aircraft purchase deposits and progress payments
|
(3,461
|
)
|
|
(3,785
|
)
|
||
Net investment in finance leases
|
(24,000
|
)
|
|
(14,258
|
)
|
||
Collections on finance leases
|
4,795
|
|
|
6,219
|
|
||
Other
|
(256
|
)
|
|
87
|
|
||
Net cash used in investing activities
|
(664,649
|
)
|
|
(607,767
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Issuance of shares net of repurchases
|
(1,960
|
)
|
|
(2,091
|
)
|
||
Proceeds from notes and term debt financings
|
800,000
|
|
|
803,200
|
|
||
Securitization and term debt financing repayments
|
(319,994
|
)
|
|
(827,512
|
)
|
||
Debt extinguishment costs
|
—
|
|
|
(32,835
|
)
|
||
Deferred financing costs
|
(11,658
|
)
|
|
(15,834
|
)
|
||
Restricted liquidity facility collateral
|
—
|
|
|
42,000
|
|
||
Liquidity facility
|
—
|
|
|
(42,000
|
)
|
||
Restricted cash and cash equivalents related to financing activities
|
13,463
|
|
|
29,015
|
|
||
Security deposits and maintenance payments received
|
71,536
|
|
|
83,144
|
|
||
Security deposits and maintenance payments returned
|
(27,336
|
)
|
|
(44,577
|
)
|
||
Payments for terminated cash flow hedges
|
—
|
|
|
(33,427
|
)
|
||
Dividends paid
|
(35,723
|
)
|
|
(32,402
|
)
|
||
Net cash provided by (used in) financing activities
|
488,328
|
|
|
(73,319
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
73,285
|
|
|
(467,081
|
)
|
||
Cash and cash equivalents at beginning of period
|
169,656
|
|
|
654,613
|
|
||
Cash and cash equivalents at end of period
|
$
|
242,941
|
|
|
$
|
187,532
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
89,639
|
|
|
$
|
112,386
|
|
Cash paid for income taxes
|
$
|
3,918
|
|
|
$
|
3,630
|
|
Supplemental disclosures of non-cash investing activities:
|
|
|
|
||||
Purchase deposits, advance lease rentals, security deposits and maintenance payments assumed in asset acquisitions
|
$
|
7,841
|
|
|
$
|
18,522
|
|
Term debt financings assumed in asset acquisitions
|
$
|
—
|
|
|
$
|
39,061
|
|
Advance lease rentals, security deposits, and maintenance payments settled in sale of flight equipment
|
$
|
40,199
|
|
|
$
|
17,533
|
|
•
|
Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs.
|
•
|
Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the asset or liability.
|
•
|
The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
|
•
|
The income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectation about those future amounts.
|
•
|
The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
|
|
|
|
Fair Value Measurements at June 30, 2015 Using Fair Value Hierarchy
|
||||||||||||||
|
Fair Value as of June 30, 2015
|
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Valuation
Technique
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
242,941
|
|
|
$
|
242,941
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Market
|
Restricted cash and cash equivalents
|
161,854
|
|
|
161,854
|
|
|
—
|
|
|
—
|
|
|
Market
|
||||
Total
|
$
|
404,795
|
|
|
$
|
404,795
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
2,548
|
|
|
$
|
—
|
|
|
$
|
2,548
|
|
|
$
|
—
|
|
|
Income
|
|
|
|
Fair Value Measurements at December 31, 2014 Using Fair Value Hierarchy
|
||||||||||||||
|
Fair Value as of December 31, 2014
|
|
Quoted Prices
In Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Valuation
Technique
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
169,656
|
|
|
$
|
169,656
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Market
|
Restricted cash and cash equivalents
|
98,884
|
|
|
98,884
|
|
|
—
|
|
|
—
|
|
|
Market
|
||||
Total
|
$
|
268,540
|
|
|
$
|
268,540
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
2,879
|
|
|
$
|
—
|
|
|
$
|
2,879
|
|
|
$
|
—
|
|
|
Income
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Carrying Amount
of Asset
(Liability)
|
|
Fair Value
of Asset
(Liability)
|
|
Carrying Amount
of Asset
(Liability)
|
|
Fair Value
of Asset
(Liability)
|
||||||||
Securitization No. 2
|
$
|
(334,073
|
)
|
|
$
|
(328,611
|
)
|
|
$
|
(391,680
|
)
|
|
$
|
(376,752
|
)
|
Credit Facilities
|
(150,000
|
)
|
|
(150,000
|
)
|
|
(200,000
|
)
|
|
(200,000
|
)
|
||||
ECA term financings
|
(427,378
|
)
|
|
(447,838
|
)
|
|
(449,886
|
)
|
|
(471,918
|
)
|
||||
Bank financings
|
(665,923
|
)
|
|
(684,772
|
)
|
|
(554,888
|
)
|
|
(560,285
|
)
|
||||
Senior Notes
|
(2,700,000
|
)
|
|
(2,851,293
|
)
|
|
(2,200,000
|
)
|
|
(2,300,615
|
)
|
Year Ending December 31,
|
Amount
|
||
Remainder of 2015
|
$
|
370,427
|
|
2016
|
690,925
|
|
|
2017
|
596,994
|
|
|
2018
|
513,158
|
|
|
2019
|
445,429
|
|
|
Thereafter
|
1,348,048
|
|
|
Total
|
$
|
3,964,981
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Region
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Asia and Pacific
|
42
|
%
|
|
38
|
%
|
|
42
|
%
|
|
40
|
%
|
Europe
|
28
|
%
|
|
28
|
%
|
|
29
|
%
|
|
29
|
%
|
South America
|
15
|
%
|
|
15
|
%
|
|
14
|
%
|
|
12
|
%
|
Middle East and Africa
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
North America
|
6
|
%
|
|
10
|
%
|
|
6
|
%
|
|
10
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||
Country
|
Revenue
|
|
Percent of
Total
Revenue
|
|
Number
of
Lessees
|
|
Revenue
|
|
Percent of
Total
Revenue
|
|
Number
of
Lessees
|
||||||||
India
(1)(2)
|
$
|
—
|
|
|
—
|
%
|
|
—
|
|
|
$
|
25,707
|
|
|
11
|
%
|
|
1
|
|
United States
(1)(3)
|
—
|
|
|
—
|
%
|
|
—
|
|
|
24,390
|
|
|
11
|
%
|
|
5
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||
Region
|
Number
of
Aircraft
|
|
Net Book
Value %
|
|
Number
of
Aircraft
|
|
Net Book
Value %
|
||||
Asia and Pacific
|
55
|
|
|
41
|
%
|
|
46
|
|
|
40
|
%
|
Europe
|
67
|
|
|
28
|
%
|
|
65
|
|
|
29
|
%
|
South America
|
18
|
|
|
17
|
%
|
|
13
|
|
|
14
|
%
|
Middle East and Africa
|
6
|
|
|
9
|
%
|
|
6
|
|
|
10
|
%
|
North America
|
15
|
|
|
5
|
%
|
|
17
|
|
|
7
|
%
|
Off-lease
|
—
|
|
|
—
|
%
|
|
1
|
|
(1)
|
—
|
%
|
Total
|
161
|
|
|
100
|
%
|
|
148
|
|
|
100
|
%
|
(1)
|
Consisted of
one
Airbus A320-200 aircraft which was subject to a commitment to lease and was delivered to our customer in February 2015.
|
|
|
Amount
|
||
Total lease payments to be received
|
|
$
|
97,817
|
|
Less: Unearned income
|
|
(39,095
|
)
|
|
Estimated residual values of leased flight equipment (unguaranteed)
|
|
64,133
|
|
|
Net investment in finance leases
|
|
$
|
122,855
|
|
Year Ending December 31,
|
|
Amount
|
||
Remainder of 2015
|
|
$
|
7,683
|
|
2016
|
|
15,365
|
|
|
2017
|
|
14,843
|
|
|
2018
|
|
9,715
|
|
|
2019
|
|
9,695
|
|
|
Thereafter
|
|
40,516
|
|
|
Total
|
|
$
|
97,817
|
|
Investment in joint venture at December 31, 2014
|
|
$
|
46,453
|
|
Investment in joint venture
|
|
2,375
|
|
|
Earnings from joint venture, net of tax
|
|
3,006
|
|
|
Distributions
|
|
(3,122
|
)
|
|
Investment in joint venture at June 30, 2015
|
|
$
|
48,712
|
|
|
|
|
|
At June 30, 2015
|
|
At December 31, 2014
|
||||||||||
Debt Obligation
|
Outstanding
Borrowings
|
|
Number of Aircraft
|
|
Interest Rate
(1)
|
|
Final Stated
Maturity
(2)
|
|
Outstanding
Borrowings |
||||
Secured Debt Financings:
|
|
|
|
|
|
|
|
|
|
||||
Securitization No. 2
|
$
|
334,073
|
|
|
30
|
|
0.49%
|
|
06/14/37
|
|
$
|
391,680
|
|
ECA Term Financings
|
427,378
|
|
|
8
|
|
3.02% to 3.96%
|
|
12/3/21 to 11/30/24
|
|
449,886
|
|
||
Bank Financings
|
665,923
|
|
|
13
|
|
1.19% to 5.09%
|
|
10/26/17 to 01/19/26
|
|
554,888
|
|
||
Total secured debt financings
|
1,427,374
|
|
|
51
|
|
|
|
|
|
1,396,454
|
|
||
|
|
|
|
|
|
|
|
|
|
||||
Unsecured Debt Financings:
|
|
|
|
|
|
|
|
|
|
||||
Senior Notes due 2017
|
500,000
|
|
|
|
|
6.75%
|
|
04/15/17
|
|
500,000
|
|
||
Senior Notes due 2018
|
400,000
|
|
|
|
|
4.625%
|
|
12/05/18
|
|
400,000
|
|
||
Senior Notes due 2019
|
500,000
|
|
|
|
|
6.250%
|
|
12/01/19
|
|
500,000
|
|
||
Senior Notes due 2020
|
300,000
|
|
|
|
|
7.625%
|
|
04/15/20
|
|
300,000
|
|
||
Senior Notes due 2021
|
500,000
|
|
|
|
|
5.125%
|
|
03/15/21
|
|
500,000
|
|
||
Senior Notes due 2022
|
500,000
|
|
|
|
|
5.50%
|
|
02/15/22
|
|
—
|
|
||
Revolving Credit Facility
|
150,000
|
|
|
|
|
2.44%
|
|
05/13/19
|
|
200,000
|
|
||
Total unsecured debt financings
|
2,850,000
|
|
|
|
|
|
|
|
|
2,400,000
|
|
||
|
|
|
|
|
|
|
|
|
|
||||
Total secured and unsecured debt financings
|
$
|
4,277,374
|
|
|
|
|
|
|
|
|
$
|
3,796,454
|
|
(1)
|
Reflects the floating rate in effect at the applicable reset date plus the margin for Securitization No. 2, five of our Bank Financings, and our Revolving Credit Facility. All other financings have a fixed rate.
|
(2)
|
For Securitization No. 2, all cash flows available after expenses and interest are applied to debt amortization.
|
|
|
|
Available Liquidity
|
|
|
|
|
||||||
Facility
|
Liquidity Facility Provider
|
|
June 30,
2015 |
|
December 31,
2014 |
|
Unused
Fee
|
|
Interest Rate
on any Advances
|
||||
Securitization No. 2
|
HSH Nordbank AG
|
|
$
|
65,000
|
|
|
$
|
65,000
|
|
|
0.50%
|
|
1M Libor + 0.75
|
Declaration Date
|
Dividend
per Common
Share
|
|
Aggregate
Dividend
Amount
|
|
Record Date
|
|
Payment Date
|
||||
May 4, 2015
|
$
|
0.220
|
|
|
$
|
17,863
|
|
|
May 29, 2015
|
|
June 15, 2015
|
February 17, 2015
|
$
|
0.220
|
|
|
$
|
17,860
|
|
|
March 6, 2015
|
|
March 13, 2015
|
October 31, 2014
|
$
|
0.220
|
|
|
$
|
17,817
|
|
|
November 28, 2014
|
|
December 15, 2014
|
July 28, 2014
|
$
|
0.200
|
|
|
$
|
16,201
|
|
|
August 29, 2014
|
|
September 12, 2014
|
May 5, 2014
|
$
|
0.200
|
|
|
$
|
16,202
|
|
|
May 30, 2014
|
|
June 13, 2014
|
February 21, 2014
|
$
|
0.200
|
|
|
$
|
16,201
|
|
|
March 7, 2014
|
|
March 14, 2014
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Weighted-average shares:
|
|
|
|
|
|
|
|
||||
Common shares outstanding
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
Restricted common shares
|
650,206
|
|
|
643,590
|
|
|
583,213
|
|
|
572,452
|
|
Total weighted-average shares
|
81,216,606
|
|
|
81,033,586
|
|
|
81,148,638
|
|
|
80,961,143
|
|
|
|
|
|
|
|
|
|
||||
Percentage of weighted-average shares:
|
|
|
|
|
|
|
|
||||
Common shares outstanding
|
99.20
|
%
|
|
99.21
|
%
|
|
99.28
|
%
|
|
99.29
|
%
|
Restricted common shares
|
0.80
|
%
|
|
0.79
|
%
|
|
0.72
|
%
|
|
0.71
|
%
|
Total
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Earnings per share – Basic:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Less: Distributed and undistributed earnings allocated to restricted common shares
(a)
|
(335
|
)
|
|
(25
|
)
|
|
(611
|
)
|
|
(63
|
)
|
||||
Earnings available to common shareholders – Basic
|
$
|
41,473
|
|
|
$
|
3,111
|
|
|
$
|
84,466
|
|
|
$
|
8,850
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding – Basic
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share – Basic
|
$
|
0.51
|
|
|
$
|
0.04
|
|
|
$
|
1.05
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – Diluted:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Less: Distributed and undistributed earnings allocated to restricted common shares
(a)
|
(335
|
)
|
|
(25
|
)
|
|
(611
|
)
|
|
(63
|
)
|
||||
Earnings available to common shareholders – Diluted
|
$
|
41,473
|
|
|
$
|
3,111
|
|
|
$
|
84,466
|
|
|
$
|
8,850
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding – Basic
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
||||
Effect of dilutive shares
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted-average common shares outstanding – Diluted
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share – Diluted
|
$
|
0.51
|
|
|
$
|
0.04
|
|
|
$
|
1.05
|
|
|
$
|
0.11
|
|
(a)
|
For the
three months ended
June 30, 2015
and
2014
, distributed and undistributed earnings to restricted shares is
0.80%
and
0.79%
of net income. For the
six months ended
June 30, 2015
and
2014
, distributed and undistributed earnings to restricted shares is
0.72%
and
0.71%
of net income. The amount of restricted share forfeitures for all periods present is immaterial to the allocation of distributed and undistributed earnings.
|
(b)
|
For the
three and six months ended
June 30, 2015
and
2014
, we had
no
dilutive shares.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
U.S. operations
|
$
|
840
|
|
|
$
|
756
|
|
|
$
|
1,220
|
|
|
$
|
1,521
|
|
Non-U.S. operations
|
43,868
|
|
|
8,417
|
|
|
90,179
|
|
|
13,862
|
|
||||
Total
|
$
|
44,708
|
|
|
$
|
9,173
|
|
|
$
|
91,399
|
|
|
$
|
15,383
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Notional U.S. federal income tax expense (benefit) at the statutory rate
|
$
|
15,648
|
|
|
$
|
3,211
|
|
|
$
|
31,990
|
|
|
$
|
5,384
|
|
U.S. state and local income tax, net
|
68
|
|
|
40
|
|
|
110
|
|
|
119
|
|
||||
Non-U.S. operations:
|
|
|
|
|
|
|
|
||||||||
Bermuda
|
(7,368
|
)
|
|
2,811
|
|
|
(15,895
|
)
|
|
6,240
|
|
||||
Ireland
|
(1,785
|
)
|
|
2,537
|
|
|
(2,907
|
)
|
|
(752
|
)
|
||||
Singapore
|
(1,375
|
)
|
|
(1,282
|
)
|
|
(2,731
|
)
|
|
(2,477
|
)
|
||||
Other
|
(901
|
)
|
|
(771
|
)
|
|
(1,579
|
)
|
|
(1,369
|
)
|
||||
Non-deductible expenses in the U.S.
|
191
|
|
|
19
|
|
|
361
|
|
|
318
|
|
||||
Other
|
(13
|
)
|
|
(7
|
)
|
|
(21
|
)
|
|
(22
|
)
|
||||
Income tax provision
|
$
|
4,465
|
|
|
$
|
6,558
|
|
|
$
|
9,328
|
|
|
$
|
7,441
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Interest on borrowings, net settlements on interest rate derivatives, and other liabilities
|
$
|
51,413
|
|
|
$
|
48,172
|
|
|
$
|
101,648
|
|
|
$
|
99,857
|
|
Hedge ineffectiveness losses
|
294
|
|
|
6
|
|
|
294
|
|
|
59
|
|
||||
Amortization of interest rate derivatives related to deferred losses
|
6,110
|
|
|
8,854
|
|
|
14,343
|
|
|
18,181
|
|
||||
Amortization of deferred financing fees
|
3,766
|
|
|
3,567
|
|
|
7,465
|
|
|
6,987
|
|
||||
Interest Expense
|
61,583
|
|
|
60,599
|
|
|
123,750
|
|
|
125,084
|
|
||||
Less interest income
|
(32
|
)
|
|
(105
|
)
|
|
(68
|
)
|
|
(327
|
)
|
||||
Interest, net
|
$
|
61,551
|
|
|
$
|
60,494
|
|
|
$
|
123,682
|
|
|
$
|
124,757
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Deferred debt issuance costs, net of amortization of $59,062 and $53,094, respectively
|
$
|
57,000
|
|
|
$
|
51,867
|
|
Deferred federal income tax asset
|
420
|
|
|
567
|
|
||
Lease incentives and lease premiums, net of amortization of $28,836 and $26,477, respectively
|
90,074
|
|
|
75,587
|
|
||
Flight equipment held for sale
|
2,895
|
|
|
7,455
|
|
||
Other assets
|
53,373
|
|
|
21,841
|
|
||
Total other assets
|
$
|
203,762
|
|
|
$
|
157,317
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Accounts payable and accrued expenses
|
$
|
49,863
|
|
|
$
|
40,765
|
|
Deferred federal income tax liability
|
35,853
|
|
|
37,340
|
|
||
Accrued interest payable
|
40,125
|
|
|
27,795
|
|
||
Lease discounts, net of amortization of $14.189 and $9,247, respectively
|
27,656
|
|
|
32,084
|
|
||
Fair value of derivative liabilities
|
2,548
|
|
|
2,879
|
|
||
Total accounts payable, accrued expenses and other liabilities
|
$
|
156,045
|
|
|
$
|
140,863
|
|
Changes in accumulated other comprehensive loss by component
(a)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Beginning balance
|
$
|
(30,355
|
)
|
|
$
|
(66,208
|
)
|
|
$
|
(38,460
|
)
|
|
$
|
(75,905
|
)
|
Amount recognized in other comprehensive loss on derivatives, net of tax expense of $14 and tax benefit of $15 for the three months and tax expense of $0 and tax expense of $721 for the six months ended June 30, 2015 and 2014, respectively
|
(317
|
)
|
|
(1,197
|
)
|
|
(1,395
|
)
|
|
(3,577
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss into income, net of tax expense of $12 and $15 for the three months and tax expense of $23 and $83 for the six months ended June 30, 2015 and 2014, respectively
|
6,991
|
|
|
10,063
|
|
|
16,174
|
|
|
22,140
|
|
||||
Net current period other comprehensive income
|
6,674
|
|
|
8,866
|
|
|
14,779
|
|
|
18,563
|
|
||||
Ending balance
|
$
|
(23,681
|
)
|
|
$
|
(57,342
|
)
|
|
$
|
(23,681
|
)
|
|
$
|
(57,342
|
)
|
Reclassifications from accumulated other comprehensive loss
(a)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Amount of effective amortization of net deferred interest rate derivative losses
(b)
|
$
|
6,110
|
|
|
$
|
8,854
|
|
|
$
|
14,343
|
|
|
$
|
18,181
|
|
Effective amount of net settlements of interest rate derivatives, net of tax expense of $12 and $15 for the three months and $23 and $83 for the six months ended June 30, 2015 and 2014, respectively
(b)
|
881
|
|
|
1,209
|
|
|
1,831
|
|
|
3,959
|
|
||||
Amount of loss reclassified from accumulated other comprehensive loss into income
(c)
|
$
|
6,991
|
|
|
$
|
10,063
|
|
|
$
|
16,174
|
|
|
$
|
22,140
|
|
•
|
Pursuing a disciplined and differentiated investment strategy.
In our view, aircraft values change in different ways over time. As a consequence, we carefully evaluate investments across different aircraft models, ages, lessees and acquisition sources and re-evaluate these choices periodically as market conditions and relative investment values change. We believe the financing flexibility offered through unsecured debt and our team’s experience with a wide range of asset types enables our value oriented strategy and provides us with a competitive advantage for many investment opportunities.
|
•
|
Originating investments from many different sources across the globe.
Our strategy is to seek out worthwhile investments broadly leveraging our team’s wide range of contacts around the world. We utilize a multi-channel approach to sourcing acquisitions and have purchased aircraft from a large number of airlines, lessors, original equipment manufacturers, lenders and other aircraft owners. Since our formation in 2004, we have acquired aircraft from more than 70 different sellers.
|
•
|
Leveraging our strategic relationships.
We intend to capture the benefits provided through the extensive global contacts and relationships maintained by Marubeni Corporation, which is both our biggest shareholder and one of the largest Japanese trading companies. Our joint venture with Ontario Teachers’ Pension Plan provides us with an opportunity to pursue larger transactions and to manage portfolio concentrations.
|
•
|
Maintaining efficient access to capital from a wide range of sources while targeting an investment grade credit rating.
We believe the aircraft investment market is subject to forces related to the business cycle and our strategy is to increase our purchase activity when prices are low and to emphasize asset sales when competition for assets is high. In order to implement this approach, we believe maintaining access to a wide variety of financing sources over the business cycle is very important. Our strategy is to improve our corporate credit ratings to an investment grade level by maintaining strong portfolio and capital structure metrics while achieving a critical size through accretive growth. We believe improving our credit rating will not only reduce our borrowing costs but also facilitate more reliable access to debt capital throughout the business cycle.
|
•
|
Selling assets when attractive opportunities arise and for portfolio management purposes.
We pursue asset sales, as opportunities arise over the course of the business cycle, with the aim of realizing profits and reinvesting proceeds where more accretive investments are available. We also use asset sales for portfolio management purposes, such as reducing lessee specific concentrations and lowering residual value exposures to certain aircraft types, and as an exit from investments when a sale would provide the greatest expected cash flow for us.
|
•
|
Capturing the value of our efficient operating platform and strong operating track record.
We believe our team's capabilities in the global aircraft leasing market place us in a favorable position to source and manage new income-generating activities. We intend to continue to focus our efforts in areas where we believe we have competitive advantages, including new direct investments as well as ventures with strategic business partners.
|
•
|
Intending to pay quarterly dividends to our shareholders based on the Company’s sustainable earnings levels.
However our ability to pay quarterly dividends will depend upon many factors, including those as described in Item 1A. “Risk Factors,” and elsewhere in our 2014 Annual Report on Form 10-K. On
May 4, 2015
, our board of directors declared a regular quarterly dividend of
$0.22
per common share, or an aggregate of
$17.9
million for the three months ended
June 30, 2015
, which was paid on
June 15, 2015
to holders of record on
May 29, 2015
. These dividends may not be indicative of the amount of any future dividends.
|
•
|
2016: 12 aircraft, representing 5%;
|
•
|
2017: 19 aircraft, representing 13%;
|
•
|
2018: 13 aircraft, representing 10%; and
|
•
|
2019: 14 aircraft, representing 10%.
|
Six Months Ended June 30, 2015
|
|
Number
|
|
|
|
Gain (Loss) on
|
|
|
|
|
|||||||||
|
|
of
|
|
Maintenance
|
|
Sale of Flight
|
|
|
|
Pre-tax
|
|||||||||
|
|
Aircraft
|
|
Revenue
|
|
Equipment
|
|
Impairment
|
|
Impact
|
|||||||||
|
|
(Dollars in thousands)
|
|||||||||||||||||
Opportunistic Sales
|
|
10
|
|
|
$
|
—
|
|
|
$
|
26,250
|
|
|
$
|
—
|
|
|
$
|
26,250
|
|
Exit Sales
|
|
2
|
|
|
7,034
|
|
|
1,530
|
|
|
(5,328
|
)
|
|
3,236
|
|
||||
Total Sales
|
|
12
|
|
|
7,034
|
|
|
27,780
|
|
|
(5,328
|
)
|
|
29,486
|
|
||||
Freighter Exits
(1)
|
|
2
|
|
|
11,412
|
|
|
(425
|
)
|
|
(17,852
|
)
|
|
(6,865
|
)
|
||||
Total
|
|
14
|
|
|
$
|
18,446
|
|
|
$
|
27,355
|
|
|
$
|
(23,180
|
)
|
|
$
|
22,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned
Aircraft as of June 30, 2015 (1) |
|
Owned
Aircraft as of
June 30, 2014
(1)
|
||||
Flight Equipment
|
$
|
6,076
|
|
|
$
|
5,651
|
|
Unencumbered Flight Equipment
|
$
|
3,705
|
|
|
$
|
3,187
|
|
Number of Aircraft
|
161
|
|
|
148
|
|
||
Number of Unencumbered Aircraft
|
110
|
|
|
91
|
|
||
Number of Lessees
|
52
|
|
|
63
|
|
||
Number of Countries
|
32
|
|
|
37
|
|
||
Weighted Average Age – Passenger (years)
(2)
|
7.3
|
|
|
7.9
|
|
||
Weighted Average Age – Freighter (years)
(2)
|
12.9
|
|
|
12.6
|
|
||
Weighted Average Age – Combined (years)
(2)
|
8.0
|
|
|
8.6
|
|
||
Weighted Average Remaining Passenger Lease Term (years)
(3)
|
6.1
|
|
|
5.1
|
|
||
Weighted Average Remaining Freighter Lease Term (years)
(3)
|
4.0
|
|
|
3.7
|
|
||
Weighted Average Remaining Combined Lease Term (years)
(3)
|
5.8
|
|
|
4.9
|
|
||
Weighted Average Fleet Utilization during the three months ended June 30, 2015 and 2014
(4)
|
99.1
|
%
|
|
100.0
|
%
|
||
Weighted Average Fleet Utilization during the six months ended June 30, 2015 and 2014
(4)
|
98.9
|
%
|
|
99.0
|
%
|
||
Portfolio Yield for the three months ended June 30, 2015 and 2014
(5)
|
12.6
|
%
|
|
13.1
|
%
|
||
Portfolio Yield for the six months ended June 30, 2015 and 2014
(5)
|
12.6
|
%
|
|
13.3
|
%
|
(1)
|
Calculated using net book value of flight equipment held for lease and net investment in finance leases at period end.
|
(2)
|
Weighted average age by net book value.
|
(3)
|
Weighted average remaining lease term by net book value.
|
(4)
|
Aircraft on-lease days as a percent of total days in period weighted by net book value.
|
(5)
|
Lease rental revenue for the period as a percent of the average net book value of flight equipment held for lease for the period; quarterly information is annualized.
|
|
Owned Aircraft as of
June 30, 2015
|
|
Owned Aircraft as of June 30, 2014
|
|||||||
|
Number of
Aircraft
|
|
% of Net
Book Value
(1)
|
|
Number of
Aircraft |
|
% of Net
Book Value (1) |
|||
Aircraft Type
|
|
|
|
|
|
|
|
|||
Passenger:
|
|
|
|
|
|
|
|
|||
Narrowbody
|
111
|
|
|
41
|
%
|
|
90
|
|
30
|
%
|
Widebody
|
35
|
|
|
46
|
%
|
|
42
|
|
54
|
%
|
Total Passenger
|
146
|
|
|
87
|
%
|
|
132
|
|
84
|
%
|
Freighter
|
15
|
|
|
13
|
%
|
|
16
|
|
16
|
%
|
Total
|
161
|
|
|
100
|
%
|
|
148
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|||
Manufacturer
|
|
|
|
|
|
|
|
|||
Airbus
|
83
|
|
|
52
|
%
|
|
61
|
|
41
|
%
|
Boeing
|
73
|
|
|
46
|
%
|
|
82
|
|
57
|
%
|
Embraer
|
5
|
|
|
2
|
%
|
|
5
|
|
2
|
%
|
Total
|
161
|
|
|
100
|
%
|
|
148
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|||
Regional Diversification
|
|
|
|
|
|
|
|
|||
Asia and Pacific
|
55
|
|
|
41
|
%
|
|
46
|
|
40
|
%
|
Europe
|
67
|
|
|
28
|
%
|
|
62
|
|
27
|
%
|
South America
|
18
|
|
|
17
|
%
|
|
13
|
|
14
|
%
|
Middle East and Africa
|
6
|
|
|
9
|
%
|
|
6
|
|
10
|
%
|
North America
|
15
|
|
|
5
|
%
|
|
21
|
|
9
|
%
|
Total
|
161
|
|
|
100
|
%
|
|
148
|
|
100
|
%
|
(1)
|
Calculated using net book value of flight equipment held for lease and net investment in finance leases at period end.
|
Percent of Net Book Value
|
|
Customer
|
|
Country
|
|
Number of
Aircraft
|
Greater than 6% per customer
|
|
LATAM
|
|
Chile
|
|
3
|
|
|
|
|
|
|
|
3% to 6% per customer
|
|
Iberia
|
|
Spain
|
|
18
|
|
|
South African Airways
|
|
South Africa
|
|
4
|
|
|
Avianca Brazil
|
|
Brazil
|
|
7
|
|
|
Thai Airways
|
|
Thailand
|
|
2
|
|
|
Singapore Airlines
|
|
Singapore
|
|
4
|
|
|
AirBridgeCargo
|
|
Russia
|
|
3
|
|
|
AirAsia X
|
|
Malaysia
|
|
3
|
|
|
Lion Air
|
|
Indonesia
|
|
7
|
|
|
Emirates
|
|
United Arab Emirates
|
|
2
|
|
|
Garuda
|
|
Indonesia
|
|
4
|
|
|
Air Berlin
|
|
Germany
|
|
9
|
|
|
AirAsia
|
|
Malaysia
|
|
8
|
|
|
|
|
|
|
|
Less than 3% per customer
|
|
Virgin Australia
|
|
Australia
|
|
2
|
|
|
Avianca
|
|
Colombia
|
|
2
|
|
Three Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Revenues:
|
|
|
|
||||
Lease rental revenue
|
$
|
184,839
|
|
|
$
|
183,231
|
|
Finance lease revenue
|
1,877
|
|
|
3,897
|
|
||
Amortization of net lease premiums, discounts and lease incentives
|
(4,351
|
)
|
|
414
|
|
||
Maintenance revenue
|
21,349
|
|
|
36,182
|
|
||
Total lease revenue
|
203,714
|
|
|
223,724
|
|
||
Other revenue
|
851
|
|
|
2,422
|
|
||
Total revenues
|
204,565
|
|
|
226,146
|
|
||
Operating expenses:
|
|
|
|
||||
Depreciation
|
77,368
|
|
|
75,784
|
|
||
Interest, net
|
61,551
|
|
|
60,494
|
|
||
Selling, general and administrative
|
14,699
|
|
|
14,057
|
|
||
Impairment of aircraft
|
23,955
|
|
|
28,306
|
|
||
Maintenance and other costs
|
3,663
|
|
|
2,646
|
|
||
Total operating expenses
|
181,236
|
|
|
181,287
|
|
||
Other income (expense):
|
|
|
|
||||
Gain on sale of flight equipment
|
21,102
|
|
|
884
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
(36,570
|
)
|
||
Other
|
277
|
|
|
—
|
|
||
Total other income (expense)
|
21,379
|
|
|
(35,686
|
)
|
||
Income from continuing operations before income taxes
|
44,708
|
|
|
9,173
|
|
||
Income tax provision
|
4,465
|
|
|
6,558
|
|
||
Earnings of unconsolidated equity method investment, net of tax
|
1,565
|
|
|
521
|
|
||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
•
|
$26.6 million due to aircraft sales; and
|
•
|
$9.4 million due to lease extensions, amendments, transitions and other changes.
|
|
Three Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Amortization of lease incentives
|
$
|
(4,066
|
)
|
|
$
|
(382
|
)
|
Amortization of lease premiums
|
(2,771
|
)
|
|
(2,183
|
)
|
||
Amortization of lease discounts
|
2,486
|
|
|
2,979
|
|
||
Amortization of net lease premiums, discounts and lease incentives
|
$
|
(4,351
|
)
|
|
$
|
414
|
|
•
|
a $12.5 million increase in depreciation for aircraft acquired;
|
•
|
a $2.0 million increase due to changes in asset lives and residual values; and
|
•
|
a $1.1 million increase due to capitalized aircraft improvements being fully depreciated.
|
|
Three Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Interest on borrowings, net settlements on interest rate derivatives, and other liabilities
|
$
|
51,413
|
|
|
$
|
48,172
|
|
Hedge ineffectiveness losses
|
294
|
|
|
6
|
|
||
Amortization of interest rate derivatives related to deferred losses
|
6,110
|
|
|
8,854
|
|
||
Amortization of deferred financing fees and notes discount
|
3,766
|
|
|
3,567
|
|
||
Interest Expense
|
61,583
|
|
|
60,599
|
|
||
Less interest income
|
(32
|
)
|
|
(105
|
)
|
||
Interest, net
|
$
|
61,551
|
|
|
$
|
60,494
|
|
Three Months Ended June 30, 2015
|
|
Number
|
|
|
|
Gain on
|
|
|
|
|
|||||||||
|
|
of
|
|
Maintenance
|
|
Sale of Flight
|
|
|
|
Pre-tax
|
|||||||||
|
|
Aircraft
|
|
Revenue
|
|
Equipment
|
|
Impairment
|
|
Impact
|
|||||||||
|
|
(Dollars in thousands)
|
|||||||||||||||||
Opportunistic Sales
|
|
8
|
|
|
$
|
—
|
|
|
$
|
19,572
|
|
|
$
|
—
|
|
|
$
|
19,572
|
|
Exit Sales
|
|
2
|
|
|
7,034
|
|
|
1,530
|
|
|
(5,328
|
)
|
|
3,236
|
|
||||
Total Sales
|
|
10
|
|
|
7,034
|
|
|
21,102
|
|
|
(5,328
|
)
|
|
22,808
|
|
||||
Freighter Exits
(1)
|
|
2
|
|
|
11,200
|
|
|
—
|
|
|
(17,852
|
)
|
|
(6,652
|
)
|
||||
Total
|
|
12
|
|
|
$
|
18,234
|
|
|
$
|
21,102
|
|
|
$
|
(23,180
|
)
|
|
$
|
16,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
Net change in fair value of derivatives, net of tax expense of $26 and $0, respectively
|
564
|
|
|
12
|
|
||
Derivative loss reclassified into earnings
|
6,110
|
|
|
8,854
|
|
||
Total comprehensive income
|
$
|
48,482
|
|
|
$
|
12,002
|
|
•
|
$41.8
million of net income; and
|
•
|
$6.1
million of amortization of deferred net losses reclassified into earnings related to terminated interest rate derivatives.
|
•
|
$3.1
million of net income; and
|
•
|
$8.9
million of amortization of deferred net losses reclassified into earnings related to terminated interest rate derivatives.
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Revenues:
|
|
|
|
||||
Lease rental revenue
|
$
|
361,985
|
|
|
$
|
357,566
|
|
Finance lease revenue
|
3,484
|
|
|
7,884
|
|
||
Amortization of net lease premiums, discounts and lease incentives
|
(8,175
|
)
|
|
(6,177
|
)
|
||
Maintenance revenue
|
39,422
|
|
|
39,224
|
|
||
Total lease revenue
|
396,716
|
|
|
398,497
|
|
||
Other revenue
|
2,145
|
|
|
4,252
|
|
||
Total revenues
|
398,861
|
|
|
402,749
|
|
||
Operating expenses:
|
|
|
|
||||
Depreciation
|
152,214
|
|
|
149,711
|
|
||
Interest, net
|
123,682
|
|
|
124,757
|
|
||
Selling, general and administrative
|
28,631
|
|
|
28,001
|
|
||
Impairment of aircraft
|
23,955
|
|
|
46,569
|
|
||
Maintenance and other costs
|
6,606
|
|
|
4,509
|
|
||
Total operating expenses
|
335,088
|
|
|
353,547
|
|
||
Other income (expense):
|
|
|
|
||||
Gain on sale of flight equipment
|
27,355
|
|
|
1,994
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
(36,570
|
)
|
||
Other
|
271
|
|
|
757
|
|
||
Total other income (expense)
|
27,626
|
|
|
(33,819
|
)
|
||
Income from continuing operations before income taxes
|
91,399
|
|
|
15,383
|
|
||
Income tax provision
|
9,328
|
|
|
7,441
|
|
||
Earnings of unconsolidated equity method investment, net of tax
|
3,006
|
|
|
971
|
|
||
Net income
|
$
|
85,077
|
|
|
$
|
8,913
|
|
•
|
$53.1 million due to aircraft sales; and
|
•
|
$19.2 million due to lease extensions, amendments and transitions and $1.6 million from other changes.
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Amortization of lease incentives
|
$
|
(7,751
|
)
|
|
$
|
(6,154
|
)
|
Amortization of lease premiums
|
(5,366
|
)
|
|
(4,513
|
)
|
||
Amortization of lease discounts
|
4,942
|
|
|
4,490
|
|
||
Amortization of net lease premiums, discounts and lease incentives
|
$
|
(8,175
|
)
|
|
$
|
(6,177
|
)
|
•
|
a $25.9 million increase in depreciation for aircraft acquired; and
|
•
|
a $4.3 million increase due to changes in asset lives and residual values; and
|
•
|
a $1.5 million increase due to capitalized aircraft improvements being fully depreciated.
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Interest on borrowings, net settlements on interest rate derivatives, and other liabilities
|
$
|
101,648
|
|
|
$
|
99,857
|
|
Hedge ineffectiveness losses
|
294
|
|
|
59
|
|
||
Amortization of interest rate derivatives related to deferred losses
|
14,343
|
|
|
18,181
|
|
||
Amortization of deferred financing fees and notes discount
|
7,465
|
|
|
6,987
|
|
||
Interest Expense
|
123,750
|
|
|
125,084
|
|
||
Less interest income
|
(68
|
)
|
|
(327
|
)
|
||
Interest, net
|
$
|
123,682
|
|
|
$
|
124,757
|
|
Six Months Ended June 30, 2015
|
|
Number
|
|
|
|
Gain (Loss) on
|
|
|
|
|
|||||||||
|
|
of
|
|
Maintenance
|
|
Sale of Flight
|
|
|
|
Pre-tax
|
|||||||||
|
|
Aircraft
|
|
Revenue
|
|
Equipment
|
|
Impairment
|
|
Impact
|
|||||||||
|
|
(Dollars in thousands)
|
|||||||||||||||||
Opportunistic Sales
|
|
10
|
|
|
$
|
—
|
|
|
$
|
26,250
|
|
|
$
|
—
|
|
|
$
|
26,250
|
|
Exit Sales
|
|
2
|
|
|
7,034
|
|
|
1,530
|
|
|
(5,328
|
)
|
|
3,236
|
|
||||
Total Sales
|
|
12
|
|
|
7,034
|
|
|
27,780
|
|
|
(5,328
|
)
|
|
29,486
|
|
||||
Freighter Exits
(1)
|
|
2
|
|
|
11,412
|
|
|
(425
|
)
|
|
(17,852
|
)
|
|
(6,865
|
)
|
||||
Total
|
|
14
|
|
|
$
|
18,446
|
|
|
$
|
27,355
|
|
|
$
|
(23,180
|
)
|
|
$
|
22,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Net income
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Net change in fair value of derivatives, net of tax expense of $23 and $804, respectively
|
436
|
|
|
382
|
|
||
Derivative loss reclassified into earnings
|
14,343
|
|
|
18,181
|
|
||
Total comprehensive income
|
$
|
99,856
|
|
|
$
|
27,476
|
|
•
|
$85.1
million of net income; and
|
•
|
$14.3
million of amortization of deferred net losses reclassified into earnings related to terminated interest rate derivatives.
|
•
|
$8.9
million of net income; and
|
•
|
$18.2
million of amortization of deferred net losses reclassified into earnings related to terminated interest rate derivatives.
|
•
|
lines of credit, our securitization, term financings, secured borrowings supported by export credit agencies for new aircraft acquisitions and bank financings secured by aircraft purchases;
|
•
|
unsecured indebtedness, including an unsecured revolving credit facility and unsecured senior notes;
|
•
|
sales of common shares; and
|
•
|
asset sales.
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Dollars in thousands)
|
||||||
Net cash flow provided by operating activities
|
$
|
249,606
|
|
|
$
|
214,005
|
|
Net cash flow used in investing activities
|
(664,649
|
)
|
|
(607,767
|
)
|
||
Net cash flow provided by (used in) financing activities
|
488,328
|
|
|
(73,319
|
)
|
•
|
a $20.2 million increase in maintenance revenues; and
|
•
|
a $5.3 million increase in cash from lease rentals.
|
•
|
a $507.5 million decrease in securitization and term debt financing repayments, primarily due to the repayment of $219.9 million for Securitization No. 1 and $450.0 million of our 9.75% Senior Notes due 2018 in 2014;
|
•
|
a $33.4 million decrease in payments for terminated cash flow hedges in 2014;
|
•
|
a $32.8 million decrease in debt extinguishment costs in 2014;
|
•
|
an $8.6 million increase in maintenance payments received net of maintenance payments returned; and
|
•
|
a $4.2 million decrease in deferred financings costs.
|
•
|
a $15.6 million decrease in restricted cash and cash equivalents related to financing activities;
|
•
|
a $3.3 million increase in dividends;
|
•
|
a $3.2 million decrease in proceeds from notes and term debt financings; and
|
•
|
a $2.9 million decrease in security deposits received net of security deposits returned.
|
•
|
an increase in borrowings and interest payments as a result of the closing of our Senior Notes due 2022 in January 2015, additional bank financings on aircraft and borrowing on our revolving credit facility; and
|
|
Payments Due By Period as of June 30, 2015
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Principal payments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Notes due 2017 - 2022
|
$
|
2,700,000
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
1,200,000
|
|
|
$
|
1,000,000
|
|
Revolving Credit Facility
|
150,000
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|||||
Securitization No. 2
(1)
|
334,073
|
|
|
254,291
|
|
|
79,782
|
|
|
—
|
|
|
—
|
|
|||||
ECA Term Financings
(2)
|
427,378
|
|
|
46,191
|
|
|
97,439
|
|
|
104,566
|
|
|
179,182
|
|
|||||
Bank Financings
(3)
|
670,945
|
|
|
59,974
|
|
|
171,047
|
|
|
137,865
|
|
|
302,059
|
|
|||||
Total principal payments
|
4,282,396
|
|
|
360,456
|
|
|
848,268
|
|
|
1,592,431
|
|
|
1,481,241
|
|
|||||
Interest payments on debt obligations and derivative instruments
(4)
|
942,037
|
|
|
206,541
|
|
|
357,653
|
|
|
254,003
|
|
|
123,840
|
|
|||||
Office leases
(5)
|
6,113
|
|
|
958
|
|
|
1,633
|
|
|
1,530
|
|
|
1,992
|
|
|||||
Purchase obligations
(6)
|
1,266,550
|
|
|
198,590
|
|
|
248,323
|
|
|
608,228
|
|
|
211,409
|
|
|||||
Total
|
$
|
6,497,096
|
|
|
$
|
766,545
|
|
|
$
|
1,455,877
|
|
|
$
|
2,456,192
|
|
|
$
|
1,818,482
|
|
(1)
|
Estimated principal payments for these non-recourse financings are based on excess cash flows available from forecasted lease rentals, net maintenance funding and proceeds from asset dispositions after the payment of forecasted operating expenses and interest payments, including interest payments on existing interest rate derivative agreements and policy provider fees.
|
(2)
|
Includes scheduled principal payments based upon eight fixed rate, 12-year, fully amortizing loans.
|
(3)
|
Includes principal payments based upon individual loan amortization schedules.
|
(4)
|
Future interest payments on variable rate, LIBOR-based debt obligations and derivative instruments are estimated using the interest rate in effect at June 30, 2015.
|
Hedged Item
|
|
Original
Maximum
Notional
Amount
|
|
Effective
Date
|
|
Maturity
Date
|
|
Fixed
Rate
%
|
|
Termination
Date
|
|
Deferred
(Gain) or
Loss Upon
Termination
|
|
Unamortized
Deferred
(Gain) or
Loss at
June 30,
2015
|
|
Amount of Deferred (Gain) or Loss Amortized (including Accelerated Amortization) into Interest Expense For the Six Months Ended June 30,
|
|
Amount of Deferred (Gain) or Loss Expected to be Amortized over the Next Twelve Months
|
||||||||||||||
2015
|
|
2014
|
|
|||||||||||||||||||||||||||||
|
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||
Securitization No. 2
|
|
410,000
|
|
|
Feb-07
|
|
Apr-17
|
|
5.14
|
|
|
Jun-07
|
|
(3,119
|
)
|
|
(132
|
)
|
|
(201
|
)
|
|
(130
|
)
|
|
(109
|
)
|
|||||
Senior Notes due 2017 and 2020
|
|
150,000
|
|
|
Jul-07
|
|
Dec-17
|
|
5.14
|
|
|
Mar-08
|
|
15,281
|
|
|
2,636
|
|
|
583
|
|
|
656
|
|
|
1,166
|
|
|||||
Senior Notes due 2019
|
|
491,718
|
|
|
May-13
|
|
May-15
|
|
5.31
|
|
|
De-designated –
Mar-12
Terminated –
April-12
|
|
31,403
|
|
|
—
|
|
|
4,401
|
|
|
7,943
|
|
|
—
|
|
|||||
Senior Notes due 2018
|
|
360,000
|
|
|
Jan-08
|
|
Feb-19
|
|
5.16
|
|
|
Partial – Jun-08
Full – Oct-08
|
|
23,077
|
|
|
4,706
|
|
|
747
|
|
|
797
|
|
|
1,418
|
|
|||||
ECA Term Financing for New A330 Aircraft
|
|
231,000
|
|
|
Apr-10
|
|
Oct-15
|
|
5.17
|
|
|
Partial – Jun-08
Full – Dec-08
|
|
15,310
|
|
|
398
|
|
|
604
|
|
|
349
|
|
|
398
|
|
|||||
ECA Term Financing for New A330 Aircraft
|
|
238,000
|
|
|
Jan-11
|
|
Apr-16
|
|
5.23
|
|
|
Dec-08
|
|
19,430
|
|
|
2,060
|
|
|
1,471
|
|
|
1,623
|
|
|
2,060
|
|
|||||
ECA Term Financing for New A330 Aircraft
|
|
238,000
|
|
|
Jul-11
|
|
Sep-16
|
|
5.27
|
|
|
Dec-08
|
|
17,254
|
|
|
1,953
|
|
|
920
|
|
|
1,016
|
|
|
1,690
|
|
|||||
Senior Notes due 2018
|
|
451,911
|
|
|
Jun-06
|
|
Jun-16
|
|
5.78
|
|
|
Feb-14
|
|
20,762
|
|
|
7,939
|
|
|
4,269
|
|
|
4,157
|
|
|
7,939
|
|
|||||
Senior Notes due 2018
|
|
108,089
|
|
|
Jun-06
|
|
Jun-16
|
|
5.78
|
|
|
Feb-14
|
|
6,101
|
|
|
2,333
|
|
|
1,254
|
|
|
1,222
|
|
|
2,333
|
|
|||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
$
|
145,499
|
|
|
$
|
21,893
|
|
|
$
|
14,048
|
|
|
$
|
17,633
|
|
|
$
|
16,895
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Depreciation
|
77,368
|
|
|
75,784
|
|
|
152,214
|
|
|
149,711
|
|
||||
Amortization of net lease discounts and lease incentives
|
4,351
|
|
|
(414
|
)
|
|
8,175
|
|
|
6,177
|
|
||||
Interest, net
|
61,551
|
|
|
60,494
|
|
|
123,682
|
|
|
124,757
|
|
||||
Income tax provision
|
4,465
|
|
|
6,558
|
|
|
9,328
|
|
|
7,441
|
|
||||
EBITDA
|
189,543
|
|
|
145,558
|
|
|
378,476
|
|
|
296,999
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Impairment of aircraft
|
23,955
|
|
|
28,306
|
|
|
23,955
|
|
|
46,569
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
36,570
|
|
|
—
|
|
|
36,570
|
|
||||
Non-cash share based payment expense
|
1,387
|
|
|
1,228
|
|
|
2,557
|
|
|
2,218
|
|
||||
Gain on mark to market of interest rate derivative contracts
|
(277
|
)
|
|
—
|
|
|
(166
|
)
|
|
(681
|
)
|
||||
Adjusted EBITDA
|
$
|
214,608
|
|
|
$
|
211,662
|
|
|
$
|
404,822
|
|
|
$
|
381,675
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Net income
|
$
|
41,808
|
|
|
$
|
3,136
|
|
|
$
|
85,077
|
|
|
$
|
8,913
|
|
Loss on extinguishment of debt
(2)
|
—
|
|
|
36,570
|
|
|
—
|
|
|
36,570
|
|
||||
Ineffective portion and termination of hedges
(1)
|
294
|
|
|
9
|
|
|
294
|
|
|
62
|
|
||||
Gain on mark to market of interest rate derivative contracts
(2)
|
(277
|
)
|
|
—
|
|
|
(166
|
)
|
|
(681
|
)
|
||||
Non-cash share based payment expense
(3)
|
1,387
|
|
|
1,228
|
|
|
2,557
|
|
|
2,218
|
|
||||
Term Financing No. 1 hedge loss amortization charges
(1)
|
1,275
|
|
|
3,839
|
|
|
4,401
|
|
|
7,943
|
|
||||
Securitization No. 1 hedge loss amortization charges
(1)
|
2,742
|
|
|
2,910
|
|
|
5,523
|
|
|
5,927
|
|
||||
Adjusted net income
|
$
|
47,229
|
|
|
$
|
47,692
|
|
|
$
|
97,686
|
|
|
$
|
60,952
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Weighted-average shares:
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Common shares outstanding
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
Restricted common shares
|
650,206
|
|
|
643,590
|
|
|
583,213
|
|
|
572,452
|
|
Total weighted-average shares
|
81,216,606
|
|
|
81,033,586
|
|
|
81,148,638
|
|
|
80,961,143
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Percentage of weighted-average shares:
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Common shares outstanding
|
99.20
|
%
|
|
99.21
|
%
|
|
99.28
|
%
|
|
99.29
|
%
|
Restricted common shares
|
0.80
|
%
|
|
0.79
|
%
|
|
0.72
|
%
|
|
0.71
|
%
|
Total
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
100.00
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Weighted-average common shares outstanding – Basic
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
Effect of dilutive shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted-average common shares outstanding - Diluted
(b)
|
80,566,400
|
|
|
80,389,996
|
|
|
80,565,425
|
|
|
80,388,691
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(Dollars in thousands,
except per share amounts)
|
||||||||||||||
Adjusted net income allocation:
|
|
|
|
|
|
|
|
||||||||
Adjusted net income (loss)
|
$
|
47,229
|
|
|
$
|
47,692
|
|
|
$
|
97,686
|
|
|
$
|
60,952
|
|
Less: Distributed and undistributed earnings allocated to restricted common shares
(a)
|
(378
|
)
|
|
(379
|
)
|
|
(702
|
)
|
|
(431
|
)
|
||||
Adjusted net income allocable to common shares – Basic and Diluted
|
$
|
46,851
|
|
|
$
|
47,313
|
|
|
$
|
96,984
|
|
|
$
|
60,521
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income per common share – Basic and Diluted
|
$
|
0.58
|
|
|
$
|
0.59
|
|
|
$
|
1.20
|
|
|
$
|
0.75
|
|
(a)
|
For the
three months ended
June 30, 2015
and
2014
, distributed and undistributed earnings to restricted shares is
0.80%
and
0.79%
of net income. For the
six months ended
June 30, 2015
and
2014
, distributed and undistributed earnings to restricted shares is
0.72%
and
0.71%
of net income. The amount of restricted share forfeitures for all periods present is immaterial to the allocation of distributed and undistributed earnings.
|
(b)
|
For the
three and six months ended
June 30, 2015
and
2014
, we had
no
dilutive shares.
|
•
|
depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our aircraft, which affects the aircraft’s availability for use and may be indicative of future needs for capital expenditures;
|
•
|
the cash portion of income tax (benefit) provision generally represents charges (gains), which may significantly affect our financial results;
|
•
|
elements of our interest rate derivative accounting may be used to evaluate the effectiveness of our hedging policy;
|
•
|
loss on the extinguishment of debt related to our 9.75% Senior Notes due 2018;
|
•
|
hedge loss amortization charges related to Term Financing No. 1 and Securitization No. 1; and
|
•
|
adjustments required in calculating covenant ratios and compliance as that term is defined in the indenture governing our senior unsecured notes.
|
•
|
forfeiting advance deposits and progress payments to Embraer, as well as incurring certain significant costs related to these commitments such as actual damages and legal, accounting and financial advisory expenses;
|
•
|
defaulting on any future lease commitments, which could result in monetary damages and strained relationships with lessees;
|
•
|
failing to realize the benefits of purchasing and leasing such aircraft; and
|
•
|
risking harm to our business reputation, which would make it more difficult to purchase and lease aircraft in the future on agreeable terms, if at all.
|
Period
|
Total
Number
of Shares
Purchased
|
|
Average
Price
Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(a)
|
|
Maximum
Number (or
Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans or
Programs
(a)
|
||||||
April 1 through April 30
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
100,000,000
|
|
May 1 through May 31
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000,000
|
|
||
June 1 through June 30
|
10,638
|
|
(b)
|
0.01
|
|
|
—
|
|
|
100,000,000
|
|
||
Total
|
10,638
|
|
|
$
|
0.01
|
|
|
—
|
|
|
$
|
100,000,000
|
|
(a)
|
On October 31, 2014, our Board of Directors authorized the repurchase of $100.0 million of the Company’s common shares.
|
(b)
|
Reflects the repurchase of unvested common shares from a former employee of the Company.
|
Exhibit
No.
|
|
Description of Exhibit
|
3.1
|
|
Memorandum of Association (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (Amendment No. 2) (No. 333-134669) filed on July 25, 2006).
|
3.2
|
|
Amended Bye-laws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-3 (No. 333-182242) filed on June 20, 2012).
|
4.1
|
|
Specimen Share Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (Amendment No. 2) (No. 333-134669) filed on July 25, 2006).
|
4.2
|
|
Indenture, dated as of April 4, 2012, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on April 5, 2012).
|
4.3
|
|
Indenture, dated as of November 30, 2012, by and between Aircastle Limited and Wells Fargo Bank, National Association as trustee (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on November 30, 2012).
|
4.4
|
|
Indenture, dated as of December 5, 2013, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on December 6, 2013).
|
4.5
|
|
First Supplemental Indenture, dated as of December 5, 2013, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K filed with the SEC on December 6, 2013).
|
4.6
|
|
Second Supplemental Indenture, dated as of March 26, 2014, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on March 26, 2014).
|
4.7
|
|
Third Supplemental Indenture, dated as of January 15, 2015, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the SEC on January 15, 2015).
|
4.8
|
|
Amended and Restated Shareholder Agreement, dated February 18, 2015 by and among Aircastle Limited, Marubeni Corporation and Marubeni Aviation Holding Coöperatief U.A. (incorporated by reference to Exhibit 4.8 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2015).
|
10.1
|
|
Amendment Agreement to the Credit Agreement, dated January 26, 2015, by and among Aircastle Limited, the several lenders from time to time parties thereto, and Citibank N.A., in its capacity as agent for the lenders (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 6, 2015).
|
10.2
|
|
Amendment Agreement to the Credit Agreement, dated May 13, 2015, by and among Aircastle Limited, the several lenders from time to time parties thereto, and Citibank N.A., in its capacity as agent for the lenders. *
|
10.3
|
|
Purchase Agreement COM0270-15, dated as of June 12, 2015, by and between Aircastle Holding Corporation and Embraer S.A. * †
|
31.1
|
|
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. *
|
31.2
|
|
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. *
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
99.1
|
|
Owned Aircraft Portfolio at June 30, 2015. *
|
101
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014, (ii) Consolidated Statements of Income for the three and six months ended June 30, 2015 and 2014, (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014, and (v) Notes to Unaudited Consolidated Financial Statements. *
|
|
AIRCASTLE LIMITED
|
|
|
(Registrant)
|
|
|
By:
|
/s/ Aaron Dahlke
|
|
|
Aaron Dahlke
|
|
|
Chief Accounting Officer and Authorized Officer
|
1.
|
INTERPRETATION
|
1.1.1.
|
“Actual Delivery Date”: shall mean, with respect to each Aircraft, the date on which Buyer obtains title to that Aircraft in accordance with Article 7.
|
1.1.5.
|
“Aircraft Basic Price”: shall mean the Aircraft price, as defined in Article 3.1.
|
1.2
|
Construction
|
2.
|
SUBJECT
|
3.
|
PRICE
|
4.
|
PAYMENT
|
5.
|
DELIVERY
|
6.
|
CERTIFICATION
|
7.
|
ACCEPTANCE AND TRANSFER OF OWNERSHIP
|
8.
|
STORAGE CHARGE
|
9.
|
DELAYS IN DELIVERY
|
10.
|
DELIVERY INSPECTION
|
12.
|
WARRANTY [***]
|
13.
|
PRODUCT SUPPORT PACKAGE
|
14.
|
ASSIGNMENT
|
15.
|
RESTRICTIONS AND PATENT INDEMNITY
|
16.
|
MARKETING PROMOTIONAL RIGHTS
|
17.
|
TAXES
|
18.
|
APPLICABLE LAW
|
19.
|
JURISDICTION
|
20.
|
TERMINATION
|
21.
|
PURCHASE RIGHT AIRCRAFT
|
22.
|
INTENTIONALLY LEFT BLANK
|
23.
|
NOTICES
|
24.
|
CONFIDENTIALITY
|
25.
|
FOREIGN CONTENT
|
26.
|
COMPLIANCE WITH LAWS
|
27.
|
SEVERABILITY
|
28.
|
NON-WAIVER
|
29.
|
INTEGRATED AGREEMENT
|
30.
|
NEGOTIATED AGREEMENT
|
31.
|
COUNTERPARTS
|
32.
|
ENTIRE AGREEMENT
|
1.
|
STANDARD AIRCRAFT
|
2.
|
OPTIONAL EQUIPMENT
|
3.
|
EXTERIOR FINISHING
|
4.
|
DEFINITION OF THE AIRCRAFT INTERIOR SPECIFICATION AND POSSIBLE CHANGES TO SUCH DEFINITION (LAYOUT, MONUMENTS AND/OR TRIM & FINISHING)
|
5.
|
OPTIONAL EQUIPMENT MODIFICATION
|
6.
|
BUYER FURNISHED EQUIPMENT (BFE) AND BUYER INSTALLED EQUIPMENT (BIE)
|
7.
|
EMBRAER RIGHT TO PERFORM FOR BUYER
|
8.
|
REGISTRATION MARKS, TRANSPONDER AND ELT CODES:
|
9.
|
EXPORT CONTROL ITEMS
|
1.
|
STANDARD AIRCRAFT
|
2.
|
OPTIONAL EQUIPMENT
|
3.
|
EXTERIOR FINISHING
|
4.
|
DEFINITION OF THE AIRCRAFT INTERIOR SPECIFICATION AND POSSIBLE CHANGES TO SUCH DEFINITION (LAYOUT, MONUMENTS AND/OR TRIM & FINISHING)
|
5.
|
OPTIONAL EQUIPMENT MODIFICATION
|
6.
|
BUYER FURNISHED EQUIPMENT (BFE) AND BUYER INSTALLED EQUIPMENT (BIE)
|
7.
|
EMBRAER RIGHT TO PERFORM FOR BUYER
|
8.
|
REGISTRATION MARKS, TRANSPONDER AND ELT CODES:
|
9.
|
EXPORT CONTROL ITEMS
|
1.
|
FERRY FLIGHT ASSISTANCE
|
1.1
|
Embraer will make available to Buyer or Buyer’s Lessee [***] the services of a third party representative at the airport in which the Aircraft will make the last stop in Brazilian territory, to assist Buyer’s or Buyer’s Lessee crew in its process to clear customs in Brazil. Such services do not include handling services such as refueling, ground equipment and communications and Buyer or Buyer’s Lessee shall hire such services from a handling service company. Buyer or Buyer’s Lessee shall also be responsible for the [***] required for the ferry flight. [***].
|
2.
|
PRODUCT SUPPORT PACKAGE
|
2.1
|
MATERIAL SUPPORT
|
2.1.3
|
OTHER SPARES SERVICES
|
2.2
|
AIRCRAFT TECHNICAL PUBLICATIONS:
|
2.2.1
|
EMBRAER PUBLICATIONS [***]
|
2.2.2
|
VENDOR PUBLICATIONS
|
2.2.3
|
The Parties further understand and agree that in the event Buyer elects not to take all or any one of the Technical Publications of Software above mentioned, or revisions thereof, no refund or other financial adjustment of the Aircraft Basic Price will be made.
|
2.3
|
SERVICES
|
2.3.1
|
Familiarization Programs:
|
a.
|
The familiarization programs specified below are offered [***], except for any travel, board and lodging expenses [***], whether imposed by the Airworthiness Authority or other authority [***].
|
b.
|
The familiarization programs shall, at Embraer’s criteria, be conducted [***]. Such familiarization programs shall be in accordance with all applicable regulations and requirements of and approved by the Airworthiness Authority. [***] shall be solely responsible for preparing and submitting its training programs to the Airworthiness Authority for approval.
|
c.
|
All familiarization programs shall be provided at the training centers of Embraer, Flight Safety International or other Embraer designated training provider at its respective training center or in such other location as Embraer, Flight Safety International or other Embraer designated training provider may reasonably indicate. Buyer or Buyer’s Lessee shall be responsible for all costs and expenses related to the training services (including but not limited to instructor travel tickets, local transportation, lodging, per diem and non-productive days), in the event Buyer or Buyer’s Lessee requires that any training services be carried outside such indicated training facilities.
|
d.
|
Notwithstanding the eventual use of the term “training” in this paragraph 2.3.1, the intent of this program is solely to familiarize Buyer or any Buyer’s Lessee pilots, mechanics, employees or representatives with the operation and maintenance of the Aircraft. It is not the intent of Embraer to provide basic training (“ab-initio”) to any representatives of Buyer or any Buyer’s Lessee.
|
e.
|
Any trainee appointed by Buyer or Buyer’s Lessee for participation in any of the familiarization programs shall be duly qualified per the governing body in the country of Buyer’s or Buyer’s Lessee’s operation and fluent in the English language as all training will be conducted in, and all training material will be presented in, such language. Pilots and mechanics shall also [***] in the [***], as applicable [***]. Neither Embraer, Flight Safety International nor other Embraer designated training provider make any representation or give any guarantee regarding the successful completion of any training program by Buyer’s or Buyer’s Lessee’s trainees, for which Buyer or Buyer’s Lessee shall be solely responsible.
|
f.
|
The familiarization programs [***] shall be carried out [***]. Substitutions of appointed trainees will not be accepted during this period.
|
g.
|
Training entitlements regarding each Aircraft that remain unused up to [***] shall expire [***].
|
h.
|
The familiarization programs referred to above covers:
|
i.
|
The presence of Buyer’s or Buyer’s Lessee’s authorized trainees shall be allowed exclusively in those areas related to the training hereof and Buyer and each Buyer’s Lessee shall hold harmless Embraer from and against all and any kind of liabilities in respect of such trainees to the extent permitted by law.
|
2.3.2
|
On site support:
|
a.
|
Embraer shall provide the following on site support services:
|
b.
|
[***] shall provide such FSR [***] (hereinafter defined as “Embraer Rep”) with communication services (international telephone line, facsimile, internet service and photocopy equipment) as well as suitable secure and private office facilities and related equipment including desk, table, chairs and file cabinet [***].
|
c.
|
During the stay of Embraer Rep at [***] shall permit access to the maintenance and operation facilities as well as to the data and files of [***].
|
d.
|
Embraer shall [***].
|
e.
|
The Embraer Rep shall not participate in test flights or flight demonstrations without the previous written authorization from Embraer.
|
f.
|
The Parties further understand and agree that in the event Buyer elects not to take all or any portion of the on site support provided for herein, no [***]. Any other additional on site support shall depend on mutual agreement between the Parties and shall be charged by Embraer accordingly.
|
g.
|
The presence of Embraer Rep shall be allowed exclusively in those areas related to the subject matter hereof [***].
|
h.
|
Embraer may, at its own cost and without previous notice to Buyer or, Buyer’s Lessee substitute at its sole discretion the Embraer Reps rendering the Services at any time during the period in which Services are being rendered.
|
i.
|
The rendering of the Services by Embraer’s Rep shall, at all times, be carried out in compliance with the applicable labor legislation.
|
j.
|
During the rendering of the Services, while on the premises of any Buyer’s Lessee, Embraer Reps shall strictly follow the administrative routines and proceedings of such Buyer’s Lessee, which shall have been expressly and clearly informed to Embraer Reps upon their arrival at said premises.
|
k.
|
Embraer shall have the right to interrupt the rendering of the Services (i) should any situation occur which, at the sole discretion of Embraer, could represent a risk to the safety or health of Embraer Reps or (ii) upon the occurrence of any of the following events: strike, insurrection, labor disruptions or disputes, riots, or military conflicts. Upon the occurrence of such an interruption, Embraer shall resume the rendering of the Services for the remainder period immediately after having been informed by Buyer or Buyer’s Lessee, in
|
2.3.3
|
Account Manager:
|
2.3.4
|
Remote Technical and Engineering Support
|
2.3.5
|
Insurance
|
2.4
|
DISCLOSURE OF [***]
|
2.5
|
INDEMNITY
|
a)
|
[***]
|
b)
|
[***]
|
c)
|
Notwithstanding anything to the contrary as specified in the Policy or any endorsement thereof, the coverage stated in paragraphs a) and b) above, shall not be cancelled or modified by the Insurer, without [***] advance written notice to Embraer to such effect.
|
1)
|
Embraer, subject to the conditions and limitations hereby expressed, warrants the Aircraft subject of the Purchase Agreement, as follows:
|
a.
|
For a period of [***] from the date of delivery to Buyer, the aircraft will be free from:
|
•
|
Defects in materials, workmanship and manufacturing processes in relation to parts manufactured by Embraer or by its subcontractors holding an Embraer part number;
|
•
|
Defects inherent to the design of the Aircraft and its parts designed or manufactured by Embraer or by its subcontractors holding an Embraer part number.
|
b.
|
For a period of [***] from the date of delivery to Buyer, the Aircraft will be free from:
|
•
|
Defects in operation of parts manufactured by Vendors, excluding the Engines, Auxiliary Power Unit (APU) and their accessories (“Vendor Parts”), as well as failures of Vendor Parts due to incorrect installation or installation not complying with the instructions issued or approved by their respective Vendors. For the purpose of this warranty, Engine shall mean the complete power plant system which comprises the engine, the nacelle including thrust reverser, the engine mounting structure, all systems inside the nacelle and their integration with the Aircraft, and the Full Authority Digital Engine Control (FADEC) unit.
|
•
|
Defects due to non-conformity of Vendor Parts to the technical specification referred to in the Purchase Agreement.
|
2)
|
The obligations of Embraer as expressed in this Warranty are limited to replacing or repairing defective parts, such replacement or repair to be determined by Embraer acting reasonably. The defective parts shall be returned to Embraer or its representatives within a period of [***], Embraer may have the right, at its sole discretion, to deny the warranty claim.
|
3)
|
Embraer will accept no warranty claims under any of the circumstances listed below:
|
a.
|
When the Aircraft has been used in an attempt to break records, or subjected to experimental flights, or in any other way not in conformity with the flight manual or the airworthiness certificate, or subjected to any manner of use in contravention of the applicable aerial navigation or other regulations and rules, issued or recommended by government authorities of whatever jurisdiction in which the aircraft is registered, when accepted and recommended by I.C.A.O.;
|
b.
|
When the relevant parts of the Aircraft have been altered or modified by Buyer, without prior approval from Embraer or from the manufacturer of the parts through a service bulletin;
|
c.
|
Whenever the Aircraft or any of its parts have been involved in [***], or when parts either defective or not complying to manufacturer's design or specification have been used;
|
d.
|
Whenever parts have had their identification marks, designation, seal or serial number altered or removed;
|
e.
|
In the event of negligence, misuse or maintenance services done on the Aircraft, or any of its parts not in accordance with the respective maintenance manual;
|
f.
|
In cases of deterioration, wear, breakage, damage or any other defect resulting from the use of inadequate packing methods when returning items to Embraer or its representatives.
|
4)
|
This Warranty does not apply to [***].
|
5)
|
The Warranty hereby expressed is established between Embraer and Buyer, and it cannot be transferred, assigned or novated to any third party, except as provided otherwise pursuant to Article 14 (Assignment) of the Purchase Agreement.
|
6)
|
TO THE EXTENT PERMITTED BY LAW, THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF EMBRAER AND REMEDIES OF BUYER SET FORTH IN THIS WARRANTY CERTIFICATE ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF EMBRAER AND ANY ASSIGNEE OF EMBRAER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST EMBRAER OR ANY ASSIGNEE OF EMBRAER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NON-CONFORMANCE OR DEFECT OR FAILURE OR ANY OTHER REASON IN ANY AIRCRAFT OR OTHER THING DELIVERED UNDER THE PURCHASE AGREEMENT OF WHICH THIS IS AN ATTACHMENT, INCLUDING DATA, DOCUMENT, INFORMATION OR SERVICE, INCLUDING BUT NOT LIMITED TO:
|
a.
|
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
|
b.
|
ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
|
c.
|
ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OR OTHER RELATED CAUSES OF EMBRAER OR ANY ASSIGNEE OF EMBRAER, WHETHER ACTIVE, PASSIVE OR IMPUTED; AND
|
d.
|
ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT OR FOR ANY DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
|
7)
|
No representative or employee of Embraer is authorized to establish any other warranty than the one hereby expressed, nor to assume any additional obligation, relative to the matter, in the name of Embraer and therefore any such statements eventually made by, or in the name of Embraer, shall be void and without effect.
|
Aircraft
|
Contractual Delivery Date
|
Configuration
|
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#
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E190-E2
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E195-E2
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Attachment
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01
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[***]
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[***]
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[***]
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02
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[***]
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[***]
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[***]
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03
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[***]
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[***]
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[***]
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04
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[***]
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[***]
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[***]
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05
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[***]
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[***]
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[***]
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06
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[***]
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[***]
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[***]
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07
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[***]
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[***]
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[***]
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08
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[***]
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[***]
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[***]
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09
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[***]
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[***]
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[***]
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10
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[***]
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[***]
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[***]
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11
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[***]
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[***]
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[***]
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12
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[***]
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[***]
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[***]
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13
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[***]
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[***]
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[***]
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14
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[***]
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[***]
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[***]
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15
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[***]
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[***]
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[***]
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16
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[***]
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[***]
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[***]
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17
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[***]
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[***]
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[***]
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18
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[***]
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[***]
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[***]
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19
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[***]
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[***]
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[***]
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20
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[***]
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[***]
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[***]
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21
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[***]
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[***]
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[***]
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22
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[***]
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[***]
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[***]
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23
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[***]
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[***]
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[***]
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24
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[***]
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[***]
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[***]
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25
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[***]
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[***]
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[***]
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a)
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Pursuant and subject to the terms and conditions of the Purchase Agreement, Buyer shall buy and Embraer shall sell fifteen (15) E190-E2 Aircraft and ten (10) E195-E2 Aircraft (the “Firm Aircraft”) and Buyer shall have the right to purchase up to fifteen (15) E190-E2 Purchase Right Aircraft and ten (10) E195-E2 Purchase Right Aircraft (the “Purchase Right Aircraft”) (collectively, the “Aircraft”).
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b)
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Embraer and Buyer wish to set forth the additional agreements with respect to certain matters related to the purchase of the Aircraft.
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1.
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[***]
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5.
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ADDITIONAL AGREEMENTS RE. [***]
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6.
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BUYER’S LESSEES [***]
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7.
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[***]
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11.
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ADDITIONAL SUPPORT
[***]
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12.
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BUYER
[***]
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13.
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[***]
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14.
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ADDITIONAL SUPPORT
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15.
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OPTIONAL [***]
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16.
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COMPLIANCE WITH LAWS
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17.
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REINSTATEMENT OF THE PURCHASE AGREEMENT
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18.
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COUNTERPARTS
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1.
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I have reviewed this quarterly report on Form 10-Q of Aircastle Limited;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Ron Wainshal
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Ron Wainshal
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Aircastle Limited;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Michael Inglese
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Michael Inglese
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Ron Wainshal
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Name:
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Ron Wainshal
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Title:
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Chief Executive Officer
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Date:
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August 6, 2015
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Michael Inglese
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Name:
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Michael Inglese
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Title:
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Chief Financial Officer
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Date:
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August 6, 2015
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Aircraft Group
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Aircraft Type
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Engine Type
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Manufacturer
Serial Number
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Date of
Manufacture
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Financing
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Narrowbody Aircraft
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A319-100
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CFM56-5B5/P
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2311
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Feb-05
|
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Unencumbered
|
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A320-200
|
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V2527-A5
|
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739
|
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Nov-97
|
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Unencumbered
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A320-200
|
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CFM56-5B4/P
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967
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Apr-99
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Unencumbered
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A320-200
|
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V2527-A5
|
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990
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May-99
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1041
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Jul-99
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1047
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Aug-99
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Unencumbered
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A320-200
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CFM56-5B4/3
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1054
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Aug-99
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1059
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Aug-99
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Unencumbered
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A320-200
|
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CFM56-5B4/P
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1067
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Sep-99
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Unencumbered
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A320-200
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CFM56-5B4/2P
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1081
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Oct-99
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1099
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Oct-99
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Unencumbered
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A320-200
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CFM56-5B4/P
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1101
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Nov-99
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Unencumbered
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A320-200
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CFM56-5B4/P
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1119
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Dec-99
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Unencumbered
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A320-200
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CFM56-5B4/P
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1316
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Oct-00
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1345
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Nov-00
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1370
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Jan-01
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Securitization No. 2
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A320-200
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CFM56-5B4/P
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1793
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Mar-04
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Unencumbered
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A320-200
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CFM56-5B4/P
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1809
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Mar-04
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Unencumbered
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A320-200
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CFM56-5B4/P
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2104
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Apr-05
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Unencumbered
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A320-200
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CFM56-5B4/P
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2248
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Apr-05
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Unencumbered
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A320-200
|
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CFM56-5B4/P
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2391
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Apr-05
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Unencumbered
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A320-200
|
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V2527-A5
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2401
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Mar-05
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Unencumbered
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A320-200
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V2527-A5
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2524
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Sep-05
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Securitization No. 2
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A320-200
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V2527-A5
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2564
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Oct-05
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Securitization No. 2
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A320-200
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CFM56-5B6/P
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2956
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Nov-06
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Unencumbered
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A320-200
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CFM56-5B4/P
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3093
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Apr-07
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Bank Financing
|
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A320-200
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CFM56-5B4/P
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3121
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May-07
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Bank Financing
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A320-200
|
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CFM56-5B6/P
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3178
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Jul-07
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Unencumbered
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A320-200
|
|
CFM56-5B6/3
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|
3213
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Sep-07
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Unencumbered
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A320-200
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CFM56-5B6/3
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3277
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Oct-07
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Unencumbered
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A320-200
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CFM56-5B6/3
|
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3328
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Dec-07
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Unencumbered
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A320-200
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CFM56-5B6/3
|
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3338
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Dec-07
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Unencumbered
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A320-200
|
|
CFM56-5B6/3
|
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3464
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Apr-08
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Unencumbered
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A320-200
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CFM56-5B6/3
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|
3502
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Jun-08
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Unencumbered
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A320-200
|
|
CFM56-5B6/3
|
|
3515
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Jun-08
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Unencumbered
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A320-200
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CFM56-5B6/3
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|
3532
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Jun-08
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Unencumbered
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A320-200
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CFM56-5B6/3
|
|
3729
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Dec-08
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Unencumbered
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A320-200
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|
CFM56-5B6/3
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|
4019
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|
Sep-09
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Unencumbered
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A320-200
|
|
CFM56-5B6/3
|
|
4070
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|
Oct-09
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Unencumbered
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A320-200
|
|
CFM56-5B6/3
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|
4088
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Nov-09
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Unencumbered
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A320-200
|
|
CFM56-5B6/3
|
|
4126
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Dec-09
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Unencumbered
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A320-200
|
|
CFM56-5B4/3
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|
6139
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Oct-14
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|
Unencumbered
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A320-200
|
|
CFM56-5B4/3
|
|
6173
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|
Oct-14
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|
Unencumbered
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|
A320-200
|
|
CFM56-5B4/3
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|
6528
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|
Mar-15
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Unencumbered
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|
|
|
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|
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Aircraft Group
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Aircraft Type
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Engine Type
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Manufacturer Serial Number
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Date of Manufacture
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Financing
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Narrowbody Aircraft (Continued)
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A320-200
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CFM56-5B4/3
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|
6536
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Mar-15
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Unencumbered
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A320-200
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CFM56-5B4/3
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6561
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Apr-15
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Unencumbered
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A320-200
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|
CFM56-5B4/3
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|
6598
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|
May-15
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Unencumbered
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A320-200
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CFM56-5B4/3
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|
6634
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|
Jun-15
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Unencumbered
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A321-200
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CFM56-5B3/P
|
|
1006
|
|
Apr-99
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|
Securitization No. 2
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|
A321-200
|
|
CFM56-5B3/2P
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|
1012
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Apr-99
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Securitization No. 2
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|
A321-200
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|
V2533-A5
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1015
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May-99
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|
Unencumbered
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|
A321-200
|
|
CFM56-5B3/P
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|
2220
|
|
May-04
|
|
Unencumbered
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|
A321-200
|
|
CFM56-5B3/P
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|
2357
|
|
Dec-04
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|
Unencumbered
|
|
A321-200
|
|
CFM56-5B3/P
|
|
2381
|
|
Feb-05
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|
Unencumbered
|
|
A321-200
|
|
CFM56-5B3/P
|
|
2472
|
|
May-05
|
|
Unencumbered
|
|
A321-200
|
|
CFM56-5B3/P
|
|
2488
|
|
Jun-05
|
|
Unencumbered
|
|
A321-200
|
|
CFM56-5B3/P
|
|
2563
|
|
Oct-05
|
|
Unencumbered
|
|
737-700
|
|
CFM56-7B22
|
|
28008
|
|
Feb-99
|
|
Securitization No. 2
|
|
737-700
|
|
CFM56-7B22
|
|
28009
|
|
Mar-99
|
|
Securitization No. 2
|
|
737-700
|
|
CFM56-7B22
|
|
28010
|
|
Oct-99
|
|
Securitization No. 2
|
|
737-700
|
|
CFM56-7B22
|
|
28013
|
|
Oct-00
|
|
Unencumbered
|
|
737-700
|
|
CFM56-7B22
|
|
28015
|
|
Feb-01
|
|
Securitization No. 2
|
|
737-800
|
|
CFM56-7B26
|
|
28213
|
|
Jun-98
|
|
Securitization No. 2
|
|
737-800
|
|
CFM56-7B27
|
|
28231
|
|
May-00
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
28381
|
|
May-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
28383
|
|
May-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
28384
|
|
Nov-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
28626
|
|
Jul-00
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29036
|
|
Dec-98
|
|
Securitization No. 2
|
|
737-800
|
|
CFM56-7B26
|
|
29037
|
|
Jan-99
|
|
Securitization No. 2
|
|
737-800
|
|
CFM56-7B26
|
|
29246
|
|
Apr-00
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29247
|
|
Apr-00
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29250
|
|
Mar-01
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B27
|
|
29345
|
|
May-02
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29916
|
|
Mar-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29917
|
|
Jun-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29918
|
|
Jun-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
29920
|
|
Sep-99
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B24
|
|
29927
|
|
Dec-00
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B24
|
|
29930
|
|
Jan-01
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
30295
|
|
Nov-04
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B27
|
|
30296
|
|
Feb-05
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B27
|
|
30824
|
|
Mar-05
|
|
Bank Financing
|
|
737-800
|
|
CFM56-7B27
|
|
30877
|
|
Mar-01
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26
|
|
33453
|
|
Jul-05
|
|
Bank Financing
|
|
737-800
|
|
CFM56-7B26
|
|
34000
|
|
Aug-05
|
|
Bank Financing
|
|
737-800
|
|
CFM56-7B24
|
|
34803
|
|
Mar-07
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B24
|
|
34804
|
|
Jun-07
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26/3
|
|
35082
|
|
Mar-08
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B26/3
|
|
35083
|
|
Mar-08
|
|
Unencumbered
|
|
|
|
|
|
|
|
|
|
|
Aircraft Group
|
Aircraft Type
|
|
Engine Type
|
|
Manufacturer Serial Number
|
|
Date of Manufacture
|
|
Financing
|
Narrowbody Aircraft (Continued)
|
737-800
|
|
CFM56-7B26
|
|
35093
|
|
Feb-07
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B27
|
|
35103
|
|
Nov-06
|
|
Bank Financing
|
|
737-800
|
|
CFM56-7B26/3
|
|
35106
|
|
Mar-08
|
|
Unencumbered
|
|
737-800
|
|
CFM56-7B24E
|
|
38686
|
|
Jan-13
|
|
Unencumbered
|
|
737-900ER
|
|
CFM56-7B26/3
|
|
35679
|
|
Apr-07
|
|
Unencumbered
|
|
737-900ER
|
|
CFM56-7B26/3
|
|
35680
|
|
May-07
|
|
Unencumbered
|
|
737-900ER
|
|
CFM56-7B26/3
|
|
35720
|
|
Dec-08
|
|
Unencumbered
|
|
737-900ER
|
|
CFM56-7B26/3
|
|
35721
|
|
Feb-09
|
|
Unencumbered
|
|
737-900ER
|
|
CFM56-7B26E
|
|
38302
|
|
Aug-11
|
|
Unencumbered
|
|
737-900ER
|
|
CFM56-7B26E
|
|
38683
|
|
Nov-12
|
|
Unencumbered
|
|
E195
|
|
CF34-10E6
|
|
449
|
|
Jul-11
|
|
Unencumbered
|
|
E195
|
|
CF34-10E6
|
|
458
|
|
Jul-11
|
|
Unencumbered
|
|
E195
|
|
CF34-10E6
|
|
484
|
|
Oct-11
|
|
Unencumbered
|
|
E195
|
|
CF34-10E7
|
|
575
|
|
Sep-12
|
|
Unencumbered
|
|
E195
|
|
CF34-10E7
|
|
588
|
|
Dec-12
|
|
Unencumbered
|
|
|
|
|
|
|
|
|
|
|
Classic Narrowbody Aircraft
|
757-200
|
|
RB211-535E4
|
|
27201
|
|
Mar-94
|
|
Securitization No. 2
|
|
757-200
|
|
RB211-535E4
|
|
27244
|
|
Mar-94
|
|
Securitization No. 2
|
|
757-200
|
|
RB211-535E4
|
|
27245
|
|
Jul-94
|
|
Securitization No. 2
|
|
757-200
|
|
RB211-535E4
|
|
27805
|
|
Jan-95
|
|
Unencumbered
|
|
757-200
|
|
RB211-535E4
|
|
27806
|
|
Jan-95
|
|
Unencumbered
|
|
757-200
|
|
RB211-535E4
|
|
27807
|
|
Feb-95
|
|
Unencumbered
|
|
|
|
|
|
|
|
|
|
|
Widebody Aircraft
|
A330-200
|
|
Trent 772B-60
|
|
311
|
|
Dec-99
|
|
Unencumbered
|
|
A330-200
|
|
Trent 772B-60
|
|
313
|
|
Jan-00
|
|
Securitization No. 2
|
|
A330-200
|
|
PW4168A
|
|
324
|
|
May-00
|
|
Unencumbered
|
|
A330-200
|
|
PW4168A
|
|
343
|
|
Jun-00
|
|
Unencumbered
|
|
A330-200
|
|
CF6-80E1A3
|
|
587
|
|
Apr-04
|
|
Unencumbered
|
|
A330-200
|
|
CF6-80E1A3
|
|
634
|
|
Nov-04
|
|
Unencumbered
|
|
A330-200
|
|
Trent 772B-60
|
|
1073
|
|
Dec-09
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1191
|
|
Feb-11
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1210
|
|
Mar-11
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1223
|
|
May-11
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1236
|
|
Jul-11
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1293
|
|
Apr-12
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1364
|
|
Nov-12
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1407
|
|
Apr-13
|
|
Bank Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1474
|
|
Dec-13
|
|
ECA Term Financing
|
|
A330-200
|
|
Trent 772B-60
|
|
1492
|
|
Oct-14
|
|
Unencumbered
|
|
A330-300
|
|
PW4168A
|
|
171
|
|
Apr-97
|
|
Securitization No. 2
|
|
A330-300
|
|
PW4168A
|
|
368
|
|
Nov-00
|
|
Unencumbered
|
|
A330-300
|
|
Trent 772B-60
|
|
997
|
|
Mar-09
|
|
Unencumbered
|
|
A330-300
|
|
Trent 772B-60
|
|
1006
|
|
Apr-09
|
|
Unencumbered
|
|
A330-300
|
|
Trent 772B-60
|
|
1012
|
|
May-09
|
|
Unencumbered
|
|
A330-300
|
|
Trent 772B-60
|
|
1015
|
|
May-09
|
|
Unencumbered
|
|
A330-300
|
|
PW4168A
|
|
1055
|
|
Oct-09
|
|
Unencumbered
|
|
|
|
|
|
|
|
|
|
|
Aircraft Group
|
Aircraft Type
|
|
Engine Type
|
|
Manufacturer Serial Number
|
|
Date of Manufacture
|
|
Financing
|
Widebody Aircraft (Continued)
|
A330-300
|
|
Trent 772B-60
|
|
1411
|
|
Apr-13
|
|
Bank Financing
|
|
A330-300
|
|
Trent 772B-60
|
|
1481
|
|
Jan-14
|
|
Bank Financing
|
|
A330-300
|
|
Trent 772B-60
|
|
1596
|
|
Jan-15
|
|
Unencumbered
|
|
767-300ER
|
|
PW4060-3
|
|
25587
|
|
Feb-96
|
|
Securitization No. 2
|
|
777-200ER
|
|
Trent 892B-17
|
|
28414
|
|
May-98
|
|
Securitization No. 2
|
|
777-300ER
|
|
GE90-115B
|
|
35256
|
|
Mar-07
|
|
Bank Financing
|
|
777-300ER
|
|
GE90-115B
|
|
35299
|
|
Oct-07
|
|
Bank Financing
|
|
777-300ER
|
|
GE90-115B
|
|
38886
|
|
Aug-12
|
|
Unencumbered
|
|
777-300ER
|
|
GE90-115B
|
|
38888
|
|
Oct-12
|
|
Unencumbered
|
|
777-300ER
|
|
GE90-115B
|
|
38889
|
|
Nov-12
|
|
Unencumbered
|
|
777-300ER
|
|
GE90-115B
|
|
41521
|
|
Oct-12
|
|
Bank Financing
|
|
777-300ER
|
|
GE90-115B
|
|
41522
|
|
Mar-13
|
|
Bank Financing
|
|
|
|
|
|
|
|
|
|
|
Freighter Aircraft
|
747-400BCF
|
|
PW4056-3
|
|
24061
|
|
Mar-89
|
|
Securitization No. 2
|
|
747-400BCF
|
|
PW4056-3
|
|
24066
|
|
Jun-90
|
|
Unencumbered
|
|
747-400BCF
|
|
PW4056-3
|
|
24226
|
|
Sep-90
|
|
Unencumbered
|
|
747-400BCF
|
|
PW4056-3
|
|
24975
|
|
Feb-91
|
|
Securitization No. 2
|
|
747-400BDSF
|
|
PW4056-1C/3
|
|
25700
|
|
May-93
|
|
Unencumbered
|
|
747-400BDSF
|
|
PW4056-3
|
|
27044
|
|
Sep-94
|
|
Unencumbered
|
|
747-400BDSF
|
|
CF6-80C2B1F
|
|
29375
|
|
Sep-99
|
|
Unencumbered
|
|
747-400F
|
|
CF6-80C2B1F
|
|
33749
|
|
Oct-04
|
|
Unencumbered
|
|
747-400ERF
|
|
CF6-80C2B5F
|
|
35233
|
|
Jan-07
|
|
Securitization No. 2
|
|
747-400ERF
|
|
CF6-80C2B5F
|
|
35235
|
|
Jul-07
|
|
Securitization No. 2
|
|
747-400ERF
|
|
CF6-80C2B5F
|
|
35236
|
|
Feb-08
|
|
Unencumbered
|
|
747-400ERF
|
|
CF6-80C2B5F
|
|
35237
|
|
Apr-08
|
|
Unencumbered
|
|
MD-11SF
|
|
PW4462-3
|
|
48445
|
|
Apr-91
|
|
Securitization No. 2
|
|
MD-11F
|
|
CF6-80C2D1F
|
|
48778
|
|
Nov-97
|
|
Unencumbered
|
|
MD-11F
|
|
CF6-80C2D1F
|
|
48779
|
|
Dec-97
|
|
Unencumbered
|