Babcock & Brown Air Reports Fourth Quarter and Full Year 2008 Results
Fourth Quarter Highlights
- Net income of
$9.4 million , EPS of$0.28 - Available Cash Flow of
$35.9 million ,$1.07 per share - Unrestricted cash of
$56.8 million at quarter end - Pre-tax gain of
$6.5 million from the sale of one aircraft - Repurchased one million shares for
$5.0 million - Fourth quarter dividend of
$0.20 per share
2008 Highlights
- Net income of
$48.1 million , EPS of$1.44 - Available Cash Flow of
$139.2 million ,$4.15 per share - Unrestricted cash increased from
$15.6 million to $56.8 million - Pre-tax gain of
$11.4 million from the sale of two aircraft $73.7 million returned to shareholders through dividends and share buybacks
“B&B Air has entered 2009 in a sound financial position after a successful year in 2008,” said
“In 2008, B&B Air expanded its fleet of modern commercial aircraft, further diversified its lessee base, significantly increased its Available Cash Flow, and returned
Fourth Quarter and Full Year 2008 Financial Results
The 2008 financial results are the first full year results for B&B Air as a public company, as the company completed its listing on
B&B Air’s basic and diluted earnings per share were
Net income in the fourth quarter of 2008 was
Total revenues in the fourth quarter of 2008 were
Total expenses in the fourth quarter of 2008 were
Depreciation expense in the fourth quarter of 2008 was
Interest expense in the fourth quarter of 2008 was
Selling, general and administrative expenses were
Maintenance and other costs were
The provision for income taxes was
Available Cash Flow
Available Cash Flow (“ACF”), which B&B Air defines as net income plus depreciation, lease incentive amortization, amortization of debt issue costs and the deferred tax provision, was
ACF should be used as a supplement to and not as a substitute for financial measures determined in accordance with Accounting Principles Generally Accepted in
Dividend and Share Repurchases
On
During 2008, B&B Air returned
B&B Air’s Board of Directors has approved an extension of the previously authorized share repurchase program. Under the repurchase program, B&B Air is authorized to repurchase up to
Financial Position
At
Aircraft Portfolio
All of the aircraft in B&B Air’s portfolio are currently on lease, except for one of the five aircraft repossessed during 2008. The remaining four repossessed aircraft have been re-leased at rentals that exceed the previous rentals. The aircraft are on lease to 36 lessees in 19 countries.
The table below shows the aircraft in B&B Air’s initial 47 aircraft portfolio and the portfolios on
Portfolio On Oct 2, 2007 Sep 30, 2007 Dec 31, 2008 Dec 31, 2008
Airbus A319 5 9 10 10
Airbus A320 16(1) 16(1) 18 17
Airbus A330 - - 1 1
Boeing 737 16(1) 16(1) 19 19
Boeing 747 - - 1 1
Boeing 757 9 10 12 12
Boeing 767 1 1 1 1
Boeing 777 - - 1 1
Total 47 52 63 62
1 One Airbus A320 and one Boeing 737 from the Initial Portfolio were
transferred to B&B Air in February 2008 and were not included in the
Portfolio on December 31, 2007.
On
Conference Call and Webcast
B&B Air’s senior management will host a conference call and webcast to discuss these results at
Participants should call +1-706-643-7953 (International) or 866-696-7906 (
A live webcast of the conference call will be also available in the investor section of B&B Air’s website at www.babcockbrownair.com. An archived webcast will be available for one year.
About B&B Air
B&B Air acquires and leases modern, high-demand and fuel-efficient commercial jet aircraft under multi-year operating lease contracts to a diverse group of airlines throughout the world. B&B Air is managed and serviced by Babcock & Brown Aircraft Management (“BBAM”), the world’s fourth largest aircraft lessor. For more information about B&B Air, please visit our website at www.babcockbrownair.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain “forward – looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for B&B Air’s future business and financial performance. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks. B&B Air expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise.
Contact:
Matt Dallas
Babcock & Brown
+ 1-212-796-3918
matt.dallas@babcockbrown.com
Babcock & Brown Air Limited
Consolidated Statements of Operations
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Period from
Three Three Inception
Months months (May 3, Year
ended ended 2007) to ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2008 2007 2008
(Unaudited) (Unaudited) (Audited) (Audited)
Revenues
Operating lease revenue $26,042 $53,738 $26,042 $218,940
Finance lease income 2,365 − 2,365 2,446
Gain on sale of aircraft − 6,458 − 11,437
Interest and other income 4,927 488 4,927 3,315
Total revenues 33,334 60,684 33,334 236,138
Expenses
Depreciation 8,573 20,172 8,573 74,161
Interest expense 14,628 22,571 14,628 81,689
Hedging costs − − 1,725 −
Selling, general and
administrative 4,226 5,250 4,866 20,989
Maintenance and other
costs 165 1,904 165 4,307
Total expenses 27,592 49,897 29,957 181,146
Net income before
provision for income
taxes 5,742 10,787 3,377 54,992
Provision for income taxes 1,327 1,437 1,032 6,867
Net income $4,415 $9,350 $2,345 $48,125
Weighted average number of
shares 33,238,195 33,439,998 12,584,008 33,524,074
Basic and diluted earnings
per share $0.13 $0.28 $0.19 $1.44
Dividends declared and
paid per share $− $0.50 $− $2.00
Babcock & Brown Air Limited
Consolidated Balance Sheets
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PAR VALUE DATA)
December 31, 2007 December 31, 2008
(Audited) (Audited)
Assets
Cash and cash equivalents $15,616 $56,763
Rent receivables 832 4,148
Restricted cash and cash equivalents 112,621 113,658
Flight equipment held for operating
lease, net 1,309,142 1,830,612
Investment in direct finance leases,
net 74,693 −
Deferred tax asset, net 36,712 40,734
Fair market value of derivative
asset − 2,368
Other assets, net 39,610 37,891
Total assets 1,589,226 2,086,174
Liabilities
Accounts payable and accrued
liabilities 7,983 13,809
Rentals received in advance 7,675 9,476
Payable to related parties 1,651 2,728
Security deposits 22,899 35,664
Maintenance payment liability 49,850 88,526
Notes payable, net 850,660 826,301
Borrowings under aircraft
acquisition facility 132,573 597,471
Fair market value of derivative
liabilities 18,731 113,374
Other liabilities 6,702 9,412
Total liabilities 1,098,724 1,696,761
Shareholders' equity
Common shares, $0.001 par value;
499,999,900 shares authorized;
33,603,450 and 32,488,911 shares
issued and outstanding at December
31, 2007 and 2008, respectively
September 30, 2008 and December 31,
2007, respectively 34 32
Manager shares, $0.001 par value;
100 shares authorized, issued and
outstanding − −
Additional paid-in capital 506,339 499,882
Notes receivable for common shares (1,827) −
Retained earnings (deficit) 2,345 (16,584)
Accumulated other comprehensive
loss, net (16,389) (93,917)
Total shareholders' equity 490,502 389,413
Total liabilities and shareholders'
equity $1,589,226 $2,086,174
Babcock & Brown Air Limited
Reconciliation of Available Cash Flow, a Non-GAAP Financial
Measure to Net Income
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Period from
Three Three Inception
Months months (May 3, Year
ended ended 2007) to ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2008 2007 2008
(Unaudited)(Unaudited) (Unaudited) (Unaudited)
Net income $4,415 $9,350 $2,345 48,125
Add:
Depreciation 8,573 20,172 8,573 74,161
Amortization of lease
incentives − 2,333 − 2,333
Amortization of debt
issuance costs 1,467 2,443 1,467 7,532
Provision for deferred
income taxes
331 1,630 36 7,054
Available cash flow $14,786 $35,928 $12,421 $139,205
Weighted average share
outstanding 33,238,195 33,439,998 12,584,008 33,524,074
Available cash flow per
share $0.44 $1.07 $0.99 $4.15
B&B Air defines Available Cash Flow (“ACF”) as net income plus depreciation, amortization of lease incentives and debt issue costs, and provision for deferred income taxes. B&B Air’s definition of ACF may not be consistent with similar definitions used by other companies. The reconciliation above compares ACF to net income computed in accordance with Accounting Principles Generally Accepted in
SOURCE Babcock & Brown Air Limited