Aircastle Announces First Quarter 2019 Results

Total Revenues Rose 5.5% to $213.9 million; Book Value per share increased 8.7% versus Q1:18

Published

STAMFORD, Conn., May 2, 2019 /PRNewswire/ -- 

Key First Quarter 2019 Financial Metrics

  • Total revenues were $213.9 million
  • Total lease rental and direct financing and sales-type lease revenues were $189.7 million
  • Net income was $34.8 million, or $0.46 per diluted common share
  • Adjusted net income(1) was $39.6 million, or $0.52 per diluted common share
  • Adjusted EBITDA(1) was $199.3 million
  • Cash ROE(1) was 11.8%; net cash interest margin was 7.3%

First Quarter 2019 Highlights

  • Acquired fourteen narrow-body aircraft for $444.7 million; committed to acquire twelve additional narrow-bodies for $385 million
  • Sold four older narrow-body aircraft for $56.3 million and a gain on sale of $12.0 million
  • Declared our 52nd consecutive quarterly dividend
  • Repurchased $8.7 million of our shares year-to-date at average price of $17.57 per share

Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported first quarter 2019 net income of $34.8 million, or $0.46 per diluted common share, and adjusted net income of $39.6 million, or $0.52 per diluted common share.  The first quarter results included total lease rental and direct financing and sales-type lease revenues of $189.7 million, versus $186.9 million in the first quarter of 2018, an increase of 1.5%.

Commenting on the results, Mike Inglese, Aircastle's Chief Executive Officer, stated, "Aircastle continued to deliver strong financial results in the first quarter of 2019.  By focusing on value-added growth opportunities, we have acquired or committed to acquire $830 million of attractively priced aircraft thus far in 2019, while simultaneously improving the quality and composition of our fleet.  Our acquisitions consist entirely of modern, narrow-body aircraft where we continue to see very strong demand from our airline customers."

Mr. Inglese continued, "Our asset management skills were recently highlighted, with the successful recovery and transition of ten Airbus A320-200 aircraft from Avianca Brazil to LATAM Airlines Group S.A.  In line with our earlier expectations, the aircraft will begin to return to service during the second quarter.  In addition, we have lease commitments and are in the process of transitioning the seven Boeing 737 family aircraft that were previously on-lease with Jet Airways."

Mr. Inglese concluded, "As a professional manager of commercial aircraft, we will continue to be responsible stewards of investor capital.  Since our initial public offering in 2006 we have acquired nearly $16 billion of aircraft, paid out $880 million of dividends, and have repurchased more than $270 million of our shares at an average price of $14.57.  We are dedicated to creating long-term value for our shareholders, and our sensible, balanced capital allocation strategy positions us well moving forward."

Financial Results

(In thousands, except share data) Three Months Ended March 31,
2019 2018
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925
Total revenues $ 213,927 $ 202,680
Adjusted EBITDA(1) $ 199,347 $ 191,145
Net income $ 34,810 $ 57,547
   Per common share - Diluted $ 0.46 $ 0.73
Adjusted net income(1) $ 39,616 $ 56,751
   Per common share - Diluted $ 0.52 $ 0.72

(In thousands, except share data) Three Months Ended March 31,
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers.
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925
Total revenues $ 213,927 $ 202,680
Adjusted EBITDA(1) $ 199,347 $ 191,145
Net income $ 34,810 $ 57,547
   Per common share - Diluted $ 0.46 $ 0.73
Adjusted net income(1) $ 39,616 $ 56,751
   Per common share - Diluted $ 0.52 $ 0.72

First Quarter Results

Net income for the quarter was $34.8 million, a decrease of $22.7 million versus the prior year, while adjusted net income was $39.6 million, a decrease of $17.1 million.  Higher total revenues of $11.2 million were offset by higher depreciation of $9.7 million, driven by the effect of net aircraft acquired since the beginning of 2018; higher maintenance expense of $6.4 million due to transition related costs; higher interest expense of $6.4 million from higher average debt balances; and higher combined hedging related costs and income taxes of $9.2 million.

Total revenues were $213.9 million, an increase of $11.2 million, or 5.5%, from the previous year.  The increase was driven by a $2.8 million rise in lease rental and direct financing and sales-type lease revenues, a $6.2 million increase in the gain on the sale of flight equipment, and a $4.4 million increase in maintenance revenues.  Rental revenues were 1.5% higher due to the positive impact of aircraft acquisitions, partly offset by aircraft sold, and the impact of the bankruptcies of Avianca Brazil and Jet Airways.  While rental revenues were $2.8 million higher in the first quarter of 2019 versus the prior year, the unrecognized rental revenue from the two bankrupt airlines totaled $15.9 million for the quarter, or approximately $0.21 per diluted share.  Maintenance revenues improved mainly due to higher lease transitions versus the prior year.  Gain on sale was higher driven by the sale of four aircraft at larger gains versus the prior year and two aircraft which were reclassified as net investment in direct financing and sales-type leases.

Adjusted EBITDA for the first quarter was $199.3 million, an increase of $8.2 million, or 4.3%, from the first quarter of 2018.  The increase was due to higher rental revenues, higher maintenance revenues, and higher gains from aircraft sales, partly offset by higher maintenance related costs.

Aviation Assets

During the first quarter 2019, we acquired fourteen aircraft for $445 million and made commitments to acquire twelve additional aircraft in 2019 for $385 million.  These 26 aircraft have a weighted average age of 7.8 years and a weighted average remaining lease term of 4.8 years.  All of the aircraft that we have acquired or have committed to acquire this year are narrow-body aircraft.

As of March 31, 2019, Aircastle owned 259 aircraft having a net book value of $7.6 billion.  We also manage fifteen aircraft with a net book value of $686 million dollars on behalf of our joint ventures.

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1)
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4%
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5%
Net Cash Interest Margin(5) 7.3% 8.3%
Managed Aircraft on behalf of Joint Ventures
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634
Number of Aircraft 15 12

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1)
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end.
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value.
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019.
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals.
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized.
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4%
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5%
Net Cash Interest Margin(5) 7.3% 8.3%
Managed Aircraft on behalf of Joint Ventures
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634
Number of Aircraft 15 12

Financing Activity

At the end of the first quarter of 2019, the current undrawn available balance under our committed credit facilities totaled $705 million.  Borrowings under our credit facilities totaled $375 million at the end of the first quarter of 2019.

Common Dividend

On April 30, 2019, Aircastle's Board of Directors declared a second quarter 2019 cash dividend on its common shares of $0.30 per share, payable on June 14, 2019 to shareholders of record on May 31, 2019.  This is our 52nd consecutive dividend.

Share Repurchases

Since the beginning of the year, the Company acquired approximately 497,000 shares at an average price of $17.57 per share.  Aircastle's Board of Directors previously authorized a $100 million share repurchase program, and there is approximately $76 million remaining under this authorization.  Since 2011, the Company has repurchased 18.5 million shares at an average cost of $14.57 per share.

Conference Call

In connection with this earnings release, management will host an earnings conference call on Thursday, May 2, 2019 at 10:00 A.M. Eastern time.  All interested parties are welcome to participate on the live call.  The conference call can be accessed by dialing (800) 667-5617 (from within the U.S. and Canada) or (334) 323-0509 (from outside of the U.S. and Canada) ten minutes prior to the scheduled start and referencing the passcode "6382988".

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

For those who are not available to listen to the live call, a replay will be available until 1:00 P.M. Eastern time on Saturday, June 1, 2019 by dialing (888) 203-1112 (from within the U.S. and Canada) or (719) 457-0820  (from outside of the U.S. and Canada); please reference passcode "6382988".

About Aircastle Limited

Aircastle Limited acquires, leases and sells commercial jet aircraft to airlines throughout the world.  As of March 31, 2019, Aircastle owned and managed on behalf of its joint ventures 274 aircraft leased to 86 customers located in 47 countries.

Safe Harbor

All statements in this press release, other than characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not necessarily limited to, statements relating to our proposed public offering of notes and our ability to acquire, sell, lease or finance aircraft, raise capital, pay dividends, and increase revenues, earnings, EBITDA, Adjusted EBITDA, Adjusted Net Income, Cash Return on Equity and Net Cash Interest Margin and the global aviation industry and aircraft leasing sector. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "may," "will," "would," "could," "should," "seeks," "estimates" and variations on these words and similar expressions are intended to identify such forward-looking statements. These statements are based on our historical performance and that of our subsidiaries and on our current plans, estimates and expectations and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements; Aircastle can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any such forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this press release. These risks or uncertainties include, but are not limited to, those described from time to time in Aircastle's filings with the SEC and previously disclosed under "Risk Factors" in Item 1A of Aircastle's 2018 Annual Report on Form 10-K.  In addition, new risks and uncertainties emerge from time to time, and it is not possible for Aircastle to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. Aircastle expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.

 

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data)
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019.
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited)
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111
Number of Aircraft 15 12 Other assets 177,398 214,361
Total assets $ 8,022,201 $ 7,871,181
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896
Accounts payable, accrued expenses and other liabilities 156,887 153,341
Lease rentals received in advance 91,190 87,772
Security deposits 124,989 120,962
Maintenance payments 734,552 739,072
Total liabilities 6,009,262 5,862,500
Commitments and Contingencies
SHAREHOLDERS' EQUITY
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754
Additional paid-in capital 1,460,564 1,468,779
Retained earnings 551,624 539,332
Accumulated other comprehensive loss (184)
Total shareholders' equity 2,012,939 2,008,681
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181

 

 

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts)
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues:
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128)
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124
Total revenues 213,927 202,680
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses:
LIABILITIES Depreciation 84,735 75,002
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933
Security deposits 124,989 120,962
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174
Total liabilities 6,009,262 5,862,500
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921
Commitments and Contingencies Income tax provision (benefit) 3,098 (844)
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic:
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted:
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28
Total shareholders' equity 2,012,939 2,008,681
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181

 

 

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands)
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities:
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities:
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768)
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501)
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities:
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57)
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures.
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands)
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities:
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities:
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768)
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501)
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities:
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57)
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

 

 

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages)
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6)
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9%
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768)
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501)
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities:
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57)
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19.
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways.
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense.
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6)
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9%
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768)
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501)
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities:
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57)
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

 

 

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts)
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6)
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information.
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs.
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6)
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

 

 

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information. Reconciliation of GAAP to Non-GAAP Measures
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs. EBITDA and Adjusted EBITDA Reconciliation
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited) (Dollars in thousands)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018 (Unaudited)
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018 Three Months Ended March 31,
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680 2019 2018
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6) Net income $ 34,810 $ 57,547
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941 Depreciation 84,735 75,002
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8 Amortization of lease premiums, discounts and incentives 5,711 3,128
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145 Interest, net 63,463 57,108
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69 Income tax provision (benefit) 3,098 (844)
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547 EBITDA 191,817 191,941
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232 Adjustments:
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73 Equity share of joint venture impairment 2,724
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73 Non-cash share-based payment expense 2,726 2,378
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665) Loss (gain) on mark-to-market of interest rate derivative contracts 2,080 (3,174)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751 Adjusted EBITDA $ 199,347 $ 191,145
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

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

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

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

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

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs. EBITDA and Adjusted EBITDA Reconciliation Adjusted Net Income Reconciliation
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited) (Dollars in thousands) (Dollars in thousands)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018 (Unaudited) (Unaudited)
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018 Three Months Ended March 31, Three Months Ended March 31,
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680 2019 2018 2019 2018
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6) Net income $ 34,810 $ 57,547 Net income $ 34,810 $ 57,547
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941 Depreciation 84,735 75,002 Loss (gain) on mark-to-market of interest rate derivative contracts(1) 2,080 (3,174)
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8 Amortization of lease premiums, discounts and incentives 5,711 3,128 Non-cash share-based payment expense(2) 2,726 2,378
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145 Interest, net 63,463 57,108
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69 Income tax provision (benefit) 3,098 (844) Adjusted net income $ 39,616 $ 56,751
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547 EBITDA 191,817 191,941
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232 Adjustments:
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73 Equity share of joint venture impairment 2,724
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73 Non-cash share-based payment expense 2,726 2,378
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665) Loss (gain) on mark-to-market of interest rate derivative contracts 2,080 (3,174)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751 Adjusted EBITDA $ 199,347 $ 191,145
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures (1)  Included in Other income (expense).
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs. EBITDA and Adjusted EBITDA Reconciliation Adjusted Net Income Reconciliation (2)  Included in Selling, general and administrative expenses.
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited) (Dollars in thousands) (Dollars in thousands)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018 (Unaudited) (Unaudited)
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018 Three Months Ended March 31, Three Months Ended March 31,
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680 2019 2018 2019 2018
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6) Net income $ 34,810 $ 57,547 Net income $ 34,810 $ 57,547
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941 Depreciation 84,735 75,002 Loss (gain) on mark-to-market of interest rate derivative contracts(1) 2,080 (3,174)
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8 Amortization of lease premiums, discounts and incentives 5,711 3,128 Non-cash share-based payment expense(2) 2,726 2,378
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145 Interest, net 63,463 57,108
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69 Income tax provision (benefit) 3,098 (844) Adjusted net income $ 39,616 $ 56,751
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547 EBITDA 191,817 191,941
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232 Adjustments:
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73 Equity share of joint venture impairment 2,724
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73 Non-cash share-based payment expense 2,726 2,378
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665) Loss (gain) on mark-to-market of interest rate derivative contracts 2,080 (3,174)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751 Adjusted EBITDA $ 199,347 $ 191,145
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

Management believes that ANI, when viewed in conjunction with the Company's results under U.S. GAAP and the above reconciliation, provides useful information about operating and period-over-period performance and additional information that is useful for evaluating the underlying operating performance of our business without regard to periodic reporting elements related to interest rate derivative accounting, changes related to refinancing activity and non-cash share-based payment expense.

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures (1)  Included in Other income (expense). Reconciliation of GAAP to Non-GAAP Measures
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs. EBITDA and Adjusted EBITDA Reconciliation Adjusted Net Income Reconciliation (2)  Included in Selling, general and administrative expenses. Cash Return on Equity Calculation
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited) (Dollars in thousands) (Dollars in thousands) (Dollars in thousands)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018 (Unaudited) (Unaudited) (Unaudited)
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018 Three Months Ended March 31, Three Months Ended March 31, Period CFFO Gain on Sale of Flight Equipment Deprec. Cash Earnings Average Shareholders Equity Trailing Twelve Month Cash ROE
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680 2019 2018 2019 2018 Q1:15 $ 498,536 $ 28,289 $ 300,284 $ 226,541 $ 1,682,857 13.5%
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6) Net income $ 34,810 $ 57,547 Net income $ 34,810 $ 57,547 Q1:16 $ 525,569 $ 64,597 $ 320,584 $ 269,582 $ 1,769,981 15.2%
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941 Depreciation 84,735 75,002 Loss (gain) on mark-to-market of interest rate derivative contracts(1) 2,080 (3,174) Q1:17 $ 499,768 $ 27,052 $ 307,743 $ 219,077 $ 1,804,573 12.1%
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8 Amortization of lease premiums, discounts and incentives 5,711 3,128 Non-cash share-based payment expense(2) 2,726 2,378 Q1:18 $ 534,771 $ 60,176 $ 294,492 $ 300,455 $ 1,881,633 16.0%
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145 Interest, net 63,463 57,108 Q1:19 $ 510,008 $ 43,000 $ 320,583 $ 232,425 $ 1,976,235 11.8%
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69 Income tax provision (benefit) 3,098 (844) Adjusted net income $ 39,616 $ 56,751 Pro-forma Q1:19 $ 525,899 $ 43,000 $ 320,583 $ 248,316 $ 1,976,235 12.6%
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547 EBITDA 191,817 191,941
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232 Adjustments:
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73 Equity share of joint venture impairment 2,724
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73 Non-cash share-based payment expense 2,726 2,378
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665) Loss (gain) on mark-to-market of interest rate derivative contracts 2,080 (3,174)
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751 Adjusted EBITDA $ 199,347 $ 191,145
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72
Security deposits 124,989 120,962 Other assets (1,030) (2,666)
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

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

Pro forma Q1:19 estimates the impact of the Avianca Brazil and Jet Airways bankruptcies on cash ROE.

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures (1)  Included in Other income (expense). Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs. EBITDA and Adjusted EBITDA Reconciliation Adjusted Net Income Reconciliation (2)  Included in Selling, general and administrative expenses. Cash Return on Equity Calculation Net Cash Interest Margin Calculation
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited) (Dollars in thousands) (Dollars in thousands) (Dollars in thousands) (Dollars in thousands)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018 Three Months Ended March 31, Three Months Ended March 31, Period CFFO Gain on Sale of Flight Equipment Deprec. Cash Earnings Average Shareholders Equity Trailing Twelve Month Cash ROE Period Average NBV Quarterly Rental Revenue(1) Cash Interest(2) Annualized Net Cash Interest Margin(1)(2)
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680 2019 2018 2019 2018 Q1:15 $ 498,536 $ 28,289 $ 300,284 $ 226,541 $ 1,682,857 13.5% Q1:15 $ 5,743,035 $ 181,027 $ 50,235 9.1%
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6) Net income $ 34,810 $ 57,547 Net income $ 34,810 $ 57,547 Q1:16 $ 525,569 $ 64,597 $ 320,584 $ 269,582 $ 1,769,981 15.2% Q2:15 $ 5,967,898 $ 189,238 $ 51,413 9.2%
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941 Depreciation 84,735 75,002 Loss (gain) on mark-to-market of interest rate derivative contracts(1) 2,080 (3,174) Q1:17 $ 499,768 $ 27,052 $ 307,743 $ 219,077 $ 1,804,573 12.1% Q3:15 $ 6,048,330 $ 191,878 $ 51,428 9.3%
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8 Amortization of lease premiums, discounts and incentives 5,711 3,128 Non-cash share-based payment expense(2) 2,726 2,378 Q1:18 $ 534,771 $ 60,176 $ 294,492 $ 300,455 $ 1,881,633 16.0% Q4:15 $ 5,962,874 $ 188,491 $ 51,250 9.2%
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145 Interest, net 63,463 57,108 Q1:19 $ 510,008 $ 43,000 $ 320,583 $ 232,425 $ 1,976,235 11.8% Q1:16 $ 5,988,076 $ 186,730 $ 51,815 9.0%
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69 Income tax provision (benefit) 3,098 (844) Adjusted net income $ 39,616 $ 56,751 Pro-forma Q1:19 $ 525,899 $ 43,000 $ 320,583 $ 248,316 $ 1,976,235 12.6% Q2:16 $ 5,920,030 $ 184,469 $ 55,779 8.7%
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547 EBITDA 191,817 191,941 Q3:16 $ 6,265,175 $ 193,909 $ 57,589 8.7%
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232 Adjustments: Q4:16 $ 6,346,361 $ 196,714 $ 58,631 8.7%
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73 Equity share of joint venture impairment 2,724 Q1:17 $ 6,505,355 $ 200,273 $ 58,839 8.7%
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73 Non-cash share-based payment expense 2,726 2,378 Q2:17 $ 6,512,100 $ 199,522 $ 55,871 8.8%
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665) Loss (gain) on mark-to-market of interest rate derivative contracts 2,080 (3,174) Q3:17 $ 5,985,908 $ 184,588 $ 53,457 8.8%
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751 Adjusted EBITDA $ 199,347 $ 191,145 Q4:17 $ 6,247,581 $ 187,794 $ 53,035 8.6%
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440 Q1:18 $ 6,700,223 $ 193,418 $ 53,978 8.3%
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72 Q2:18 $ 6,721,360 $ 193,988 $ 53,979 8.3%
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72 Q3:18 $ 6,787,206 $ 200,354 $ 54,521 8.6%
Security deposits 124,989 120,962 Other assets (1,030) (2,666) Q4:18 $ 7,136,627 $ 200,027 $ 60,348 7.8%
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367 Q1:19 $ 7,449,957 $ 195,601 $ 60,279 7.3%
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595 Pro-forma Q1:19 $ 7,449,957 $ 211,501 $ 60,279 8.1%
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19. Supplemental Financial Information (1) Refer to the selected information accompanying this press release for a reconciliation of GAAP to Non-GAAP information. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures (1)  Included in Other income (expense). Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures (1) Based on the growing level of direct financing and sales-type lease revenue, management revised the calculation of net cash interest margin to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type lease in lease rentals.  The calculation of net cash interest margin for all prior periods presented is revised to be comparable with the current period presentation.
Lease rental and direct financing and sales-type lease revenues $ 189,677 $ 186,925 Net Book Value of Unencumbered Flight Equipment ($ mils.) $ 6,298 $ 5,304 (2) Weighted by net book value. (Dollars in thousands, except share data) (Dollars in thousands, except per share amounts) (Dollars in thousands) ($ in millions, except for percentages) (2) Includes $10.1M of net maintenance revenue (maintenance reserves net of a transactional impairment) in connection with the early return of seven aircraft from Jet Airways. (Amount in thousands, except per share amounts) (2) For the three months ended March 31, 2019 and March 31, 2018 dilutive shares represented contingently issuable shares related to the Company's PSUs. EBITDA and Adjusted EBITDA Reconciliation Adjusted Net Income Reconciliation (2)  Included in Selling, general and administrative expenses. Cash Return on Equity Calculation Net Cash Interest Margin Calculation (2) Excludes loan termination payments of  $1.5 million and $3.5 million in the first quarter and fourth quarter of 2016, respectively, and loan termination payments of $1.0 million in both the second and third quarters of 2017.
Total revenues $ 213,927 $ 202,680 Number of Aircraft 259 222 (3) Aircraft on-lease days as a percent of total days in period weighted by net book value. The decrease from our historical utilization rate was due to discontinued revenue recognition from eleven aircraft from Avianca Brazil and seven aircraft from Jet Airways during the three months ended March 31, 2019. (Unaudited) (Unaudited) (Unaudited) (3) Includes $3.2M of non-cash share-based payment expense. (Unaudited) (Dollars in thousands) (Dollars in thousands) (Dollars in thousands) (Dollars in thousands)
Adjusted EBITDA(1) $ 199,347 $ 191,145 Number of Unencumbered Aircraft 228 193 (4) Lease rental revenue, interest income and cash collections on our net investment in direct financing and sales-type leases for the period as a percent of the average net book value for the period; quarterly information is annualized.  Based on the growing level of direct financing and sales-type lease revenue management revised the calculation of portfolio yield to include our net investment in direct financing and sales-type leases in the average net book value and to include the interest income and cash collections on our net investment in direct financing and sales-type leases in lease rentals. March 31, 2019 December 31, 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net income $ 34,810 $ 57,547 Weighted Average Fleet Age (years)(2) 9.4 9.3 (5) Net Cash Interest Margin = Lease rental yield including direct financing and sales-type lease revenue and collections minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities  / average NBV of flight equipment for the period calculated on a quarterly basis, annualized. (Unaudited) Three Months Ended March 31, Three Months Ended March 31, Guidance Item Q2:19 Three Months Ended March 31,
   Per common share - Diluted $ 0.46 $ 0.73 Weighted Average Remaining Lease Term (years)(2) 4.5 4.8 ASSETS 2019 2018 2019 2018 Lease rental revenue(1) $186 - $190 2019 2018 Three Months Ended March 31, Three Months Ended March 31, Period CFFO Gain on Sale of Flight Equipment Deprec. Cash Earnings Average Shareholders Equity Trailing Twelve Month Cash ROE Period Average NBV Quarterly Rental Revenue(1) Cash Interest(2) Annualized Net Cash Interest Margin(1)(2)
Adjusted net income(1) $ 39,616 $ 56,751 Weighted Average Fleet Utilization for the quarter ended(3) 93.7% 99.4% Cash and cash equivalents $ 92,629 $ 152,719 Revenues: Cash flows from operating activities: Direct financing and sales-type lease revenue $8 - $9 Revenues $ 213,927 $ 202,680 2019 2018 2019 2018 Q1:15 $ 498,536 $ 28,289 $ 300,284 $ 226,541 $ 1,682,857 13.5% Q1:15 $ 5,743,035 $ 181,027 $ 50,235 9.1%
   Per common share - Diluted $ 0.52 $ 0.72 Portfolio Yield for the quarter ended(2)(4) 10.5% 11.5% Restricted cash and cash equivalents 15,579 15,134 Lease rental revenue $ 181,234 $ 177,483 Net income $ 34,810 $ 57,547 Amortization of net lease discounts and lease incentives $(5) - $(6) Net income $ 34,810 $ 57,547 Net income $ 34,810 $ 57,547 Q1:16 $ 525,569 $ 64,597 $ 320,584 $ 269,582 $ 1,769,981 15.2% Q2:15 $ 5,967,898 $ 189,238 $ 51,413 9.2%
Net Cash Interest Margin(5) 7.3% 8.3% Accounts receivable 15,636 15,091 Direct financing and sales-type lease revenue 8,443 9,442 Adjustments to reconcile net income to net cash and restricted cash provided by operating activities: Maintenance revenue(2) $16 - $20 EBITDA(1) $ 191,817 $ 191,941 Depreciation 84,735 75,002 Loss (gain) on mark-to-market of interest rate derivative contracts(1) 2,080 (3,174) Q1:17 $ 499,768 $ 27,052 $ 307,743 $ 219,077 $ 1,804,573 12.1% Q3:15 $ 6,048,330 $ 191,878 $ 51,428 9.3%
Flight equipment held for lease, net of accumulated depreciation of $1,276,266 and $1,221,985, respectively 7,138,689 6,935,585 Amortization of lease premiums, discounts and incentives (5,711) (3,128) Depreciation 84,735 75,002 Gain on sale of flight equipment $4 - $8 Amortization of lease premiums, discounts and incentives 5,711 3,128 Non-cash share-based payment expense(2) 2,726 2,378 Q1:18 $ 534,771 $ 60,176 $ 294,492 $ 300,455 $ 1,881,633 16.0% Q4:15 $ 5,962,874 $ 188,491 $ 51,250 9.2%
Managed Aircraft on behalf of Joint Ventures Net investment in direct financing and sales-type leases 505,964 469,180 Maintenance revenue 16,401 11,991 Amortization of deferred financing costs 3,364 3,533 Depreciation $87 - $90 Adjusted EBITDA(1) $ 199,347 $ 191,145 Interest, net 63,463 57,108 Q1:19 $ 510,008 $ 43,000 $ 320,583 $ 232,425 $ 1,976,235 11.8% Q1:16 $ 5,988,076 $ 186,730 $ 51,815 9.0%
Net Book Value of Flight Equipment ($ mils.) $ 686 $ 634 Unconsolidated equity method investments 76,306 69,111 Total lease revenue 200,367 195,788 Amortization of lease premiums, discounts and incentives 5,711 3,128 Interest, net $66 - $69 Income tax provision (benefit) 3,098 (844) Adjusted net income $ 39,616 $ 56,751 Pro-forma Q1:19 $ 525,899 $ 43,000 $ 320,583 $ 248,316 $ 1,976,235 12.6% Q2:16 $ 5,920,030 $ 184,469 $ 55,779 8.7%
Number of Aircraft 15 12 Other assets 177,398 214,361 Gain on sale of flight equipment 12,002 5,768 Deferred income taxes 3,164 1,306 SG&A(3) $18 - $19 Net income $ 34,810 $ 57,547 EBITDA 191,817 191,941 Q3:16 $ 6,265,175 $ 193,909 $ 57,589 8.7%
Total assets $ 8,022,201 $ 7,871,181 Other revenue 1,558 1,124 Non-cash share-based payment expense 2,726 2,378 Full year effective tax rate 7% - 9% Net income allocable to common shares $ 34,609 $ 57,232 Adjustments: Q4:16 $ 6,346,361 $ 196,714 $ 58,631 8.7%
Total revenues 213,927 202,680 Cash flow hedges reclassified into earnings 184 301 Per common share - Basic $ 0.46 $ 0.73 Equity share of joint venture impairment 2,724 Q1:17 $ 6,505,355 $ 200,273 $ 58,839 8.7%
LIABILITIES AND SHAREHOLDERS' EQUITY Operating expenses: Collections on direct financing and sales-type leases 5,925 6,493 Per common share - Diluted $ 0.46 $ 0.73 Non-cash share-based payment expense 2,726 2,378 Q2:17 $ 6,512,100 $ 199,522 $ 55,871 8.8%
LIABILITIES Depreciation 84,735 75,002 Security deposits and maintenance payments included in earnings (14,975) (665) Loss (gain) on mark-to-market of interest rate derivative contracts 2,080 (3,174) Q3:17 $ 5,985,908 $ 184,588 $ 53,457 8.8%
Borrowings from secured financings, net of debt issuance costs and discounts $ 773,153 $ 798,457 Interest, net 63,463 57,108 Gain on sale of flight equipment (12,002) (5,768) Adjusted net income(1) $ 39,616 $ 56,751 Adjusted EBITDA $ 199,347 $ 191,145 Q4:17 $ 6,247,581 $ 187,794 $ 53,035 8.6%
Borrowings from unsecured financings, net of debt issuance costs and discounts 4,128,491 3,962,896 Selling, general and administrative (including non-cash share-based payment expense of $2,726 and $2,378 for the three months ended March 31, 2019 and 2018, respectively) 18,000 17,835 Other 1,613 (4,501) Adjusted net income allocable to common shares $ 39,387 $ 56,440 Q1:18 $ 6,700,223 $ 193,418 $ 53,978 8.3%
Accounts payable, accrued expenses and other liabilities 156,887 153,341 Maintenance and other costs 7,404 988 Changes in certain assets and liabilities: Per common share - Basic $ 0.53 $ 0.72 Q2:18 $ 6,721,360 $ 193,988 $ 53,979 8.3%
Lease rentals received in advance 91,190 87,772 Total operating expenses 173,602 150,933 Accounts receivable (3,662) 4,320 Per common share - Diluted $ 0.52 $ 0.72 Q3:18 $ 6,787,206 $ 200,354 $ 54,521 8.6%
Security deposits 124,989 120,962 Other assets (1,030) (2,666) Q4:18 $ 7,136,627 $ 200,027 $ 60,348 7.8%
Maintenance payments 734,552 739,072 Total other income (expense) (2,061) 3,174 Accounts payable, accrued expenses and other liabilities (7,337) (57) Basic common shares outstanding 74,704 78,367 Q1:19 $ 7,449,957 $ 195,601 $ 60,279 7.3%
Total liabilities 6,009,262 5,862,500 Lease rentals received in advance 3,134 8,554 Diluted common shares outstanding(2) 75,274 78,595 Pro-forma Q1:19 $ 7,449,957 $ 211,501 $ 60,279 8.1%
Income from continuing operations before income taxes and earnings (loss) of unconsolidated equity method investments 38,264 54,921 Net cash and restricted cash provided by operating activities 106,360 148,905
Commitments and Contingencies Income tax provision (benefit) 3,098 (844) Cash flows from investing activities:
Earnings (loss) of unconsolidated equity method investments, net of tax (356) 1,782 Acquisition and improvement of flight equipment (355,817) (82,493)
SHAREHOLDERS' EQUITY Net income $ 34,810 $ 57,547 Proceeds from sale of flight equipment 56,307 43,917
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding Earnings per common share — Basic: Net investment in direct financing and sales-type leases (16,256)
Common shares, $0.01 par value, 250,000,000 shares authorized, 75,077,638 shares issued and outstanding at March 31, 2019; and 75,454,511 shares issued and outstanding at December 31, 2018 751 754 Net income per share $ 0.46 $ 0.73 Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 19,697 2,900
Additional paid-in capital 1,460,564 1,468,779 Earnings per common share — Diluted: Unconsolidated equity method investments and associated costs (7,551)
Retained earnings 551,624 539,332 Net income per share $ 0.46 $ 0.73 Other 1,118 1,320
Accumulated other comprehensive loss (184) Dividends declared per share $ 0.30 $ 0.28 Net cash and restricted cash used in investing activities (286,246) (50,612)
Total shareholders' equity 2,012,939 2,008,681 Cash flows from financing activities:
Total liabilities and shareholders' equity $ 8,022,201 $ 7,871,181 Repurchase of shares (11,424) (9,413)
Proceeds from secured and unsecured debt financings 215,000
Repayments of secured and unsecured debt financings (76,131) (101,725)
Deferred financing costs (1,921)
Security deposits and maintenance payments received 45,149 53,674
Security deposits and maintenance payments returned (27,914) (20,262)
Dividends paid (22,518) (22,085)
Net cash and restricted cash used in financing activities 120,241 (99,811)
Net increase in cash and restricted cash (59,645) (1,518)
Cash and restricted cash at beginning of period 167,853 233,857
Cash and restricted cash at end of period $ 108,208 $ 232,339
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents $ 92,629 $ 210,815
Restricted cash and cash equivalents 15,579 21,524
Unrestricted and restricted cash and cash equivalents $ 108,208 $ 232,339

We define net cash interest margin as lease rentals from operating leases, interest income and cash collections from direct financing and sales-type leases minus interest on borrowings, net settlements on interest rate derivatives and other liabilities adjusted for loan termination payments divided by the average net book of flight equipment (which includes net investment on direct financing and sales-type leases) for the period calculated on a quarterly and annualized basis.

Management believes that net cash interest margin, when viewed in conjunction with the Company's results under U.S. GAAP and the above reconciliation, provides useful information about the effective deployment of our capital in the context of the yield on our aircraft assets, the utilization of those assets by our lessees, and our ability to borrow efficiently.

Pro-forma Q1:19 estimates the impact of the Avianca Brazil and Jet Airways bankruptcies on annualized net cash interest margin.

(In thousands, except share data) Three Months Ended March 31, Owned Aircraft As of March 31, 2019(1) As of March 31, 2018(1) Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries Aircastle Limited and Subsidiaries
2019 2018 (1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers. Net Book Value of Flight Equipment ($ mils.) $ 7,645 $ 6,677 (1) Calculated using net book value of flight equipment held for lease and net investment in direct financing and sales-type leases at period end. Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows (1) As part of the Company's adoption of FASB ASC 842, we classified collections on direct financing and sales-type leases within operating activities on our Consolidated Statement of Cash Flows for the three months ended March 31, 2019.  This had previously been included in investing activities.  The presentation for the three months ended March 31, 2018, has also been reclassified to conform to the current period presentation.  The standard did not have a material impact on our consolidated financial statements and related disclosures. Selected Financial Guidance Elements for the Second Quarter of 2019 (1) Reflects the return to service of Avianca Brazil and Jet Airways aircraft commencing in Q2:19.