Key Financial Metrics
Total revenues(1) were $202.7 million
Total lease rental and finance and sales-type lease revenues were $186.9 million
Net income was $57.5 million, or $0.73 per diluted common share
Adjusted net income(2) was $56.8 million, or $0.72 per diluted common share
Adjusted EBITDA(2) was $191.1 million
Cash ROE(2) was 15.9%; net cash interest margin was 8.3%
First Quarter 2018 Highlights
Acquired four narrow-body aircraft for $111 million
Sold four older narrow-body aircraft for $44 million and a gain on sale of $5.8 million
Committed to acquire twelve additional narrow-body aircraft this year for more than $490 million, including our first expected investment in A320 NEOs
Declared our 48th consecutive quarterly dividend
Repurchased $9.6 million of our shares year-to-date at average price of $19.54 per share
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported first quarter 2018 net income of $57.5 million, or $0.73 per diluted common share, and adjusted net income of $56.8 million, or $0.72 per diluted common share. The first quarter results included total lease rental and finance and sales-type lease revenues of $186.9 million, a decrease of 4.0%, versus $194.7 million in the first quarter of 2017. Compared sequentially to the fourth quarter of 2017, lease rental and finance and sales-type lease revenues increased by 4.3%, from $179.3 million.
Commenting on the results, Mike Inglese, Aircastle's Chief Executive Officer, stated, "Aircastle's strong first quarter results reflect portfolio enhancements that were completed over the past year. The quality of our fleet has improved, and we continued to reduce residual value risk and generate healthy gains from aircraft sold during the first quarter. We have also continued to actively pursue attractive growth opportunities and have already acquired or committed to acquire more than $600 million of narrow-body aircraft in 2018, which includes Aircastle's first investment in new technology narrow-body aircraft."
Mr. Inglese concluded, "With a 35% increase in net earnings per diluted share and consistently high cash ROE and fleet utilization, Aircastle is positioned to continue increasing the sustainable cash flow that supports our attractive dividend. As a public company, since 2006 we have acquired more than $14 billion of aircraft, paid out more than $790 million of dividends, and have repurchased more than $202 million of our shares at an average price of $13.50. By continuing to execute our thoughtful capital allocation strategy, Aircastle remains committed to creating long-term value for our shareholders."
First Quarter Results
Net income for the quarter was $57.5 million, an increase of $15.1 million, or 36%, versus the prior year. Lower total revenues of $2.4 million were offset by lower interest expense of $6.0 million, lower depreciation of $4.2 million and a mark to market benefit from interest rate hedging of $3.2 million.
Total revenues were $202.7 million, a decrease of $2.4 million, or 1.1%, from the previous year. The decrease was driven by a $7.7 million decline in lease rental and finance and sales-type lease revenues, partially offset by a $5.0 million increase in the gain on the sale of flight equipment. Rental revenues were lower primarily due to the impact of wide-body lease transitions and extensions which occurred during the fourth quarter of 2017 at lower lease rates.
Adjusted EBITDA for the first quarter was $191.1 million, a decrease of $2.2 million, or 1.2%, from the first quarter of 2017, due primarily to lower rental revenues, partially offset by higher gains from aircraft sales. We sold four aircraft for a gain on sale of $5.8 million during the first quarter of 2018 versus one aircraft sale that was closed during the first quarter of 2017.
During the first quarter 2018, we acquired four aircraft for $111 million and had commitments to acquire twelve additional aircraft in 2018 for more than $490 million. These sixteen aircraft have a weighted average age of 4.7 years and a weighted average remaining lease term of 5.6 years. All of the aircraft that we have acquired or have committed to acquire this year are narrow-body aircraft.
As of March 31, 2018, Aircastle owned 222 aircraft having a net book value of $6.7 billion. We also manage twelve aircraft with a net book value of $634 million on behalf of our joint ventures.
During the first quarter of 2018, we repaid $75 million that was drawn under our unsecured revolving line of credit. The current undrawn available balance under this committed credit facility is $710 million.
On May 1, 2018, Aircastle's Board of Directors declared a second quarter 2018 cash dividend on its common shares of $0.28 per share, payable on June 15, 2018 to shareholders of record on May 31, 2018. This is our 48th consecutive dividend.
Since the beginning of the year, the Company acquired approximately 494 thousand shares at an average price of $19.54 per share. Aircastle's Board of Directors previously authorized a $100 million share repurchase program, and there is approximately $86 million remaining under this authorization. Since 2011, the Company has repurchased 15.0 million shares at an average cost of $13.50 per share.