Aircastle LTD (NYSE:AYR) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 10:00 am ET


Aircastle LTD (NYSE:AYR) Q4 2018 Earnings Conference Call Transcript


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Good day and welcome to Aircastle Q4 2018 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Frank Constantinople, SVP, Investor Relations.

Frank Constantinople

Thank you, Ashbey. Good morning everyone and welcome to Aircastle Limited's fourth quarter and full-year 2018 earnings call. With me today are Mike Inglese, Chief Executive Officer; Aaron Dahlke, Chief Financial Officer; and Mike Kriedberg, Chief Commercial Officer. We'll begin the presentation shortly, but I'd like to remind everyone that this call is being recorded and the replay will be available through our website at, along with the earnings press release and our PowerPoint presentation. I would like to point out the statements today, which are not historical facts may be deemed forward-looking statements.

Actual results may differ materially from the estimates or expectations expressed in those statements and certain facts that could cause actual results to differ materially from Aircastle Limited's expectations are detailed in our SEC filings, which can also be found on our website. I'll direct you to Aircastle Limited's earnings release for the full forward-looking statement legend, and we'll now turn the call over to Mike Inglese.

Michael J. Inglese

Thanks, Frank. Good morning, everyone. Today, I'm going to discuss our results for the year, our view on current market conditions and our strategy for the coming years. I'll then turn the call over to Aaron Dahlke to cover our financial results for the fourth quarter and the year, after which we'll open it up to Q&A.

Let me start by summarizing Aircastle's investment thesis. Our industry had solid fundamentals, growth in air traffic remains very strong and while growth slowed a bit in 2018, it continued to significantly outpace global GDP growth. Globally, aircraft leasing demand also remains very strong, particularly for the modern narrow-body aircraft that make up the majority of our fleet.

Aircastle's balanced approach towards capital allocation is focused on long-term value creation for shareholders and includes the solid dividend, opportunistic share repurchases and profitable cash flow and fleet growth. We are disciplined investors and able to find attractive opportunities throughout the cycle with a conservative balance sheet and ample liquidity to enable us to act opportunistically as market conditions change. Being an adept asset manager is a critical element to executing on our investment thesis. We have a team of seasoned industry veterans that can effectively move assets around the globe, and we believe this differentiates us from any other platforms.

2018 was a very strong year. We closed with a very active fourth quarter and we achieved significant milestones during the year. We were awarded investment grade credit ratings by S&P, Fitch and Moody's. We returned over $1.1 billion of capital to shareholders since our formation, crossing over the $1 billion milestone in the fourth quarter. This is more than half the current shareholders' equity, which is a little over $2 billion for the first time at year-end.

In our history, we have acquired 470 aircraft for over $15 billion and