AWAS Annual Report 2012 all V25.indd

Transcription

Dedicated to delivering
expertise, value and
sustained growth
ANNUAL REPORT AND FINANCIAL STATEMENTS 2012
Headquarters
Block B,
Riverside IV,
Sir John Rogerson’s Quay,
Dublin 2,
Ireland.
T: + 353 1 635 5000
F: + 353 1 635 5001
Singapore Office
435 Orchard Road,
#10-03 Wisma Atria,
Singapore 238877
T: + 65 6690 9280
F: + 65 6690 9281
Miami Office
801 Brickell Avenue,
Suite 800,
Miami,
Florida 33131,
USA.
T: + 1 305 530 3800
F: + 1 305 530 3801
www.awas.com
ANNUAL REPORT AND FINANCIAL STATEMENTS 2012
New York Office
444 Madison Avenue,
4th Floor,
New York NY10022,
uSA.
T: + 1 212 782 3360
F: + 1 212 782 3366
AWAS – dedicated to delivering expertise,
value and sustained growth
241 95
Total Fleet
Global
Customers
77
72
45
44
New Lease
Transactions
Total Countries
Served
Pipeline Aircraft
to be Delivered
Aircraft
Purchased
We offer solutions that support our
customers’ GROWTH strategies
Purchasing and leasing back new aircraft to a successful
and growing airline in India
¾¾ In 2012 AWAS delivered four new Airbus A320 passenger aircraft to the largest low cost airline in India,
IndiGo. AWAS had entered into a purchase and leaseback transaction (PLB) with IndiGo to provide the
successful, expanding carrier with flexible, quick access to new, modern aircraft. AWAS has successfully
completed several PLBs in Asia, Latin America and Europe and this has become a strong secondary
growth channel for our platform. AWAS has developed high levels of expertise in the Asia-Pacific
region and our Singapore office has dedicated Sales, Corporate Finance, Technical and Aircraft Trading
personnel to support our operations in this region where aviation growth is projected to far outpace that
of other global regions.
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AWAS AVIATION CAPITAL LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 2012
Diverse portfolio supports the growth ambitions of low cost carrier in Mexico
¾¾ AWAS began a successful relationship with VivaAerobus in 2011 when we delivered our first Boeing
737-300 aircraft to the growing low cost airline which provides a domestic and intra-Americas service
based out of Mexico City. After proving itself with that initial delivery, AWAS delivered another three
aircraft to the airline in 2011. Our diverse portfolio of mid-life aircraft became an asset to VivaAerobus,
helping to fuel the airline’s planned growth and expansion. In 2012 AWAS delivered an additional three
737 Classics to VivaAerobus, bringing the total to seven. Juan Carlos Zuazua, CEO of VivaAerobus, said
“AWAS has been with us since the beginning and we have been very pleased to grow with them”.
3
Our EXPERTISE opens
new markets and supports
new relationships
The ability to acquire portfolios of
attractive aircraft assets
¾¾ The acquisition of highly desirable aircraft from
other financiers in the secondary market is
another strong growth channel for AWAS. During
2012 we were able to acquire a portfolio of 12
aircraft, all with long-term leases to successful
airlines across multiple geographies. Our ability to
complete this transaction was in large part due to
our ability to work in multiple jurisdictions, as well
as having the technical expertise and flexibility to
manage and market diverse aircraft types.
Developing and expanding profitable
relationships
¾¾ In 2012 AWAS had acquired one A320 aircraft
in a secondary market transaction that was
leased to the flag carrier of Russia, Aeroflot.
Our pipeline of modern aircraft and strong
knowledge of the region enabled us to enter
into an agreement to place five additional A320
aircraft with the airline. This was a direct result of
our regional expertise which allowed us to deliver
benefits for both parties.
Our platform DELIVERS
VALUE to our customers
and shareholders
4
Proving ourselves with the customer:
Providing leading solutions and
service, and then growing with them
¾¾ Early in 2012 AWAS acquired two aircraft that
were leased to Spring Airlines, a leading low cost
airline in China. Only a few months later, on the
strength of how the AWAS Sales and Technical
teams worked with the airline, AWAS was
honoured to receive an Outstanding Performance
Award from Spring at its Annual Supplier
Conference. The relationship grew further from
that point when our Asia team and Spring agreed
to the delivery of two additional new A320s from
AWAS' pipeline. These aircraft will assist the
airline in expanding its route network to additional
intra-Asia destinations.
Innovative finance structures to
support shareholder value
¾¾ AWAS teamed with Investec Bank and Airbus
to develop a highly innovative, first of its kind
revolving credit facility to provide assured
financing for AWAS' pre-delivery payments
(PDPs) for new pipeline aircraft. PDPs can be
a challenging segment of the aircraft financing
market, and this transaction offers meaningful
financial benefits for AWAS as a result of the
revolving nature of the facility, which provides
$120m of PDP debt over two years across
20 discrete aircraft. The facility also provides
the significant benefit of de-risking AWAS'
forward order pipeline, further strengthening the
company’s credit position.
Lorenzo Levi, Werner Seifert and Riaz Punja
Yielding results with a proactive
Corporate Finance strategy,
successfully raising AWAS’ S&P rating
¾¾ AWAS has a proactive, multi-tiered funding
strategy which offers us excellent access to
capital at competitive pricing supporting the
company’s profitable long-term growth. A
tangible example of this strategy was the 2012
re-pricing of the $360m July 2012 Term Loan,
to take advantage of more favourable market
conditions. More than 40 institutional investors
participated and interest in AWAS paper was
further stimulated by our strong third quarter
2012 results as well as by the recent upgrading
to BB+ of the company’s corporate rating by
Standard & Poor's.
Process reengineering to support
planned growth
¾¾ In 2012 AWAS launched the Stratos
Programme, a company-wide process
improvement effort to ensure we are working
as efficiently as possible, as well as preparing
our people and our company for success as we
grow in size and scope. The programme has
already yielded significant results by streamlining
processes for acquisitions and customer
management, speeding approvals, empowering
deal team members, and aiding cross-functional
communication leading to our people having the
right information to make the best decisions for
our business.
5
Contents
PAGE
About AWAS
6
8

Overview 2012
10

Strategy
11

Airlines
12

Leasing Markets
13

Outlook
13
Financial Overview
14
Corporate Social Responsibility 20
Environmental Responsibility
22
AWAS' People
24
Board Governance and Committees
25
AWAS’ Compliance Programme
32
Financial Statements 2012
34
7
About AWAS
Headquartered in Dublin, with offices in New York, Miami and
Singapore, AWAS is one of the largest aircraft leasing
companies in the world. AWAS is managed by a highly
experienced team of commercial aviation industry professionals
serving every developed global aviation market in the world. At
the end of the 2012 financial year, AWAS had a fleet of 241
commercial aircraft, with a value of US$ 7.6bn, on lease to 95
customers in 45 countries. In addition, AWAS had 77 Airbus and
Boeing aircraft on order offering new more fuel-efficient and
environmentally-progressive aircraft to customers.
Our solutions, strategy and customer
focus make the difference
We have successfully transformed our business: AWAS'
total revenue is up 28%, lease revenue by over 23%, and
our fleet had grown 8% from 223 to 241 aircraft by the
end of the 2012 financial year.
Our profitable growth has been driven by a fundamental
belief that everything we do begins and ends with a
relentless focus on the customer: listening to their unique
operational needs and delivering truly meaningful solutions
to enhance their bottom line growth and success. We are
very proud of our reputation for forging long lasting valueadded relationships with our customers.
AWAS can offer a more complete set of solutions than
many of our competitors in the commercial aviation leasing
business. In addition to leasing our existing fleet of aircraft
to customers we also actively purchase new and mid-life
aircraft directly from airlines and lessors, and then lease
them back to the airlines. Our highly experienced technical
team provides our customers with valuable insights into
and solutions for the assets they currently have, and what
they may need for future expansion and optimisation. We
can offer airlines a diverse range of options for their fleet
needs: new to mid-life aircraft, narrow and wide-bodies,
passenger and freighter variants.
8
Our business focus is on achieving optimal yields from
a wide range of jurisdictions, aircraft fleet options, and
customer business models including established flag
carriers, newer start-ups, successful charter operators,
and low cost carriers.
The success of our transformation is shown in our results:
2012 was a record year of growth and profitability for
AWAS despite significant industry headwinds. We believe
our performance illustrates the current strength and future
potential of our strategy and business model as we look
forward to a more stable, stronger global market in 2013.
Sincerely
Raymond C. Sisson
President & Chief Executive Officer
9
AWAS Overview:
2012 Highlights
2012 was a record year of growth
and profitability for AWAS despite
challenging global markets due to
the lingering effects of the global
economic crisis, uncertainty in
the Eurozone, and the continuing
fragility of the recovery in the West.
At AWAS our strategic focus is on prudent growth.
This strategy involves the proactive management of
our portfolio along with achieving access to capital
at attractive rates enabling us to thrive even in
challenged markets.
Our continued growth is underpinned by our very
strong new order pipeline from both Boeing and
Airbus with the majority of deliveries set to come
through over the next three years. In addition, over
the past year we have acquired nearly $1bn in
aircraft assets on lease to well performing airlines.
We plan to continue to be active in purchasing new
aircraft from airlines who have ordered them directly
from the manufacturers and then leasing them back
to the operator (PLB). We have also been successful
10
in acquiring portfolios of attractive, high-yield aircraft
from other lessors. These additional acquisition
methods have become significant secondary growth
channels for AWAS.
reloadable structure designed to provide significant
flexibility and the capability to finance PDPs for our
pipeline of 20 A320 Family aircraft due for delivery in
2013 and 2014.
During 2012 we purchased 44 aircraft, 20 of which
were from our forward order pipeline. At the end of
the year we had 241 aircraft with a balance sheet
value of $7.6bn. We also had 77 aircraft on order of
which 30 will be delivered in 2013. As a result of this
activity, the AWAS fleet is getting younger and more
fuel-efficient with an average age of 5.8 years,
compared to 6.9 years at the end of 2011.
In October the AWAS Board of Directors approved
the conversion of $800m of existing shareholder
loans to share capital, thereby increasing the
overall share capital in the consolidated accounts
of the AWAS Group from $923m to $1,723m. The
shareholder loans concerned had been advanced by
AWAS closed 72 new leasing transactions with 35
customers in 2012. In addition, 26 aircraft were sold
and we successfully placed all aircraft with leases
scheduled to expire during the year.
Throughout 2012, AWAS continued to pursue its
proactive financing strategy to ensure the company’s
stable access to financial liquidity at attractive rates
to support planned growth.
In June, this strategy saw AWAS close on a $120m
Pre-Delivery Payment (‘PDP’) Facility; an innovative,
the owner of AACL, Carmel Capital, whose Board
approved the conversion to share capital in October
2012. This conversion demonstrates the ongoing
commitment of AWAS' shareholders to support the
company’s growth by further strengthening its
equity base.
Also in October, AWAS closed on a re-pricing of a
$360m July 2012 Term Loan, taking advantage of
more favourable market conditions. Over 40
institutional investors in the Term Loan either
renewed or increased their participation on the back
of positive inflows of capital in the high yield market.
Interest in AWAS paper was further spurred by the
company’s third quarter results and the recent
upgrading of our corporate rating to BB+ by S&P.
Strategy
At AWAS our mission is straightforward:
We aim to be the leading provider of aviation
fleet management and finance solutions to
airlines worldwide.
We believe AWAS is exceptionally well positioned to
continue to deliver on this mission due to our proven
business model, our range of customer solutions,
and the expertise of our people. We offer customers
a customised, solutions-oriented approach to aircraft
leasing, financing and fleet management. We assess
each opportunity individually in order to meet
customer requirements while maximising return on
investment.
Our business model allows us to originate
transactions and manage leases across a broad range
of aircraft types, ages and customer credits. As a
result of this flexibility, AWAS is able to transact in
every market segment and provide varied and
complete solutions to our global airline customer base.
11
All leasing, financing and asset trading decisions are
managed with a rigorous, investment-led approach.
This applies whether it is a simple lease extension or
a more complex multi-aircraft portfolio purchase.
The AWAS approach focuses on risk-adjusted return
on equity, residual asset values, credit risk, as well
as the optimisation of the underlying capital
structure.
We will continue to actively manage our aircraft
lease portfolio by adjusting marketplace
concentration, retiring end-of-life assets, and
managing the asset mix to achieve an optimised
rate of risk-adjusted return. This portfolio strategy is
complemented by proactive asset trading based on
prevailing market conditions as well as our long-term
objectives for customer and asset mix.
AWAS expects to substantially grow its overall asset
base as a result of our new order pipeline with
Boeing and Airbus as well as the significant equity
available to us for investment in secondary aircraft
acquisition channels.
In order to further prepare for future growth, AWAS
launched a major cross-company effort to drive
process efficiencies in 2012: the Stratos Programme.
The programme has already delivered tangible
benefits in the form of quicker time to market by our
originations teams, reduced duplication of effort
across the business, enhanced quality, and
repeatable results.
12
Airlines
Leasing Markets
Outlook
In 2012 airline passenger demand grew by 5.3%
year on year despite negative global economic news
and a tepid recovery in some key markets. Airlines
were extremely effective in managing their available
seat capacity and the industry attained near-record
load factors. Growth and high aircraft utilisation
combined to help airlines deliver an estimated
$6.7bn profit in 2012 in spite of persistently high
fuel prices.
Leasing as a tool to acquire efficient, modern aircraft
has continued to grow in both popularity and share
across all types of airlines around the world. Global
aviation advisory expert Ascend puts the current
market share of leased aircraft at approximately
40% and forecasts it to grow to over 50% by 2015.
The inherent flexibility of leasing provides airlines with
a technology hedge and allows them to balance
their fleets with the mix of owned and leased aircraft
that best suits their particular business model and
growth plans.
We believe that 2013 will see a return to moderate
growth and marketplace stabilisation. This stability
will aid airlines to move forward with plans to re-fleet
with new and newer aircraft in order to manage
stubbornly high fuel prices.
In its 2013 forecast, the International Air Transport
Association (IATA) projected 4.5% growth in
passenger markets and 1.4% growth for cargo
demand. This is expected to contribute to an
improvement in profitability from $6.7bn (1.0% net
profit margin) in 2012 to $8.4bn (1.3% net profit
margin) in 2013.
The Conference Board, an international research
agency, is predicting 1.3% growth for the global
economy in 2013, compared to an observed 1.2%
in 2012. This slight increase is largely due to the
Eurozone, which is expected to return to very slow
growth of 0.2% after a 0.6% contraction in 2012. In
the medium term, the organisation also expects the
U.S. and other advanced economies to help close
output and consumption gaps.
The growth of operating leasing has also been driven
by a number of other factors including restricted
access of airlines to traditional lending sources as a
result of the recent global recession as well as the
Eurozone sovereign debt crisis and its strong negative
impact on lending in that region. The implementation
of the Basel III accords from January 2013 onwards
could also further constrain lending to airlines, moving
additional volume toward leasing options.
With a continued constriction of capital and a
pull-back by some traditional lending resources for
airlines, we see leasing and purchase leaseback
transactions as increasingly attractive to operators
looking to re-fleet or indeed expand in the coming
year. AWAS' strong access to capital means we are
well positioned to take full advantage of the more
benign market conditions forecast for the year
ahead and beyond.
Aviation fuel is the single highest cost factor for an
airline today, and the price continues to rise.
According to IATA the cost of jet fuel in 2013 will
increase by an additional 3% over 2012 and its
impact on the airline industry will add over $6bn in
incremental cost. This will drive airlines toward the
acquisition of replacement aircraft to achieve fuel
and overall operational efficiencies. AWAS is very
well positioned to assist in this regard due to our
pipeline of fuel-efficient, modern aircraft.
13
Financial Overview
OPBT (USD $M)
FYE 2012
FYE 2011
161.8
125.8
Tax
23.6
18.4
Impairment
62.3
23.1
45.2
29.0
4.1
6.6
Net profit
CONSOLIDATED COMPREHENSIVE INCOME DATA (USD $M)
Add back
FYE 2012
FYE 2011
Total revenue
996.6
777.3
Depreciation
(321.6)
(258.0)
Gain/(loss) on disposal of aircraft
(0.9)
8.8
Internal interest on shareholder loans
Loss on transfer to held-for-sale
(8.8)
0.0
Unrealised (loss)/gain on the fair value of derivatives
Aircraft maintenance expense
(26.0)
(19.9)
Operating profit before Tax
297.0
202.9
General and administrative expenses
(86.7)
(67.1)
Total revenue
996.6
777.3
Results from operating activities before impairment
552.6
441.1
OPBT margin
30%
26%
Impairment
(62.3)
(23.1)
Results from operating activities
490.3
418.0
(304.9)
(273.8)
Tax expense
(23.6)
(18.4)
Profit
161.8
125.8
Total other comprehensive income
168.0
125.8
Net finance costs
Simon Glass
AWAS generated Results from operating activities
before impairment of $552.6m (2011: $441.1m) an
increase of 25.3%, with overall profit for the year
increasing to $161.8m from $125.8m in the prior
year. AWAS' Operating Profit Before Tax (OPBT) of
$297.0m, measured by Profit before Tax and
Impairment excluding internal interest, other
expenses and fair value on derivatives (MTM),
represented a substantial increase on the prior year
figure of $202.9m. The OPBT margin was 30%
(2011: 26%). AWAS ended the year with total cash
and cash resources of $677.2m which represents a
decrease of $7.4m (2011: $684.6m), mainly
reflecting our contribution to aircraft acquisition
during the year.
Operating Profit Before Tax (USD m)
$300–
$250–
$200–
$150–
$100–
$50–
$0–
14
15
Revenues
Expenses
Total revenue increased by 28.2% to $996.6m for
2012 (2011: $777.3m), driven primarily by an
increase in lease revenue as detailed below.
Expenses for 2012 increased by 32.1% to $444.0m
(2011: $336.2m). Depreciation increased in 2012 to
$321.6m (2011: $258.0m), due mainly to increased
charges relating to aircraft acquisitions and changes
in residual values. There was a loss on the disposal
of aircraft in 2012 of $0.9m as opposed to a gain of
$8.8m in 2011. A loss of $8.8m was recognised on
two aircraft held-for-sale during 2012 (2011: nil).
During 2012, we disposed of 26 aircraft which
consisted of 21 sales and five consignments (2011:
six sales and four consignments).
Lease revenue increased to $952.2m for 2012
(2011: $774.0m) due to the impact of additional
revenue from the purchase of aircraft and the release
of maintenance advances as a result of a change in
accounting estimate; this was offset by lower
revenue following aircraft sales and transitions.
The change in the accounting estimate allowed for
an additional release of maintenance advances of
$58.2m bringing total such releases to $106.3m for
2012 (2011: $41.3m). Amortisation associated with
lease incentive assets decreased to $32.7m for
2012 (2011: $36.2m).
Other income increased to $44.4m for 2012 (2011:
$3.3m), due primarily to the novation of forward
order aircraft, sale of claims, and a gain on engine
and spare part sales.
16
Aircraft maintenance expenses increased to $26.0m
in 2012 (2011: $19.9m). This was due to increased
costs associated with early terminations and releases of aircraft in 2012. General and administrative
expenses increased to $86.7m for 2012 (2011:
$67.1m), due to increased general overhead costs,
one-off project costs and additional costs for share
based payments and retention plans.
Results from Operating Activities
Before Impairment and Results from
Operating Activities
Results from operating activities before
impairment increased by 25.3% to $552.6m for
2012 (2011: $441.1m).
In 2012, we recorded a non-cash asset impairment
charge of $62.3m relating to the deterioration in the
expected recoverable amounts for certain aircraft
(2011: $23.1m). Results from operating activities
increased to $490.3m for 2012 (2011: $418.0m).
Finance Costs
Net finance costs increased by 11.3% to $304.9m
for 2012 (2011: $273.8m). This increase is due to
higher interest charged on higher loan balances, the
acceleration of imputed interest as a result of the
repayment of certain interest free shareholder loans
subsequently reinvested in the business as a further
interest free shareholder loan, offset by lower
financing fees amortisation.
Profit
Profit after tax for 2012 was $161.8m (2011:
$125.8m).
In 2012 the tax expense was $23.6m (2011:
$18.4m). The effective tax rate for 2012 was 12.7%
(2011: 12.8%).
Other Comprehensive Income
Other comprehensive income was $6.2m for 2012
and relates to the fair value of assets available-forsale net of deferred tax for the year ended 30
November 2012.
Statement of Financial Position and
Cash Flows
Total assets increased to $9,214.4m as at 30
November 2012, from $7,804.3m as at 30
November 2011. This increase was due primarily to
the acquisition of 44 aircraft during the year.
There are currently 241 aircraft (2011: 223) in
the fleet.
17
Cash flows from operating activities were $946.4m,
(2011: $802.9m). This is due primarily to changes in
operating assets and liabilities (working capital) which
contributed to the increase in net cash from operating
activities for 2012. Net cash used in investing activities
was $1,873.8m in 2012 (2011: $1,279.8m). Capital
expenditure for 2012 was $1,492.8m (acquisition in
property, plant and equipment and acquisition of
interest in aircraft), which related to the purchase of 44
aircraft (2011: $1,013.5m total purchased: 30 aircraft).
Proceeds from sales of 26 aircraft for 2012 increased
to $143.5m (2011: $16.9m). Deposits paid for aircraft
have increased to $469.2m for 2012 (2011: $361.1m).
Cash flow from financing activities for the year ended
30 November 2012 was a net cash inflow of
$869.6m (2011: $438.8m), due primarily to
increased funding received for aircraft acquisitions
during 2012. Our cash and cash equivalents, net of
restricted cash, at the end of 2012 was $536.4m
(2011: $594.2m). This movement was due mainly to
capital expenditure on the acquisition of aircraft and
interest in aircraft during the year ended 30
November 2012.
sources of liquidity mentioned above, together with
cash generated from operations, will be sufficient to
operate our business and repay our debt maturities
for 2013.
Since acquiring AWAS, our shareholders have
invested over $2.7bn in AWAS and have chosen to
maintain and grow their investment rather than to
realise any returns in the form of either cash interest
or dividend payments.
In 2012 the total share capital in AWAS increased to
$1,723.2m following the conversion of $800m of
interest free shareholders’ loans to share capital.
Additional Paid In Capital was $541.1m as at 30
November 2012, which relates to interest free loans
from Carmel Capital which are repayable, to the
extent outstanding, from 2058 to 2059. The interest
free loans have been recorded at their fair value and
the difference between their face value and fair value
is reflected as a credit to other reserves,
representing a contribution from the shareholder.
Medium & Long-term Debt (USD m)
$5,600–
$5,200–
$4,800–
$4,400–
$4,000–
$3,600–
$3,200–
$2,800–
$2,400–
$2,000–
$1,600–
$1,200–
$800–
$400–
$0–
Total Equity (USD m)
$3,000 –
$2,500–
$2,000–
$1,500–
$1,000–
$500–
$0–
Risk Management
The principal risks facing the business are set out in
note 24 of the consolidated financial statements.
Liquidity and Capital Resources
Historically, we have financed our operations through a
mixture of equity and debt, comprising lines of credit,
loan facilities and Senior Secured Notes. Our thirdparty indebtedness increased to $5,294.2m at the end
of 2012 (2011: $4,138.3m). Our total equity increased
to $2,842.2m at the end of 2012 from $2,507.3m as
at 30 November 2011. Our Debt to Equity ratio was
1.9:1 at the end of 2012 (2011: 1.7:1).
Signed
Simon Glass
Chief Financial Officer
May 2013
Our estimated purchase commitments for predelivery payments in 2013 are $294.0m. We plan to
finance the remaining deliveries through operating
cash flows and by incurring additional debt to
already contracted debt facilities. We believe that the
18
Ray Sisson and Simon Glass
19
Corporate Social
Responsibility
The people at AWAS share an ingrained belief in
Corporate Social Responsibility and they continued
their support of worthy local and global causes
during 2012.
“AWAS is proud to support ORBIS. The
ORBIS and AWAS: Pulling together to battle
sight-related illnesses
the neediest and performs sight saving
Established in 2005, ORBIS Ireland is focused on
one major project; to eliminate trachoma – a highly
prevalent and life destroying, blinding disease in
some of the poorest regions of southern Ethiopia.
me the importance of the cause as well as
2012 began with AWAS hosting the AWAS Ball in
aid of ORBIS for the fifth consecutive year. The ball
coincides with the very well attended annual Air
Finance Conference in Dublin. This event raised over
€130,000 for ORBIS with AWAS covering the full
cost of the ball allowing all contributions to go
directly to support the vital work of the charity.
.
Further support from AWAS during the year came
when, for the third year in a row, we entered a 25
strong team in ORBIS Ireland’s Plane Pull event. The
event involves teams pulling a freighter aircraft at
Dublin airport and has raised more than €40,000 in
recent years.
work that they do is truly remarkable and
meaningful. Recently I had an opportunity
to tour ORBIS’ flying air hospital that visits
procedures. The experience reinforced for
how well organised ORBIS is in combating
sight-related illnesses throughout Africa.”
Ray Sisson, President & CEO AWAS. For more information on the organisation and how to
help: www.orbisireland.ie
Fighting breast cancer in Ireland
Breast Cancer Ireland is a charity established to
raise funds to support research into this devastating
disease. In 2012 AWAS employees held a number of
fundraising events, including auctions of
merchandise, raffles, and several casual days across
our global offices for this crucial cause.
Supporting children and families affected by
neurological disorders
The Jack & Jill Children's Foundation provides
nursing care and support for children in Ireland with
severe neurological development issues, as well as
offering some respite to the parents and families.
AWAS employees held a raffle to secure donations
that were matched by the company.
20
21
Environmental Responsibility
AWAS is committed to environmental responsibility
as an integrated element of our business strategy.
This applies both within our business as well as in
every region we serve. It is, therefore, extremely
important that we are able to offer airline customers
some of the most fuel-efficient and cost effective
aircraft available today. Our policy is to work with
airlines to evaluate their current fleets and aircraft
types and ensure that they have the most fuelefficient aircraft to meet their individual needs. This
enhances AWAS' ability to deliver tailored solutions
to customers which simultaneously address
environmental and cost-performance issues.
in the AWAS fleet, firm plans are in place for the
acquisition of retrofit winglet kits for 4 of those
aircraft. The resulting fuel savings realised by our
customers total up to 130,000 gallons and a
corresponding CO2 saving up to 1,374 tons per
Our ongoing environmental responsibility
initiatives include:
In February 2012 AWAS reached agreement with
Airbus to offer the ability to deliver sharklets on all
A320 aircraft from May 2013 onwards. The first
sharklet-equipped AWAS aircraft will deliver to
Spanish airline Vueling in May 2013.
Reduction of Fleet Age
Aircraft manufacturers continue to improve fuel
efficiency and to reduce emissions generated by
their aircraft. The new aircraft which comprise our
pipeline will consume up to 20%* less fuel than
existing models. In 2012 AWAS reduced the average
age of its fleet to 5.8 years from 6.9 years (end of
2011). This level will continue to fall as new pipeline
aircraft are delivered from Airbus and Boeing and the
divestment programme for older assets continues.
*Source: Boeing Commercial Airplanes
Decreasing Emissions While
Enhancing Fleet Fuel Efficiency
aircraft per year. Airbus has developed its Sharklet system which can
save airlines up to $270k on fuel per aircraft each
year along with several performance and
maintenance benefits. Importantly, Sharklets will
also save up to 730 tons in CO2 emissions annually
per aircraft.
Aircraft Recycling
AWAS has adopted a comprehensive and
responsible end-of-life strategy for all its aircraft.
We work directly with our customers and industry
partners to recycle end-of-life aircraft to reduce
waste while maximising the remaining value of the
airframe, engine, and all core systems. Engines,
landing gear and auxiliary power units (APUs) from
disassembled aircraft are, where possible, put to use
elsewhere within the AWAS fleet to avoid expensive
overhauls. Alternatively, engines are disassembled
and the parts sold to third parties through
consignment partners.
Disassembled airframe components including the
APU, landing gears, avionics, actuators, flight control
surfaces and interiors are sold on a consignment
basis. AWAS works to identify opportunities to
achieve optimum returns in the shortest period. The
fuselage is cut into pieces and the various metals are
recycled for future use.
Engine manufacturers are continually improving the
fuel efficiency of their engines and AWAS' Technical
and Asset Management team ensures that our fleet
is among the first to receive the most advanced,
upgraded components. All new AWAS IAE equipped
aircraft are delivering with the V2500 SelectOne
engines. CFM’s CFM56-7BE and CFM5-5B PIP
engines were delivered on all AWAS pipeline
737NGs and CFM equipped A320s during 2012.
These engines deliver a fuel consumption saving of
between 0.5% and 1% as a result of a range of
technological advances within the engines.
AWAS actively seeks to increase average fuel
efficiency across its fleet. The use of advance
winglets on a Boeing 737NG aircraft can reduce fuel
consumption by as much as 5%. As of the end of
November 2012, AWAS had 59 of these advanced
aircraft, a full 89% of AWAS’ 737NG fleet.
Additionally, of the 7 non-winglet equipped 737NGs
22
23
AWAS' People
Contributing to Growth and Enhanced
Productivity
A key strength of our business is the in-depth
industry expertise of our people and their dedication
to our customers. This is why we consistently
develop programmes to assist our employees to
increase their expertise and take on new
responsibilities and projects. This upskilling pays
significant dividends to both AWAS and our
employees who gain in expertise as well as potential
career advancements.
During 2012 these programmes involved 204
training events, approximately 1.6 courses per
person over the year where employees took
professional courses as part of their personalised
AWAS development plan. Additionally, more than
15% of our employees took part in advanced
education to improve their skillset and enhance their
career opportunities.
In 2012, AWAS launched the Stratos programme, a
cross-functional, integrated process efficiency effort
to help streamline decision-making, speed time to
action, and minimise duplication of effort. The overall
goal of Stratos is to prepare our organisation for
planned future growth while minimising additional
resource requirements.
Steven Webber and Ryan Selwood
Board Governance
and Committees
The Board of Directors of AWAS Aviation Capital
Limited, the holding company of the AWAS Group,
meets in Dublin approximately every other month.
The Board of Directors is chaired by Dr. Werner G.
Seifert and the remaining directors (as at year-end
2012) were: Mr. Daniel Bunyan, Mr. Simon Glass,
Mr. Hafiz Lalani, Mr. Lorenzo Levi, Mr. Riaz Punja,
Mr. Ryan Selwood, Mr. Raymond C. Sisson,
Mr. Steven Webber and Mr. Angus Williamson.
Directors’ profiles
Dr. Werner G. Seifert (Swiss)
Appointed April 2008
Non-executive Chairman
24
Dr. Seifert joined AWAS in April 2008 as Chairman of
the AWAS Board of Directors. During the course of
his extensive career, Dr. Seifert held the position of
Chief Executive of Deutsche Börse AG for 12 years.
Prior to this, Dr. Seifert was General Manager and a
member of the Senior Management Board of Swiss
Re and Chief Executive Officer of Swiss Re
Beteiligungen AG. Before that, he was a partner with
McKinsey & Company.
Mr. Daniel Bunyan (Canadian)
Appointed October 2010
Executive Director
Mr. Bunyan is Chief Investment Officer of the AWAS
Group. Prior to joining AWAS he founded a boutique
aviation consultancy that helped airlines reduce
costs and improve operations. He was also
previously Chief Commercial Officer at AVEOS, an
aviation maintenance, repair and overhaul (MRO)
company. He also spent 10 years at Oliver Wyman
Management Consulting (formerly Mercer
Management Consulting) in their aviation practice
where he was a partner and director based in
Montreal.
25
Mr. Simon Glass (British)
Appointed February 2011
Executive Director
Mr. Riaz Punja (British)
Appointed January 2011
Non-executive Director
Mr. Glass is the Chief Financial Officer of the AWAS
Group. Mr. Glass has over 25 years international
business experience in banking and financial
services. Before joining AWAS, Mr. Glass was
Deputy Group Finance Director of the Royal Bank of
Scotland Group PLC. Prior to that Mr. Glass held a
number of senior finance positions within the global
banking industry.
Mr. Riaz Punja has been the CEO and major
shareholder of Vancouver based residential property
developer Forest Gate Homes since 2009. Mr. Punja
joined Terra Firma Capital Partners in 1998 and was
a Financial Managing Director with the company
between 2004 and 2008 with primary focus on the
media and entertainment sectors. Prior to joining
Terra Firma he was a member of Nomura
International’s Risk and Exposure and Capital
Committees. Mr. Punja began his career with Arthur
Andersen before moving on to Babcock International
PLC and then CS First Boston Limited.
Mr. Hafiz Lalani (Canadian)
Appointed February 2011
Mr. Lalani is a Principal within the Principal Investing
Group at CPPIB and is based in Toronto. Prior to
joining CPPIB in February 2006, Mr. Lalani worked in
the Technology, Media & Telecom investment
banking group at CIBC World Markets in Toronto
where he was involved in the analysis and execution
of capital markets and M&A transactions across
Canada. Mr. Lalani is also a board member of
Livingston International.
Mr. Lorenzo Levi (Italian)
Appointed April 2008
Mr. Levi is an Operational Managing Director with
Terra Firma Capital Partners. He has been closely
involved in the AWAS business since its acquisition
by Terra Firma in 2006. Mr. Levi has been with
Terra Firma since 2002 focusing on operational
and commercial due diligence for new deals as
well as the implementation of operational and
strategic agendas in portfolio companies. Prior
to joining Terra Firma, Mr. Levi was Director of
Corporate Development and Ventures in Europe
for Nortel Networks.
26
Mr. Ryan Selwood (Canadian)
Appointed July 2012
Mr. Selwood is a Senior Principal at the CPP
Investment Board in their London offices and leads
CPPIB’s direct private equity activities in Europe.
Prior to joining the CPP Investment Board in July
2006, Mr. Selwood was a Vice-President at Merrill
Lynch & Co. in the Financial Institutions Group in the
Investment Banking Division in New York and
Toronto. Mr. Selwood holds his MBA and law
degrees from York University and a BA from the
University of Western Ontario. Mr. Selwood also
serves on the board of directors of Dorna Sports S.L.
Services in 1995, where he spent thirteen years in a
variety of roles including Vice President and Legal
Counsel; Senior Vice President, Sales & Marketing
– Asia/Pacific; and Senior Vice President & Region
Manager – Middle East, Africa & Russia/CIS. In
October 2008, Mr. Sisson became President and
CEO of Titan Aviation Leasing Ltd. Prior to his
appointment at AWAS, he held the position of Chief
Commercial Officer of SR Technics in Zurich,
Switzerland.
Mr. Steven Webber (British)
Appointed December 2011
Mr. Webber is a Financial Managing Director with
Terra Firma Capital Partners having joined PFG, the
forerunner to Terra Firma, in 1996 following his
graduation from the University of Reading with a
Masters degree in International Securities,
Investment & Banking. Mr. Webber has worked on
some of the firm's most successful investments
including transactions as diverse as Annington
Homes, Tank & Rast, and the group’s pub
Current Members
Werner Seifert
Daniel Bunyan
Simon Glass
Hafiz Lalani**
Lorenzo Levi*
Mr. Raymond C. Sisson (US)
Appointed August 2010
Executive Director
Riaz Punja
Mr. Sisson is President and Chief Executive Officer of
the AWAS Group. Mr. Sisson has extensive
experience in the aviation industry across
international sales, marketing, operations, finance
and legal disciplines. Mr. Sisson began his aviation
career in 1991 as a corporate lawyer specialising in
aircraft finance. He moved to GE Capital Aviation
Steven Webber*
Ryan Selwood**
Raymond C. Sisson
Angus Williamson
Eric Silber**
businesses. More recently, Mr. Webber worked on
the AWAS deal and the acquisition of Pegasus by
AWAS, and has focused on the leisure, leasing and
transportation sectors.
Mr. Angus Williamson (Australian)
Appointed November 2008
Executive Director
Mr. Williamson is Head of Risk Management of the
AWAS Group having joined the company in April
2007. He has over 18 years experience in the
commercial aviation industry having worked in the air
transport consulting environment and was previously
with aircraft leasing company, AerCap, where he
held the positions of Head of Global Risk and Head
of Asset Investment.
Committees of AWAS Aviation
Capital Limited
The Board has established an Audit Committee,
a Finance Committee and a Nomination and
Remuneration Committee.
Board
Audit
Finance
Nomination &
Remuneration
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Alternate Director to Mr. Selwood and Mr. Lalani
*Employed by Terra Firma Capital Partners Limited
** Employed by CPPIB
27
On 15 December 2011 Julie Kay Williamson
resigned as a director of the Company and Steven
Webber was simultaneously appointed as a director
of the Company.
On 6 July 2012 Robert Barr and James Fasano
resigned as directors of the Company and Nils
Steinmeyer and Ryan Selwood were simultaneously
appointed as directors of the Company.
On 28 November 2012 Nils Steinmeyer resigned as
a director of the Company.
Audit Committee
The Charter of the Audit Committee provides that
the Audit Committee may have up to four members.
The Audit Committee is elected by the Board. It
is currently chaired by Mr. Webber and the other
members are Mr. Levi, Dr. Seifert, and Mr. Selwood.
The Audit Committee meets as often as its members
deem necessary, but in any event no less than twice
a year; a quorum is two members. It is responsible
for ensuring that the internal and external audit
processes are carried out in the best interests of the
Company’s shareholders, creditors, employees and
customers.
The Audit Committee has the unrestricted right
to obtain information for this purpose from any
source within the Group. It reports to the Board,
which retains full responsibility for the oversight of
the Company’s (unconsolidated and consolidated)
financial statements and of the Group’s financial
reporting requirements and obligations. The specific
duties and responsibilities of the Audit Committee
include:
28
• to make decisions on behalf of the Board
regarding the appointment of the external
auditor of the Company and any questions of its
resignation or dismissal and to make decisions
on behalf of the Board regarding the amount of
fees paid to the Company’s auditor;
• to discuss with the Company’s and the Group’s
external auditors before the audit commences,
the nature and scope of the audit, to review the
audit plan and to ensure co-ordination where
more than one audit firm is involved;
• to review with the Company’s and the Group’s
external auditors, the interim (if any) and annual
financial statements of the Company and the
Group before submission to the Board, focusing
particularly on
• any changes in accounting policies and
practices or major judgement areas;
• to review the effectiveness of internal control
policies and to seek regular assurance
from management that will enable the Audit
Committee to satisfy itself that the system is
functioning effectively in managing risks in the
manner which it has approved and to report its
findings to the Board;
• to decide on the implementation of the Group’s
internal audit program and, in such case, to
ensure co-ordination between the internal and
external auditors and ensure that the internal
audit function is adequately resourced and has
appropriate authority and standing within the
Company and the Group;
• to consider the major findings of the internal and
external audits and the Management’s response
and to take all necessary steps to clarify all
matters it deems appropriate to submit to the
Board;
• to submit to the Board any recommendations
with respect to internal controls and to make
recommendations with respect to the Company’s
financial statements (audited and unaudited) if
necessary;
• to submit to the Finance Committee its
recommendations on the management of foreign
exchange, interest rate, credit and other financial
risks if deemed necessary;
• to review compliance with tax legislation and to
consider actual or potential tax liabilities of the
Group and to review tax planning for the Group;
and
• to appoint outside advisers as it deems
necessary.
• significant adjustments resulting from the
audit (at year-end only);
• the going concern assumption;
• compliance with accounting standards; and
• compliance with legal requirements
• to discuss with the Company’s and the Group’s
external auditors any problems or reservations
arising from the interim review and final audit and
any other matters the external auditors may wish
to discuss;
• to review the Company’s and the Group’s
external auditors’ management letters, if any, and
the Management’s response;
• to recommend to the Board appropriate policies
of internal control;
• to advise the Board on the implementation of
policies on risk and control and to ensure that
a suitable system of internal control for the
implementation of such policies is formulated,
operated and monitored;
29
• to advise the Board on and monitor a suitable
performance-related formula for the Group
overall. The goal of such a formula should
be to create rewards which are justifiable in
terms of the Group’s own performance and
the corresponding returns on the shareholders’
investment over the same period;
• to provide an objective and independent
assessment of any benefits granted to Directors;
and
• to ensure that the pension arrangements
throughout the Group are appropriate, well
supervised and conform to applicable law.
Finance Committee
Riaz Punja, Angus Williamson and Daniel Bunyan
Nomination and Remuneration
Committee
The Nomination and Remuneration Committee
may comprise up to six members, and a quorum
is two members. The Chairman of the Nomination
and Remuneration Committee is Dr. Seifert and the
other members are Messrs. Levi, Selwood, Sisson,
and Webber. The Nomination and Remuneration
Committee may meet as often as its members
deem necessary but in any event, at least once a
year. The Nomination and Remuneration Committee
is responsible for recommending to the Board the
appointment of Committee members, ensuring
that Directors and Management are fairly rewarded
for their contributions to the Group’s performance,
ensuring that their remuneration is fixed or
approved by individuals not directly receiving such
remuneration (and who will therefore give due regard
to the ultimate interests of the shareholders and the
financial interests of the Company) and administering
any incentive plans within the AWAS group of
30
companies. The specific duties and responsibilities
of the Nomination and Remuneration Committee
include:
• to establish criteria to be used in selecting
Directors. Such criteria may be established in
consultation with the entire Board, with the CEO
or with other members of Management;
The Finance Committee may comprise up to six
directors, and a quorum is two members.
Dr. Seifert chairs the Finance Committee and the
other members are Messrs. Levi, Selwood, Sisson,
and Webber. The Finance Committee may meet as
often as its members deem necessary. The powers
of the Finance Committee include the establishment
of a Group financial strategy and the general
guidelines and policies for implementing the strategy.
This includes:
• to authorise, as and when requested to do
so by the Board, searches for the selection of
Management and Directors and to engage the
services of executive search firms or consultants
to assist in this process;
• financial and investment policy, including the
capital structure of Group companies and the
payment of dividends;
• to approve the remuneration of the executive
Directors and of Management and any
adjustments to such remuneration. The
remuneration packages are to commence with a
base salary and may also, at the discretion of the
Board, include a performance-related element;
• the management of credit risk and
implementation of credit policies (where
appropriate);
• to elaborate incentive and remuneration plans to
be applied within the Group;
• communication policy regarding the financial
press, the financial community and shareholders;
• the management of foreign exchange, interest
rate, liquidity and other financial risk;
• participation and acquisition/divestiture policy,
including the acquisition and sale of individual
participations of strategic importance;
• acquisition and divestiture of material corporate
premises, whether of a purchase, lease, or other
contractual nature; and
• submitting recommendations on matters to be
decided or approved by the Board (generally on
the basis of proposals to the Finance Committee
by the CEO and/or the Management, as the case
may be).
In addition, the Finance Committee is specifically
charged with deciding the following matters, based
on proposals by the CEO and/or Management:
• raising of external financing by the Company
and/ or the issuance of guarantees by the
Company in amounts above the limits delegated
to Management;
• approval of investments or divestments within
the Group, insofar as they reflect a capital
commitment or sales proceeds in excess of
certain delegated amounts;
• granting of securities, guarantees and indemnities
(or any other form of contingent commitment) by
the Company on behalf of third parties outside
the ordinary course of business; and
• approval of certain investments or divestments
within the Group.
The Finance Committee is also charged with
reviewing, in conjunction with the Audit Committee,
tax planning for the Group. Any matter decided by
the Finance Committee within the limits of authority
delegated to it generally does not require ratification
by the full Board. However, the Finance Committee
may seek ratification from the full Board of any
decision taken by it, if the Finance Committee
determines that such ratification is desirable or
appropriate in the circumstances.
31
AWAS’ Compliance
Programme
AWAS maintains a robust compliance programme
designed to promote:
• honest and ethical conduct, including the ethical
handling of actual or apparent conflicts of interest
between personal and professional relationships;
• fair and accurate reporting of financial information
in accordance with applicable requirements;
• compliance with applicable laws, rules and
regulations that affect AWAS as an aircraft owner,
trader and lessor and as a global employer;
• the safeguarding of corporate assets and the
proper use of proprietary and confidential
information;
• the prompt internal reporting of violations of
legal or regulatory requirements or other AWAS
policies regarding ethical conduct; and
• accountability for adherence to these principles.
It is AWAS' policy to comply (and to require
compliance by its employees) with all applicable
laws and regulations (including applicable antibribery, antitrust and anti-money laundering laws).
As an employer, AWAS is also committed to
opposing and eliminating unlawful discrimination,
32
retaliation and victimisation in the workplace.
Violation of these policies can subject an employee
to disciplinary action, up to and including termination
of employment.
In furtherance of these principles, AWAS maintains
a Code of Conduct which is made available to all
employees on AWAS’ intranet portal. In addition,
each employee is provided with a copy of the Code
of Conduct at the commencement of employment
and is asked to certify familiarity with, and agreement
to, its terms as a condition of employment.
AWAS provides training to its employees in areas
that present particular risk to the Company, such as
compliance with the Irish Prevention of Corruption
Acts (1889-2010), the UK Bribery Act 2010,
the OECD Convention on Combating Bribery of
Foreign Public Officials in International Business
Transactions, the United States Foreign Corrupt
Practices Act and various other applicable laws
involving export controls and boycotts.
The Code of Conduct requires employees to report
to their manager, a Human Resources representative
or the General Counsel any conduct of which
they become aware that may violate the Code of
Conduct or applicable law, and employees are
protected from retaliation by AWAS resulting from
good faith reporting of these possible violations.
AWAS also provides a channel of anonymous
reporting.
Terra Firma and CPPIB receive formal weekly reports
that contain current information typically provided
to a shareholder and have regular and substantial
informal contact with AWAS management. Neither
Terra Firma nor CPPIB act as guarantor with
respect to any of the Company’s obligations and all
corporate decisions affecting the Group are made by
the Company and, where appropriate, the Board or
Shareholder Oversight
Since the acquisition of AWAS, our shareholders
have invested over $2.7bn in AWAS. No cash
interest or dividend payments have been made by
AWAS is owned by Carmel Capital Sàrl, which is
owned by investment funds managed by Terra
Firma Investments (GP) 2 Limited and Terra
Firma Investments (GP) 3 Limited, and by CPP
Investment Board Private Holdings Inc (“CPPIB”).
AWAS considers Terra Firma Holdings Limited, a
Guernsey registered company, to be the ultimate
parent company and Guy Hands to be the ultimate
controlling party.
governing body of the relevant Group affiliate.
AWAS to our shareholders since the date of such
acquisition.
33
FINANCIAL
STATEMENTS
2012
34
35
Contents
Directors and other information
Directors' and other information
37
Directors’ report
38
Statement of Directors’ responsibilities
40
Independent Auditor’s report
41
Consolidated statement of comprehensive income
43
Consolidated statement of financial position
44
Consolidated statement of cash flows
45
Consolidated statement of changes in equity
46
Notes to the consolidated financial statements
47
Unaudited Pro-forma condensed financial information
90
Directors
Werner Seifert – Swiss citizen (Irish resident)
Raymond C. Sisson – US citizen (Irish resident)
Simon Glass – UK citizen (Irish resident)
Lorenzo Levi – Italian citizen (UK resident)
Daniel Bunyan – Canadian citizen (Irish resident)
Angus Williamson – Australian citizen (Irish resident)
Hafiz Lalani – Canadian citizen (Canadian resident)
Riaz Punja – UK citizen (UK resident)
Steven Webber – UK citizen (UK resident)
Ryan Selwood – Canadian citizen (UK resident)
Registered office
70 Sir John Rogerson’s Quay
Dublin 2
Secretary
Matsack Trust Limited
c/o Matheson
Dublin 2
Independent auditorKPMG
Chartered Accountants
1 Harbourmaster Place
IFSC
Dublin 1
Principal bankers
Citibank N.A. New York
21st Floor Zone 1
111 Wall Street
New York, NY 10043
SolicitorsMatheson
Dublin 2
36
37
Directors’ report
Directors’ report (continued)
The directors present their annual report together with the audited consolidated financial statements of AWAS
Aviation Capital Limited (the “Company”) and its subsidiaries (together and hereinafter “The Group”) for the year
ended 30 November 2012.
Directors, Secretary and their interests
In accordance with the Articles of Association, the directors are not required to retire by rotation.
Principal activities, business review and future developments
On 15 December 2011 Julie Kay Williamson resigned as a director of the Company and Steven Webber was
simultaneously appointed as a director of the Company.
During the year the Group maintained its position as a leader in the aircraft leasing industry. The operational
highlights of the year are summarised below:
On 6 July 2012 Robert Barr and James Fasano resigned as directors of the Company and Nils Steinmeyer and
Ryan Selwood were simultaneously appointed as directors of the Company.
Purchases – the Group purchased 44 aircraft in the course of 2012.
On 28 November 2012 Nils Steinmeyer resigned as a director of the Company.
Sales – the Group disposed of 26 aircraft during the year.
The directors and secretary who held office at 30 November 2012 had no interests in the share capital of the
Company or any Group company at any time during the year.
Leasing – the Group completed 72 new leasing transactions during the year with 35 customers. The
total number of aircraft at 30 November 2012 was 241 (2011: 223).
Subsequent Events
The Group closed USD 1,461.4 million worth of financings for aircraft during the year. During 2012 AWAS
secured a USD 120.0 million revolving pre-delivery payment facility, and a USD 360.0 million Term Loan
Agreement which was subsequently re-issued on more favourable pricing terms.
Details of important events affecting the Group which have taken place since the end of the reporting period are
disclosed in note 25 to the financial statements.
The directors expect the general level of activity to continue and will continue to evaluate new opportunities.
Accounting Records
Details of the activities carried out by subsidiary undertakings together with the information required by Section
158 of the Companies Act 1963 are set out in note 22 to these financial statements.
The directors believe that they have complied with the requirements of Section 202 of the Companies Act, 1990
with regard to keeping books of account by employing accounting personnel with appropriate expertise and by
providing adequate resources to the financial function. The books of account of the Company are maintained at
4th Floor Block B, Riverside IV, Sir John Rogerson’s Quay, Dublin 2, Ireland.
Principal risks and uncertainties
Auditors
The following risks and uncertainties are addressed in note 24 to these financial statements:
KPMG, Chartered Accountants, will continue in office in accordance with Section 160(2) of the Companies
Act, 1963.
Subsidiaries
• Asset risk;
• Interest rate risk;
• Credit risk; and
• Liquidity risk.
Results and dividends
The results for the year are set out in the consolidated statement of comprehensive income on page 43 and in
the consolidated statement of changes in equity on page 46. The directors do not recommend the payment of a
dividend (2011: USD Nil).
On behalf of the board
Raymond C. SissonSimon Glass
DirectorDirector
Date 28 February 2013
38
39
Statement of Directors’ responsibilities
The directors are responsible for preparing the Directors’ report and the consolidated financial statements of the
Group in accordance with applicable law and regulations.
Company law requires the directors to prepare consolidated financial statements of the Group for each financial
year. Under that law the directors have elected to prepare the consolidated financial statements in accordance
with International Financial Reporting Standards (“IFRSs”) as adopted by the EU and as applied in accordance
with the Companies Act 1963 to 2012.
The consolidated financial statements of the Group are required by law and IFRSs as adopted by the EU to
present fairly the financial position and performance of the Group. The Companies Acts 1963 to 2012 provide in
relation to such financial statements that references in the relevant parts of these Acts to consolidated financial
statements of the Group giving a true and fair view are references to their achieving a fair presentation.
In preparing the consolidated financial statements of the Group, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state that the financial statements comply with IFRSs as adopted by the EU and have been properly
prepared in accordance with the Companies Acts 1963 to 2012; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group will continue in business.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy
at any time the financial position of the Company and enable them to ensure that it’s consolidated financial
statements comply with the Companies Acts 1963 to 2012 and Article 4 of the IAS Regulation. They are
responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
The directors are also responsible for preparing a Directors’ report that complies with the requirements of the
Companies Acts 1963 to 2012.
KPMG
IFSC
Dublin 1
Ireland
Independent Auditor’s report to the members of
AWAS Aviation Capital Limited
We have audited the consolidated financial statements of AWAS Aviation Capital Limited (“the Company”) and
its subsidiaries (“the Group”) for the year ended 30 November 2012 which comprise the consolidated statement
of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows,
consolidated statement of changes in equity and the related notes. The financial reporting framework that has
been applied in their preparation is Irish law and International Financial Reporting Standards (IFRSs) as adopted
by the European Union, as applied in accordance with the provisions of the Companies Acts 1963 to 2012.
This report is made solely to the Company’s members, as a body, in accordance with Section 193 of the
Companies Act 1990. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of directors’ responsibilities on page 40 the directors are responsible for
the preparation of the financial statements giving a true and fair view. Our responsibility is to audit and express
an opinion on the financial statements in accordance with Irish law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with the Ethical Standards for Auditors issued by the
Auditing Practices Board.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the financial statements. In addition,
we read all the financial and non-financial information in the annual report to identify material inconsistencies with
the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies
we consider the implications for our report.
Raymond C. SissonSimon Glass
DirectorDirector
40
41
KPMG
IFSC
Dublin 1
Ireland
Independent Auditor’s report to the members of
AWAS Aviation Capital Limited (continued)
Consolidated statement of comprehensive income
For the year ended 30 November 2012
In thousands of US Dollars
Note
2012
2011
Revenues
Lease revenue
4
952,237
774,026
Other income
5
44,341
3,310
10
(321,578)
(258,046)
Expenses
Depreciation
Opinion on financial statements
In our opinion:
(Loss)/gain on disposal of aircraft
Loss on transfer to held-for-sale
• the consolidated financial statements give a true and fair view, in accordance with IFRSs as adopted by the
EU, of the state of the Group’s affairs as at 30 November 2012 and of its profit for the year then ended; and
Aircraft maintenance
• the consolidated financial statements have been properly prepared in accordance with the Companies Acts
1963 to 2012 and Article 4 of the IAS Regulation.
Matters on which we are required to report by the Companies Acts 1963 to 2012
We have obtained all the information and explanations which we consider necessary for the purposes of
our audit.
Asset impairment
General and administrative expenses
(900)
8,786
(8,823)
-
(26,010)
(19,900)
10
(62,272)
(23,066)
6
(86,728)
(67,075)
490,267
418,035
2,334
5,067
Results from operating activities
Finance income
8
Finance expenses
8
Net finance costs
Profit before income tax
(307,160)
(278,850)
(304,826)
(273,783)
185,441
144,252
(23,643)
(18,420)
161,798
125,832
7,069
-
(884)
-
6,185
-
167,983
125,832
In our opinion the information given in the directors’ report is consistent with the financial statements.
Income tax expense
9
Profit for the year
Matters on which we are required to report by exception
Other comprehensive income
We have nothing to report in respect of the provisions in the Companies Acts 1963 to 2012 which require us to
report to you if, in our opinion the disclosures of directors’ remuneration and transactions specified by law are
not made.
Available-for-sale financial assets
21
Income tax relating to components of other
comprehensive income
Total other comprehensive income
Total comprehensive income for the year
Killian Croke. For and on behalf of
All activities derive from continuing operations. All profits and total comprehensive income for the year and the
preceding financial year are attributable to the owners of the Company.
KPMG
The accompanying notes on pages 47 to 89 form an integral part of these consolidated financial statements.
Chartered Accountants, Statutory Audit Firm
IFSC
Dublin 1
Raymond C. Sisson
Director
Ireland
Simon Glass
Director
42
43
Consolidated statement of financial position
As at 30 November 2012
Consolidated statement of cash flows
Assets
Property, plant and equipment
Deposits for aircraft purchases
Deferred tax assets
Other non-current assets
Loans to shareholders
Total non-current assets
Cash and cash equivalents
Restricted cash
Other current assets
Derivative financial assets
Trade and other receivables
Prepayments
Assets held-for-sale
Total current assets
Total assets
Note
2012
2011
10
11
14
12
22
7,641,678
778,546
969
44,953
5,033
8,471,179
6,376,980
605,880
1,335
76,602
7,060,797
15
15
21
12
21
13
536,364
140,853
7,069
35,325
1,653
20,049
1,936
743,249
9,214,428
594,176
90,401
37,113
980
10,295
1,671
8,852
743,488
7,804,285
16
Equity
Share capital
Additional paid in capital
Capital contribution
Reserves
Total equity
17
17
17
17
1,723,152
541,112
583,594
(5,647)
2,842,211
923,152
1,178,254
579,528
(173,630)
2,507,304
Liabilities
Loans and borrowings
Borrowings from shareholders
Deferred tax liabilities
Maintenance advances and liabilities
Non-current trade and other payables
Total non-current liabilities
18
22
14
19
20
4,318,314
41,016
134,505
569,425
158,633
5,221,893
3,566,308
67,626
203,297
575,008
159,748
4,571,987
18
20
21
19
16
881,864
116,543
10,346
137,631
3,940
1,150,324
6,372,217
9,214,428
510,944
99,546
7,606
92,181
8,541
6,176
724,994
5,296,981
7,804,285
Loans and borrowings
Trade and other payables
Derivative financial liabilities
Liabilities held-for-sale
Current tax
Total current liabilities
Total liabilities
Total equity and liabilities
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation
Asset impairment
Loss/(gain) on disposal of fixed assets
Loss on assets classified as held-for-sale
Unrealised loss in value of derivatives
Net finance costs
Amortisation of fair value discounts and financing fees
Income tax
Changes in operating assets and liabilities
(Increase)/decrease in trade and other receivables
Decrease in other assets
Increase in trade and other payables
Increase in maintenance advances and liabilities
(Decrease)/increase in other liabilities
Net cash from operating activities
Cash flows from investing activities
Movement in restricted cash
Acquisition of property, plant and equipment
Acquisition of interest in aircraft
Proceeds from sale of aircraft
Borrowing to shareholder
Deposits paid for the purchase of aircraft
Net cash used in investing activities
Cash flows from financing activities
Proceeds from shareholder financing
Repayment of shareholder financing
Proceeds from borrowings
Repayment of borrowings
Cash interest paid
Payment of transaction costs related to loans and borrowings
Interest received
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at 30 November
Supplemental disclosure:
Cash paid for interest
Cash paid for taxes
2012
2011
161,798
125,832
321,578
62,272
900
8,823
4,084
262,298
38,444
23,643
258,046
23,066
(8,786)
6,598
213,523
53,662
18,420
(11,712)
33,437
15,883
39,867
(14,923)
946,392
9,499
22,944
23,287
28,628
28,215
802,934
(50,452)
(1,133,026)
(359,772)
143,524
(4,890)
(469,200)
(1,873,816)
77,883
(1,013,486)
16,891
(361,119)
(1,279,831)
22,500
(22,500)
1,975,590
(829,807)
(215,114)
(65,350)
4,293
869,612
(57,812)
594,176
536,364
287,774
(5,100)
891,214
(491,820)
(192,083)
(54,432)
3,257
438,810
(38,087)
632,263
594,176
215,114
1,246
192,083
386
Raymond C. Sisson
Director
Simon Glass
Director
Raymond C. Sisson
Director
Simon Glass
Director
44
45
Consolidated statement of changes in equity
1. Reporting entity
Share
Capital
At 30 November 2010
Capital
Additional
Paid In Contribution
Capital
Profit and
Loss
Reserves
Total
Equity
923,152
929,680
575,462
(299,462)
2,128,832
-
-
-
125,832
125,832
Total comprehensive income for
the year
Total comprehensive income for the
year
Other reserve
-
248,574
-
-
248,574
Share based payment reserve
-
-
4,066
-
4,066
923,152
1,178,254
579,528
(173,630)
2,507,304
-
-
-
167,983
167,983
the year
Total comprehensive income for the year
Transactions with shareholders,
recorded directly in equity
Release from obligation to
shareholder
Issue of ordinary shares
Other reserve
At 30 November 2012
Our shareholder is Carmel Capital Sàrl (“Carmel Capital”), a Luxembourg Société à Responsabilité Limitée,
which is owned by investment funds managed by Terra Firma Investments (GP) 2 Limited and, Terra Firma
Investments (GP) 3 Limited, and by CPP Investment Board Private Holdings Inc (“CPPIB”).
2. Significant accounting policies
Transactions with shareholders,
recorded directly in equity
At 30 November 2011
AWAS Aviation Capital Limited (the “Company”) is a company incorporated and domiciled in the Republic of
Ireland. The address of the Company’s registered office is 70 Sir John Rogerson’s Quay, Dublin 2, Ireland.
The consolidated financial statements of the Company as at 30 November 2012 and for the year ended 30
November 2012 comprise the Company and its subsidiaries (together referred to as the “Group”).
-
(656,480)
-
-
(656,480)
800,000
-
-
-
800,000
-
19,338
-
-
19,338
-
-
4,066
-
4,066
1,723,152
541,112
583,594
(5,647)
2,842,211
All equity is attributable to the holders of the ordinary shares in the company.
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU and the Companies Acts 1963 to 2012.
IFRSs applied by the Group in the preparation of these consolidated financial statements are those that
were effective at 30 November 2012.
New standards and interpretations adopted during the year
The following new standards, amendments and interpretations became effective in 2012, however,
they either do not have an effect on the Group Financial Statements or they are not currently relevant for
the Group:
• IFRS 7 Amendments: Financial Instruments Disclosures and Transfer of Financial Assets – issued in
October 2010, these amendments extend to existing disclosure requirements relating to transfers of
financial assets, particularly those that involve securitisation of such assets. The extended disclosures are
intended to help the users of financial statements to evaluate the risk exposures in relation to transfers of
financial assets and the effect of those risks on an entity’s financial position.
New standards and interpretations not adopted
A number of new standards, amendments to standards and interpretations that have been EU endorsed are
effective for future reporting periods, and have not been applied in preparing these consolidated financial
statements:
• IAS 12 Amendments: Deferred tax: Recovery of Underlying Assets
• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements
Raymond C. Sisson
Director
Simon Glass
Director
• IFRS 12 Disclosures of Interests in Other Entities
• IFRS 13 Fair Value Measurement
• IAS 27 Separate Financial Statements
• IAS 28 Investments in Associates and Joint Ventures
• IAS 32 Amendments: Financial Instruments: Presentation – Offsetting Financial Assets and
Financial Liabilities
• IFRS 7 Amendments: Financial Instruments: Disclosures – Offsetting Financial Asset and
Financial Liabilities
These are all effective for annual periods beginning on or after 1 January 2013, unless otherwise noted.
The Group has taken the decision not to adopt these standards early. The extent of the impact for future
accounting periods is still under review by the Group.
46
47
2. Significant accounting policies (continued)
(b) Basis of preparation
(e) Basis of consolidation
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU. They have been prepared under the historical cost
convention as modified by the valuation of certain financial assets and liabilities at fair value through the
consolidated statement of comprehensive income. Shareholder loans are accounted for at fair value at the
date of drawdown.
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable are taken into account. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until
the date that control ceases.
(c) Estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRSs requires management to
make judgements, estimates and assumptions that affect the application of policies and reported amounts
of assets and liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making the judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in
the year of the revision and future years if the revision affects both current and future years.
AWAS records as maintenance revenue all maintenance receipts not expected to be repaid to lessees at the
point in time when the Group has reliable information necessary to allow it to determine that the lessee will
not seek reimbursement of maintenance advances. Heretofore the termination of the lease was the point in
time when the most reliable and accurate information in this regard was available to the Group. During the
year the Group implemented an improved maintenance forecasting model which provides for more accurate
estimates of both the expected timing and amount of maintenance events during the Group’s leases.
Consequently, the Group changed the points in time at which it recognises maintenance revenue, and the
amounts thereof, from the termination of the lease to those derived from the model. In the year ended 30
November 2012, USD 58.2 million of maintenance advances were recorded as a one-off adjustment to
maintenance revenue as a result of these changes in estimates. It is not practicable to estimate the effect of
these changes in future periods.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the consolidated
financial statements are described in the following notes:
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with
equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the
investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.
(f) Foreign currency transactions
Transactions in foreign currencies are translated to USD at exchange rates at the dates of the transactions.
Assets and liabilities denominated in foreign currencies are translated into USD at the exchange rate ruling
at the reporting date, with differences arising recognised as profit or loss in the consolidated statement of
comprehensive income.
(g) Financial instruments
A financial instrument is recognised when the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from the
financial assets expire, are extinguished, or if the Group transfers the financial assets to a third party and
transfers all the risks and rewards of ownership of the asset, or if the Group does not retain control and
transfers substantially all the risk and rewards of ownership of the asset. Regular way purchases and sales
of financial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or
sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire
or are discharged or cancelled.
Note 4 – Lease revenue
Non-derivative financial instruments
Note 10 – Property, plant and equipment
Note 14 – Deferred tax assets and liabilities
Note 19 – Maintenance advances and liabilities
Note 22 – Related party transactions Non-derivative financial instruments comprise trade and other receivables, cash and cash resources, loans
and borrowings, and trade and other payables. Non-derivative financial instruments are recognised initially
at fair value plus, for instruments not at fair value through profit and loss, any directly attributable transaction
costs, except as described below. Subsequent to initial recognition, non-derivative financial instruments are
measured at amortised cost using the effective interest rate method, less any impairment losses in the case
of financial assets.
Note 23 – Commitments and contingent liabilities
(d) Functional and presentation currency
Fair values of non-derivative financial instruments, which are determined for disclosure purposes, are
calculated based on the present value of future principal and interest cash flows, discounted at the market
rate of interest at the reporting date.
These financial statements are presented in United States Dollars (“USD”), which is the functional currency
of the Company and all the companies in the Group. All financial information presented in USD has been
rounded to the nearest thousand. The Directors of the Company believe that USD most faithfully represents
the economic effects of the underlying transactions, events and conditions.
48
49
(g) Financial instruments (continued)
(g) Financial instruments (continued)
Cash
Embedded derivatives
Cash and cash equivalents comprise cash balances held for the purpose of meeting short-term cash
commitments and investments which are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value. Where investments are categorised as cash equivalents, the
related balance has a maturity of three months or less from the date of acquisition. Cash is carried at
amortised cost.
Certain derivatives embedded in other financial instruments, are treated as separate derivatives when their
economic characteristics and risks are not closely related to those of the host contract and the host contract
is not carried at fair value through profit or loss. These embedded derivatives are separately accounted for at
fair value, with changes in fair value recognised in profit or loss.
(h) Property, plant and equipment
Restricted cash
Restricted cash comprises cash held by the Group but which is ring-fenced or used as security for specific
financing arrangements, and to which the Group does not have unfettered access. Restricted cash is
measured at amortised cost.
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or
are not classified as any other category of financial assets. Available-for-sale financial assets comprise estimated
values of approved claims arising from lessee bankruptcies and restructurings. The fair value of available-forsale financial assets is determined by reference to inputs that are observable for the asset, either directly (i.e. as
prices) or indirectly (i.e. derived from prices). Fair value changes, other than impairment losses, are recognised in
other comprehensive income and presented in profit and loss reserves within equity. When the available-for-sale
financial asset is sold, the gain or loss accumulated in equity is reclassified to profit or loss.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and
the redemption value is recognised as profit or loss in the consolidated statement of comprehensive income
over the period of borrowings using the effective interest rate method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of the liability for at least one year
after the reporting date.
Trade and other receivables are recognised initially at fair value and are thereafter measured at amortised
cost using the effective interest rate less any provision for impairment. Trade and other receivables are
discounted when the time value of money is considered material. A provision for impairment of trade
receivables is recognised when there is objective evidence the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are
considered indicators that the trade receivable is impaired.
Residual values are determined based on estimated values at the end of the useful lives of the aircraft
assets, which are supported by estimates received from independent appraisers.
The carrying amount of an item of property, plant, and equipment includes the cost of replacing the part of
such an item when that cost is incurred if the recognition criteria (future benefits and measurement reliability)
are met. The costs of the day-to-day servicing of property, plant and equipment are recognised through
profit or loss as incurred.
Aircraft and engines are assessed for recoverability in accordance with IAS-36 – Impairment of Assets
(“IAS-36”), at each reporting date or whenever events or changes in circumstances indicates that their
carrying value may not be recoverable. For the purposes of measuring an impairment loss, each aircraft is
tested individually by comparing its carrying amount to the higher of value in use and fair value less cost
to sell.
Value in use is determined as the total cash flows expected to be generated by an aircraft, discounted
at a market rate. Fair value is determined as an average of three professional valuations obtained from
independent appraisers. The review for recoverability has a level of subjectivity and requires the use of
judgement in the assessment of estimated future cash flows associated with the use of an aircraft and its
eventual disposition. Expected future cash flows are based on all relevant information available, including the
existing lease, current contracted rates for similar aircraft, residual values, economic conditions, technology,
airline demand for a particular aircraft type, appraisal data and industry trends, and assumptions about
downtime between re-leasing events and the amount of re-leasing costs. Notwithstanding the results of
the review described above, in certain circumstances management also considers the carrying values of
specified aircraft where indicators of a diminution in value have been identified, based on aircraft specific
sales and technical information.
Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of each
part of an item of property, plant and equipment. Assets held under finance leases are depreciated over the
shorter of the lease term and their useful lives.
The estimated useful lives for the current and comparative periods are as follows:
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
Derivative financial instruments
Derivatives not designated as hedges
The Group holds derivative financial instruments to economically hedge its interest rate risk exposures.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised through
profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value through
profit or loss.
50
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Aircraft that management intends to hold and lease are stated at cost less accumulated depreciation
and impairment charges, if applicable. Depreciation is calculated on a straight line basis to the aircrafts’
estimated residual value over the estimated useful economic life of the aircraft asset, which is up to 35 years
from the date of manufacture.
–– passenger aircraft and engines
–– freighter aircraft
–– buyer furnished equipment
–– computer equipment
–– fixtures and fittings
–– other assets
25 years
35 years
lease term
3 years
5-8 years
5-8 years
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
51
(i) Interest in aircraft
(k) Maintenance advances and liabilities (continued)
The Group recognises an interest in aircraft where a substantial interest in an aircraft is obtained prior to
transfer of ownership. On transfer of ownership to the Group, interests in aircraft are reclassified as aircraft.
Interests in aircraft are recorded at cost less provision for impairment where necessary.
Repossession provision
(j) Non-current assets held-for-sale
Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered
primarily through sale rather than through continuing use are classified as held-for-sale. Immediately
before classification as held-for-sale, the assets (or components of a disposal group) are re-measured in
accordance with the Group’s accounting policies. Thereafter the assets (or disposal groups) are measured at
the lower of their carrying amount and fair value less cost to sell, except for certain items that continue to be
measured in accordance with usual accounting policies. These include financial assets, deferred tax assets
and employee benefit assets.
Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and
liabilities on a pro-rata basis, except that no loss is allocated to the various items specified in 2(h) above
as they continue to be measured in accordance with the Group’s accounting policies. Impairment losses
on initial classification as held-for-sale and subsequent gains or losses on re-measurement are recognised
through profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
(k) Maintenance advances and liabilities
Maintenance advances and liabilities comprise of maintenance advances, lessor contributions, repossession
accruals and re-lease accruals.
Re-lease provision
Re-lease provisions represent the Group’s best estimate of the costs associated with the preparing and
transitioning of an aircraft from one lessee to another. Re-lease provisions are recognised when the Group
has a present obligation and the probable outflow of economic benefits and the amount of the provision can
be reliably measured.
(l) Employee benefits
Private pension plans
Obligations for contributions to defined contribution private pension plans are recognised as an expense
through profit or loss when they are due.
Long term employee benefits
The Group’s net obligation in respect of long-term employee benefits other than pension plans is the amount
of future benefit that employees have earned in return for their service in the current and prior periods.
Termination benefits
Maintenance advances
In many aircraft operating lease contracts, the lessee has the obligation to make periodic payments which
are calculated with reference to the utilisation of airframes, engines and other major life-limited components
during the lease (supplemental amounts). In such contracts, upon lessee presentation of invoices evidencing
the completion of qualifying work on the aircraft, the Group reimburses the lessee for the work, up to a
maximum of the supplemental amounts received with respect to such work.
The Group records supplemental amounts as maintenance advances. Amounts not expected to be refunded
during the lease are recorded as lease revenue when the Group has reliable information that the lessee will
not seek reimbursement of maintenance advances based on the maintenance forecasting model.
When aircraft are sold the portion of the accrued liability not specifically assigned to the buyer is
derecognised from the statement of financial position as part of the gain or loss on disposal of the aircraft.
Lessor contributions
At the beginning of each new lease, lessor contributions representing contractual obligations on the part of
the Group to contribute to the lessee’s cost of the next planned major maintenance event, expected to occur
during the lease, are established. The Group regularly reviews the level of lessor contributions to cover its
contractual obligations under current lease contracts and makes adjustments as necessary.
Lessor contributions represent a lease incentive and are recorded as a charge against lease rental income
over the life of the associated lease. When aircraft are sold the portion of the accrued liability not specifically
assigned to the buyer is derecognised from the statement of financial position as part of the gain or loss on
disposal of the aircraft.
52
The repossession provision represents the costs associated with the repossession, preparation and
transition of an aircraft to a new lessee including any costs related to heavy maintenance overhaul costs
not covered by collected maintenance advances. Repossession accruals are recognised when the Group
believes it is probable that the costs will be incurred and the amount is reasonably estimable.
Termination benefits are recognised as an expense when the Group is demonstrably committed, without
realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal
retirement date. Termination benefits for voluntary redundancies are recognised if the Group has made an
offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances
can be estimated reliably.
Short term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
A provision is recognised for the amount expected to be paid under short term cash bonus or profit sharing
plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Share-based payments transactions
The grant-date fair value of equity settled share-based payment awards granted to employees is recognised
as an employee expense, with a corresponding increase in equity, over the period that the employee
becomes unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect
the number of awards for which the related service and non-market performance conditions are expected
to be met, such that the amount ultimately recognised as an expense is based on the number of awards
that meet the related service and non-market performance conditions at the vesting date. For share based
payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual
outcomes.
53
(l) Employee benefits (continued)
(o) Finance income and expenses
The fair value of the amount payable to employees in respect of share appreciation rights, which are settled
in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the
employees become unconditionally entitled to payment. The liability is remeasured at each reporting date
and at settlement date. Any changes in the fair value of the liability are recognised as compensation and
benefit expenses in profit or loss.
Finance income comprises of interest income on funds invested, dividend income, changes in the fair
value of financial assets at fair value through profit or loss, foreign currency gains, and gains on hedging
instruments that are recognised in profit or loss. Interest income is recognised as it accrues, using the
effective interest method. Dividend income is recognised on the date that the Group’s right to receive
payment is established, which in the case of quoted securities is the ex-dividend date.
(m) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows at
a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the liability.
(n) Revenue
The Group, as a lessor, leases aircraft principally under operating leases and records rental income on a
straight line basis over the life of the lease as it is earned. The Group accounts for lease rental income under
lease agreements that include step-rent clauses on a straight line basis over the lease term. In a few cases,
lease agreements provide for rentals based on usage. The usage may be calculated based on hourly usage
or on the number of cycles operated, depending on the lease contract. The Group accounts for lease rentals
under such agreements on a basis that represents the time pattern in which the revenue is earned. For
past-due rentals on all leases, an impairment provision may be established on the basis of management’s
assessment of collectability and to the extent such past-due rentals exceed related security deposits held.
Impairment charges are expensed through profit or loss and included in lease revenue.
Most of the Group’s lease contracts require payment in advance. Rentals received, but unearned under
these lease agreements, are recorded as deferred revenue in trade and other payables.
In certain contracts, the lessee is required to re-deliver the aircraft in a similar maintenance condition
(normal wear and tear excepted) as when accepted under the lease, with reference to major life-limited
components of the aircraft. To the extent that such components are re-delivered in a different condition than
at acceptance, there is normally an end-of-lease compensation adjustment for the difference at re-delivery.
Amounts received as part of these re-delivery adjustments are recorded as lease rental income at lease
termination.
AWAS records as maintenance revenue all maintenance receipts not expected to be repaid to lessees at
the point in time when the Group has reliable information that the lessee will not seek reimbursement of
maintenance advances. Heretofore the termination of the lease was the most reliable and accurate estimate
in this regard. During the year the Group implemented an improved maintenance forecasting model which
provides for more accurate estimates of both the expected timing and amount of maintenance events during
the Group’s leases. Consequently, the Group changed the points in time at which it recognises maintenance
revenue and the amounts thereof from the termination of the lease to those derived from the model.
Finance expenses comprise of interest expense on borrowings, unwinding of the discount on provisions,
foreign currency losses, changes in the fair value of financial assets at fair value through profit or loss,
impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in
profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.
(p) Lease payments
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Upon entering into such a lease, payments made under operating leases are
recognised as an expense through profit or loss on a straight line basis over the term of the lease. Lease
incentives are recognised as a reduction of the total lease expense, over the term of the lease.
When the Group leases an asset from an external party and has substantially all the risks and rewards of
ownership, the lease is classified as a finance lease. Minimum lease payments made under finance leases
are apportioned between the finance expense and reduction of the outstanding liability. The finance expense
is allocated to each period during the lease term so as to produce a constant periodic rate of interest on
the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum
lease payments over the remaining term of the lease when the lease adjustment is confirmed.
(q) Income tax expense
Income tax expense comprises of current and deferred tax. Income tax expense is recognised in profit or
loss except to the extent that it relates to items recognised in other comprehensive income or directly in
equity, in which case the related tax is also recognised in other comprehensive income or equity respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the statement of financial position method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:
those arising on the initial recognition of goodwill, those arising on the initial recognition of assets or liabilities
in a transaction that is not a business combination and that affects neither accounting nor taxable profit,
and differences relating to investments in subsidiaries to the extent that they probably will not reverse in
the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the
liability to pay the related dividend is recognised.
(r) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity, net of any tax effects.
54
55
3. Determination of fair values
(s) Low interest and interest free loans
Low interest and interest free loans are measured on initial recognition at fair value. Fair value of
below–market loans is the present value of the expected future cash flows, discounted using a market
related rate.
Any difference between the cost and the fair value of the instrument upon initial recognition is recognised as
a gain or a loss in profit or loss, unless the loan is from a shareholder or related party acting on behalf of the
shareholder in its capacity as a shareholder. In the latter case the resulting credit is reflected in equity, as the
substance of the low interest and/or interest free terms represent a contribution by the shareholder.
The difference between the amount initially recognised as a liability in respect of loan interest and/or interest
free loans and the amount ultimately repayable is recognised as a finance expense through profit or loss
using the effective interest method.
(t) Segmental reporting
IFRS 8, Operating Segments sets out the requirements for disclosure of financial and descriptive information
about the Group’s operating segments. As a consequence of the listing of the Group’s Senior Secured Notes
due 2016 on the Global Exchange Market of the Irish Stock Exchange, the Group applied IFRS 8 ‘Operating
Segments’. For management and reporting purposes the Group’s activities are organised in one reportable
segment based on information provided internally to the Chief Operating Decision Maker (the “CODM”). The
CODM is considered to be the Company’s Board of Directors. The principal activities of the Group involve
the acquisition and leasing of commercial jet aircraft and associated aircraft disposals.
A number of the Group’s accounting policies and disclosures require the determination of fair value, for
financial and non-financial assets and liabilities. Fair value is the amount at which an instrument could be
exchanged in an arm’s length transaction between informed and willing parties, other than as part of a forced
liquidation sale. Fair values have been determined for measurement and / or disclosure purposes based on
the following methods. Where applicable, further information about the assumptions made in determining fair
values is disclosed in the notes specific to that asset or liability.
The fair value of property, plant and equipment recognised as a result of a business combination is based
on market values. The market value of property, plant and equipment is the estimated amount for which a
property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently
and without compulsion. The Group uses an average of three independent, professional valuations as an
estimate of the fair value of aircraft.
The fair value of trade and other receivables is estimated as the present value of future cash flows and is
discounted at the market rate of interest when the impact is material.
The carrying amount approximates to fair value due to the short-term nature of these instruments. Cash
and cash resources comprise of restricted, unrestricted cash and short term investments.
(u) Financial guarantees
Financial guarantees are initially recognised in the financial statements at fair value on the date that the
guarantee is given. Subsequent to initial recognition, the Group’s liabilities under such guarantees are
measured at the higher of the initial measurement and the best estimate of the expenditure required to settle
any financial obligation arising as a result of the guarantees at the balance sheet date. Any increase in the
liability relating to guarantees is taken to the income statement.
The fair value of available-for-sale financial assets is estimated by reference to their quoted bid price at
the reporting date. The fair value for unquoted available-for-sale financial assets is determined by using
valuation techniques for the underlying security such as discounted cash flows and similar unquoted equity
valuation models.
Derivatives – interest rate swaps and caps
Interest rate swaps and interest rate cap contracts held by the Group are designated as financial instruments
through profit and loss and measured at fair value. Fair value is based on broker quotes, which are tested
for reasonableness by discounting estimated future cash flows based on the terms and maturity of each
contract and using market interest rates for a similar instrument at the measurement date. Fair values include
adjustments to take account of the credit risk of the Group entity and counterparty as required.
Derivatives – embedded derivatives
Embedded derivatives are fair valued using option pricing models, and by reference to market rates provided
by external parties.
56
57
4. Lease revenue
5. Other income
2012
In thousands of USD
2011
In thousands of USD
Lease rental income
952,237
774,026
Other income
Total lease revenue
952,237
774,026
Total other income
2012
2012
2011
2011
USD ’000
%
USD ’000
%
Europe
202,703
21
197,393
26
Asia / Pacific
395,230
41
297,388
38
Compensation and benefit expenses
North America and Caribbean
171,236
18
160,108
21
54,022
6
29,690
3
Latin America
129,046
14
89,447
12
Travel expenses
Total revenues
952,237
100
774,026
100
Lease rental income from the top five customers represented 21% of total revenues for the year ended
30 November 2012 (2011: 24%). No customer accounted for more than 7% of revenues in the year to 30
November 2012 (2011: 8%). At 30 November 2012, there were 37 aircraft subject to lease contracts with
customers which are scheduled to expire during the year ending 30 November 2013 (2011: 30 scheduled to
expire during year ended 30 November 2012).
At 30 November 2012, 27 lease contracts had lessee early termination rights (2011: 23), 6 lease contracts
had purchase option rights (2011: 11), and 8 lease contracts had lessor early termination rights (2011: 9).
During the year ended 30 November 2012, leases were terminated for which the Group held maintenance
advances at lease expiry. Release of maintenance advances totalled USD 106.3 million (2011: USD 41.3
million) and are recorded as lease rental income. The increase from the year ended 30 November 2012, is
due to USD 58.2 million recorded as maintenance revenue as a result of the change in estimate (note 2c).
Lease revenue includes a charge associated with the amortisation of lease incentive assets of USD 32.7
million for the year ended 30 November 2012 (2011: USD 36.2 million).
At 30 November 2012 the Group had contracted to receive the following minimum cash lease rentals under
non-cancellable operating leases:
2012
2011
Due within one year
873,855
813,010
Due between one and two years
763,241
714,873
Due between two and three years
619,098
579,267
Due between three and four years
534,964
439,607
Due after four years
1,248,359
1,132,786
Total
4,039,517
3,679,543
In thousands of USD
58
2011
3,310
44,341
3,310
Other income relates mainly to novation of forward order aircraft, the sale of third party claims, a gain on
engine and spare part sales and settlements received from counterparties as part of the Group’s normal
aircraft leasing.
Lease rental income is derived mainly from leasing commercial jet aircraft to various operators around the
world. The distribution of lease rental income by operator’s geographic region is as follows:
Africa / Middle East
2012
44,341
6. General and administrative expenses
2012
2011
49,397
39,651
Legal and professional fees
9,381
6,790
Office expenses
4,482
5,263
In thousands of USD
5,533
5,129
Administrative expenses
17,935
10,242
Total general and administrative expenses
86,728
67,075
The Group had 130 persons in employment as at 30 November 2012 (2011: 126). The average number of
employees during the year was 125 (2011: 121).
Costs of employer PRSI in respect of employees in Irish subsidiaries amounted to USD 2.7 million (2011:
USD 2.2 million).
At 30 November 2012 the Group had contracted to pay the following minimum lease rentals under noncancellable operating leases relating to office space:
In thousands of USD
Due within one year
2012
2011
2,648
2,419
2,537
2,431
2,487
2,327
2,500
2,043
27,172
26,381
Total
37,344
35,601
The Group incurred office lease rental expense for the period ended 30 November 2012 of USD 2.7 million
(2011: USD 3.0 million)
59
7. Statutory Information
9. Income tax expense included in the determination of profit or loss for the year
2012
In thousands of USD
2011
In thousands of USD
The profit for the year has been arrived at after charging:
Current tax expense
Directors’ remuneration:
Current period
Fees
Share based payments
43
22
3,266
3,266
Other emoluments
5,309
3,719
Total
8,618
7,007
Adjustment for prior periods
Adjustment for prior periods
Audit of the group financial statements
752
892
Other assurance services
683
410
Tax advisory services
873
595
40
-
2,348
1,897
Other non-audit services
Total
Depreciation and amortisation of:
321,578
Impairment of property, plant and equipment
Total
258,046
62,272
23,066
383,850
281,112
Total income tax expense
2,565
409
(620)
1,483
1,945
1,892
22,289
18,685
(591)
(2,157)
21,698
16,528
23,643
18,420
Reconciliation of effective tax rate
In thousands of USD
2012
2011
Profit for the year
161,798
125,832
Profit excluding income tax
Income tax using the Company’s domestic tax rate (12.5%)
US state taxes
8. Finance income and expenses
2011
Deferred tax expense
Origination and reversal of temporary differences
Auditor’s remuneration:
2012
23,643
18,420
185,441
144,252
23,180
18,031
1,519
1,896
Income taxable at different rate
406
145
2012
2011
Tax arising on permanent items
585
9
Interest income
2,334
5,067
Adjustment to prior period
(536)
(674)
Finance income
2,334
5,067
Impairment of deferred tax asset
In thousands of USD
Interest expense on financial liabilities
- External
- Internal interest on shareholder loans
Movement in fair value of derivatives
Net foreign exchange gain / (loss)
(257,608)
(243,294)
(45,228)
(29,012)
(4,084)
(6,598)
(240)
54
Finance expense
(307,160)
(278,850)
Net finance income and expenses
(304,826)
(273,783)
176
-
Utilisation of losses not previously recognised
(1,687)
(987)
23,643
18,420
Internal interest on shareholder loans during the year ended 30 November 2012, includes a charge of USD
22.1 million (2011: USD 5.1 million) relating to the acceleration of interest as a result of the repayment of
certain shareholder loans of USD 22.5 million. This charge is offset in equity by an equal amount recognised
as Additional Paid In Capital, net of deferred tax, upon the receipt of a shareholder loan for a similar amount.
External interest during the year ended 30 November 2012, also includes a charge of USD 14.5 million
relating to acceleration of financing fees amortisation, and financing fees incurred, on the re-pricing of the
2012 term loan. External interest during the year ended 30 November 2011, also includes a charge of USD
35.0 million relating to acceleration of financing fees amortisation, and financing fees incurred, on the repricing of the 2010 term loan.
60
61
10. Property, plant and equipment
10. Property, plant and equipment (continued)
AircraftCapitalised
and engines
maintenance
OtherTotal
assets
During the year ended 30 November 2012, the Group entered into a Conditional Sale Agreement (the
“CSA”) with another lessor (the “Other Lessor”) to acquire ten aircraft for consideration of USD 409.1 million.
Until the Group obtained full ownership of these aircraft they were presented as “Interest in aircraft”. At 30
November 2012 the Group has full ownership of these aircraft and therefore they have been transferred from
interest in aircraft to property, plant and equipment, at the carrying value of USD 404.8 million.
Aircraft and engines are assessed for recoverability in accordance with IAS-36 – Impairment of Assets (“IAS36”), at each reporting date or whenever events or changes in circumstances indicates that their carrying
value may not be recoverable. For the financial year ended 30 November 2012, no indicators of impairment
were identified for the majority of the Group’s aircraft.
In thousands of USD
Cost or deemed cost
Balance at 30 November 2010
Capitalised maintenance
Transfer to assets held-for-sale
Additions
Disposals
Capitalised maintenance
Additions
Transfer from interest in aircraft
Disposals
6,791,121
200,567
11,483
7,003,171
-
25,224
-
25,224
(10,266)
(221)
-
(10,487)
1,265,505
-
9921,266,497
(88,275) (19,595)
(57)(107,927)
7,958,085
205,975
12,418
8,176,478
-
9,599
-
9,599
(56,985)
(4,457)
-
(61,442)
1,449,379
404,799
-
9361,450,315
-
-
(316,525) (41,797)
404,799
-(358,322)
Depreciation for the year
Transfer to assets held-for sale. Impairment charge
Disposals
Depreciation for the year
13,354
9,621,427
(1,502,066)
(76,484)
(5,243)
(1,583,793)
2012
2012
2011
2011
USD ’000
%
USD ’000
%
Europe
1,645,427
22
1,279,115
21
Asia / Pacific
3,182,213
42
2,813,825
45
North America & Caribbean
1,394,363
19
1,275,211
20
(239,698)
(16,492)
(1,856)
(258,046)
1,518
117
-
1,635
(23,066)
-
-
(23,066)
48,921
14,801
50
63,772
(1,714,391)
(78,058)
(7,049)
(1,799,498)
(18,551)
(1,544)
(321,578)
31,050
2,602
-
33,652
Impairment charge
(62,272)
-
-
(62,272)
Disposals
140,083 29,864
During 2012 the Directors recognised a non-cash impairment charge of USD 62.3 million (2011: USD 23.1
million), the impairment related to the deterioration in the expected recoverable amounts for certain aircraft.
169,320
(301,483)
The factors considered in estimating the future cash flows are impacted by changes in contracted lease
rates, future projected lease rates, transition costs, estimated downtime, estimated residual values,
economic conditions, technology and airline demand for particular aircraft types. These estimated cash flows
are discounted at 5.30% per annum (2011: 6.20%).
9,438,753
Depreciation
The Directors develop the assumptions used in the recoverability assessment based on their knowledge of
active lease contracts, current and future expectations of the global demand for particular aircraft types and
historical experience in the aircraft leasing market and aviation industry, as well as information received from
third party sources.
(1,907,013)
(64,143)
-169,947
(8,593)
(1,979,749)
Carrying amounts
At 30 November 2011
6,243,694
127,917
5,369
6,376,980
At 30 November 2012
7,531,740 105,177 4,7617,641,678
As of 30 November 2012 the Group owned 241 aircraft and 4 spare engines (2011: 223 aircraft and 2 spare
engines), within this the Group had 241 aircraft and 4 engines held for lease on an operating basis (2011: 222
aircraft and 2 spare engines). During the year ended 30 November 2012, the Group sold 26 aircraft (2011: 10).
In addition the Group purchased 44 aircraft (2011: 30).
Geographic concentration
The distribution of net book value of the aircraft by operator’s geographic region is as follows:
Africa & Middle East
559,451
7
266,740
4
Latin America
750,286
10
608,803
10
7,531,740
100
6,243,694
100
Total
11. Deposits for aircraft purchases
In thousands of USD
Cost
471,545
Increase in purchase deposits
380,694
Transferred to property plant and
equipment as aircraft and engines
(246,359)
605,880
Increase in purchase deposits
497,081
Transferred to property plant and
equipment as aircraft and engines
(324,415)
778,546
t 30 November 2012, the Group had no agreements for the sale of aircraft which met the criteria of IFRS 5 to
A
be classified as held-for-sale (2011: one aircraft). See note 16 for details of assets held-for-sale.
he Group’s obligations under its secured bank loans and the Senior Secured Notes are secured by charges
T
over, amongst other things, some of the Group’s aircraft and related assets.
62
63
12.Other assets
13.Trade and other receivables
In thousands of USD
Deferred lease incentive cost
Property lease deposits
Security deposits
Other
2012
2011
24,806
29,796
826
627
4,531
-
5,162
6,690
Total other current assets
35,325
37,113
Deferred lease incentive cost
33,530
46,513
Deferred maintenance asset
11,423
30,089
Total other non-current assets
44,953
76,602
The lease incentive asset represents amounts of lessor contributions to the cost of maintenance events
during current leases. The asset is amortised over the respective lease terms and recorded as a reduction of
lease rental income.
Deferred maintenance asset
As a result of the Group’s application of acquisition accounting principles in accordance with IFRS 3, an
intangible asset of USD 332.2 million was recognised at the date of acquiring the Group from its previous
shareholder in 2006 representing the fair value of the lessee’s contractual obligations to perform expected
planned major maintenance activities under the current leases.
Similarly, an intangible asset of USD 89.8 million was recognised at the date of the Pegasus Aviation Finance
Company acquisition representing the fair value of the lessee’s contractual obligations to perform expected
planned major maintenance activities under the current leases.
Upon termination of a lease contract the lessee is released from its contractual obligations to perform
planned major maintenance activities. In most instances this release of the lessee obligation is offset by an
equal amount of maintenance advances collected from the lessee that the Group is not required to return
to the lessee. Similarly, the lessor is released of its obligation to make a lessor contribution to maintenance
claims, therefore lessor contributions and the related deferred maintenance balances are released from the
statement of financial position.
Upon completion of maintenance activity the asset is reclassified as property, plant and equipment in
accordance with IAS 16 and amortised over the remaining useful life of the aircraft. The intangible asset is
not amortised in periods prior to transfer to property, plant and equipment.
During the year ended 30 November 2012, USD 9.1 million (2011: USD 6.5 million) was released and
USD 9.6 million (2011: USD 25.2 million) was transferred to property plant and equipment as capitalised
maintenance.
64
In thousands of USD
Trade receivables
Notes and other receivables
2012
2011
20,665
12,020
4,439
2,296
Allowance for impairment
(5,055)
(4,021)
Net trade and other receivables
20,049
10,295
Trade receivables represent rent, maintenance and other charges related to the lease of aircraft to lessees.
The table below presents credit and default risk relating to the Group’s trade and other receivables by gross
carrying amount:
Neither past due
nor impaired
Past due and not
impaired
Impaired
Total
2012
2012
2012
2012
Trade receivables
10,530
5,080
5,055
20,665
Other receivables
4,439
-
-
4,439
14,969
5,080
5,055
25,104
Neither past due
nor impaired
Past due and not
impaired
Impaired
Total
2011
2011
2011
2011
7,999
-
4,021
12,020
In thousands of USD
Measured at amortised cost:
Total
In thousands of USD
Measured at amortised cost:
Trade receivables
Other receivables
Total
2,296
-
-
2,296
10,295
-
4,021
14,316
The Group’s most significant customer, an Asian airline, accounts for none of the receivables balances at
30 November 2012 and 30 November 2011. A Middle Eastern airline accounted for 16% of the receivables
balance at 30 November 2012 and another Asian airline accounted for 25% of the receivables balance at 30
November 2011.
The Group’s trade receivables are secured by security deposits, letters of credit and maintenance reserves
that the Group holds on behalf of their customers.
65
14.Deferred tax assets and liabilities
15.Cash and cash resources
Consolidated deferred tax assets and liabilities are attributable to the following:
In thousands of USD
Unrestricted bank balances
In thousands of USD
Employee entitlements
Assets
Liabilities
Net
2012
2012
2012
-
(255,974)
(255,974)
1,211
-
1,211
-
(50,120)
(50,120)
Trade losses
171,347
-
171,347
Tax assets/(liabilities)
172,558
(306,094)
(133,536)
(171,589)
171,589
-
969
(134,505)
(133,536)
Assets
Liabilities
Net
2011
2011
2011
-
(178,041)
(178,041)
Employee entitlements
754
-
754
Other items
183
-
183
Interest
Set off
Net tax assets/(liabilities)
In thousands of USD
-
(143,732)
(143,732)
Trade losses
Interest
118,874
-
118,874
Tax assets/(liabilities)
119,811
(321,773)
(201,962)
Set off
Net tax assets/(liabilities)
(118,476)
118,476
-
1,335
(203,297)
(201,962)
At 30 November 2012, the Group had an unrecognised deferred tax asset of USD 53.1 million in respect of
tax losses (2011: USD 63.6 million).
In assessing the ability to realise the deferred tax assets, directors consider whether it is probable that some
portion or all of the deferred tax assets will not be realised. All available evidence is considered and weighed
to determine whether derecognition of a deferred tax asset is needed or should be removed. The ultimate
realisation of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible.
Whilst the amount of the deferred tax asset that is recognised is considered realisable, it could be
significantly reduced in the near term if estimates of future taxable income during the carry-forward period
are reduced due to the impact of a prolonged dislocation in the capital markets and/or negative changes in
economic conditions, and their consequences for air travel generally and specifically demand for aircraft.
Short term investment
2012
2011
461,546
594,176
74,818
-
536,364
594,176
Bank balances subject to withdrawal restrictions
140,853
90,401
Total cash and cash resources
677,217
684,577
The average effective interest rate on deposits was 0.38% (2011: 0.61%).
Cash and cash resources subject to withdrawal restrictions represent cash securing the Group’s obligations
under third party credit facilities. Amounts received from lessees in respect of aircraft subject to certain
funding arrangements may be required to be held in segregated accounts to support, amongst other things,
certain maintenance related payments including major airframe overhauls, engine overhauls, engine lifelimited parts replacements, auxiliary power unit overhauls and landing gear overhauls, as well as interest and
principal payments on the related debt facility.
16.Held-for-sale
At 30 November 2012 the Group has entered into no sale agreements for aircraft which met the
requirement to be classified as held-for-sale. During the year end 30 November 2012, three aircraft were
transferred to held-for-sale and subsequently sold and so no balance remains. At 30 November 2011, one
aircraft met the requirements to be classified as held-for-sale and was subsequently sold during year ended
30 November 2012.
Assets classified as held-for-sale
2012
2011
-
8,852
Total assets held-for-sale
-
8,852
In thousands of USD
Liabilities classified as held-for-sale
2012
2011
-
8,541
Total liabilities held-for-sale
-
8,541
In thousands of USD
During the year ended 30 November 2012, USD 800.0 million of previously advanced interest free loans from
Carmel Capital were converted into equity. This resulted in USD 93.8 million of a deferred tax liability being
re-classed as equity. This transaction is discussed in further detail at note 17.
66
67
17. Capital and reserves
17. Capital and reserves (continued)
Additional paid in capital
Consolidated reconciliation of movement in capital and reserves
In thousands of USD
At 30 November 2010
Share Capital
Additional Paid
In Capital
Capital
Contribution
Profit and Loss
Reserves
Total Equity
923,152
929,680
575,462
(299,462)
2,128,832
Movements
In millions of USD
Total comprehensive income
for the year
the year
Amount Additional Paid
Received
in Capital
-
-
-
125,832
248,574
-
-
248,574
-
-
4,066
-
4,066
923,152
1,178,254
579,528
(173,630)
2,507,304
Total comprehensive income
for the year
-
-
-
167,983
167,983
-
(656,480)
-
-
(656,480)
800,000
-
-
-
800,000
Other reserve
-
19,338
-
-
19,338
-
-
4,066
-
4,066
1,723,152
541,112
583,594
(5,647)
2,842,211
At 30 November 2012
- Received
- Repaid
Other reserve converted to share
capital
929.7
287.8
248.6
The authorised share capital of the Company at 30 November 2012 comprised 1,300,000,000 ordinary
shares of USD 1 par value each and 45,888,262,735 ordinary shares of USD 0.01 par value each
(30 November 2011: 500,000,000 and 45,888,262,735 respectively).
The issued share capital of the Company at 30 November 2012 comprised 1,264,269,739 ordinary shares
of USD 1.00 each issued and fully paid, and 45,888,262,735 ordinary shares of USD 0.01 each issued and
fully paid (30 November 2011 464,269,739 and 45,888,262,735 issued and fully paid respectively).
The holders of ordinary shares are entitled to receive dividends as declared from time to time.
The sole shareholder has all powers and full voting rights as permitted under the applicable company laws.
(5.1)
3.7
35.5
-
(0.1)
(0.6)
-
1,313.7
1,178.3
(800.0)
(656.5)
(10.0)
(93.8)
(39.7)
22.5
19.3
0.4
2.8
-
(0.4)
(2.8)
-
Other reserve
- Received
Transactions with
shareholders, recorded directly
in equity
Issue of ordinary shares
1,031.0
Other reserve
-
Release from obligation to
shareholder
Unwind of
interest
through APIC
Other reserve converted to share
capital
Other reserve
the year
Movement
Deferred Tax
125,832
Transactions with
shareholders, recorded directly
in equity
At 30 November 2011
Loan Liability
- Repaid
(22.5)
513.7
541.1
During the year ended 30 November 2012, the Group was released from an obligation to repay certain loans
advanced by Carmel Capital (the “Carmel Loans”) with an aggregate value of USD 800.0 million. The release
from the obligation to repay the Carmel Loans was accounted for as a capital contribution and resulted in
a net increase in equity (reflected initially in APIC) of USD 143.5 million due to certain balances previously
classified as liabilities comprising loan interest accrual, loan liability and deferred tax being reclassified as
equity. Contemporaneously with the release from the obligation to repay the Carmel Loans, AWAS converted
USD 800.0 million of existing reserves into 800 million ordinary shares of USD 1.00 each in the capital of
the Company by way of a bonus issue of shares. This resulted in a decrease in APIC and a corresponding
increase in share capital of USD 800.0 million.
During the year ended 30 November 2012, Carmel Capital advanced the Group an additional USD 22.5
million in interest free loans, with no repayments due until loan maturity in 2059. The fair value of these loans
when advanced and converted respectively, were recognised as a loan balance in the amount of USD 0.4
million net of deferred tax. The difference between face value and fair value of these loans is recognised
as an interest expense over their expected 50 year term. A loan repayment of USD 22.5 million was made
during the year 30 November 2012, the difference between the amounts repaid and the loan carrying
amounts are included as additional interest in finance expenses.
The movement in Share Capital represents shares issued as a result of converting existing reserves into
ordinary shares.
The movement in Additional Paid in Capital represents a contribution by Carmel Capital to the Group as a
shareholder.
Capital contribution
The movement during the year ended 30 November 2012, relate to share based payments which is dealt
with in note 22.
68
69
17. Capital and reserves (continued)
18.Loans and borrowings
The contractual terms of the Group’s interest-bearing loans and borrowings are:
Additional paid in capital (continued)
million in interest free loans, with no repayments due until loan maturity in 2060 and 2061. The fair value of
these loans when advanced and converted respectively, were recognised as loan balance in the amount
of USD 3.7 million net of deferred tax. The difference between face value and fair value of these loans is
recognised as an interest expense over their expected 50 year term. A loan repayment of USD 5.1 million
was made during the year ended 30 November 2011, the difference between the amounts repaid and the
loan carrying amounts is included as additional interest in finance expenses.
In thousands of USD
Principal
Accrued and unpaid interest
Fair value discounts
Total secured bank loans
Net loans and borrowings
Historically, the Group has financed its operations through a mixture of equity and debt, comprising of
lines of credit, credit facilities and, on and after 18 October 2010, Senior Secured Notes. The Group’s third
party indebtedness increased during the year ended 30 November 2012, to USD 5,294.2 million from
USD 4,138.3 million in the previous year. The Group’s total equity increased by USD 334.9 million during
the 2012 financial year to USD 2,842.2 million partly arising as a result of the amendment of the terms of
certain shareholder financings made in prior years such that these are now recorded as equity in the financial
statements, more appropriately reflecting the nature of the shareholder’s investment in the business. The
Group’s Debt to Equity ratio is 1.9:1 times as of 30 November 2012 compared to 1.7:1 times as of 30
November 2011.
2011
5,286,181
4,140,399
23,351
19,301
Secured bank loans (repayable by instalment)
Debt issuance costs
Capital risk management
2012
In thousands of USD
(15,297)
(21,410)
5,294,235
4,138,290
(94,057)
(61,038)
5,200,178
4,077,252
2012
2011
4,392,640
3,615,350
Non-current liabilities
Secured bank loans
Debt issuance costs
(74,326)
(49,042)
4,318,314
3,566,308
Current portion of secured bank loans
901,595
522,940
Debt issuance costs
(19,731)
(11,996)
Current loans and borrowings
881,864
510,944
Non-current loans and borrowings
Current liabilities
Amortisation of debt issuance costs included in financing costs was USD 32.3 million during the year ended
30 November 2012 (2011: USD 46.5 million). This amount includes a charge of USD 14.5 million relating
to acceleration of financing fees amortisation and financial fees incurred on the re-pricing of the 2012 Term
Loan. The unamortised debt issuance costs at 30 November 2012 amortise over the term of the related
borrowings.
Movements
In thousands of USD
3,734,297
Advanced during the year
1,389,413
Amortisation of fair value discounts
Interest accrued but not paid
Repayment during the year
(990,019)
4,138,290
2,332,188
Amortisation of fair value discounts
6,113
4,050
7,133
(2,534)
70
Total
(1,186,406)
5,294,235
71
18.Loans and borrowings (continued)
The aggregate principal repayment amounts of loans for each of the financial years subsequent to
30 November 2012 is as follows:
Terms and conditions of outstanding loans at 30 November 2012 were as follows:
In thousands of USD
Floating rate loans:
Average Nominal Interest rate
Year of Maturity
2012
In thousands of USD
%
Per Statement of financial position
Contractual Cash flow*
2012
2011
2012
2011
Non-recourse obligations
2.35
2012-2023
866,745
Due within one year
888,739
511,122
1,101,705
689,913
Lines of credit
5.51
2012-2014
207,343
730,638
581,183
910,766
740,089
711,530
579,325
858,924
707,914
3.79
2020
37,407
Term Loan 2010
LIBOR (floor 1.25) +4.00
2016
437,516
1,001,292
590,933
1,119,924
691,915
Term Loan 2012
2018
358,842
1,953,982
1,877,836
2,109,950
2,026,332
1.05
2019-2024
406,732
Total
5,286,181
4,140,399
6,101,269
4,856,163
LIBOR + 3.25
2016
34,846
Recourse
Ex-Im/ECA
Warehouse Facility
*Contractual cash flows include both scheduled payments of principal and interest.
Fixed rate loans:
5.08
2013-2024
1,896,262
Recourse obligations
6.07
2014-2015
22,287
Senior Secured Notes
7.00
2016
489,182
Ex-Im/ECA
3.21
2016-2024
537,073
As of 30 November 2012, 97 aircraft (30 November 2011: 80) were being financed by 30 commercial
banks (30 November 2011: 26), on a non-recourse basis. All of the loans contain provisions that require
the payment of principal and interest throughout the terms of the loans. The interest rates on the loans are
based on fixed rates of between 2.23% and 12.00% and 1, 3 or 6 month LIBOR plus margins ranging from
45 bps to 480 bps on the variable rate loans.
5,294,235
Total interest bearing liabilities
Lines of credit
Terms and conditions of outstanding loans at 30 November 2011 were as follows:
In thousands of USD
Floating rate loans:
Average Nominal Interest rate
Year of Maturity
2011
%
2.01
2012-2023
738,933
Lines of credit
3.56
2012
75,015
Term Loan
2016
493,289
Ex-Im/ECA
0.83
2019-2023
322,654
LIBOR +3.25
2016
97,511
Warehouse Facility
As of 30 November 2012, the Group had in place four Pre-delivery Payment (PDP) facilities (30 November
2011: 3) in the amount of USD 207.3 million (30 November 2011: USD 75.0 million) to which the applicable
PDP lenders provide facilities to be used in funding pre-delivery payments for aircraft the Group has ordered.
The facilities are secured by security assignments of the buyer’s right under the related purchase agreements
to purchase the aircraft which are subject to the financing. The PDP facilities bear interest at floating rates
based on 1 month LIBOR plus margins ranging from 275 bps to 700 bps. The Group’s PDP facilities have
been utilised to cover 22 aircraft (30 November 2011: 26). As is typical for such facilities, interest accrues on
the outstanding balance of each such loan until repayment of the concerned loan with the repayment being
due on the date of delivery of the concerned aircraft.
Fixed rate loans:
5.31
2012-2023
1,597,647
6.07
2014-2015
25,792
7.00
2016
547,067
Ex-Im/ECA
4.18
2016-2023
240,382
As of 30 November 2012 three aircraft (30 November 2011: 2) were being financed by two commercial
banks (30 November 2011: 1), on a full recourse basis. The loans amortise over their lives of between 1
and 7.5 years remaining and bear interest at a fixed rate of 6.06% and 6.08% and floating interest rate of 6
month LIBOR plus a margin.
4,138,290
Total interest bearing liabilities
All these facilities contain various customary financial and non-financial loan covenants including:
• Financial information obligations
• Limitations on activities which would negatively impact concentration limits such as regional location of
lessees and types of aircraft in the portfolio
• LTV maintenance ratio covenant
72
73
Term Loan 2012
In July 2012 AWAS entered into a USD 360.0 million Term Loan Credit Agreement. The Term Loan 2012
requires periodic payment of principal plus interest and amortises to a bullet repayment in July 2018.
During the year ended 30 November 2012, the Group concluded a series of arrangements to re-price USD
356.6 million then outstanding (the “2012 New Facility”) of the USD 360.0 million Term Loan facility entered
into in July 2012 (the “2012 Existing Facility”). The arrangements required the exercise of a prepayment
clause in the 2012 Existing Facility under which the Group paid a fee of approximately USD 3.6 million.
The 2012 New Facility was entered into with a syndicate comprising over 95% of the lenders under the
2012 Existing Facility and a number of new lenders. The arrangements have been accounted for as a derecognition of the 2012 Existing Facility and the recognition of the 2012 New Facility.
The fees associated with the exercise of the prepayment clause and unamortised costs incurred in entering
into the 2012 Existing Facility were expensed in the year (note 8). As the substance of the arrangements
was a re-pricing of the 2012 Existing Facility and there was no repayment or additional capital drawdown,
the movements attributable to these arrangements have not been reflected in the consolidated statement of
cash flows.
The Term Loan 2012 accrues interest at a rate of 3 month LIBOR plus a margin of 3.50%, with a LIBOR floor
of 1.25%. As of 30 November 2012, 11 aircraft were being financed with the proceeds of Term Loan 2012.
In October 2010 the Group issued USD 600.0 million Senior Secured Notes which carry a fixed rate of
interest of 7.00% and mature in 2016. These Notes are included in fixed rate loans. The Notes amortise on
a semi-annual basis with the final payment of principal of USD 283.2 million in October 2016. These notes
are guaranteed, on a joint and several basis, by the subsidiary guarantors that hold either the ownership
or lease interest in the collateral and certain other guarantors. The notes and guarantees are secured by
first-priority interests in the collateral. Notes rank equally in right of payment with all of our existing and future
subordinated indebtedness. As at 30 November 2012, 53 aircraft were being financed with the proceeds
from this facility.
19.Maintenance advances and liabilities
2012
2011
Long term maintenance reserves
569,425
575,008
Current maintenance reserves
137,631
92,181
Total maintenance advances and liabilities
707,056
667,189
Releases
Drawdowns
Balance at 30
November
In thousands of USD
In thousands of USD
Term Loan 2010
In June 2010 AWAS entered into a USD 530.0 million Term Loan Credit Agreement. The Term Loan requires
periodic payment of principal plus interest and amortises to a bullet repayment in June 2016. A substantial
part of the proceeds of such loans were used to prepay two secured aircraft facilities which were with JP
Morgan. The Term Loan, which was re-priced and re-issued during the prior year, is secured by a portfolio
of aircraft, assignments of leases and various share pledges. The Term Loan accrues interest at a rate of 3
month LIBOR plus a margin of 4.00%, with a LIBOR floor of 1.25%. As of 30 November 2012, 27 aircraft (30
November 2011: 30) were being financed with the proceeds of Term Loan 2010.
Balance at 30
November
Additions
2011
467,921
176,112
10,212
Repossessions provisions
2012
253,919
(198,043)*
523,797
50,409
(71,077)
155,444
15,196
(14,686)
10,722
Re-lease provisions
4,479
13,387
(14,415)
3,451
Heavy maintenance
8,465
19,310
(14,133)
13,642
667,189
352,221
(312,354)
707,056
Total
Ex-Im Bank and ECA backed facilities
As of 30 November 2012, 12 aircraft (30 November 2011: 7) were being financed with the proceeds of loans
guaranteed by the Ex-Im Bank on standard export credit agency supported financing terms whereby the
subject loans are amortised monthly or quarterly over the period of 12 years from date of drawdown, with
interest accruing at fixed rates of between 2.00% and 6.73%, and floating rates of 3 month LIBOR plus
margins up to 40 bps. As of 30 November 2012, 12 aircraft (30 November 2011: 5) were being financed with the proceeds of a
loan guaranteed by one of the ECA’s, on standard export agency supported financing terms whereby the
subject loan is amortised quarterly over the period of 12 years from date of drawdown, with interest accruing
at fixed rates between 2.52% and 5.06%, and floating rates of 3 month LIBOR plus a margin ranging from
67.5 bps to 110 bps. The Ex-Im and ECA loan documentation contain covenants and events of default
customary for export credit agency supported financings.
In thousands of USD
In June 2011, the Group entered into a USD 500.0 million limited recourse, revolving credit facility (the
“Warehouse Facility”), which can be drawn within a two and a half year period (originally was a two year
drawing period) from its effective date. The Warehouse Facility accrues interest at LIBOR plus 3.25% on
drawn balances up to 10 June 2013 and 0.75% on undrawn balances. Borrowings under the Warehouse
Facility are secured by collateral including mortgages over the aircraft assets and pledges of ownership
interest in the aircraft. The outstanding principal balance at the end of this period will convert to an
amortising, two and a half year term loan. During the final three-year period, interest increases in steps, from
LIBOR plus 3.75% commencing on 11 June 2013 through and including the commitment termination date,
10 December 2013, to LIBOR plus 4.25% for the period ending 10 June 2014, to LIBOR plus 4.75% for the
period ending 10 June 2015, to LIBOR plus 5.75% in the period ending 10 June 2016.
Balance at 30
November
Additions
Releases
Drawdowns
Balance at 30
November
2010
2011
414,146
184,193
(130,418)*
467,921
196,974
19,570
(40,432)
176,112
Repossessions provisions
8,467
9,297
(7,552)
10,212
Re-lease provisions
5,985
9,172
(10,678)
4,479
Heavy maintenance
12,989
7,164
(11,688)
8,465
638,561
229,396
(200,768)
667,189
Total
Warehouse
74
*Including USD 58.2 million of maintenance revenue which was released as a result of the change in
estimate (note 2c).
*Including USD 8.5 million transferred to liabilities classified held-for–sale in 2011.
75
20.Trade and other payables
21.Financial instruments and financial risk management
2012
2011
Employee benefits
17,814
18,279
Deferred lease revenue
55,651
48,252
Deposits held – current
23,756
17,654
The Group utilises financial instruments to reduce exposures to market risks throughout its business. Equity,
borrowings and cash and cash resources are used to finance the Group’s operations. Derivative financial
instruments are contractual agreements with a value which reflects price movements in an underlying
variable. The Group uses derivative financial instruments, principally interest rate swaps and caps, to
manage interest rate risks and achieve the desired profile of borrowings.
Other liabilities and accruals
19,322
15,361
The main risks attaching to the Group’s financial instruments are disclosed in note 24.
116,543
99,546
In thousands of USD
Total current trade and other payables
a) Fair value of financial assets and liabilities
The carrying value and fair value of the Group’s financial assets by class and category were as follows:
2012
2011
8,727
4,594
Deposits held
149,906
155,154
Total non-current trade and other payables
158,633
159,748
In thousands of USD
Employee benefits
In thousands of USD
Restricted cash
Instruments at fair
value through profit
and loss
Loans and
receivables
Carrying amount
Fair Value
2012
2012
2012
2012
-
536,364
536,364
536,364
-
140,853
140,853
140,853
Rental security deposits relate to cash security received with respect to 197 aircraft and 2 spare engines. In
addition, the Group holds security on lease obligations in the form of letters of credit in the amount of USD
103.1 million as of 30 November 2012 (2011: USD 87.2 million). Security deposits are refundable at the end
of the contract lease period after all lease obligations have been met by the lessee.
7,069
-
7,069
7,069
1,653
-
1,653
1,653
-
20,049
20,049
20,049
Loan to shareholder
-
5,033
5,033
5,033
Employee benefits and share based payments
Financial assets 2012
8,722
702,299
711,021
711,021
External borrowings
-
5,200,178
5,200,178
5,463,333
Borrowings from shareholder
-
41,016
41,016
128,624
10,346
-
10,346
10,346
Financial liabilities 2012
10,346
5,241,194
5,251,540
5,602,303
Instruments at fair
value through profit
and loss
Loans and
receivables
Carrying amount
Fair Value
Certain entities within the Group sponsor employee defined contribution superannuation and 401(K)
schemes in various countries. The total expense to the Group in 2012 was USD 2.0 million
(2011: USD 1.6 million).
The Group also has employee bonus plans. The total expense included in general and administrative
expenses related to the bonus plans was USD 13.4 million during the year ended 30 November 2012
(2011: USD 12.8 million). As of 30 November 2012 USD 24.3 million (2011: USD 21.5 million) had been
accrued and included in trade and other payables.
Certain executives of AWAS have been granted share appreciation rights under management incentive
schemes. The total expense included in selling, general and administrative expenses relating to these
schemes was USD 4.1 million during the year ended 30 November 2012 (2011: USD 4.1 million). The terms
and key assumptions of these schemes are outlined in note 22.
In thousands of USD
Restricted cash
2011
2011
594,176
594,176
594,176
-
90,401
90,401
90,401
-
980
980
-
10,295
10,295
10,295
980
694,872
695,852
695,852
External borrowings
-
4,077,252
4,077,252
4,347,566
Borrowings from shareholder
-
67,626
67,626
67,626
7,606
-
7,606
7,606
Financial liabilities 2011
7,606
4,144,878
4,152,484
4,422,798
Financial assets 2011
2011
980
76
2011
77
21.Financial instruments and financial risk management (continued)
21.Financial instruments and financial risk management (continued)
b) Derivative financial instruments
(b) Derivative financial instruments (continued)
The objective of the Group’s interest rate risk management policy is to adopt a risk averse position with
respect to changes in interest rates and to match, when feasible, lease income subject to fixed / variable
rates to loan financing.
During the year ended 30 November 2012, the change in the fair value of the swaps recorded in finance
expense was a USD 2.5 million loss (2011: USD 4.6 million loss). The fair value liability of the interest rate
swaps at 30 November 2012 was based on broker quotes and was a liability of USD 10.1 million (2011:
USD 7.6 million). The change in fair value of the cap recorded as a finance expense was USD 1.6 million
loss (2011: USD 2.0 million loss). The fair value of the interest rate cap at 30 November 2012 was based on
observable market prices and was an asset of USD 1.4 million (2011: USD 1.0 million).
Accordingly, the Group employs derivative financial instruments, principally interest rate swap and cap
contracts, to hedge the current and expected future interest rate payments on the Group’s variable rate
debt. Interest rate swaps are agreements in which a series of interest rate flows are exchanged with a
third party over a prescribed period. The notional amount on a swap is not exchanged. Under the swap
transactions the Group makes fixed rate payments and receives floating rate payments to convert the
floating rate borrowings to fixed rate obligations to better match the largely fixed rate cash flows from the
leasing of aircraft. An interest rate cap is designed to hedge a company’s maximum exposure to upward
interest movements. It establishes a maximum total dollar interest amount that will be paid out over the life
of the cap. The Group pays an initial premium and will receive payments each settlement period in which
the interest rate exceeds the strike price. The counterparties to these agreements are highly rated financial
institutions. In the event that the counterparties fail to meet the terms of the interest rate swap contracts, the
Group’s exposure is limited to the interest rate differential on the notional amount at each settlement period
over the life of the agreements. The Group does not anticipate any non-performance by the counterparties.
All of the Company’s derivatives are carried at fair value and are classified as Level 2. The different levels
have been defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
c) Available-for-sale financial assets
As at 30 November 2012 the Group had the following derivatives:
Derivative Type
Notional amount
In millions of USD
Pay
Receive
Maturity
Swap:
14.9
1.94%
USD LIBOR
9 February 2015
32.5
5.65%
USD LIBOR
28 April 2023
32.4
5.00%
USD LIBOR
4 October 2023
149.0
1.78%
USD LIBOR
10 June 2016
19.4
3.30%
USD LIBOR
12 August 2020
12.6
5.13%
USD LIBOR
12 August 2020
33.0
2.82%
USD LIBOR
4 October 2017
33.0
4.08%
USD LIBOR
4 October 2017
149.0
2.00% Strike Price
10 June 2016
113.5
1.75% Strike Price
17 July 2017
113.5
1.75% Strike Price
17 July 2017
Available-for-sale financial assets comprise estimated values of approved claims arising from lessee
bankruptcies and restructurings. At the year-end, the Group recognised available-for-sale financial assets of
USD 7.1 million (2011: USD Nil) in this regard.
During the year, the Group sold its rights to certain claims, the proceeds of which are recorded as other
income in the statement of comprehensive income.
Cap:
78
79
22.Related party transactions
22.Related party transactions (continued)
Our shareholder is Carmel Capital, which is owned by investment funds managed by Terra Firma
Investments (GP) 2 Limited and, Terra Firma Investments (GP) 3 Limited, and by CPPIB. The Group
considers Terra Firma Holdings Limited; a Guernsey registered company, to be the ultimate parent company
and Guy Hands to be the ultimate controlling party.
Related party loan (repayable other than by instalment)
2012
2011
6,440
16,434
Accreted and unpaid interest
34,576
51,192
Total loans from shareholders
41,016
67,626
41,016
67,626
In thousands of USD
Proceeds initially recognised as a liability
Related party loan
Movements
Total
In thousands of USD
40,024
287,774
Conversion to equity reserves and principal
(279,067)
23,995
(5,100)
67,626
22,500
Conversion to equity reserves and principal
(9,994)
Unwind on interest through Additional Paid in Capital
(39,743)
23,127
(22,500)
41,016
During the year ended 30 November 2012, Carmel Capital advanced the Group an additional USD 22.5 million
in interest free loans, with no repayments due until loan maturity in 2059. The fair value of these loans when
advanced and converted respectively, were recognised as loan balances in the amount of USD 0.4 million net of
deferred tax. In addition, during the year ended 30 November 2012, loan repayments of USD 22.5 million were
made, the difference between the amounts repaid and the loan carrying amounts are included as additional
interest in finance costs. Also during the year ended 30 November 2012, USD 800.0 million was converted from
interest free loans to equity, resulting in a reduction in the loan balance of USD 10.0 million.
million in interest free loans, with no repayments due until loan maturity in 2060 – 2061. The fair value of these
loans when advanced and converted respectively, were recognised as loan balances in the amount of USD 3.7
million net of deferred tax. The difference between cost and fair value of these loans is recognised as an interest
expense over their expected 50 year term. Loan repayments of USD 5.1 million were made during the year,
the difference between the amounts repaid and the loan carrying amounts are included as additional interest in
finance costs.
Terms and conditions of outstanding loans were as follows:
Amount Repayable
on Maturity
Year of Maturity
Carrying Value at
30 November 2012
377,200
2058
37,611
Carmel Capital Loan – AACL Tranche 2
136,580
2059
Total
513,780
In thousands of USD
Carmel Capital Loan – AAIL
3,405
41,016
The loans above are interest free and have no scheduled repayment due until the year of maturity, when the
entire principal balance outstanding is due and payable. Early repayments are permitted. Interest has been
imputed on this loan at a rate of 9.16% and is recorded as accrued and unpaid interest.
During the year ended 30 November 2012, the Company, acting as lender, entered into an Intercompany
Interest Bearing Loan Agreement with Carmel Capital. The amount lent to Carmel Capital under the agreement
was USD 4.9 million and loan maturity is 2017. Interest is calculated at the rate of 5.00% annually on the
amount of the loan outstanding starting on the effective date. Interest accrued at 30 November 2012 was USD
0.1 million.
During the year ended 30 November 2012, there was a movement in the share based payment reserve of USD
4.1 million relating to share based payment. The balance as at 30 November 2012 was USD 8.1 million.
There were no transactions, and there are no outstanding balances, relating to key management personnel and/
or entities over which they have control or significant influence.
80
81
Significant subsidiaries and registered offices
Remuneration of key management personnel (continued)
Shareholding
Country of
incorporation
AWAS Aviation Acquisitions Limited*
100%
Ireland
AWAS Aviation Trading Limited**
100%
Ireland
AWAS (Ireland) Limited ***
100%
Ireland
AWAS Aviation Investments Limited **
100%
Ireland
AWAS Aviation Finance Limited***
100%
Ireland
Benefits under the scheme are payable within 60 days following one of a number of specified trigger
events, comprising the earlier of a disposal of the Group by the shareholder or a long stop date (as defined
in the terms of the Incentive Scheme). Amounts recognised in the financial statements are determined
with reference to a notional profit or loss, calculated in accordance with a predetermined methodology,
representing the increase or decrease in the value of the Group at year end compared with the Initial
Valuation. The Incentive Scheme incorporates additional rewards based upon the Group achieving a target
compound growth rate between the Initial Valuation and the occurrence of a specified trigger event. The
assumed expected term used in estimating the Initial Valuation of the Incentive Scheme is 4 years.
70 Sir John Rogerson’s Quay, Dublin 2, Ireland
AWAS Capital Inc. ****
100%
USA
Pegasus Aviation Finance Company*****
100%
USA
AWAS Acquisitions Inc.
100%
USA
2711 Centerville Road, Suite 400
Wilmington, Delaware 19808, USA
AWAS Consolidated Holdings Limited
100%
Cayman
AWAS Aviation Holdings Limited**
100%
Cayman
Cricket Square, Hutchins Drive, PO Box 2681
Grand Cayman, KY1-1111, Cayman Islands
AWAS Finance Luxembourg 2012 S.A******
100%
Luxembourg
AWAS Finance Luxembourg S.A*******
100%
Luxembourg
Rue Eugène Ruppert 19, L-2453 Luxembourg
In addition, certain key management personnel are members of bonus plans (the “Bonus Plans”), which has
been accounted for under IAS 19 “Employee Benefits”. Payments are calculated based on a percentage
of the executive’s total compensation and/or a percentage of target bonus and are payable within 30 days
following one of a number of specified trigger events, comprising the earlier of a disposal of the Group by
the shareholder or a long stop date (as defined in the terms of the Bonus Plan). A discount rate of 5.30% is
applied for 2012.
The expected total costs of the Incentive Scheme and the Bonus Plans are accrued over a number of years
to the earliest expected trigger event that has been assumed to be the most likely to occur. In each case,
the expense recognised during the year ended 30 November 2012 represents the current portion of the
expected total cost to the Group.
The remuneration of the key management personnel of the Group, which includes directors and certain
members of the management team, is set out below in aggregate for each of the categories specified in IAS
24 “Related Party Disclosures” and IFRS 2 “Share-Based Payment”.
In thousands of USD
Short term employee benefits
Long term employment benefits
2012
2011
-
2,700
3,363
-
* – shareholdings held via AWAS Aviation Investments Limited
4,066
4,066
** – shareholding held via AWAS Consolidation Holdings Limited
Total expenses
7,429
6,766
*** – shareholdings held via AWAS Aviation Acquisitions Limited
**** – shareholdings held via AWAS Holdings Inc.
***** – shareholdings held via AWAS Acquisitions Inc.
****** – shareholdings held via AWAS Aviation Trading Limited
******* – shareholdings held via AWAS Aviation Holdings Limited
The principal activity of the above entities is the sale and leasing of aircraft and provision of administrative
services to related parties.
Information related to all other subsidiary entities will be filed with the Company’s annual return as provided
for by Section 16 (3) (a) of the Companies (Amendment) Act, 1986.
Remuneration of key management personnel
Short term employee benefits include contracted payments to key management personnel to fund private
pension plans. The Group does not provide any pension benefits for key management personnel. The
carrying amount of liabilities in relation to the incentive and bonus plans for key management personnel is set
out below in accordance with IAS 24 “Related Party Disclosures” and IFRS 2 “Share-Based Payment”.
2012
2011
-
2,700
Long term employment benefits
8,727
4,549
8,132
4,066
16,859
11,315
In thousands of USD
Short term employee benefits
Total liabilities
Certain key management personnel have entered into incentive arrangements (the “Incentive Scheme”)
with the Group, which have been accounted for under IFRS 2 “Share-Based Payment”. Members of the
Incentive Scheme were awarded share appreciation rights based upon the fair value of the Group at the
commencement date (the “Initial Valuation”).
82
83
23.Commitments and contingent liabilities
23.Commitments and contingent liabilities (continued)
a) Capital Commitments
c) Guarantees
At 30 November 2012, the Group had committed to purchase 77 new aircraft scheduled to deliver from
2012 through 2017. All of these purchase commitments to purchase new aircraft are based upon master
agreements with either of Airbus S.A.S. (“Airbus”) and Boeing Company (“Boeing”).
The Company has guaranteed the obligations of its subsidiary, AWAS Aviation Trading Limited (“AATL”)
under aircraft purchase agreements between AATL and Boeing, and Airbus. The Company has also
guaranteed the obligations of multiple subsidiaries, special purpose borrower entities, under loan facilities for
the financing of pre-delivery payments owed to Boeing and Airbus.
The Airbus aircraft (models A320 and A350XWB) and the Boeing aircraft (model 737) are being purchased
pursuant to agreements executed by Group companies with Airbus or Boeing. These agreements establish
the pricing formulas, (which include certain price adjustments based upon inflation and other factors), and
various other terms with respect to the purchase of aircraft. Under certain circumstances, there is the right to
alter the mix of aircraft type ultimately acquired.
In addition, the Group is committed to the purchase of one aircraft from an airline.
The total capital commitment at 30 November 2012 is USD 3,496.6 million.
The Directors anticipate that a portion of the aggregate purchase price for the purchase of aircraft will be
funded by incurring additional debt. The exact amount of the indebtedness to be incurred will depend upon
the actual purchase price of the aircraft, which can vary due to a number of factors, including inflation, and
the percentage of the purchase price of the aircraft which must be financed.
The Senior Secured Notes are guaranteed, on a joint and several basis, by the subsidiary guarantors that
hold either the ownership or lease interest in the collateral and certain other guarantors. The notes and
guarantees are secured by first-priority interests in the collateral.
The Company has guaranteed the obligations of its subsidiary, AWAS Finance Luxembourg Sàrl (“AFLS”),
under that Term Loan Credit Agreement, June 2010, between AFLS, as the borrower, and various lenders.
The Company has guaranteed the obligations of its subsidiary, AWAS Finance Luxembourg 2012 Sàrl
(“AFLS 2012”), under that Term Loan Credit Agreement, July 2012, between AFLS 2012, as the borrower,
and various lenders.
Finally, the Company has guaranteed certain of the obligations of multiple subsidiaries, special purpose
borrower entities under limited recourse loan facilities for the acquisition financing of multiple aircraft in the
AWAS fleet.
b) Contingent Loss
A contingent loss exists at 30 November 2012 in relation to unpaid Eurocontrol charges incurred by
operators of the Group’s aircraft.
Eurocontrol’s Central Route Charges Office bills and collects charges from users of en-route services
on behalf of Eurocontrol Member States pursuant to a Multilateral Agreement (“the Agreement”). The
Agreement, which came into force on 1 January 1986, stipulates that the party liable for the payment of
Eurocontrol charges is the operator of the aircraft at the time the relevant flight was performed. If the identity
of the operator is unknown and the owner fails to prove that another party is the operator, then the owner
will be treated as the operator.
The Agreement provides that where a debtor has not paid the amount due, measures may be taken by
Eurocontrol to enforce recovery. The measures available to Eurocontrol are subject to national law in each of
the Eurocontrol Member States and in some jurisdictions include the ability to arrest and detain an aircraft
pending recovery of unpaid charges. The Group as owner of the aircraft may become liable for Eurocontrol
costs in the event that an operator defaults on their Eurocontrol obligations.
No accrual has been made at 30 November 2012 (30 November 2011: nil) in relation to contingent losses
pertaining to Eurocontrol charges as any potential loss is not considered probable at this time, and the
amount of any potential loss cannot be reasonably estimated.
84
24.Risks and uncertainties
Asset risk
The Group bears the risk of re-leasing or selling the aircraft in its fleet at the end of their lease terms. If
demand for aircraft decreases market lease rates may fall, and should such conditions continue for an
extended period, it could affect the market value of aircraft in the fleet and may result in an impairment
charge. The directors have employed personnel with appropriate experience of the aviation industry to
manage the fleet and remarket or sell aircraft as required in order to reduce this risk.
The Group is highly dependent upon the continuing financial strength of the commercial airline industry. A
significant deterioration in this sector could adversely affect the Group through a reduced demand for aircraft
in the fleet and/or reduced market rates, higher incidences of lessee default and an increase in aircraft on
the ground. The Group periodically performs reviews of its carrying values of aircraft and associated assets,
trade receivables, notes receivables and the recoverable amount of deferred tax assets and the sufficiency of
accruals and provisions, substantially all of which are susceptible to the above risks and uncertainties.
85
24.Risks and uncertainties (continued)
Interest rate risk
Credit risk (continued)
Interest rate risk is the risk (variability in value) borne by an interest-bearing financial instrument, such as a
loan or a bond, due to variability of interest rates. The Group has entered into derivative contracts for some
of its loan facilities which swap variable interest rates for fixed; therefore any increase or decrease in interest
rates on the loan will lead to a decrease or increase in the differential on the swap. The Group’s floating rate
loans partially offset the floating rate nature of our lease rental contracts, where by an increase in interest
rates will be expected to be offset by higher rentals earned.
The value of trade receivables and other receivables are highly dependent upon the financial strength of the
commercial aviation industry as described in the asset risk section. Defaults by one or more of the Group’s
major customers could have a material adverse effect on our cash flow and earnings and our ability to meet
our debt obligations.
The effect on profit before tax of a 50 and 100 basis point change in interest rate, assuming all other
variables are held constant, would be as follows:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
In thousands of USD
50 BPS
100 BPS
Exposure to credit risk:
Note
2012
2011
15
536,364
594,176
In thousands of USD
2012
694
1,387
Restricted cash
15
140,853
90,401
2011
569
1,138
21
7,069
-
Whereas, a decrease of 50 and 100 basis points change in interest rates, would have had the equal but
opposite effect, on the basis that all other variables remain constant.
The Group also has loans and borrowings that bear fixed interest rates determined at the inception of the
agreement. A significant change in interest rates could have a material adverse impact on the fair value of
the Group’s loans and borrowings. However, the company records these loans at the amortised cost and
therefore the company’s future performance would not be impacted by any future rate changes.
Credit risk
Other assets
12
5,162
6,690
21
1,653
980
Loans to shareholder
22
5,033
-
13
Total
Creditworthiness of each new customer is assessed and the Group seeks security deposits in the form of
cash or Letter of Credit to mitigate overall financial exposure to its lessees. The assessment process takes
into account qualitative and quantitative information about the customer such as business activities, senior
management team, financial fitness, resources and performance, and business risks, to the extent that this
information is publicly available or otherwise disclosed to the Group.
10,295
702,542
Receivables represent rent, maintenance and other charges related to the lease of aircraft to lessees.
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
In thousands of USD
The Group is subject to the credit risk of its lessees as to collection of rental payments under its operating
leases. Credit risk is defined as the unexpected loss in cash and earnings if the counterparty is unable to
pay its obligations in due time. The effective monitoring and controlling of airline customer credit risk is a
competency of a dedicated Risk Management team.
20,049
716,183
2012
2011
Africa and Middle East
4,620
819
Asia/Pacific
9,102
4,192
Europe
5,592
3,318
Latin America
958
3,015
North America and Caribbean
393
676
20,665
12,020
Total
The Group holds significant cash balances which are invested on a short-term basis and are classified as
cash and cash resources. These deposits and other financial instruments give rise to credit risk on amounts
due from counterparties. Credit risk is managed by limiting the aggregate amount and duration of exposure
to any one counterparty. The Group typically does not enter into deposits with a duration of more than
12 months.
86
87
Liquidity risk
It is not expected that the cash flows in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
The Group has funded a significant part of its operations with debt financing. The ability of the Group to
continue to operate is dependent upon its ability to meet its payment obligations and adhere to covenant
requirements under the respective loan agreements, which are dependent, among other things, upon the
factors outlined above.
As explained in note 18, the Group has principal repayments due under its existing loans from external parties
which fall due during the next 12 month period. These will be financed via operational cash flows (rental and
disposal/acquisition of aircraft activities), new debt financing and potentially new equity.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
Carrying
Amount
In thousands of
USD 2012
Contractual
Cash flows
12 months
or less
1 – 2 years
2 – 3 years
3 – 4 years
After 4 years
Non-derivative
financial liabilities
External borrowings
Borrowings from
shareholder
Total
5,294,235
(6,081,941)
(1,097,103)
(906,764)
(855,974)
(1,117,649)
(2,104,451)
41,016
(513,780)
-
-
-
-
(513,780)
275,176
(275,176)
(116,543)
(20,299)
(10,919)
(9,227)
(118,188)
5,610,427
(6,870,897)
(1,213,646)
(927,063)
(866,893)
(1,126,876)
(2,736,419)
(10,346)
(19,328)
(4,602)
(4,001)
(2,951)
(2,276)
(5,498)
1,653
-
-
-
-
-
-
(8,693)
(19,328)
(4,602)
(4,001)
(2,951)
(2,276)
(5,498)
Derivative financial
assets/(liabilities)
Interest rate swaps
Interest rate caps
and swaps
Total
In thousands of
USD 2011
Carrying
Amount
Contractual
Cash flows
12 months
or less
1 – 2 years
2 – 3 years
3 – 4 years
After 4 years
Non-derivative
financial
liabilities
External
borrowings
Borrowings from
shareholder
Trade and other
payables
Total
As a result of its growth strategy, at 30 November 2012 the Group had committed to purchase 78 new
aircraft, scheduled to deliver from 2012 through 2017. The directors anticipate that a significant portion of the
aggregate purchase price for the aircraft will be funded by incurring additional debt. The exact amount of the
indebtedness to be incurred will depend upon the actual purchase price of the aircraft, which can vary due to
a number of factors, including inflation, and the percentage of the purchase price of the aircraft which will be
financed.
If the Group cannot meet its obligations or if it breaches certain covenants under the various debt
arrangements, it may be subject to contract breach damages suits, it may be required to restrict or apply all
cash flows from aircraft pledged as collateral for certain debt facilities to meet principal and interest payments,
and/or to paydown such debt facilities on an accelerated basis.
25.Subsequent events
The Group has signed agreements to purchase 9 aircraft from other lessors and airlines post 30
November 2012.
26.Financial statements of the company
In publishing the parent Company financial statements together with the Group financial statements, AWAS
Aviation Capital Limited (‘AWAS’) has taken advantage of the exemption in the Companies Act 1963, Section
148(8) not to present its parent Company statement of comprehensive income and related notes that form
part of the AWAS Aviation Capital Limited consolidated financial statements.
27. Approval of financial statements
The directors approved these financial statements on 28 February 2013.
4,138,290
(4,834,416)
(685,467)
(735,925)
(704,440)
(689,220)
(2,019,364)
67,626
(1,313,780)
-
-
-
-
(1,313,780)
259,294
(259,294)
(97,477)
(34,369)
(19,260)
(8,362)
(99,826)
4,465,210
(6,407,490)
(782,944)
(770,294)
(723,700)
(697,582)
(3,432,970)
(7,606)
(21,747)
(4,446)
(4,164)
(3,474)
(2,693)
(6,970)
Derivative
financial assets/
(liabilities)
Interest rate swaps
Interest rate caps
Total
88
980
-
-
-
-
-
-
(6,626)
(21,747)
(4,446)
(4,164)
(3,474)
(2,693)
(6,970)
89
Unaudited Pro-forma Condensed Financial Information
During the year ended 30 November 2010, the Group issued USD 600.0 million Senior Secured Notes (the “Notes”).
The Notes are secured by a portfolio of 53 aircraft. The Notes are also jointly and severally guaranteed on a senior
secure basis by certain subsidiaries of the company, including AWAS Aviation Acquisitions Limited (“AAAL”), together
hereinafter the Guarantor Group.
Lease rental income in respect of the Guarantor Group amounting to approximately USD 204.5 million (2011: USD
187.5 million) has been pledged as part of the collateral provided in respect of the Senior Secured Notes issued by
the Group during the year.
This note sets out certain pro-forma financial information concerning the financial condition and results of the
Guarantor Group.
Financial Position
In thousands of USD
Guarantor Non-Guarantor
Group 2012
Group 2012
Total assets
1,188,665
Total Equity and liabilities
1,188,665
Results of Operations
In thousands of USD
Elimination
2012
Total Group
2012
8,025,763
-
9,214,428
8,025,763
-
9,214,428
Guarantor Non-Guarantor
Group 2012
Group 2012
Elimination
2012
Total Group
2012
Revenue
338,266
694,224
(35,912)
996,578
Expenses
(196,729)
(345,494)
35,912
(506,311)
141,537
348,730
-
490,267
Results from Operating Activities
Net finance costs
(39,580)
(265,246)
-
(304,826)
Profit before income tax
101,957
83,484
-
185,441
Income tax expense
(10,596)
(13,047)
-
(23,643)
91,361
70,437
-
161,798
Profit after income tax
90

AWAS Annual Report 2012 all V25.indd

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