==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission file number 33-99970-01
-----------------
Airplanes Limited Airplanes U.S. Trust
Exact Name of Registrants as specified in memorandum
of association or trust agreement
Jersey, Channel Islands Delaware
(State or other jurisdiction of incorporation or organization)
7359 13-3521640
SIC Code (I.R.S. Employer
Identification No.)
Airplanes Limited Airplanes U.S. Trust
22 Grenville Street 1100 North Market Street,
St. Helier Rodney Square North
Jersey, JE4 8PX Wilmington, Delaware
Channel Islands 19890-0001
(011 44 1534 609 000) (302-651-1000)
(Addresses and telephone numbers, including area codes,
of Registrants' principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Issuer Class June 30, 1996
------ ----- ---------------
Airplanes Limited Common Stock, $1.00 par value 30
Airplanes Limited and Airplanes U.S. Trust
Form 10-Q for the Three Month Period Ended June 30, 1996
Index
Part I. FINANCIAL INFORMATION Page No.
-------
Item 1. Financial Statements (Unaudited)
bullet Unaudited Condensed Balance Sheets - June 30, 1996
and March 31, 1996
bullet Unaudited Condensed Statements of Operations -
Three Months Ended June 30, 1996 and June 30, 1995
bullet Unaudited Condensed Statements of Changes in
Shareholders' Deficit / Net Liabilities
- Three Months Ended June 30, 1996 and June 30, 1995
bullet Unaudited Condensed Statements of Cash Flows - Three Months
Ended June 30, 1996 and June 30, 1995
bullet Notes to the Unaudited Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8 - K
Signatures
Index to Exhibits
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
<TABLE>
<CAPTION>
AIRPLANES GROUP
UNAUDITED CONDENSED BALANCE SHEETS
March 31, 1996 June 30, 1996
---------------------------------- ----------------------------------
Airplanes Airplanes Airplanes Airplanes
Limited Trust Combined Limited Trust Combined
---------- ---------- -------- --------- --------- --------
($millions) ($millions)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash 214 6 220 233 6 239
Accounts receivable
Trade receivables 40 2 42 38 2 40
Allowance for doubtful
debts (12) (1) (13) (12) (1) (13)
Amounts due from GPA 12 1 13 16 - 16
Net investment in capital
and sales type leases 113 - 113 108 - 108
Aircraft, net 3,471 381 3,852 3,375 427 3,802
Other assets 8 1 9 9 1 10
--------- --------- -------- --------- --------- --------
Total assets 3,846 390 4,236 3,767 435 4,202
========= ========= ======== ========= ========= ========
LIABILITIES
Accrued expenses and
other liabilities 163 17 180 196 24 220
Amounts due (from)/to
Airplanes Limited/Airplanes
Trust - - - (44) 44 -
Amounts due to GPA 12 - 12 12 - 12
Indebtedness 4,221 413 4,634 4,170 409 4,579
Provision for
maintenance 276 35 311 284 39 323
Deferred income taxes 67 48 115 68 47 115
--------- --------- -------- --------- --------- --------
Total liabilities 4,739 513 5,252 4,686 563 5,249
--------- --------- -------- --------- --------- --------
Net liabilities (893) (123) (1,016) (919) (128) (1,047)
--------- --------- -------- --------- --------- --------
3,846 390 4,236 3,767 435 4,202
========= ========= ======== ========= ========= ========
The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>
<TABLE>
<CAPTION>
AIRPLANES GROUP
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended June 30,
-------------------------------------------------------------------------
1995 1996
---------------------------------- -----------------------------------
Airplanes Airplanes Airplanes Airplanes
Limited Trust Combined Limited Trust Combined
---------- ---------- -------- --------- --------- --------
($millions) ($millions)
<S> <C> <C> <C> <C> <C> <C>
Revenues
Aircraft leasing 140 16 156 131 20 151
Expenses
Depreciation and amortization (46) (6) (52) (45) (6) (51)
Net interest expense (83) (8) (91) (85) (9) (94)
Provision for maintenance (16) (4) (20) (15) (7) (22)
Bad and doubtful debts 7 - 7 - - -
Provision for loss making leases and
downtime, net (9) (3) (12) - - -
Other lease costs (6) - (6) (3) (3) (6)
Selling, general and administrative expenses (8) (1) (9) (8) (1) (9)
---------- ---------- -------- --------- --------- --------
Operating loss before income taxes (21) (6) (27) (25) (6) (31)
Income tax benefit/(charge) 2 (1) 1 (1) 1 -
---------- ---------- -------- --------- --------- --------
Net loss (19) (7) (26) (26) (5) (31)
========== ========== ======== ========= ========= ========
The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>
<TABLE>
<CAPTION>
AIRPLANES GROUP
UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES
Three Months Ended June 30,
Combined
Airplanes -------------
Airplanes Limited Trust Shareholders'
------------------------------------------ ---------- -------------
Share Net Shareholders' Net Deficit/Net
Capital Liabilities Deficit Liabilities Liabilities
----------- ----------- ------------- ---------- -------------
($millions) ($millions) ($millions) ($millions) ($millions)
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1995 - 772 772 70 842
Net loss for the period - 19 19 7 26
Distributions to GPA, net - 53 53 9 62
Deferred interest on indebtedness to GPA - (11) (11) (1) (12)
----------- ----------- ------------- ---------- -----------
Balance at June 30, 1995 - 833 833 85 918
=========== =========== ============= =========== ===========
Balance at March 31, 1996 - 893 893 123 1,016
Net loss for the period - 26 26 5 31
----------- ----------- ------------- ---------- -----------
Balance at June 30, 1996 - 919 919 128 1,047
=========== =========== ============= =========== ===========
The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>
<TABLE>
<CAPTION>
AIRPLANES GROUP
UNAUDITED CONDENSED STATEMENTS OF CASHFLOWS
Three Months Ended June 30,
-------------------------------------------------------------------------
1995 1996
---------------------------------- -----------------------------------
Airplanes Airplanes Airplanes Airplanes
Limited Trust Combined Limited Trust Combined
---------- ---------- -------- --------- --------- --------
($millions) ($millions)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net loss (19) (7) (26) (26) (5) (31)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 46 6 52 45 6 51
Aircraft maintenance, net 1 3 4 10 6 16
Deferred income taxes (2) 1 (1) 1 (1) -
Provision for loss making leases and downtime 9 3 12 - - -
Accrued and deferred interest expense 11 1 12 31 5 36
Changes in operating assets and liabilities:
Accounts receivable, net 3 - 3 (1) (2) (3)
Intercompany account movements - - - 8 (8) -
Amounts due to GPA - - - (4) 1 (3)
Other accruals and liabilities (2) - (2) 1 2 3
---------- ---------- -------- --------- --------- --------
Net cash provided by operating activities 47 7 54 65 4 69
========== ========== ======== ========= ========== ========
Cash flows from investing activities
Purchase of aircraft - - - 52 (52) -
Intercompany account movements - - - (52) 52 -
Capital and sales type leases 4 - 4 5 - 5
---------- ---------- -------- --------- --------- --------
Net cash (used in)/provided by investing
activities 4 - 4 5 - 5
========== ========== ======== ========= ========== ========
Cash flows from financing activities
Repayment of indebtedness - - - (51) (4) (55)
Distributions to GPA Group plc (51) (7) (58) - - -
---------- ---------- -------- --------- --------- --------
Net cash used in financing activities (51) (7) (58) (51) (4) (55)
========== ========== ======== ========= ========== ========
Net increase in cash - - - 19 - 19
Cash at beginning of period 123 12 135 214 6 220
---------- ---------- -------- --------- --------- --------
Cash at end of period 123 12 135 233 6 239
========== ========== ======== ========= ========== ========
Cash paid in respect of:
Interest 74 7 81 56 4 60
========== ========== ======== ========= ========== ========
The accompanying notes are an integral part of the unaudited condensed financial statements
</TABLE>
Airplanes Group
Notes to the Unaudited Condensed Financial Statements
1. Securitization Transaction
On March 28, 1996 (the "Closing Date") GPA Group plc and its subsidiary
undertakings ("GPA") re-financed on a long term basis certain indebtedness
due to commercial banks and other senior secured debt, most of which was
due to mature in September 1997. The re-financing was effected through a
major aircraft securitization transaction (the "Transaction").
Under the terms of the Transaction, a combination ("Airplanes Group")
comprising Airplanes Limited, a special purpose company formed under the
laws of Jersey, Channel Islands ("Airplanes Limited") and Airplanes U.S.
Trust, a trust formed under the laws of Delaware ("Airplanes Trust")
together acquired directly or indirectly from GPA a portfolio of 229
commercial aircraft (collectively the "Aircraft") and related leases (the
"Leases"). The Transaction was effected by transferring existing
subsidiaries of GPA that owned the Aircraft to Airplanes Limited and
Airplanes Trust, respectively. References to Airplanes Group in these
notes to the unaudited condensed financial statements may relate to
Airplanes Limited and Airplanes Trust on a combined or individual basis as
applicable.
Simultaneously with such transfers, Airplanes Group issued notes of
$4,048 million in aggregate principal amount in four classes: Class A,
Class B, Class C and Class D ("Notes") with approximately 90% of the
principal amount of Notes in each class being issued by Airplanes Limited
and 10% approximately by Airplanes Trust. Airplanes Group also issued
Class E Notes of $604 million ranking after the Notes and these were taken
up by GPA as part consideration for the transfer of the Aircraft and
certain related lease receivables. Of the $604 million Class E Notes
issued, approximately $13 million were subsequently canceled under the
terms of the Transaction. Indebtedness at March 31, 1996 represents the
aggregate of the Class A - E Notes in issue (net of approximately $5
million of discounts on issue and net of $13 million of Class E Notes
subsequently canceled as referred to below). Airplanes Limited and
Airplanes Trust have each fully and unconditionally guaranteed each others'
obligations under the relevant notes.
2. Basis of Preparation
The accompanying unaudited condensed financial statements of Airplanes
Limited, Airplanes Trust and the combined unaudited condensed balance
sheets, statements of operations and statements of changes in shareholders'
deficit/net liabilities and statements of cash flows of Airplanes Group
(together the "financial statements") have been prepared on a going concern
basis and on the bases and using the assumptions set out below and in
conformity with United States generally accepted accounting principles.
The accompanying financial statements for Airplanes Limited and Airplanes
Trust reflect all adjustments which in the opinion of management are necessary
to present a fair statement of the information presented as of June 30, 1996
and for the three month periods ending June 30, 1996 and June 30, 1995. Such
adjustments are of a normal, recurring nature. The results of operations for
the three month period ended June 30, 1996 are not necessarily indicative of
the results to be expected for the full year.
Bases and Assumptions
(i) The financial statements are presented on historical cost basis as if
Airplanes Limited and Airplanes Trust had been organized as single economic
entities for all periods presented.
Accordingly, the financial statements reflect, on the bases and assumptions
set out herein, the results of operations, assets and liabilities relating to
the 229 Aircraft transferred to Airplanes Limited and Airplanes Trust, from
the date of original acquisition of controlling interest by GPA of each
Aircraft.
(ii) For the purposes of these financial statements for periods prior to
March 28, 1996, an allocation of certain costs such as selling, general and
administrative expenses of GPA to Airplanes Limited and Airplanes Trust has
been made. The most significant element of these costs relate to aircraft
servicing fees, substantially all of which are asset based fees calculated
as an annual percentage of a reference net book value of aircraft under
management. The balance of such costs has been allocated in proportion to
rental revenues. Management believes that the bases for these allocations
are reasonable for these periods.
(iii)The financial statements for the year ended March 31, 1995 and in
respect of the period up to the Closing Date have been prepared assuming
Airplanes Group had been financed with indebtedness to GPA in an amount
equivalent to the aggregate amount of all classes of notes (A, B, C, D and E)
originally expected to be issued by Airplanes Group pursuant to the
Transaction of $4,602 million. It has also been assumed that such indebtedness
built up as and when Airplanes Group acquired Aircraft, at an amount equal to
the appraised value (based on the value of each Aircraft given a stable market
with a reasonable balance of supply and demand and a reasonable period of time
available for marketing) of the Aircraft at October 31, 1995. In addition, it
has been assumed that no repayment of debt was made during the period up to
the Closing Date.
At the Closing Date the actual aggregate amount of all classes of notes
issued was $4,652 million. Of the $604 million Class E Notes issued,
approximately $13 million were subsequently canceled under the terms of the
Transaction (giving effect to certain purchase price adjustment provisions of
the agreements pursuant to which subsidiaries of GPA were sold to Airplanes
Group). These financial statements include indebtedness in respect of the
Class E Notes of $591 million at March 31, 1996 (approximately 13% of the
total indebtedness of Airplanes Group on a combined basis). It has been
assumed that the indebtedness to GPA (explained above) of $4,602 million was
repaid from the proceeds of the Notes with the Class E Notes.
(iv) The interest charged on Airplanes Group's indebtedness to GPA in the
periods prior to the Closing Date is based on GPA's average cost of debt of
7.83% and 8.25% for the years ended March 31, 1995 and 1996, respectively. In
the period from the Closing Date to June 30, 1996 interest expense is based on
the actual terms of the Notes and the Class E Notes issued.
For the period prior to March 28, 1996, in respect of the portion of the
indebtedness to GPA which is represented by the Class E Notes (assumed in
these financial statements to be approximately 15% of total indebtedness up
until the Closing Date), the statements of cash flows in the periods prior to
the Closing Date give effect to cash payments for interest of only 1% per
annum and the balance is deferred and reflected as a movement in net
liabilities.
(v) Airplanes Group's cash balances were maintained throughout the period
to the Closing Date at the amount originally assumed to be retained by
Airplanes Group on completion of the Transaction of $135 million. Cash
generated from or absorbed by the activities of Airplanes Group during the
period up to the Closing Date is reflected as distributions to or transfers
from GPA. The cash balances as at March 31, 1996 and June 30, 1996 represent
the actual cash balances held by Airplanes Group at those dates.
(vi) Airplanes Group's tax provisions and deferred income tax assets and
liabilities have been determined as if the underlying taxable entities of
Airplanes Limited and Airplanes Trust were separate taxable entities from GPA.
The accompanying financial statements of Airplanes Limited and Airplanes
Trust are presented in accordance with the requirements of the Report on
Form 10-Q and consequently do not include all the disclosure normally
required by generally accepted accounting principles. For further
information regarding Airplanes Group and its financial condition, results
of operations and cash flows, refer to the audited financial statements and
notes thereto included in Airplanes Group's annual Report on Form 10-K for
the year ended March 31, 1996, previously filed with the Securities and
Exchange Commission.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Introduction
On March 28, 1996, Airplanes Pass Through Trust (the "Trust") issued $4,048
million of Pass Through Certificates (the "Certificates") in four classes -
Class A, Class B, Class C and Class D. The Class A Certificates were
further subdivided into five separate sub-classes. Each class and subclass
of the Certificates represents fractional undivided beneficial interests in
two corresponding classes or subclasses of notes (collectively, the
"Notes") issued by Airplanes Limited ("Airplanes Limited") and Airplanes
U.S. Trust ("Airplanes Trust" and, together with Airplanes Limited and
their respective subsidiaries, "Airplanes Group"). Airplanes Limited and
Airplanes Trust have each fully and unconditionally guaranteed (the
"Guarantees") the other's obligations under each class or subclass of
Notes. Also on March 28, 1996, Airplanes Group received the net proceeds
from an underwritten offering of the Certificates (the "Underwritten
Offering") in exchange for the Notes and used such net proceeds, together
with approximately $604 million in aggregate principal amount of a fifth
class of Airplanes Group notes (the "Class E Notes") to acquire certain
subsidiaries of GPA Group plc ("GPA Group" and, together with its
subsidiaries and affiliates "GPA"). Of the $604 million of Class E Notes
issued, approximately $13 million were subsequently canceled pursuant to
the purchase price adjustment provisions of the agreements pursuant to
which these subsidiaries of GPA Group were sold to Airplanes Group. The
acquired subsidiaries owned 229 aircraft (the "Aircraft") and related
leases to approximately 82 aircraft operators in approximately 40 different
countries as at March 31, 1996.
Airplanes Limited is a special purpose limited liability company formed on
November 3, 1995 under the laws of Jersey Channel Islands. Airplanes
Limited has one direct subsidiary, Airplanes Holdings Limited, in which it
holds 95% of the ordinary share capital. At June 30, 1996, Airplanes
Holdings Limited directly and indirectly owned 204 of the Aircraft.
Airplanes Trust is a business trust formed pursuant to the Airplanes Trust
Agreement dated November 29, 1995 under the laws of Delaware. Airplanes
Trust has one direct subsidiary, AeroUSA, Inc. AeroUSA, Inc. is a
Connecticut corporation and is wholly-owned by Airplanes Trust. AeroUSA,
Inc. itself has one direct, wholly-owned subsidiary, AeroUSA 3, Inc., also
a Connecticut corporation. At June 30, 1996, AeroUSA, Inc. directly and
indirectly owned 25 of the Aircraft.
The following discussion and analysis of Airplanes Group's financial condition
and results of operations is presented as though the Aircraft have been
operated and financed separately from GPA within the Airplanes Group in all
periods under review or from their date of acquisition by GPA, as appropriate.
It should be noted, however, that Airplanes Group only acquired the Aircraft
on March 28, 1996 and, therefore, did not conduct any business operations
prior to March 28, 1996. Accordingly, adjustments and allocations have been
made with respect to, inter alia, historical indebtedness, net interest
expense, selling, general and administrative expenses and tax amounts for
periods prior to March 28, 1996. While Airplanes Group believes that the
following discussion and analysis is an appropriate presentation of the
results of Airplanes Group for periods prior to March 28, 1996, it is not
necessarily indicative of the financial results that might have occurred had
Airplanes Group been an independently financed and managed group during these
periods.
The discussion and analysis which follows is based primarily on the combined
operating results of Airplanes Limited and Airplanes Trust and not on their
results reported as individual entities. It should be noted, however, that the
Notes and the Guarantees comprise obligations of two different legal entities
owning different assets. The Directors of Airplanes Limited and the
Controlling Trustees of Airplanes Trust believe that a combined discussion is
the most appropriate basis of presentation because, inter alia, Airplanes
Limited and Airplanes Trust are not intended to be regarded as separate
businesses but rather on the basis of one combined aircraft fleet.
Furthermore, each of Airplanes Limited and Airplanes Trust has fully and
unconditionally guaranteed the performance of the other under their respective
Notes. The Guarantees have been structured to ensure that no payments are made
on a junior class of Notes of Airplanes Limited or Airplanes Trust, as the
case may be, before any amounts due and payable on a more senior class of
Notes of Airplanes Limited or Airplanes Trust, respectively, are paid pursuant
to the Guarantees.
General
Substantially all of Airplanes Group's business is expected to consist of
aircraft operating lease activities. Airplanes Group may also engage in
aircraft sales subject to certain limitations and guidelines. Airplanes
Group's revenues and operating cash flows are determined by a number of
significant factors including (i) trading conditions in the civil aviation
industry, and in particular, the market for aircraft on operating leases, (ii)
the mix, relative age and popularity of the various aircraft types in the
portfolio of aircraft owned by Airplanes Group and (iii) Airplanes Group's
financial resources and liquidity position relative to its competitors who may
possess substantially greater financial resources.
Results of Operations - Three Months Ended June 30, 1996 Compared with Three
Months Ended June 30, 1995.
Certain of Airplanes Group's lessees continued to experience difficult trading
conditions and these had an adverse effect on Airplanes Group's operations for
the three months to June 30, 1996. There were, however, some signs of
continued improvement in the industry and certain other lessees recorded
generally improved payment performances resulting in the reversal of some
provisions previously made in respect of bad and doubtful debts. Overall
there was no net charge in respect of bad and doubtful debts due to the
requirement for additional provisions in respect of other Airplanes Group
lessees.
Revenues
Revenues for the three months ended June 30, 1996 remained relatively
unchanged at $151 million (Airplanes Limited: $131 million; Airplanes Trust:
$20 million) compared with $156 million (Airplanes Limited: $140 million;
Airplanes Trust $16 million) for the three months ended June 30, 1995,
reflecting the relatively similar portfolio in the periods and relatively
similar interest rate environments. At June 30, 1996, Airplanes Group had 221
Aircraft on lease (Airplanes Limited: 198 Aircraft; Airplanes Trust: 23
Aircraft) compared with 216 Aircraft on lease at June 30, 1995 (Airplanes
Limited: 196 Aircraft; Airplanes Trust: 20 Aircraft). Maintenance reserve
receipts, which Airplanes Group receives from certain of its lessees to
provide against the cost of maintaining leased Aircraft, are included in
revenues.
Depreciation and Amortization
The charge for depreciation and amortization in the three months ended June
30, 1996 amounted to $51 million (Airplanes Limited: $45 million; Airplanes
Trust: $6 million) compared with $52 million (Airplanes Limited: $46 million;
Airplanes Trust: $6 million) for the comparative period in 1995. This reflects
the relatively similar fleets in both periods.
Net Interest Expense
Net interest expense amounted to $94 million (Airplanes Limited: $85 million;
Airplanes Trust: $9 million) in the three month period ended June 30, 1996. On
the basis assumed (as explained below), net interest expense recorded in the
three month period ended June 30, 1995 amounted to $91 million (Airplanes
Limited: $83 million; Airplanes Trust: $8 million).
Net interest expense in the period to June 30, 1995 has been determined on the
basis set out in Note 2 to the unaudited condensed financial statements. This
essentially assumes that for this period, Airplanes Group's debt was owed to
GPA and was approximately equal to the appraised value of the Aircraft at
October 31, 1995 plus the value of certain receivables acquired from GPA by
Airplanes Group. The interest charge for the three month period ended June 30,
1995 has been calculated based on the assumption that all of the debt bears
interest at the assumed historic rate (based on GPA's assumed average cost of
debt) of 8.25% in the year ended March 31, 1996. The interest charge for the
three month period ended June 30, 1996 is based on the actual debt outstanding
during the period and the actual terms of the Notes and the Class E Notes. The
weighted average interest rate on the Notes during the period was 6.58% and
the average debt in respect of the Notes outstanding during the period was
$4,029 million. The Class E Notes accrue interest at a rate of 20% per annum.
The difference in Airplanes Group's net interest expense and cash paid in
respect of interest in the three month period to June 30, 1995 is
substantially accounted for by the assumption that Airplanes Group paid cash
interest at the per annum rate of 1% on the portion of indebtedness to GPA
which was assumed, for purposes of the unaudited condensed financial
statements, to be refinanced by the Class E Notes (the "Class E Note
Portion"). The Class E Note Portion was assumed to represent approximately
15% of total indebtedness to GPA in each period under review prior to March
28, 1996.
The difference in Airplanes Group's net interest expense and cash paid in
respect of interest in the three month period ended June 30, 1996 is
substantially accounted for by the fact that Airplanes Group accrues interest
on the Class E Notes at a rate substantially higher than the per annum rate of
1% actually paid in cash in the period.
Bad Debt, Downtime, Loss-Making Lease Provisions and Other Lease Costs
A substantial part of the balance of Airplanes Group's costs in any period may
consist of allowances for bad and doubtful debts and net provisions for
downtime and "loss making" leases. It is Airplanes Group's practice to
provide specifically for any amounts due but unpaid by lessees based primarily
on an assessment of the amount due in excess of security held. Airplanes
Group provides for downtime costs based on an estimated re-lease date of the
particular aircraft off-lease. Downtime costs include depreciation, allocated
interest (determined as set forth below in the context of provisions for
"loss-making" leases) and any other directly attributable costs for the
specific aircraft for the estimated off-lease period. A lease agreement is
deemed to be "loss making" in circumstances where the contracted rental
payments are insufficient to cover the depreciation and allocated interest
attributable to the aircraft plus certain direct costs, such as legal fees and
registration costs, attributable to the lease over its term. For these
purposes, interest is allocated to individual aircraft based on the weighted
average interest cost of the Notes and the Class E Notes (excluding, in the
case of the Class E Notes, the element of interest, 9% per annum, which is
payable only in the event that the principal amount of all the Notes is
repaid) or, in the case of periods prior to March 28, 1996, with assumed
indebtedness from GPA equivalent to the appraised value of such Aircraft at
October 31, 1995. This results in a significant number of leases being "loss
making" -- in terms of profitability -- while still being cash positive.
While certain of Airplanes Group's lessees continued to experience financial
difficulties in the three month period ended June 30, 1996 resulting in the
requirement for additional provisions in respect of bad and doubtful debts in
respect of these lessees, the credit exposure with regard to certain other
carriers improved in the period reflecting a somewhat improved trading
environment in certain regions. Overall, there was no additional charge in
respect of bad and doubtful debts (Airplanes Limited: nil; Airplanes Trust:
nil) in the period ended June 30, 1996. This is compared with an overall net
credit in respect of bad and doubtful debts for the three months ended June
30, 1995 of $7 million (Airplanes Limited: $7 million; Airplanes Trust: nil).
The net credit in 1995 was primarily as a result of the reversal of
significant provisions previously made in respect of one Brazilian lessee due
to the improved payment performance of this lessee.
There was no overall net charge in respect of downtime and "loss making"
leases in the three months to June 30, 1996 (Airplanes Limited: nil;
Airplanes Trust: nil). This was compared with a net overall charge of $12
million (Airplanes Limited: $9 million; Airplanes Trust: $3 million) in
the three month period to June 30, 1995. With respect to the three months
to June 30, 1996, a gross "loss making" lease provision of $7 million was
made in respect of one widebody aircraft (reflecting the weak market for
older widebody aircraft generally) during the period which was offset by
the utilization of $7 million in respect of "loss making" lease provisions
previously made for other Airplanes Group Aircraft.
Other lease costs in the three months ended June 30, 1996 amounted to $6
million (Airplanes Limited: $3 million; Airplanes Trust: $3 million).
This is a similar overall charge to that incurred in the three months to
June 30, 1995.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three month period to
June 30, 1996 amounted to $9 million (Airplanes Limited: $8 million; Airplanes
Trust: $1 million). This is compared with $9 million (Airplanes Limited: $8
million; Airplanes Trust: $1 million) reported for the three months ended June
30, 1995.
The most significant element of selling, general and administrative expenses
is the aircraft management fees paid to GE Capital Aviation Services Limited
("GECAS"). Substantially all of these amounts represent asset based fees
calculated as an annual percentage of agreed values of Aircraft under
management pursuant to a servicing agreement. Selling, general and
administrative expenses of $9 million in 1995 (Airplanes Limited: $8 million;
Airplanes Trust: $1 million) include $6 million (Airplanes Limited: $5
million; Airplanes Trust $1 million) relating to GECAS servicing fees. This
is a similar charge to the actual expense incurred in respect of GECAS
servicing fees in the period to June 30, 1996 of $6 million (Airplanes
Limited: $5 million; Airplanes Trust: $1 million).
A further significant element of Airplanes Group's actual selling, general and
administrative expenses reported in the period to June 30, 1996 was $2 million
(Airplanes Limited: $2 million; Airplanes Trust: nil) in respect of
administrative agency and cash management fees payable to GPA. Arrangements
with GPA in respect of administrative agency services and cash management
services only became effective on March 28, 1996.
Operating Loss
The operating loss for the three months ended June 30, 1996 was $31 million
(Airplanes Limited: $25 million; Airplanes Trust: $6 million) compared with an
operating loss of $27 million for the three months ended June 30, 1995
(Airplanes Limited: $21 million; Airplanes Trust: $6 million). Airplanes
Limited and Airplanes Trust are expected to continue to report substantial
losses in the future.
Taxes
Tax provisions and deferred tax assets and liabilities have been calculated as
if Airplanes Limited and Airplanes Trust were separate taxable entities from
GPA. There was no overall tax benefit or charge in the three months to June
30, 1996 (Airplanes Limited: a charge of $1 million; Airplanes Trust: a
benefit of $1 million) compared with a tax benefit of $1 million in the same
period in 1995 (Airplanes Limited: a benefit of $2 million; Airplanes Trust: a
charge of $1 million).
Net Loss
The net loss for the three months ended June 30, 1996 after taxation was $31
million (Airplanes Limited: $26 million; Airplanes Trust: $5 million) compared
with a net loss after taxation for the three months ended June 30, 1995 of $26
million (Airplanes Limited: $19 million; Airplanes Trust: $7 million).
Airplanes Group's activities will continue to be adversely affected by the
weak financial position of certain lessees and by continuing difficult trading
conditions in certain jurisdictions, most particularly in Mexico. Airplanes
Group's results will also continue to be affected by utilization of provisions
previously made in respect of the substantial number of leases that continue
to be "loss making" and by any requirement to make future provisions in
respect of "loss making" leases.
Financial Resources and Liquidity
Overview
Prior to the closing of the Underwritten Offering, Airplanes Group had not
operated as a separate business, and consequently, had not been financed as
such. GPA managed its cash resources centrally and cash generated by the
subsidiaries of Airplanes Limited and Airplanes Trust was assumed to be
transferred to GPA for the purpose of servicing GPA's indebtedness.
Liquidity
Airplanes Group's statement of cash flows for the period to June 30, 1995 has
been prepared on the assumption that Airplanes Group maintained constant cash
balances of approximately $135 million up to March 28, 1996. The actual cash
balances of Airplanes Group at March 31, 1996 amounted to $220 million
(Airplanes Limited: $214 million; Airplanes Trust: $6 million). The increase
in actual cash balances at March 31, 1996 reflects primarily $50 million in
additional Class A-5 Notes issued on March 28, 1996, together with certain
adjustments to the mix of collateral in respect of receivables transferred on
such date. Actual cash balances at June 30, 1996 amounted to $239 million
(Airplanes Limited: $233 million; Airplanes Trust: $6 million).
Operating Activities
Net cash provided by operating activities in the three months ended June 30,
1996 amounted to $69 million (Airplanes Limited: $65 million; Airplanes Trust:
$4 million), compared with $54 million in the three months ended June 30, 1995
(Airplanes Limited: $47 million; Airplanes Trust: $7 million). This reflects
cash paid in respect of interest of $60 million in the period to June 30, 1996
(Airplanes Limited: $56 million; Airplanes Trust: $4 million), compared with
$81 million in the period to June 1995 (Airplanes Limited: $74 million;
Airplanes Trust: $7 million). See above for a discussion of the basis upon
which Airplanes Group's interest charge and cash paid in respect of interest
has been calculated for periods prior to March 28, 1996. In addition,
depreciation and amortization amounted to $51 million in the three months to
June 30, 1996 (Airplanes Limited: $45 million; Airplanes Trust: $6 million),
compared with $52 million in the comparable period in 1995 (Airplanes Limited:
$46 million; Airplanes Trust: $6 million).
Investing and Financing Activities
Cash flows from investing and financing activities in three months to June
30, 1996, primarily reflect the repayment of $55 million of principal on
subclass A-5 and Class B Notes by Airplanes Group (Airplanes Limited: $51
million; Airplanes Trust: $4 million).
As described, no use of cash to repay indebtedness has been assumed in periods
prior to March 28, 1996. Instead, distributions and transfers back to GPA of
cash in amounts required to restore Airplanes Group's cash balance to $135
million in 1995 have been assumed as Airplanes Group was not a separately
financed entity in this period. These distributions and transfers back have
been treated as increases in Airplanes Group's net liabilities and amounted to
$58 million in the three months to June 1995 (Airplanes Limited: $51 million;
Airplanes Trust: $7 million).
Indebtedness
Following the closing of the Underwritten Offering, Airplanes Group's
indebtedness consists of the Class A-E Notes. In order to repay principal on
the Subclass A-1, A-2, A-3 and A-4 Notes, Airplanes Group will have to
refinance such Notes in the capital markets. In order to avoid stepped up
interest costs, $850 million of the Subclass A-1 Notes, $750 million of
Subclass A-2 Notes, $500 million of Subclass A-3 Notes and $200 million in
Subclass A-4 Notes are expected to be refinanced through the sale of further
pass-though certificates by early 1998, 1999, 2001 and 2003, respectively.
There can be no assurance that further pass-through certificates can be sold
in the amounts and at the times required and any failure to do so may have the
impact of increasing Airplanes Group's borrowing costs.
Interest Rate Management
The leasing revenues of Airplanes Group are generated primarily from lease
rental payments which are either fixed or floating. In the case of floating
rate leases, an element of the rental varies in line with changes in LIBOR,
generally six-month LIBOR. Some leases carry fixed and floating rental
payments for different rental periods. The majority of leases are floating
rate leases.
In general, an interest rate exposure arises to the extent that Airplanes
Group's fixed and floating interest obligations in respect of the Class A-D
Notes do not correlate to the mix of fixed and floating rental payments for
different rental periods. This interest rate exposure can be managed
through the use of interest rate swaps. The Class A and B Notes bear
floating rates of interest and the Class C and D Notes bear fixed rates of
interest. The mix of fixed and floating rental payments contains a higher
percentage of fixed rate payments than the percentage of fixed rate
interest payments on the Notes, including as a result of the fact that the
reset periods on floating rental payments are generally longer than the
monthly reset periods on the floating rate Notes. In order to correlate
the contracted fixed and floating rental payments to the fixed and floating
interest payments on the Notes, Airplanes Group initially entered into
interest rate swaps with an aggregate notional principal amount of
approximately $2.62 billion (the "Initial Swaps"). Under these Initial
Swaps, Airplanes Group pays fixed amounts and receives floating amounts on
a monthly basis. The Initial Swaps amortize having regard to the minimum
amortization schedule of the Class A and B Notes, the expiry dates of the
leases under which lessees make fixed rate rental payments and the LIBOR
reset dates under the floating rates leases. At least every three months,
GPA, as Airplanes Group's "Administrative Agent", will seek to enter into
additional swaps or sell at market value or unwind part or all of the
initial and any future swaps in order to rebalance the fixed and floating
mix of interest obligations and the fixed and floating mix of rental
payments. At June 30, 1996, Airplanes Group had unamortized swaps with an
aggregate notional principal balance of approximately $2.9 billion. This
consisted of $1,990 million in respect of the unamortized balance of the
notional amount of the Initial Swaps and $915 million in respect of the
unamortized balance of the notional amount of additional swaps ("additional
swaps") entered into by Airplanes Group since March 28, 1996 in order to
rebalance Airplanes Group's mix of fixed and floating interest rate
obligations and the fixed and floating mix of rental payments. None of the
additional swaps have maturity dates extending beyond December 1996. As of
June 30, 1996, of the $1,990 million aggregate notional amount of the
unamortized balance of the Initial Swaps, an amortizing swap with a
notional amount of $1,170 million with a final maturity date of April 1997,
an amortizing swap with a notional amount of $310 million with a final
maturity date of October 1998 and an amortizing swap with a notional amount
of $510 million with a final maturity date of April 2001.
Additional interest rate exposure will arise to the extent that lessees owing
fixed rate rental payments default and interest rates have declined between
the contract date of the lease and the date of default. This exposure can be
managed through the purchase of options on interest rate swaps ("Swaptions").
Airplanes Group will purchase Swaptions which, if exercised, will allow
Airplanes Group to enter into interest rate swap transactions under which it
will pay floating amounts and received fixed amounts. These Swaptions can be
exercised in the event of defaults by lessees owing fixed rate rental payments
in circumstances where interest rates have declined since the contract date of
such leases. Because not all lessees making fixed rate rental payments are
expected to default and not all lessee defaults are expected to occur
following a decline in interest rates, Airplanes Group will purchase Swaptions
in a notional amount less than the full extent of the exposure associated with
the lessees making fixed rate rental payments. This notional amount (the
"Target Hedge") will be varied from time to time to reflect, inter alia,
changes in the mix of payments bases under future leases. From time to time
the Administrative Agent may also sell at market value or unwind part or all
of the initial and any future Swaptions, for example, to reflect any decreases
in the Target Hedge. In the period to June 30, 1996, Airplanes Group purchased
Swaptions for interest rate swaps with an aggregate notional principal amount
of $18 million.
Through the use of interest rate swaps, Swaptions and other interest rate
hedging products, it is Airplanes Group's policy not to be adversely exposed
to material movements in interest rates. There can be no assurance, however,
that Airplanes Group's interest rate risk management strategies will be
effective in this regard.
The Directors of Airplanes Limited and the Controlling Trustees of Airplanes
Trust are responsible for reviewing and approving the overall interest rate
management policy and transaction authority limits. Specific hedging contracts
are approved by officers of the Administrative Agent acting within the overall
policies and limits.
Counterparty risk is monitored on an ongoing basis. Counterparties are
subject to the prior approval of the Directors of Airplanes Limited and the
Controlling Trustees of Airplanes Trust. Airplanes Group's counterparties
will consist primarily of the affiliates of major U.S. and European financial
institutions (including special purpose derivatives vehicles) whose senior,
unsecured, long-term debt obligations carry ratings which are consistent with
maintaining the ratings of the Class A Notes.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
AeroUSA, Inc. and AeroUSA 3, Inc. have in the past filed, and
will continue to file, United States federal consolidated tax returns with
GPA, Inc., and its subsidiaries (the "GPA U.S. Tax Group"). GPA, Inc. is
a Delaware corporation and a wholly-owned subsidiary of GPA Group.
AeroUSA, Inc. and AeroUSA 3, Inc. also file certain other state and local
tax returns on an unconsolidated basis. Currently, there are ongoing tax
audits by certain state and local tax authorities with respect to taxes
previously reported by the GPA U.S Tax Group or members thereof. Airplanes
Trust believes that none of these audits will have a material adverse
impact on the financial position or liquidity of AeroUSA, Inc.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Certificate of Incorporation of Atlanta Holdings Limited
dated November 3, 1995 and Certificate of Incorporation on
change of name to Airplanes Limited dated November 29,
1995(*)
3.2 Memorandum and Articles of Association
of Airplanes Limited(**)
3.3 Airplanes U.S. Trust Amended and Restated Trust Agreement
among GPA, Inc., as Settlor, Wilmington Trust Company, as
the Delaware Trustee, and the Controlling Trustees referred
to therein(**)
4.1 Pass Through Trust Agreement dated as of March 28, 1996
among Airplanes Limited, Airplanes U.S. Trust and Bankers
Trust Company, as Trustee(**)
4.2 Trust Supplement No. 1 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.3 Trust Supplement No. 2 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.4 Trust Supplement No. 3 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.5 Trust Supplement No. 4 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.6 Trust Supplement No. 5 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.7 Trust Supplement No. 6 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.8 Trust Supplement No. 7 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.9 Trust Supplement No. 8 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.10 Form of Subclass A-1 Pass Through Certificate(**)
- ----------
(*) Incorporated by reference to the Registration Statement on Form S-1,
as amended (File No. 33-99970), previously filed with the Securities
and Exchange Commission.
(**) Incorporated by reference to the Report on Form 10-Q for the quarterly
period ended December 31, 1995, previously filed with the
Securities and Exchange Commission.
4.11 Form of Subclass A-2 Pass Through Certificate(**)
4.12 Form of Subclass A-3 Pass Through Certificate(**)
4.13 Form of Subclass A-4 Pass Through Certificate(**)
4.14 Form of Subclass A-5 Pass Through Certificate(**)
4.15 Form of Class B Pass Through Certificate(**)
4.16 Form of Class C Pass Through Certificate(**)
4.17 Form of Class D Pass Through Certificate(**)
4.18 Airplanes Limited Indenture dated as of March 28, 1996
among Airplanes Limited, Airplanes U.S. Trust and
Bankers Trust Company, as Trustee(**)
4.19 Airplanes U.S. Trust Indenture dated as of March 28, 1996
among Airplanes U.S. Trust, Airplanes Limited and Bankers
Trust Company, as Trustee(**)
4.20 Form of Floating Rate Subclass A-1 Note(**)
4.21 Form of Floating Rate Subclass A-2 Note(**)
4.22 Form of Floating Rate Subclass A-3 Note(**)
4.23 Form of Floating Rate Subclass A-4 Note(**)
4.24 Form of Floating Rate Subclass A-5 Note(**)
4.25 Form of Floating Rate Class B Note(**)
4.26 Form of 8.15% Class C Note(**)
4.27 Form of 10.875% Class D Note(**)
4.28 Form of 20.00% (inflation adjusted) Class E Note(**)
10.1 Stock Purchase Agreement dated as of March 28, 1996 among
GPA, Inc., GPA Group plc and Airplanes U.S. Trust(**)
10.2 Stock Purchase Agreement dated as of March 28, 1996 among
GPA Group plc, Skyscape Limited and Airplanes Limited(**)
10.3 Administrative Agency Agreement dated as of March 28, 1996
among GPA Financial Services (Ireland) Limited, GPA Group
plc, Airplanes Limited, GPA II Limited, Airplanes U.S.
Trust and AeroUSA, Inc.(**)
10.4 Servicing Agreement dated as of March 28, 1996 among GE
Capital Aviation Services, Limited, Airplanes Limited,
AeroUSA, Inc., GPA II Limited, Airplanes U.S. Trust and GPA
Cash Manager Limited(**)
10.5 Reference Agency Agreement dated as of March 28, 1996 among
Airplanes Limited, Airplanes U.S. Trust, Bankers Trust
Company, as Airplanes Limited Indenture Trustee and
Airplanes U.S. Trust Indenture Trustee, Bankers Trust
Company, as Reference Agent, and GPA Cash Manager Limited,
as Cash Manager (**)
10.6 Secretarial Services Agreement dated as of March 28, 1996
between Airplanes Limited and Mourant & Co. Secretaries
Limited, as Company Secretary(**)
10.7 Cash Management Agreement dated as of March 28, 1996
between GPA Cash Manager Limited, as Cash Manager, GPA
Group plc, Airplanes Limited, Airplanes U.S. Trust and
Bankers Trust Company, as Trustee under each of the
Airplanes Limited Indenture, the Airplanes U.S. Trust
Indenture and the Security Trust Agreement(**)
10.8 Form of Swap Agreement(**)
10.9 Security Trust Agreement dated as of March 28, 1996 among
Airplanes Limited, Airplanes U.S. Trust, Mourant & Co.
Secretaries Limited, the Issuer Subsidiaries listed
therein, GPA Financial Services (Ireland) Limited, GPA Cash
Manager Limited, GPA Group plc, GE Capital Aviation
Services, Limited, Bankers Trust Company, as Airplanes U.S.
Trust Indenture Trustee and Airplanes Limited Indenture
Trustee, Bankers Trust Company, as Reference Agent, and
Bankers Trust Company, as Security Trustee(**)
27.1 Financial Data Schedule of Airplanes Limited
27.2 Financial Data Schedule of Airplanes U.S. Trust
(b) Reports on Form 8-K: filed for event dates May 15, 1996;
June 14, 1996; and July 16, 1996 (relating to the monthly
report to holders of the Certificates).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, each registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: August 12, 1996 AIRPLANES LIMITED
/s/ Roy M. Dantzic
-------------------------
Roy M. Dantzic
Director and Principal
Financial Officer
Date: August 12, 1996 AIRPLANES U.S. TRUST
/s/ Roy M. Dantzic
-------------------------
Roy M. Dantzic
Controlling Trustee
and Principal
Financial Officer
AIRPLANES LIMITED AND AIRPLANES U.S. TRUST
INDEX TO EXHIBITS
EXHIBIT NUMBER
3.1 Certificate of Incorporation of Atlanta Holdings Limited
dated November 3, 1995 and Certificate of Incorporation on
change of name to Airplanes Limited dated November 29,
1995(*)
3.2 Memorandum and Articles of Association
of Airplanes Limited(**)
3.3 Airplanes U.S. Trust Amended and Restated Trust Agreement
among GPA, Inc., as Settlor, Wilmington Trust Company, as
the Delaware Trustee, and the Controlling Trustees referred
to therein(**)
4.1 Pass Through Trust Agreement dated as of March 28, 1996
among Airplanes Limited, Airplanes U.S. Trust and Bankers
Trust Company, as Trustee(**)
4.2 Trust Supplement No. 1 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.3 Trust Supplement No. 2 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.4 Trust Supplement No. 3 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.5 Trust Supplement No. 4 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.6 Trust Supplement No. 5 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.7 Trust Supplement No. 6 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.8 Trust Supplement No. 7 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.9 Trust Supplement No. 8 dated as of March 28, 1996 to the
Pass Through Trust Agreement(**)
4.10 Form of Subclass A-1 Pass Through Certificate(**)
4.11 Form of Subclass A-2 Pass Through Certificate(**)
4.12 Form of Subclass A-3 Pass Through Certificate(**)
4.13 Form of Subclass A-4 Pass Through Certificate(**)
4.14 Form of Subclass A-5 Pass Through Certificate(**)
- ----------
(*) Incorporated by reference to the Registration Statement on Form S-1,
as amended (File No. 33-99970), previously filed with the Securities
and Exchange Commission.
(**) Incorporated by reference to the Report on Form 10-Q for the quarterly
period ended December 31, 1995, previously filed with the
Securities and Exchange Commission.
4.15 Form of Class B Pass Through Certificate(**)
4.16 Form of Class C Pass Through Certificate(**)
4.17 Form of Class D Pass Through Certificate(**)
4.18 Airplanes Limited Indenture dated as of March 28, 1996
among Airplanes Limited, Airplanes U.S. Trust and Bankers
Trust Company, as Trustee(**)
4.19 Airplanes U.S. Trust Indenture dated as of March 28, 1996
among Airplanes U.S. Trust, Airplanes Limited and Bankers
Trust Company, as Trustee(**)
4.20 Form of Floating Rate Subclass A-1 Note(**)
4.21 Form of Floating Rate Subclass A-2 Note(**)
4.22 Form of Floating Rate Subclass A-3 Note(**)
4.23 Form of Floating Rate Subclass A-4 Note(**)
4.24 Form of Floating Rate Subclass A-5 Note(**)
4.25 Form of Floating Rate Class B Note(**)
4.26 Form of 8.15% Class C Note(**)
4.27 Form of 10.875% Class D Note(**)
4.28 Form of 20.00% (inflation adjusted) Class E Note(**)
10.1 Stock Purchase Agreement dated as of March 28, 1996 among
GPA, Inc., GPA Group plc and Airplanes U.S. Trust(**)
10.2 Stock Purchase Agreement dated as of March 28, 1996 among
GPA Group plc, Skyscape Limited and Airplanes Limited(**)
10.3 Administrative Agency Agreement dated as of March 28, 1996
among GPA Financial Services (Ireland) Limited, GPA Group
plc, Airplanes Limited, GPA II Limited, Airplanes U.S.
Trust and AeroUSA, Inc.(**)
10.4 Servicing Agreement dated as of March 28, 1996 among GE
Capital Aviation Services, Limited, Airplanes Limited,
AeroUSA, Inc., GPA II Limited, Airplanes U.S. Trust and GPA
Cash Manager Limited(**)
10.5 Reference Agency Agreement dated as of March 28, 1996 among
Airplanes Limited, Airplanes U.S. Trust, Bankers Trust
Company, as Airplanes Limited Indenture Trustee and
Airplanes U.S. Trust Indenture Trustee, Bankers Trust
Company, as Reference Agent and GPA Cash Manager Limited,
as Cash Manager(**)
10.6 Secretarial Services Agreement dated as of March 28, 1996
between Airplanes Limited and Mourant & Co. Secretaries
Limited, as Company Secretary(**)
10.7 Cash Management Agreement dated as of March 28, 1996
between GPA Cash Manager Limited, as Cash Manager, between
GPA Group plc, Airplanes Limited, Airplanes U.S. Trust and
Bankers Trust Company, as Trustee under each of the
Airplanes Limited Indenture, the Airplanes U.S. Trust
Indenture and the Security Trust Agreement(**)
10.8 Form of Swap Agreement(**)
10.9 Security Trust Agreement dated as of March 28, 1996 among
Airplanes Limited, Airplanes U.S. Trust, Mourant & Co.
Secretaries Limited, the Issuer Subsidiaries listed
therein, GPA Financial Services (Ireland) Limited, GPA Cash
Manager Limited, GPA Group plc, GE Capital Aviation
Services, Limited, Bankers Trust Company, as Airplanes U.S.
Trust Indenture Trustee and Airplanes Limited Indenture
Trustee, Bankers Trust Company, as Reference Agent, and
Bankers Trust Company, as Security Trustee(**)
27.1 Financial Data Schedule of Airplanes Limited
27.2 Financial Data Schedule of Airplanes U.S. Trust
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001004539
<NAME> AIRPLANES LIMITED
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6
<SECURITIES> 0
<RECEIVABLES> 2
<ALLOWANCES> 1
<INVENTORY> 0
<CURRENT-ASSETS> 7
<PP&E> 562
<DEPRECIATION> 135
<TOTAL-ASSETS> 435
<CURRENT-LIABILITIES> 11
<BONDS> 409
0
0
<COMMON> 0
<OTHER-SE> (128)
<TOTAL-LIABILITY-AND-EQUITY> 435
<SALES> 0
<TOTAL-REVENUES> 20
<CGS> 0
<TOTAL-COSTS> 16
<OTHER-EXPENSES> 1
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> (6)
<INCOME-TAX> (1)
<INCOME-CONTINUING> (6)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001004540
<NAME> AIRPLANES U.S. TRUST
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 233
<SECURITIES> 0
<RECEIVABLES> 38
<ALLOWANCES> 12
<INVENTORY> 0
<CURRENT-ASSETS> 264
<PP&E> 4433
<DEPRECIATION> 950
<TOTAL-ASSETS> 3767
<CURRENT-LIABILITIES> 146
<BONDS> 4170
0
0
<COMMON> 0
<OTHER-SE> (919)
<TOTAL-LIABILITY-AND-EQUITY> 3767
<SALES> 0
<TOTAL-REVENUES> 131
<CGS> 0
<TOTAL-COSTS> 63
<OTHER-EXPENSES> 8
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85
<INCOME-PRETAX> (25)
<INCOME-TAX> 1
<INCOME-CONTINUING> (25)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
