Exhibit B
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following pro forma consolidated financial information of MSAF group
consists of an unaudited pro forma consolidated balance sheet as of February 29,
2000 and unaudited pro forma consolidated statements of operations for the
fiscal year ended November 30, 1999 and the three months ended February 29,
2000.
The unaudited pro forma consolidated balance sheet was prepared by
adjusting the consolidated balance sheet of MSAF group as of February 29, 2000.
The unaudited pro forma consolidated balance sheet gives effect to (1) the
acquisition of 29 aircraft from a subsidiary of MSDW (27 of such aircraft were
acquired by MSDW from International Lease Finance Corporation, and the remaining
2 were acquired from an affiliate of GE Capital Corporation), (2) the issuance
of the restricted notes of $1,310 million, (3) the repayment of MSAF group's
$400 million of subclass A-1 notes, and (4) the increase in equity resulting
from capital contributions from a subsidiary of MSDW. The pro forma adjustments
for the purpose of the balance sheet presentation give effect to such
transactions as though they had occurred as of February 29, 2000.
The unaudited pro forma consolidated statements of operations were
prepared by adjusting the consolidated statements of operations of MSAF group
for the fiscal year ended November 30, 1999 and the three month period ended
February 29, 2000. The unaudited pro forma consolidated statements of operations
give effect to MSAF group's acquisition of 29 aircraft from a subsidiary of MSDW
and the issuance of the restricted notes. The pro forma adjustments for the
purposes of the statements of operations presentation give effect to such
transactions as though they had occurred at December 1, 1998.
The pro forma adjustments are based upon currently available information
and certain assumptions that management of MSAF group believes are reasonable
under the circumstances. The pro forma statements and accompanying notes should
be read in conjunction with the consolidated financial statements of MSAF group
and the notes thereto. The pro forma statements do not purport to represent what
MSAF group's financial position or results of operations would have actually
been if the aforementioned transactions in fact had occurred on such date at the
beginning of the period indicated or to project MSAF group's financial position
or results of operations at any future date or for any future period.
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<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
As of February 29, 2000
(Unaudited)
<TABLE>
MSAF Group Pro Forma Pro Forma
Historical Adjustments Combined
---------- ----------- --------
<S> <C> <C> <C>
(Dollars in thousands)
ASSETS
Cash and cash equivalents............................. $ 39,391 $1,310,000 (1) $ 60,425 (5)
(412,450) (2)
Receivables: (876,516) (3)
Lease income, net.................................... 2,041 1,493 (3) 3,534
Investment income and other.......................... 183 183
Aircraft under operating leases, net................. 874,286 1,027,484 (3) 1,901,770
Investment in capital lease, net..................... 17,382 17,382
Underwriting and other issuance related costs, net of
amortization......................................... 15,655 12,450 (2) 28,105
-------- ---------- ----------
Total Assets.......................................... $948,938 $1,062,461 $2,011,399
======== ========== ==========
</TABLE>
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<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
As of February 29, 2000
(Unaudited)
<TABLE>
MSAF Group Pro Forma Pro Forma
Historical Adjustments Combined
---------- ----------- --------
LIABILITIES AND BENEFICIAL (Dollars in thousands)
INTERESTHOLDER'S (DEFICIT)/EQUITY
<S> <C> <C> <C> <C>
Payables:
Interest payable to Noteholders.......................... $2,397 $2,397
Deferred rental income....................................... 5,650 $8,913 (3) 14,563
Liability for maintenance.................................... 64,935 50,947 (3) 115,882
Other liabilities............................................ 11,033 7,121 (3) 22,077
3,923 (4)
Notes payable:
Subclass A-1............................................. 400,000 (400,000) (2) --
Subclass A-2............................................. 229,516 229,516
Subclass A-3............................................. 580,000 (1) 580,000
Subclass A-4............................................. 200,000 (1) 200,000
Subclass A-5............................................. 400,000 (1) 400,000
Subclass B-1............................................. 90,044 90,044
Subclass B-2............................................. 75,000 (1) 75,000
Subclass C-1............................................. 99,910 99,910
Subclass C-2............................................. 55,000 (1) 55,000
Subclass D-1............................................. 110,000 110,000
--------- ---------- -----------
1,013,485 980,904 1,994,389
--------- ---------- -----------
Commitments and contingencies
Beneficial Interestholder's (Deficit) / Equity:
Beneficial Interest................................... 1 1
Deemed (Distribution)/Contribution.................... (15,305) 85,480 (3) 66,252
(3,923) (4)
Accumulated Deficit................................... (49,243) (49,243)
--------- ---------- ----------
Total Beneficial Interestholder's (Deficit)/Equity.... (64,547) 81,557 17,010
--------- ---------- ----------
Total Liabilities and Beneficial Interestholder's
(Deficit)/Equity......................................... $ 948,938 $1,062,461 $2,011,399
========= ========== ==========
</TABLE>
-----------------------
(1) To record the net proceeds from the restricted notes of approximately
$1,310 million.
(2) To record the redemption of MSAF group's subclass A-1 notes and the payment
of $12.5 million of financing and other costs associated with the issuance
of the restricted notes.
(3) To record the purchase of $962.0 million of net assets from a subsidiary of
MSDW (including $1,027.5 million of aircraft, $1.5 million of lease
payments receivable, $8.9 million of deferred rental income, $50.9 million
of maintenance liabilities and $7.1 million of security deposits) and to
record a capital contribution from that subsidiary of MSDW of $85.5
million.
(4) To record the contribution of $3.9 million of interest rate swaps to MSAF
group from a subsidiary of MSDW at book value.
(5) The pro forma increase in MSAF group's cash and cash equivalents of $21.0
million is comprised of the following: an increase in the liquidity reserve
amount of $5.0 million, security deposits of $7.1 million and advance
rental payments of $8.9 million.
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<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal year ended November 30, 1999
(Unaudited)
<TABLE>
MSAF Group Pro Forma Pro Forma
Historical Adjustments Combined
---------- ----------- --------
(Dollars in thousands)
Revenues:
<S> <C> <C> <C> <C>
Lease income, net......................................... $ 114,651 $ 126,103 (1) $ 240,754
Investment income on collection account................... 1,845 75 (1) 1,920
---------- --------- ---------
Total revenues............................................ 116,496 126,178 242,674
Expenses:
Interest expense.......................................... 63,584 59,428 (2) 123,012
Depreciation expense...................................... 47,060 53,209 (1) 100,269
Operating expenses:
Service provider and other fees........................ 8,568 6,305 (1) 14,873
Maintenance and other aircraft related costs........... 5,216 4,569 (1) 9,785
---------- --------- ---------
Total expenses............................................ 124,428 123,511 247,939
---------- --------- ---------
Net loss...................................................... $ (7,932) $ 2,667 $ (5,265)
========== ======== =========
</TABLE>
-----------------------
(1) To record the estimated amount of revenues and expenses resulting from the
acquisition of the 29 aircraft from a subsidiary of MSDW.
(2) To record the interest relating to the issuance of the restricted notes,
net of the elimination of interest expense associated with the repayment of
the subclass A-1 notes.
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<PAGE>
MORGAN STANLEY AIRCRAFT FINANCE AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended February 29, 2000
(Unaudited)
<TABLE>
MSAF Group Pro Forma Pro Forma
Historical Adjustments Combined
---------- ----------- --------
(Dollars in thousands)
Revenues:
<S> <C> <C> <C> <C>
Lease income, net....................................... $25,716 $32,647 (1) $58,363
Investment income on collection account................. 539 - 539
------- ------- -------
Total revenues.......................................... 26,255 32,647 58,902
Expenses:
Interest expense........................................ 15,245 14,144 (2) 29,389
Depreciation expense.................................... 11,765 13,302 (1) 25,067
Operating expenses:
Service provider and other fees...................... 1,682 1,216 (1) 2,898
Maintenance and other aircraft related costs......... 7,429 2 (1) 7,431
------- ------- -------
Total expenses.......................................... 36,121 28,664 64,785
------- ------- -------
Net loss.................................................... ($9,866) $3,983 ($5,883)
======= ====== =======
</TABLE>
----------
(1) To record the estimated amount of revenues and expenses resulting from the
acquisition of the 29 aircraft from a subsidiary of MSDW.
(2) To record the interest relating to the issuance of the restricted notes,
net of the elimination of interest expense associated with the repayment of
the subclass A-1 notes.
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