Aircraft Finance Trust
Asset Backed Notes, Series 1999-1
Quarterly Report to Noteholders
June 30, 2000
I. Management's Discussion and Analysis
Any statements contained herein that are not historical facts, or that might be
considered an opinion or projection, whether expressed or implied, are meant as,
and should be considered, forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
are based on assumptions and opinions concerning a variety of known and unknown
risks. If any assumptions or opinions prove incorrect, any forward-looking
statements made on that basis may also prove materially incorrect. AFT assumes
no obligation to update any forward-looking statements to reflect actual results
or changes in the factors affecting such forward-looking statements.
Background and General
On May 5, 1999, Aircraft Finance Trust (AFT) issued $1,209 million of Asset
Backed Notes (the "Initial Notes"). The Initial Notes were issued in five
classes; Class A-1, Class A-2, Class B, Class C and Class D. The Initial Notes
were issued simultaneously with the execution of an agreement for the sale of
the beneficial interest of AFT for $39 million and an agreement to acquire 36
commercial jet aircraft for $1,196 million. On January 20, 2000 four classes of
the Initial Notes were exchanged for four corresponding classes of new notes
(the "Exchange Notes"), as more fully discussed below. The remaining outstanding
Initial Notes and the outstanding Exchange Notes are together referred to as the
Notes.
AFT is a special purpose entity, which owns aircraft subject to operating
leases. AFT's business consists of aircraft leasing activities. AFT may also
engage in acquisitions of additional aircraft and sales of aircraft. Any
acquisitions of additional aircraft and the related issuance of additional notes
will require confirmation by the rating agencies that they will not lower,
qualify or withdraw their ratings on the outstanding Notes as a result. AFT's
cash flows from such activities will be used to service the interest and
principal on the outstanding Notes and to make distribution of remaining amounts
to the holders of the beneficial interest certificates, after the payment of
expenses incurred by AFT.
AFT's ability to generate sufficient cash from its aircraft assets to service
the outstanding Notes will depend primarily on the rental rates it can achieve
on leases, the lessees' ability to perform according to the terms of the leases
and the prices it can achieve on any aircraft sales. AFT's ability to service
the outstanding Notes will also depend on the level of AFT's operating expenses,
including maintenance obligations that are expected to increase as the aircraft
age, and any unforeseen contingent liabilities. The indenture governing the
Notes requires that AFT maintain a cash reserve balance on deposit in a
collections account and permits AFT to establish a credit facility, in order to
provide a source of liquidity for AFT's obligations.
Interest incurred by AFT on the Notes and the rental income received by AFT
under operating leases are based on combinations of variable and fixed measures
of interest rates. AFT is exposed to interest rate risk to the extent that the
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mix of variable and fixed interest obligations under the Notes do not correlate
to the mix of variable and fixed rents under operating leases. AFT has engaged
advisors to monitor interest rates in order to mitigate its exposure to
unfavorable variations. AFT utilizes interest rate swaps that shift the risk of
fluctuations in floating rates to the counterparty in exchange for fixed
payments by AFT. Risks in the use of these instruments arise from the possible
inability of the counterparties to meet the terms of their contracts and from
market movements in securities values and interest rates.
AFT was party to seven interest rate swap agreements at June 30, 2000. Under the
agreements AFT will pay a fixed rate of interest on the notional amount to the
counterparty and, in turn, the counterparty will pay AFT a rate of interest on
the notional amount based on 30-day LIBOR.
Additional financial information regarding AFT, including AFT's annual and
quarterly reports on Forms 10-K and 10-Q, respectively, have been filed with the
Securities and Exchange Commission. These reports can be viewed at the SEC's
website (http://www.sec.gov).
The indenture governing the Notes and other governing documents impose
restrictions on how AFT operates its business. For example, there are
concentration limits contained in the indenture that restrict AFT's ability to
lease a certain percentage of aircraft to any individual lessee, to lessees in
particular countries, or to lessees in particular geographical regions. The
tables included in the section "Description of the Aircraft and Leases"
illustrate such concentrations as of June 30, 2000.
Recent Developments
On January 20, 2000, AFT completed an exchange offer whereby AFT issued four
classes of new notes, the Exchange Notes, designated Class A-1, A-2, B and C, in
exchange for the four corresponding classes of the Initial Notes. The terms of
the Exchange Notes are identical in all material respects to the Initial Notes,
except that the Exchange Notes are registered under the Securities Act of 1933,
as amended. The Class D Notes were not exchanged and remain unchanged. $3
million of the Class A-2 Initial Notes were not tendered in the exchange offer
and remain outstanding.
Under the terms of the indenture, AFT is required to obtain annual appraisals of
its aircraft. In February 2000, AFT received appraisals of the adjusted base
values of the aircraft as of December 31, 1999 from three independent appraisers
that are members of the International Society of Transport Aircraft Trading, as
required by the indenture. The aggregate of the average of the three appraisals
(the current appraised value) of the aircraft at December 31, 1999 was $1,256.1
million. The appraisals at December 31, 1999 did not indicate a decline in value
of the aircraft sufficiently in excess of the value decline assumed under the
terms of the indenture to require excess cash flows, as defined, to be
redirected to the Class A Notes.
In February 2000, a B737-300 aircraft formerly leased to a Dutch lessee was
delivered for lease to a lessee based in the Philippines for a lease term of 57
months. The aircraft with respect to this lessee represents approximately 2.6%
of the aggregate appraised value at December 31, 1999.
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In March 2000, AFT entered into a restructuring agreement with Canadian
Airlines, a lessee of two Airbus A320-200 aircraft. Under the restructuring
agreement, Canadian Airlines, a subsidiary of Air Canada, was replaced by Air
Canada Capital LTD as the new lessee. Air Canada guarantees these leases.
Pursuant to this restructuring, the cash security deposits of $1.5 million held
by AFT in connection with these aircraft were returned to Canadian Airlines. As
of June 30, 2000, all current rent amounts due under these leases had been paid.
The two aircraft with respect to this lessee represent approximately 4.5% of the
aggregate appraised value of the aircraft at December 31, 1999.
In April 2000, AFT entered into an agreement for one MD-83 aircraft, currently
leased to an Italian lessee, to extend the lease from April 2000 to November
2001. The aircraft with respect to this lessee represents approximately 1.9% of
the aggregate appraised value at December 31, 1999.
In June 2000, a B767-300ER aircraft formerly leased to a Swedish lessee was
delivered for lease to a Canadian lessee for a lease term of 36 months. The
aircraft with respect to this lessee represents approximately 4.7% of the
aggregate appraised value at December 31, 1999.
During the six month period ended June 30, 2000, there were two lessees on
non-accrual status. The total amount of rent and maintenance reserve payments
outstanding under the leases for the three aircraft from these two lessees
amounted to approximately $5.0 million as of June 30, 2000, after the
application of certain security deposits. One of these lessees, based in Brazil,
owed approximately $1.0 million at June 30, 2000 for outstanding maintenance
reserve payments, after the application of a $1.0 million security deposit. The
other lessee, based in Turkey, owed approximately $4.0 million at June 30, 2000
for outstanding rent and maintenance reserve payments, after the application of
$0.5 million of security deposits and a letter of credit. AFT holds additional
security deposits and a letter of credit in the aggregate of $0.5 million
against the remaining arrearages of this Turkish lessee.
In May 2000, a B737-300 aircraft formerly leased to Transbrasil was returned
early. In July 2000, this aircraft was delivered to VARIG for a lease term of 60
months. The aircraft with respect to this lessee represents approximately 2.7%
of the aggregate appraised value at December 31, 1999.
In April 2000, a B737-400 aircraft formerly leased to a Turkish lessee was
returned early and re-delivered to a new lessee (based in Belgium) in April 2000
for a lease term of 36 months. This aircraft represents approximately 2.6% of
the aggregate appraised value at December 31, 1999.
In July 2000, a second B737-400 aircraft was returned from a Turkish lessee and
is currently being re-marketed for lease. This second aircraft also represents
approximately 2.6% of the aggregate appraised value at December 31, 1999.
As a result of the new and extended leases discussed above, in aggregate,
monthly lease revenues are approximately $0.3 million or 2.4% lower than
anticipated in the Offering Memorandum dated April 21, 1999 ("Assumed Case"). As
of June 30, 2000, AFT has repaid principal of $53.0 million, as compared to
$47.2 million anticipated under the Assumed Case. AFT's ability to generate
sufficient cash from its aircraft assets to service the outstanding Notes will
depend primarily on the rental rates it can achieve on leases, the lessees'
ability to perform according to the terms of the leases and the prices it can
achieve on any aircraft sales. AFT's ability to service the outstanding Notes
will also depend on the level of AFT's operating expenses, including maintenance
obligations that are expected to increase as the aircraft age, and any
unforeseen contingent liabilities. The indenture governing the Notes requires
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that AFT maintain a cash reserve balance on deposit in a collections account and
permits AFT to establish a credit facility, in order to provide a source of
liquidity for AFT's obligations.
As previously discussed, AFT has entered into agreements with two lessees for
the two off-lease aircraft. As a result of these agreements, the concentration
of the five largest lessees is 38.8% of the most recent appraised value of the
portfolio. One of the concentration limits in the indenture requires the five
largest lessees not to exceed 35% of the most recent appraised value of the
portfolio. Under the indenture, AFT is not permitted to enter into a lease
agreement that would exceed certain concentration limits unless it receives
rating agency confirmation that the rating agencies will not downgrade, qualify,
or withdraw their ratings on the Notes. AFT received such rating agency
confirmations from the rating agencies during the quarter ended June 30, 2000.
On August 15, 2000, Wayne Lippman resigned as Equity Trustee of AFT effective
upon the appointment of Martin Kalb as successor Equity Trustee.
II. Analysis of Activity in the Collection Account during the Quarter
AFT makes payments on the Notes monthly on the 15th of each month, or the next
business day if the 15th is not a business day (the "Payment Date"). The amount
of cash available for payment is determined on the Calculation Date, which is
defined as being four business days prior to the Payment Date. For the purposes
of this report, the "Three Month Period" comprises information from the three
Monthly Reports to Noteholders through June 15, 2000 and the "Cumulative to
Date", comprises information from all of the Monthly Reports to Noteholders
since the Closing Date, May 5, 1999, through June 15, 2000.
The April 21, 1999 Offering Memorandum (the "Offering Memorandum") contains
assumptions in respect of AFT's future cash flows and expenses (the "Assumed
Case"). The following reports contain an analysis of the actual cash flows
versus the Assumed Case for the Three Month Period and Cumulative to Date.
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Aircraft Finance Trust
Asset Backed Notes, Series 1999-1
Actual Cash Flows versus Assumed Case
Three Month Period - March 16, 2000 to June 15, 2000
<TABLE>
<CAPTION>
Three months ended June 15, 2000 As % of Assumed Lease Rentals
Actual Assumed Variance Actual Assumed Variance
------ ------- -------- ------ ------- --------
CASH COLLECTIONS
<S> <C> <C> <C> <C> <C> <C>
Lease rentals 33,081,617 33,081,617 0 100.00% 100.00% 0.00%
- Renegotiated leases (188,332) 0 (188,332) -0.57% 0.00% -0.57%
- Rental resets (409,271) 0 (409,271) -1.24% 0.00% -1.24%
----------------------------------------------- -----------------------------------------
Contracted lease rentals 32,484,014 33,081,617 (597,603) 98.19% 100.00% -1.81%
Movement in current arrears 2,708,235 0 2,708,235 8.19% 0.00% 8.19%
balance
Less net stress related costs
- Bad debts (1,239,833) (331,722) (908,111) -3.75% -1.00% -2.75%
- AOG (417,386) (995,167) 577,781 -1.26% -3.01% 1.75%
- Other leasing income 135,531 0 135,531 0.41% 0.00% 0.41%
----------------------------------------------- -----------------------------------------
Sub-total 1,186,547 (1,326,889) 2,513,436 3.59% -4.01% 7.60%
Net lease revenues 33,670,561 31,754,728 1,915,833 101.78% 95.99% 5.79%
----------------------------------------------- -----------------------------------------
Interest earned 1,314,003 745,749 568,254 3.97% 2.25% 1.72%
Maintenance receipts 4,975,635 4,975,635 15.04% 0.00% 15.04%
Maintenance disbursements paid (1,045,805) (1,045,805) -3.16% 0.00% -3.16%
----------------------------------------------- -----------------------------------------
Net maintenance 3,929,830 0 3,929,830 11.88% 0.00% 11.88%
----------------------------------------------- -----------------------------------------
Total cash collections 38,914,394 32,500,477 6,413,917 117.63% 98.24% 19.39%
----------------------------------------------- -----------------------------------------
CASH EXPENSES
Aircraft operating expenses (1,133,231) (1,326,889) 193,658 -3.43% -4.01% 0.59%
SG&A expenses
Aircraft servicer fees (1,104,969) (1,096,746) (8,223) -3.34% -3.32% -0.02%
Other servicer fees (458,512) (525,000) 66,488 -1.39% -1.59% 0.20%
----------------------------------------------- -----------------------------------------
Sub-total (1,563,481) (1,621,746) 58,265 -4.73% -4.90% 0.18%
----------------------------------------------- -----------------------------------------
Total cash expenses (2,696,712) (2,948,635) 251,923 -8.15% -8.91% 0.76%
----------------------------------------------- -----------------------------------------
NET CASH COLLECTIONS
Total cash collections 38,914,394 32,500,477 6,413,917 117.63% 98.24% 19.39%
Total cash expenses (2,696,712) (2,948,635) 251,923 -8.15% -8.91% 0.76%
Movement in expense account (4,228,580) 0 (4,228,580) -12.78% 0.00% -12.78%
Interest payments (21,132,046) (17,923,482) (3,208,564) -63.88% -54.18% -9.70%
Swap receipts (payments) 844,725 (1,217,819) 2,062,544 2.55% -3.68% 6.23%
----------------------------------------------- -----------------------------------------
Total 11,701,781 10,410,541 1,291,240 35.37% 31.47% 3.90%
----------------------------------------------- -----------------------------------------
Principal payments
A1 0 0 0 0.00% 0.00% 0.00%
A2 (11,701,781) (10,410,541) (1,291,240) -35.37% -31.47% -3.90%
B 0 0 0 0.00% 0.00% 0.00%
C 0 0 0 0.00% 0.00% 0.00%
D 0 0 0 0.00% 0.00% 0.00%
----------------------------------------------- -----------------------------------------
Total (11,701,781) (10,410,541) (1,291,240) -35.37% -31.47% -3.90%
----------------------------------------------- -----------------------------------------
</TABLE>
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Aircraft Finance Trust
Asset Backed Notes, Series 1999-1
Actual Cash Flows versus Assumed Case
Cumulative to Date - May 5, 1999 to June 15, 2000
<TABLE>
<CAPTION>
Cumulative to Date As % of Assumed Lease Rentals
Actual Assumed Variance Actual Assumed Variance
------ ------- -------- ------ ------- --------
CASH COLLECTIONS
<S> <C> <C> <C> <C> <C> <C>
Lease rentals 149,253,491 149,253,491 0 100.00% 100.00% 0.00%
- Renegotiated leases (629,659) 0 (629,659) -0.42% 0.00% -0.42%
- Rental resets (92,450) 0 (92,450) -0.06% 0.00% -0.06%
- Excess rents at closing 5,924,523 0 5,924,523 3.97% 0.00% 3.97%
------------------------------------------------ -----------------------------------------
Contracted lease rentals 154,455,905 149,253,491 5,202,414 103.49% 100.00% 3.49%
Movement in current arrears (2,115,036) 0 (2,115,036) -1.42% 0.00% -1.42%
balance
Less net stress related costs
- Bad debts (1,239,833) (1,496,623) 256,790 -0.83% -1.00% 0.17%
- AOG (417,386) (4,489,868) 4,072,482 -0.28% -3.01% 2.73%
- Other leasing income 243,564 0 243,564 0.16% 0.00% 0.16%
------------------------------------------------ -----------------------------------------
Sub-total (3,528,691) (5,986,491) 2,457,800 -2.36% -4.01% 1.65%
Net lease revenues 150,927,214 143,267,000 7,660,214 101.12% 95.99% 5.13%
------------------------------------------------ -----------------------------------------
Investment income 4,741,736 3,307,081 1,434,655 3.18% 2.22% 0.96%
Maintenance receipts 20,001,418 20,001,418 13.40% 0.00% 13.40%
Maintenance disbursements (8,452,378) (8,452,378) -5.66% 0.00% -5.66%
------------------------------------------------ -----------------------------------------
Net maintenance 11,549,040 0 11,549,040 7.74% 0.00% 7.74%
------------------------------------------------ -----------------------------------------
Total cash collections 167,217,990 146,574,081 20,643,909 112.04% 98.20% 13.83%
------------------------------------------------ -----------------------------------------
CASH EXPENSES
Aircraft operating expenses (1,839,876) (5,986,491) 4,146,615 -1.23% -4.01% 2.78%
SG&A expenses
Aircraft servicer fees (4,965,489) (4,867,906) (97,583) -3.33% -3.26% -0.07%
Other servicer fees (1,795,710) (2,275,000) 479,290 -1.20% -1.52% 0.32%
------------------------------------------------ -----------------------------------------
Sub-total (6,761,199) (7,142,906) 381,707 -4.53% -4.79% 0.26%
------------------------------------------------ -----------------------------------------
Total cash expenses (8,601,075) (13,129,397) 4,528,322 -5.76% -8.80% 3.03%
------------------------------------------------ -----------------------------------------
NET CASH COLLECTIONS
Total cash collections 167,217,990 146,574,081 20,643,909 112.04% 98.20% 13.83%
Total cash expenses (8,601,075) (13,129,397) 4,528,322 -5.76% -8.80% 3.03%
Movement in expense account (17,838,287) 0 (17,838,287) -11.95% 0.00% -11.95%
Interest payments (88,136,826) (80,495,957) (7,640,869) -59.05% -53.93% -5.12%
Swap receipts (payments) 372,869 (5,742,792) 6,115,661 0.25% -3.85% 4.10%
------------------------------------------------ -----------------------------------------
Total 53,014,671 47,205,935 5,808,736 35.52% 31.63% 3.89%
------------------------------------------------ -----------------------------------------
Principal payments
A1 0 0 0 0.00% 0.00% 0.00%
A2 (51,308,543) (45,564,028) (5,744,515) -34.38% -30.53% -3.85%
B (1,706,128) (1,641,907) (64,221) -1.14% -1.10% -0.04%
C 0 0 0 0.00% 0.00% 0.00%
D 0 0 0 0.00% 0.00% 0.00%
------------------------------------------------ -----------------------------------------
Total (53,014,671) (47,205,935) (5,808,736) -35.52% -31.63% -3.89%
------------------------------------------------ -----------------------------------------
</TABLE>
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Notes:
The line item descriptions below should be read in conjunction with the Actual
Cash Flows versus Assumed Case reports provided above.
Lease rentals. Lease rentals refers to gross revenue based on the assumptions in
the offering memorandum dated April 21, 1999.
Renegotiated leases. Renegotiated leases refer to the loss in rental revenue
caused by a lessee negotiating a reduction in the lease rental. This can be a
permanent reduction over the remaining lease term in exchange for other
contractual concessions or a result of seasonal adjustments in the monthly
rental amount.
Rental resets. Rental resets are a measure of the gain or loss in rental revenue
when new lease rates are different from those assumed in the Assumed Case,
including lease rate adjustments for changes in interest rates on floating rate
leases, lease extensions or renewals with current lessees at the end of the
lease term.
Excess rents at closing. Excess rents at Closing refer to the excess of the
actual rental revenue over the anticipated rental revenue under the Assumed
Case. AFT received rents from April 29, 1999 forward and pro-rated rental
payment from the seller, for rents earned by AFT, but received by the seller(s)
prior to the close of AFT.
Contracted lease rentals. Contracted lease rentals represent the current
contracted lease rental rollout which equates to the Assumed Case lease rentals
less adjustments for renegotiated leases, rental resets and excess rent at
closing.
Movement in current arrears balance. Movement in current arrears balance is the
total contracted lease rentals outstanding from current lessees at a given date
and excludes any amounts classified as bad debts.
Net stress-related costs. Net stress-related costs is a combination of all the
factors which can cause actual lease rentals received to differ from the
contracted lease rentals. The Assumed Case estimated net stress-related costs
based on a percentage of the sum of the Assumed Case lease rentals and the
interest on the lease rentals.
Bad debts. Bad debts are total contracted lease rentals in arrears, net of
security deposits drawn down, owed by lessees who have defaulted and which are
deemed irrecoverable. Rental arrears from non-accrual lessees are reclassified
to Bad Debts when the aircraft is redelivered from the lessee.
Aircraft on ground ("AOG"). AOG is defined as the Assumed Case lease rental lost
when an aircraft is off-lease and non-revenue earning.
Other leasing income. Other leasing income consists of miscellaneous income
received in connection with a lease other than contracted rentals, maintenance
receipts and security deposits, such as early termination payments or default
interest.
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Net lease rentals. Net lease rentals is contracted lease rentals less any
movement in current arrears balance and net stress-related costs.
Interest earned. Interest earned mainly relates to interest received on cash
balances held in the collection, expense and certain lessee funded accounts.
Cash held in the collection account consists of the cash liquidity reserve
amount of $52 million, in addition to the intra-month cash balances for all the
rentals and maintenance payments collected prior to the monthly payment date.
The expense account contains cash set aside to pay for expenses which are
expected to be payable over the next five months. Lessee funded accounts consist
of cash security deposits. In most instances, interest earned from the lessee
funded accounts, accrues in favor of AFT.
Net maintenance. Net maintenance refers to maintenance reserve revenue received
less any maintenance reimbursements paid. The Assumed Case assumes that, over
time, maintenance revenue will equal maintenance expenditures. However, it is
unlikely that in any particular note payment period, maintenance revenue will
exactly equal maintenance expenses.
Aircraft operating expenses. Aircraft operating expenses includes all
operational costs related to the leasing of an aircraft including costs of
re-leasing, repossession and other overhead costs.
Aircraft servicer fees. Aircraft servicer fees are amounts paid to the aircraft
servicer, GE Capital Aviation Services Ltd., in accordance with the terms of the
servicing agreement.
Other servicer fees. Other servicer fees relate to fees and expenses paid to and
for other service providers including the administrative agent, financial
advisor, legal advisors, auditors, rating agencies, the trustees, and other
selling, general and administrative expenses.
Movement in expense account. Movement in expense account relates to increases or
decreases in the accrued expense amounts transferred in or out of the expense
account.
Interest payments. Interest payments represent the amount of interest paid on
AFT's outstanding classes of Notes issued on May 5, 1999.
Swap receipts (payments). According to the terms of the interest rate swap
agreements, AFT pays a fixed rate of interest on the notional amount of the
swaps to the counterparty and in turn the counterparty pays AFT a rate of
interest on the notional amount based on the 30 day LIBOR rate, which will
results in monthly net swap payments paid or received.
III. Description of the Aircraft and Leases
The following tables set forth details of the aircraft owned by AFT as of June
30, 2000. See "Management's Discussion and Analysis - Recent Developments" for
further information about events that have occurred subsequent to June 30, 2000.
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The following table identifies the 36 aircraft by type of aircraft.
% of Aircraft by
Type of Number of Appraised Value as of
Manufacturer Aircraft Aircraft Body Type December 31, 1999
------------ -------- -------- --------- ----------------
Boeing B737-300 11 Narrowbody 28.6 %
B737-400 5 Narrowbody 11.9
B767-200ER 2 Widebody 5.2
B767-300ER 4 Widebody 23.8
Airbus A310-300 1 Widebody 2.7
A320-200 7 Narrowbody 17.8
McDonnell Douglas DC-10-30 2 Widebody 3.0
MD-83 4 Narrowbody 7.0
--- ------
Total 36 100.0 %
All of the aircraft hold or are capable of holding a noise certificate issued
under Chapter 3 of Volume I, Part II of Annex 16 of the Chicago Convention or
have been shown to comply with the Stage 3 noise levels set out in Section 36.5
of Appendix C of Part 36 of the United States Federal Aviation Regulations.
The following table identifies the countries in which the lessees of the 36
aircraft are based, calculated as of June 30, 2000.
% of Aircraft by
Number of Appraised Value as of
Country Aircraft December 31, 1999
------- -------- -----------------
U.K.......................................... 7 22.0 %
U.S.......................................... 6 15.8
Canada....................................... 4 11.9
Italy........................................ 2 9.0
France....................................... 2 6.3
China........................................ 2 5.2
Brazil....................................... 2 5.2
Spain........................................ 3 5.0
Ireland...................................... 2 5.0
India........................................ 2 4.1
Turkey....................................... 1 2.6
Philippines.................................. 1 2.6
Belgium...................................... 1 2.6
Off Lease.................................... 1 2.7
--- ------
Total........................................ 36 100.0 %
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The following table identifies the regions in which the 36 aircraft are based,
calculated as of June 30, 2000.
% of Aircraft by
Number of Appraised Value as of
Region Aircraft December 31, 1999
------ -------- -----------------
Developed Markets
Europe.................................. 17 49.9 %
North America........................... 10 27.7
Emerging Markets
Asia.................................... 5 11.9
Europe and the Middle East.............. 1 2.6
Latin America........................... 2 5.2
Off Lease.................................... 1 2.7
--- ------
Total........................................ 36 100.0 %
The following table identifies the current lessees of the 36 aircraft,
calculated as of June 30, 2000.
% of Aircraft by
Number of Appraised Value as of
Lessee Aircraft December 31, 1999
------ -------- -----------------
Air 2000 Limited.............................. 1 7.0 %
Air Canada Capital Limited.................... 3 9.2
Airtours International Airways Limited........ 2 4.6
Linee Aeree Italiane S.p.A.................... 1 7.1
America West Airlines, Inc.................... 1 2.7
British Airways............................... 1 2.6
British Midland Airways PLC................... 3 7.7
CityBird...................................... 1 2.6
China Eastern Airlines Corporation Limited.... 2 5.2
Continental Airlines, Inc..................... 2 3.0
Eurofly S.p.A................................. 1 1.9
Frontier Airlines, Inc........................ 1 2.6
Istanbul Hava Yollari A.S..................... 1 2.6
Jet Airways (India) Limited................... 2 4.1
Philippine Airlines Inc....................... 1 2.6
Royal Aviation, Inc........................... 1 2.7
Spanair S.A................................... 3 5.1
Societe de Transport Aerien Regional.......... 2 6.3
TransMeridian Airlines, Inc................... 1 2.4
TWA........................................... 1 5.0
VARIG......................................... 2 5.2
Virgin Express S.A. N.V....................... 2 5.1
Off Lease..................................... 1 2.7
--- ------
Total......................................... 36 100.0%
Total Number of Lessees: 22
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The following table lists the 36 aircraft by seat category.
% of Aircraft by
Number of Appraised Value as of
Seat Category Aircraft Types Aircraft December 31, 1999
------------- -------------- -------- -----------------
121-170 B737-300, B737-400, MD-83 20 47.5 %
135-180 A320-200 7 17.8
171-240 A310-300, B767-200ER, B767-300ER 7 31.7
240+ DC-10-30 2 3.0
--- -----
Total 36 100.0 %
The following table identifies the aircraft by year of aircraft manufacture. The
weighted average age of the 36 aircraft as of June 30, 2000 is approximately 6.0
years.
% of Aircraft by
Number of Appraised Value as of
Year of Manufacture Aircraft December 31, 1999
------------------- -------- -----------------
1980......................................... 1 1.4 %
1982......................................... 1 1.6
1986......................................... 1 1.5
1987......................................... 2 5.2
1988......................................... 1 2.7
1989......................................... 1 1.7
1991......................................... 6 15.7
1992......................................... 4 11.1
1993......................................... 1 2.4
1996......................................... 5 12.8
1997......................................... 10 27.1
1998......................................... 1 2.7
1999......................................... 2 14.1
---- ------
Total........................................ 36 100.0 %
Further particulars of the 36 aircraft, calculated as of June 30, 2000 are
contained in the table below:
<TABLE>
<CAPTION>
Appraised
Value as of
Country in which Aircraft Engine Serial Date of December 31, % of
Region Aircraft is Based Lessee Type Type No. Manufacture 1999 Total
------ ----------------- ------ ---- ---- -- ----------- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Europe (Developed) ($000)
Belgium CityBird B737-400 CFM56-3C1 28491 11/96 $ 32,550 2.6 %
France STAR Airlines A320-200 CFM56-5B4 737 9/97 39,404 3.1
France STAR Airlines A320-200 CFM56-5B4 749 9/97 39,401 3.1
Ireland Virgin Express B737-300 CFM56-3C1 28333 8/96 30,721 2.5
Ireland Virgin Express B737-400 CFM56-3C1 28489 11/96 32,640 2.6
Italy Alitalia B767-300ER CF6-80C2B7F 30008 3/99 88,549 7.1
Italy Eurofly S.p.A. MD-83 JT8D-219 53199 3/92 24,288 1.9
Spain Spanair S.A. MD-83 JT8D-219 49398 11/86 18,829 1.5
Spain Spanair S.A. MD-83 JT8D-219 49791 9/89 21,674 1.7
Spain Spanair S.A. MD-83 JT8D-219 53198 4/91 22,882 1.8
United Kingdom Air 2000 B767-300ER CF6-80C2B7F 29617 3/99 88,308 7.0
United Kingdom Airtours A320-200 CFM56-5A3 221 9/91 29,019 2.3
United Kingdom Airtours A320-200 CFM56-5A3 222 10/91 29,053 2.3
United Kingdom British Airways B737-300 CFM56-3C1 28548 12/97 33,207 2.7
11
<PAGE>
United Kingdom British Midland B737-300 CFM56-3C1 28554 12/96 31,282 2.5
United Kingdom British Midland B737-300 CFM56-3C1 28557 3/97 32,447 2.6
United Kingdom British Midland B737-300 CFM56-3C1 28558 4/97 32,518 2.6
North America (Developed)
United States America West B737-300 CFM56-3C1 28740 6/98 34,467 2.7
United States Continental DC-10-30 CF6-50C2 46584 2/80 18,070 1.4
United States Continental DC-10-30 CF6-50C2 48292 2/82 19,966 1.6
United States Frontier Airlines B737-300 CFM56-3C1 28563 8/97 32,874 2.6
United States TransMeridian
Airlines A320-200 V2500-A1 373 1/93 30,623 2.4
United States TWA B767-300ER PW4060 25403 1/92 62,950 5.0
Canada Air Canada A320-200 CFM56-5A1 210 7/91 27,962 2.2
Canada Air Canada A320-200 CFM56-5A1 231 9/91 28,330 2.3
Canada Air Canada B767-300ER CF6-80C2B6F 25221 7/91 59,513 4.7
Canada Royal Aviation A310-300 CF6-80C2A2 448 2/88 34,087 2.7
Asia (Emerging)
China China Eastern B737-300 CFM56-3C1 28561 6/97 32,424 2.6
China China Eastern B737-300 CFM56-3C1 28562 7/97 32,538 2.6
India Jet Airways B737-400 CFM56-3C1 25663 11/92 25,913 2.1
India Jet Airways B737-400 CFM56-3C1 25664 11/92 26,071 2.1
Philippines Philippine Airlines B737-300 CFM56-3C1 28559 5/97 32,701 2.6
Europe & Middle East (Emerging)
Turkey Istanbul B737-400 CFM56-3C1 28490 11/96 32,510 2.6
Latin America (Emerging)
Brazil VARIG B767-200ER CF6-80C2B 23805 7/87 32,515 2.6
Brazil VARIG B767-200ER CF6-80C2B 23806 7/87 32,527 2.6
Off Lease B737-300 CFM56-3C1 28564 11/97 33,321 2.7
----------- ---
Total $ 1,256,134 100 %
</TABLE>
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