Aircraft Finance Trust
Asset Backed Notes, Series 1999-1
Quarterly Report to Noteholders
September 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
mix of variable and fixed interest obligations under the Notes do not correlate
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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 September 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 September 30, 2000.
Recent Developments
The Aircraft and Lessees
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 of all aircraft owned at December 31,
1999.
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 September 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 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 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.
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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 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.
In July 2000, a second B737-400 aircraft was returned from a Turkish
lessee. AFT has entered into a letter of intent to lease this aircraft to an
Indonesian lessee for a term of 60 months with an anticipated delivery date in
November 2000. This aircraft represents approximately 2.6% of the aggregate
appraised value at December 31, 1999.
In September 2000, an A320-200 aircraft formerly leased by a lessee
based in the United States was returned early. In October 2000, this aircraft
was delivered to a lessee based in Mexico for a lease term of 60 months. This
aircraft represents approximately 2.4% of the aggregate appraised value at
December 31, 1999.
Other 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.
As previously discussed, AFT has entered into agreements with two
lessees for the two aircraft formerly leased to Turkish and Brazilian lessees.
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 June 2000.
On June 21, 2000, Wayne Lippman tendered his resignation as Equity
Trustee of AFT effective upon the appointment of a replacement. At September 30,
2000 a replacement had not been appointed.
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During the nine month period ended September 30, 2000, there were three
lessees on non-accrual status. All aircraft with respect to these lessees have
been returned early, as discussed above. The total amount of rent and
maintenance reserve payments outstanding under the leases for the four aircraft
from these three lessees amounted to approximately $5.8 million as of September
30, 2000. One of these lessees, based in Brazil, owed approximately $1.0 million
at September 30, 2000 for outstanding maintenance reserve payments, after the
application of a $1.0 million cash security deposit. The second lessee based in
the United States owed approximately $1.2 million at September 30, 2000 for
outstanding maintenance reserve payments after the application of $0.8 million
of cash security deposits and a letter of credit. The third lessee, based in
Turkey, owed approximately $3.6 million at September 30, 2000 for outstanding
rent and maintenance reserve payments after the application of $1.1 million of
cash security deposits and letters of credit.
As of September 30, 2000, AFT has repaid principal on the Notes of
$65.8 million, as compared to $58.7 million anticipated in the Offering
Memorandum dated April 21, 1999 (the "Offering Memorandum"). 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.
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 September 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 September 15, 2000.
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 - June 16, 2000 to September 15, 2000
<TABLE>
<CAPTION>
Three months ended September 15, 2000 As % of Assumed Lease Rentals
Actual Assumed Variance Actual Assumed Variance
------ ------- -------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
CASH COLLECTIONS
Lease rentals 34,072,617 34,072,617 0 100.00% 100.00% 0.00%
- Renegotiated leases 248,865 0 248,865 0.73% 0.00% 0.73%
- Rental resets (694,854) 0 (694,854) -2.04% 0.00% -2.04%
----------------------------------------------- -----------------------------------------
Contracted lease rentals 33,626,628 34,072,617 (445,989) 98.69% 100.00% -1.31%
Movement in current arrears
balance 1,232,426 0 1,232,426 3.62% 0.00% 3.62%
Less net stress related costs
- Bad debts (933,585) (341,659) (591,926) -2.74% -1.00% -1.74%
- AOG (1,143,708) (1,024,978) (118,730) -3.36% -3.01% -0.35%
- Other leasing income 40,997 0 40,997 0.12% 0.00% 0.12%
----------------------------------------------- -----------------------------------------
Sub-total (803,870) (1,366,637) 562,767 -2.36% -4.01% 1.65%
Net lease revenues 32,822,758 32,705,980 116,778 96.33% 95.99% 0.34%
----------------------------------------------- -----------------------------------------
Interest earned 1,470,618 748,463 722,155 4.32% 2.20% 2.12%
Maintenance receipts 5,276,751 5,276,751 15.49% 15.49%
Maintenance disbursements (5,000,269) (5,000,269) -14.68% -14.68%
----------------------------------------------- -----------------------------------------
Net maintenance 276,482 0 276,482 0.81% 0.00% 0.81%
----------------------------------------------- -----------------------------------------
Total cash
collections 34,569,858 33,454,443 1,115,415 101.46% 98.19% 3.27%
----------------------------------------------- -----------------------------------------
CASH EXPENSES
Aircraft operating expenses (596,453) (1,366,638) 770,185 -1.75% -4.01% 2.26%
SG&A expenses
Aircraft servicer fees (1,103,334) (1,116,120) 12,786 -3.24% -3.28% 0.04%
Other (207,191) (525,000) 317,809 -0.61% -1.54% 0.93%
----------------------------------------------- -----------------------------------------
Sub-total (1,310,525) (1,641,120) 330,595 -3.85% -4.82% 0.97%
----------------------------------------------- -----------------------------------------
Total cash expenses (1,906,978) (3,007,758) 1,100,780 -5.60% -8.83% 3.23%
----------------------------------------------- -----------------------------------------
NET CASH COLLECTIONS
Total cash collections 34,569,858 33,454,443 1,115,415 101.46% 98.19% 3.27%
Total cash expenses (1,906,978) (3,007,758) 1,100,780 -5.60% -8.83% 3.23%
Movement in expense account (183,138) 0 (183,138) -0.54% 0.00% -0.54%
Interest payments (21,961,327) (17,769,808) (4,191,519) -64.45% -52.15% -12.30%
Swap receipts (payments) 2,234,465 (1,208,775) 3,443,240 6.56% -3.55% 10.11%
----------------------------------------------- -----------------------------------------
Total 12,752,880 11,468,102 1,284,778 37.43% 33.66% 3.77%
----------------------------------------------- -----------------------------------------
Principal payments
A1 0 0 0 0.00% 0.00% 0.00%
A2 (10,761,820) (9,472,949) (1,288,871) -31.58% -27.80% -3.78%
B (1,991,060) (1,995,153) 4,093 -5.84% -5.86% 0.01%
C 0 0 0 0.00% 0.00% 0.00%
D 0 0 0 0.00% 0.00% 0.00%
----------------------------------------------- -----------------------------------------
Total (12,752,880) (11,468,102) (1,284,778) -37.43% -33.66% -3.77%
----------------------------------------------- -----------------------------------------
</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 September 15, 2000
<TABLE>
<CAPTION>
Cumulative to Date As % of Assumed Lease Rentals
Actual Assumed Variance Actual Assumed Variance
------ ------- -------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
CASH COLLECTIONS
Lease rentals 183,326,108 183,326,108 0 100.00% 100.00% 0.00%
- Renegotiated leases (380,795) 0 (380,795) -0.21% 0.00% -0.21%
- Rental resets (787,304) 0 (787,304) -0.43% 0.00% -0.43%
- Excess rents at closing 5,924,523 0 5,924,523 3.23% 0.00% 3.23%
------------------------------------------------ -----------------------------------------
Contracted lease rentals 188,082,532 183,326,108 4,756,424 102.59% 100.00% 2.59%
Movement in current arrears
balance (882,610) 0 (882,610) -0.48% 0.00% -0.48%
Less net stress related costs
- Bad debts (2,173,418) (1,838,282) (335,136) -1.19% -1.00% -0.18%
- AOG (1,561,094) (5,514,847) 3,953,753 -0.85% -3.01% 2.16%
- Other leasing income 284,561 0 284,561 0.16% 0.00% 0.16%
------------------------------------------------ -----------------------------------------
Sub-total (4,332,561) (7,353,129) 3,020,568 -2.36% -4.01% 1.65%
Net lease revenues 183,749,971 175,972,979 7,776,992 100.23% 95.99% 4.24%
------------------------------------------------ -----------------------------------------
Investment income 6,212,354 4,055,544 2,156,810 3.39% 2.21% 1.18%
Maintenance receipts 25,278,169 25,278,169 13.79% 13.79%
Maintenance disbursements (13,452,646) (13,452,646) -7.34% -7.34%
------------------------------------------------ -----------------------------------------
Net maintenance 11,825,523 0 11,825,523 6.45% 0.00% 6.45%
------------------------------------------------ -----------------------------------------
Total cash
collections 201,787,848 180,028,523 21,759,325 110.07% 98.20% 11.87%
------------------------------------------------ -----------------------------------------
CASH EXPENSES
Aircraft operating expenses (2,436,329) (7,353,129) 4,916,800 -1.33% -4.01% 2.68%
SG&A expenses
Aircraft servicer fees (6,068,823) (5,984,025) (84,798) -3.31% -3.26% -0.05%
Other (2,002,901) (2,800,000) 797,099 -1.09% -1.53% 0.43%
------------------------------------------------ -----------------------------------------
Sub-total (8,071,724) (8,784,025) 712,301 -4.40% -4.79% 0.39%
------------------------------------------------ -----------------------------------------
Total cash expenses (10,508,053) (16,137,154) 5,629,101 -5.73% -8.80% 3.07%
------------------------------------------------ -----------------------------------------
NET CASH COLLECTIONS
Total cash collections 201,787,848 180,028,523 21,759,325 110.07% 98.20% 11.87%
Total cash expenses (10,508,053) (16,137,154) 5,629,101 -5.73% -8.80% 3.07%
Movement in expense account (18,021,424) 0 (18,021,424) -9.83% 0.00% -9.83%
Interest payments (110,098,153) (98,265,765) (11,832,388) -60.06% -53.60% -6.45%
Swap receipts (payments) 2,607,334 (6,951,567) 9,558,901 1.42% -3.79% 5.21%
------------------------------------------------ -----------------------------------------
Total 65,767,552 58,674,037 7,093,515 35.87% 32.01% 3.87%
------------------------------------------------ -----------------------------------------
Principal payments
A1 0 0 0 0.00% 0.00% 0.00%
A2 (62,070,364) (55,036,977) (7,033,387) -33.86% -30.02% -3.84%
B (3,697,188) (3,637,060) (60,128) -2.02% -1.98% -0.03%
C 0 0 0 0.00% 0.00% 0.00%
D 0 0 0 0.00% 0.00% 0.00%
------------------------------------------------ -----------------------------------------
Total (65,767,552) (58,674,037) (7,093,515) -35.87% -32.01% -3.87%
------------------------------------------------ -----------------------------------------
</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. Other relates 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
September 30, 2000. See "Management's Discussion and Analysis - Recent
Developments" for further information about events that have occurred subsequent
to September 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 September 30, 2000.
% of Aircraft by
Number of Appraised Value as of
Country Aircraft December 31, 1999
------- -------- -----------------
U.K....................................... 7 22.0 %
U.S....................................... 5 13.4
Canada.................................... 4 11.9
Italy..................................... 2 9.0
France.................................... 2 6.3
China..................................... 2 5.2
Brazil.................................... 3 7.9
Spain..................................... 3 5.0
Ireland................................... 2 5.0
India..................................... 2 4.1
Philippines............................... 1 2.6
Belgium................................... 1 2.6
Off Lease................................. 2 5.0
--- ------
Total..................................... 36 100.0 %
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The following table identifies the regions in which the 36 aircraft are based,
calculated as of September 30, 2000.
% of Aircraft by
Number of Appraised Value as of
Region Aircraft December 31, 1999
------ -------- -----------------
Developed Markets
Europe............................... 17 49.9 %
North America........................ 9 25.3
Emerging Markets
Asia................................. 5 11.9
Latin America........................ 3 7.9
Off Lease................................. 2 5.0
--- ------
Total..................................... 36 100.0 %
The following table identifies the current lessees of the 36 aircraft,
calculated as of September 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
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
TWA.......................................... 1 5.0
VARIG........................................ 3 7.9
Virgin Express S.A. N.V...................... 2 5.1
Off Lease.................................... 2 5.0
--- ------
Total........................................ 36 100.0%
Total Number of Lessees: 20
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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 September 30, 2000 is
approximately 6.2 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 September 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
------ ----------------- ------ ---- ---- -- ----------- ---- -----
Europe (Developed) ($000)
<S> <C> <C> <C> <C> <C> <C> <C>
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
11
<PAGE>
United Kingdom British Airways B737-300 CFM56-3C1 28548 12/97 33,207 2.7
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 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
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
Brazil VARIG B737-300 CFM56-3C1 28564 11/97 33,321 2.7
Off Lease
B737-400 CFM56-3C1 28490 11/96 32,510 2.6
A320-200 V2500-A1 373 1/93 30,623 2.4
----------- ---
Total $ 1,256,134 100 %
</TABLE>
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