Castlelake portfolio acquisition expected to accelerate growth, delivering higher earnings profile

Dublin | 30 October 2024: Avolon, a leading global aviation finance company, announces results for the third quarter (‘Q3’) of 2024.

2024 THIRD QUARTER | Financial Highlights

Income Statement (US$M)	Q3 2024	Q3 2023	$ Change	% Change
Lease revenue	677	588	89	+15%
Operating cashflow	536	626	(90)	(14%)
EBITDA	645	597	48	+8%
Net income	120	97	23	+24%

Balance Sheet (US$M)	Q3 2024	FY 2023	$ CHANGE	% CHANGE
Total available liquidity	9,072	7,228	1,844	+26%
Total assets	31,587	30,513	1,074	+4%
Unsecured debt / Total debt	64%	63%	1%	–
Net debt to Equity	2.3x	2.2X	0.1x	–

• Net income of US$120 million for the quarter, up 24% year on year;

Generated US$536 million of cash from operating activities, taking last 12 months operating cash to US$1.8 billion;

• Increased unsecured revolving debt capacity to US$5.7 billion taking total available liquidity to US$9.1 billion at quarter end;
• Net debt to equity of 2.3 times, unsecured debt to total debt ratio of 64% and sources to uses ratio of 1.7 times; and,
  Moody’s upgraded Avolon’s outlook to Positive; both Fitch and Moody’s now on Positive Outlook.

2024 THIRD QUARTER | OPERATING HIGHLIGHTS

• Agreed to acquire a portfolio of 118 aircraft through the acquisition of Castlelake Aviation Limited;

• Sold 11 aircraft during the quarter, ending the quarter with 59 aircraft agreed for sale;

• Delivered 9 new aircraft and transitioned 5 aircraft to a total of 11 customers;

• Entered into letters of intent for the sale and leaseback of 9 aircraft;

• Customer base of 141 airlines operating in 62 countries; and,

• Ended the quarter with an owned and managed fleet of 577 aircraft, with total orders and commitments for 442 aircraft, not including the proposed acquisition of Castlelake Aviation Limited.

ACQUISITION OF CASTLELAKE AVIATION LIMITED*

• Avolon to acquire a portfolio of 105 aircraft, 2 engines and 13 aircraft commitments;
• Acquired at a discount to book value and appraised Current Market Value;
• Average aircraft age of 4.7 years with 70% of the portfolio invested in new technology aircraft;
• Up to US$3.3 billion of transferable debt available to Avolon on closing, with an estimated US$1.2 billion net purchase price funded from Avolon’s existing sources of liquidity;

• Pro forma net debt to equity of 2.5 times estimated at quarter end; and,
• The transaction is expected to close in Q1 2025, subject to customary closing conditions.

*All figures as of March 31st, 2024

Andy Cronin, Avolon CEO, commented:

“We continued our strong financial performance from the previous quarter, delivering total revenues of US$733 million and 24% growth in net income to US$120 million. Our positive earnings momentum will be further strengthened by the Castlelake acquisition, adding a complementary portfolio of assets that will drive our earnings profile. Our aircraft sales activity and operating cash generation support our strong balance sheet and liquidity position, driving further positive credit ratings momentum.”

About Avolon

Avolon is a leading global aviation finance company connecting capital with customers to drive the transformation of aviation and the economic and social benefits of global travel. We pride ourselves on our deep customer relationships, our collaborative team approach, and our fast execution. We invest with a long-term perspective, diversifying risk and managing capital efficiently to maintain our strong balance sheet.  Working with 141 airlines in 62 countries, Avolon has an owned, managed, and committed fleet of 1,137 aircraft as of 30 September 2024 on a pro forma basis including the proposed acquisition of Castlelake Aviation Limited. www.avolon.aero