1
EXHIBIT 5
AIRPLANES GROUP CASH FLOW ANALYSIS
COMPARISON OF ACTUAL CASH FLOWS VERSUS THE ADJUSTED 1998 BASE CASE FOR THE
THIRTY-FIVE MONTH PERIOD FROM MARCH 11, 1998 TO FEBRUARY 15, 2001.
The financial information set forth in this Airplanes Group Cash Flow
Analysis, which was not prepared in accordance with U.S. GAAP, shows the cash
receipts and payments of Airplanes Group for the thirty-five month period from
March 11, 1998 to February 15, 2001 (the "THIRTY-FIVE MONTH PERIOD"). You should
read this information together with the financial statements and related notes
of Airplanes Group.
The Adjusted 1998 Base Case referred to below represents the 1998 Base Case
adjusted to take account of the 21 aircraft sales which have occurred since
March 1998 (three DC8-71Fs, one B737-300, four B737-200As, two B737-200QCs,
three A300-B4-100s and eight DC9s), which sales were not anticipated in the 1998
Base Case.
The following is a discussion of the Total Cash Collections, Total Cash
Expenses, Interest Payments and Principal Payments of Airplanes Group for the
Thirty-Five Month Period. You should read this discussion in conjunction with
the analysis under "-- Airplanes Cash Flow Performance for the Period from March
11, 1998 to February 15, 2001 (35 Months) Comparison of Actual Cash Flows versus
Adjusted 1998 Base Case Cash Flows."
CASH COLLECTIONS
"TOTAL CASH COLLECTIONS" include Net Lease Rentals, Interest Earned,
Aircraft Sales, Net Maintenance and Other Receipts (each as defined below). In
the Thirty-Five Month Period, Airplanes Group generated approximately $1,427.5
million in Total Cash Collections, $56.0 million less than the Total Cash
Collections contemplated by the Adjusted 1998 Base Case. This difference is due
to a combination of the factors set out below. The numbers in square brackets
below refer to the line item number in the analysis under "-- Airplanes Cash
Flow Performance for the Period from March 11, 1998 to February 15, 2001 (35
Months) Comparison of Actual Cash Flows versus Adjusted 1998 Base Case Cash
Flows."
[2] RENEGOTIATED LEASES
"RENEGOTIATED LEASES" refers to the loss in rental revenue caused by a
lessee negotiating a reduction in the lease rental. Typically, this can be a
permanent reduction over the remaining lease term in exchange for other
contractual concessions from the lessee. In the Thirty-Five Month Period, the
amount of revenue loss attributed to Renegotiated Leases was $2.6 million, as
compared to $Nil assumed in the Adjusted 1998 Base Case, and related to leases
renegotiated with two lessees. The renegotiated rentals were set at the then
prevailing market rate for these aircraft types.
[3] RENTAL RESETS, INCLUDING INTEREST RATE ADJUSTMENTS FOR FLOATING RATE LEASES
"RENTAL RESETS" is a measure of the loss in rental revenue when new lease
rates are different than those assumed in the Adjusted 1998 Base Case, including
lease rate adjustments for changes in interest rates on floating rate leases.
Rental Resets amounted to $24.3 million in the Thirty-Five Month Period, as
compared to $Nil assumed in the Adjusted 1998 Base Case.
[5] CONTRACTED LEASE RENTALS
"CONTRACTED LEASE RENTALS" represents the current contracted lease rental
rollout, which is equal to the Adjusted 1998 Base Case Lease Rentals less
adjustments for Renegotiated Leases and Rental Resets. For the Thirty-Five Month
Period, Contracted Lease Rentals were $1,334.6 million, which was $26.9 million
less than that assumed in the Adjusted 1998 Base Case. The difference is due to
losses from Renegotiated Leases and Rental Resets as discussed above.
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[6] MOVEMENT IN CURRENT ARREARS BALANCE
"CURRENT ARREARS" is the total Contracted Lease Rentals outstanding from
current lessees at a given date but excluding any amounts classified as Bad
Debts. There was a net negative movement of $20.9 million in the Current Arrears
balance over the Thirty-Five Month Period, compared to $Nil assumed in the
Adjusted 1998 Base Case.
NET STRESS-RELATED COSTS
"NET STRESS-RELATED COSTS" is a combination of all the factors which can
cause actual lease rentals to vary from the Contracted Lease Rentals. The
Adjusted 1998 Base Case assumed gross stress-related costs equal to 6.0% of the
Adjusted 1998 Base Case Lease Rentals. However, the Adjusted 1998 Base Case also
assumed the recovery of certain deferred arrears equal to 1.1% of the Adjusted
1998 Base Case Lease Rentals in the Thirty-Five Month Period, resulting in an
overall Net Stress-Related Costs assumption of 4.9% of the Adjusted 1998 Base
Case Lease Rentals. For the Thirty-Five Month Period, Net Stress-Related Costs
incurred amounted to a net cash outflow of $48.8 million (3.5% of Lease Rentals)
compared to the $67.3 million outflow assumed in the Adjusted 1998 Base Case, a
variance of $18.5 million that is due to the following five factors described in
items [8] to [12] below.
[8] BAD DEBTS
"BAD DEBTS" are arrears owed by lessees who have defaulted and which are
deemed irrecoverable. They amounted to $5.2 million (0.4% of Lease Rentals) for
the Thirty-Five Month Period, $8.6 million less than the Adjusted 1998 Base Case
assumption of $13.8 million (1.0% of Lease Rentals). Actual Bad Debts related to
four lessees.
[9] DEFERRED ARREARS BALANCE
"DEFERRED ARREARS BALANCE" refers to current arrears that have been
capitalized and restructured into a deferred balance. In the Thirty-Five Month
Period, Airplanes Group received payments totalling $16.5 million in accordance
with these restructurings. Payments totalling $15.4 million were assumed to be
received in accordance with restructurings included in the Adjusted 1998 Base
Case.
[10] AIRCRAFT ON GROUND ("AOG")
AOG is defined as the Adjusted 1998 Base Case Lease Rentals lost when an
aircraft is off-lease and non-revenue earning. In the Thirty-Five Month Period,
the amount of revenue lost attributed to AOG was $48.2 million (3.5% of Lease
Rentals), as compared to $57.9 million under the Adjusted 1998 Base Case, and
relates to 37 aircraft which were off-lease at different times during this
period. At January 31, 2001, six aircraft were AOG.
[11] 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. In
the Thirty-Five Month Period, Other Leasing Income amounted to $4.9 million, as
compared to $Nil assumed under the Adjusted 1998 Base Case.
[12] REPOSSESSION COSTS
"REPOSSESSION COSTS" cover legal and aircraft technical costs incurred as a
result of repossessing an aircraft. In the Thirty-Five Month Period, Airplanes
Group repossessed 15 aircraft from nine lessees, resulting in Repossession Costs
totalling $16.8 million (1.2% of Lease Rentals), as compared to $11.0 million
under the Adjusted 1998 Base Case.
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[14] NET LEASE RENTALS
"NET LEASE RENTALS" is Contracted Lease Rentals less any movement in
Current Arrears Balance and Net Stress-Related Costs. In the Thirty-Five Month
Period, Net Lease Rentals amounted to $1,264.9 million, $29.3 million less than
that assumed in the Adjusted 1998 Base Case. The variance was attributable to
the combined effect of the factors outlined in items [2] and [3] and in items
[6] to [12] above.
[15] INTEREST EARNED
"INTEREST EARNED" relates to interest received on cash balances held in the
Collection and Expense Accounts, which are described in greater detail in
"Description of Securities -- The Accounts." In the Thirty-Five Month Period,
interest earned amounted to $34.6 million, $5.3 million more than that assumed
in the Adjusted 1998 Base Case. The difference is due to a combination of two
offsetting factors: (1) the Adjusted 1998 Base Case made no assumption as to the
interest earned on the intra-month cash balances in the Collection Account and
Expense Account and (2) the average actual reinvestment rate for the Thirty-Five
Month Period was 5.62% (excluding a $5 million guaranteed investment contract)
as compared to the 5.75% assumed in the Adjusted 1998 Base Case.
[16] AIRCRAFT SALES
Since March 1998, Airplanes Group has received net sales proceeds of $160.0
million in respect of the sale of 28 aircraft (including final bullet payments
on four finance leases), 21 of which were not anticipated in the 1998 Base Case.
The net sales proceeds on the 28 aircraft of $160.0 million compares with
the relevant Note Target Price at the date of the respective sale of $146.6
million and a depreciated (using the depreciation curve assumed in the
indentures) Initial Appraised Value (appraised as of October 1995) at the date
of the respective sale of $157.0 million.
[17] NET MAINTENANCE
"NET MAINTENANCE" refers to maintenance reserve revenue received less any
maintenance reimbursements paid to lessees. In the Thirty-Five Month Period, Net
Maintenance costs of $41.4 million were incurred. The Adjusted 1998 Base Case
makes no assumptions for Net Maintenance as it assumes that, over time,
maintenance revenue will equal maintenance expenditure. The negative maintenance
cashflow performance is primarily due to the acceleration of maintenance events
due to aircraft repossessions, the return of approximately $7 million in
maintenance reserves to a Latin American lessee as a result of the restructuring
of its leases and a greater than expected incidence of maintenance events in the
Thirty-Five Month Period.
[18] OTHER RECEIPTS
"OTHER RECEIPTS" totalling $9.4 million during the Thirty-Five Month Period
comprise the following two receipts: a payment of $8.4 million from GE under the
tax sharing agreement for the period ended December 31, 1999 and net proceeds of
$1.0 million resulting from the exercise by Airplanes Group of an option to
purchase shares in a lessee which Airplanes Group had been granted under the
terms of a lease to that lessee and the subsequent sale of those shares. No
Other Receipts were anticipated in the Adjusted 1998 Base Case.
CASH EXPENSES
"TOTAL CASH EXPENSES" include Aircraft Operating Expenses and Selling,
General and Administrative ("SG&A") Expenses. In the Thirty-Five Month Period,
Total Cash Expenses were $190.8 million compared to $129.7 million assumed in
the Adjusted 1998 Base Case, a negative variance of $61.1 million. A number of
offsetting factors discussed below have given rise to this.
"AIRCRAFT OPERATING EXPENSES" includes all operational costs related to the
leasing of aircraft including costs of insurance, re-leasing and other overhead
costs.
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[20] RE-LEASING AND OTHER OVERHEAD COSTS
"RE-LEASING AND OTHER OVERHEAD COSTS" consist of miscellaneous re-delivery
and leasing costs associated with re-leasing events, costs of insurance and
other lessee-related overhead costs. In the Thirty-Five Month Period, these
costs amounted to $82.4 million (or 6.0% of Lease Rentals) compared to $27.6
million (or 2.0% of Lease Rentals) assumed in the Adjusted 1998 Base Case.
Actual Re-leasing and Other Overhead Costs exceeded the Adjusted 1998 Base Case
assumption primarily due to higher than assumed transition costs on aircraft
delivery to new lessees and payments made in the form of lessor contributions to
defray certain technical costs during the term of certain leases.
SG&A Expenses relate to fees paid to the servicer and to other service
providers.
[21] AIRCRAFT SERVICER FEES
The "AIRCRAFT SERVICER FEES" are defined as amounts paid to the servicer in
accordance with the terms of the servicing agreement. In the Thirty-Five Month
Period, the total Aircraft Servicer Fees paid were $70.8 million, $4.4 million
more than assumed in the Adjusted 1998 Base Case, principally as a result of
higher incentive fees than assumed in the Adjusted 1998 Base Case.
Aircraft Servicer Fees consist of:
$ MILLIONS
----------
Retainer Fee................................................ 62.8
Minimum Incentive Fee....................................... 4.5
Core Cash Flow/Sales Incentive Fee.......................... 3.5
----
Total Aircraft Servicer Fees.............................. 70.8
====
The Retainer Fee is a fixed amount per month per aircraft and changes only
as aircraft are sold.
[23] OTHER SERVICER FEES AND OTHER OVERHEADS
"OTHER SERVICER FEES AND OTHER OVERHEADS" relate to fees and expenses paid
to other service providers including the administrative agent, the cash manager,
financial advisors, legal advisors and accountants, and to the directors. In the
Thirty-Five Month Period, Other Servicer Fees and Other Overheads amounted to
$37.6 million, $1.9 million more than an assumed expense of $35.7 million in the
Adjusted 1998 Base Case.
NET CASH COLLECTIONS
"NET CASH COLLECTIONS" is defined as Total Cash Collections less Total Cash
Expenses, Interest Payments and Swap Payments, each as defined below.
[30] INTEREST PAYMENTS
In the Thirty-Five Month Period, interest payments to investors amounted to
$658.6 million, which is $2.9 million lower than the Adjusted 1998 Base Case. As
a result of a greater decline in aircraft appraisals over the Thirty-Five Month
Period than that implied by the depreciation curve contemplated by the
indentures, which resulted in a reallocation of cash flows in favour of the
class A notes, there was a suspension of payments of the class E minimum
interest amount of 1% from February 1999 to January 2000 and from May 2000 to
February 2001. Total class E minimum interest payments suspended during these
periods amounted to $10.8 million (also see Item [33] below). Higher actual
amounts outstanding on each class of notes than those assumed under the Adjusted
1998 Base Case, the impact of which has been partly offset by a slightly lower
than expected level of average interest rates, resulted in interest payments to
the holders of the class A, B, C and D notes which were $7.9 million higher than
that assumed by the Adjusted 1998 Base Case. The Adjusted 1998 Base Case assumed
LIBOR to be 5.75% whereas the average monthly LIBOR rate was 5.73%.
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[31] SWAP PAYMENTS
Airplanes Group had net swap payments of $1.1 million during the
Thirty-Five Month Period compared with $1.8 million assumed in the Adjusted 1998
Base Case. Included in the net swap payments of $1.1 million for the Thirty-Five
Month Period is a net cash inflow of approximately $11 million on the
re-couponing and unwinding of 30 of Airplanes Group's portfolio of 44 swaps in
November 1999. Also included in net swap payments are net payments of $3.9
million in respect of the minimum and supplemental hedge payments in the
Thirty-Five Month Period.
[33] PRINCIPAL PAYMENTS
In the period from March 11, 1998 to February 15, 2001, total principal
payments amounted to $580.9 million (comprising $493.2 million on the class A
notes, $57.6 million on the class B notes, $25.2 million on the class C notes
and $4.9 million on the class D notes), $109.6 million less than assumed in the
Adjusted 1998 Base Case. See "Summary -- Overview -- Summary Performance to
Date" for a breakdown of this $109.6 million variance.
Applying the declining value assumptions to the original March 1996
appraisals and adjusting for aircraft sales, the total appraised value of the
aircraft was assumed to be $4,073.0 million at March 15, 1998 and $3,424.3
million at February 15, 2001. Our portfolio is appraised annually and the most
recent appraisal dated January 31, 2001, which was effective for the February
2001 payment date, valued our portfolio at $3,135.4 million. Applying the
declining value assumptions to this appraisal, the total appraised value was
$3,125.4 million at February 15, 2001.
As a consequence of the cumulative excess decline in appraised values
experienced in the period from March 1996 to February 2001, combined with
overall cash performance during that period, Airplanes Group's available cash
flows after payment of expenses, interest and class A and B minimum principal
amounts, have been redirected in accordance with the priority of payments to pay
class A principal adjustment amounts in April 1998 and May 1998 and from
February 1999 to February 2001. Since the principal adjustment amounts on the
class A notes rank ahead of the scheduled principal payments on the class C and
D notes, and since available cash flows were not sufficient to pay all of the
class A principal adjustment amounts, some of the scheduled principal payments
on the class C and D notes have been deferred on some payment dates during these
periods. In particular, an adverse movement in cashflow performance in the ten
month period from the April 2000 payment date to the February 2001 payment date
which arose due to the factors described above and in "Management's Discussion
and Analysis of Financial Condition and Results of Operations," together with
the cumulative decline in appraised values to date, resulted in available
cashflows not being sufficient to pay all of the class A principal adjustment
amounts in the ten month period. As a result, no payments of the class C and D
scheduled principal amounts were made in that ten month period. Consequently,
total deferrals of class C and class D scheduled principal amounts amounted to
$13.1 million and $6.1 million, respectively, as of February 15, 2001. The class
E minimum interest amount was also suspended during the Thirty-Five Month Period
(refer to Item 30 above).
Based on the most recent appraisal as of January 31, 2001, the decline in
aircraft valuations in the period from February 2000 to February 2001 was
approximately $10 million more than the decrease implied by the aircraft
depreciation schedules that form part of the terms of the notes. Details of the
appraised values are contained in Exhibits 3 and 4 to this report. The decline
in appraised values in this period results in an increase of $6.2 million in the
principal adjustment amount outstanding from $32.4 million to $38.6 million on
the class A notes as of February 15, 2001.
The continued payment of class A principal adjustment amount will result in
the continued reallocation of cashflows in favour of the class A notes until
such time as the class A Target Loan to Value Ratio has been restored.
Accordingly, payments of the class C and D scheduled principal amounts will
continue to be deferred and the current suspension of payments of the class E
minimum interest amount will also continue. There can be no assurance that cash
collections will be sufficient to restore this ratio in the foreseeable future.
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NOTE REPORT LINE NAME DESCRIPTION
- ---- ---------------- -----------
CASH COLLECTIONS
[1] Lease Rentals........................ Assumptions as per the Adjusted 1998 Base Case
[2] Renegotiated Leases.................. Change in contracted rental cash flow caused by a
renegotiated lease
[3] Rental Resets........................ Re-leasing events where new lease rate deviated from the
Adjusted 1998 Base Case
[4] Other................................
[5]k[1]...[4] CONTRACTED LEASE RENTALS............. Current Contracted Lease Rentals due as at the latest
Calculation Date
[6] Movement in Current Arrears Current Contracted Lease Rentals not received as at the
Balance.............................. latest Calculation Date, excluding Bad Debts
[7] Less Net Stress related Costs
[8] Bad Debts............................ Arrears owed by former lessees and deemed irrecoverable
[9] Deferred Arrears Balance............. Current arrears that have been capitalised and restructured
as a Note Payable
[10] AOG.................................. Loss of rental due to an aircraft being off-lease and
non-revenue earning
[11] Other Leasing Income................. Includes lease termination payments, rental guarantees and
late payments charges
[12] Repossession......................... Legal and technical costs incurred in repossessing
aircraft.
[13]k[8]...[12] Sub-total
[14] [5]+[6]+[13] NET LEASE RENTALS.................... Contracted Lease Rentals less Movement in Current Arrears
Balance and Net Stress-related costs
[15] Interest Earned...................... Interest earned on monthly cash balances
[16] Aircraft Sales....................... Proceeds, net of fees and expenses, from the sale of
aircraft.
[17] Net Maintenance...................... Maintenance Revenue Reserve received less reimbursements to
lessees
[18] Other Receipts....................... Net proceeds received from the sale of shares held in an
airline and amounts received under the Tax Sharing
Agreement for the utilisation by GE Capital of tax losses
of Airplanes Group companies.
[19]k[14]...[18] Total Cash Collections............... Net Lease Rentals + Interest Earned + Aircraft Sales + Net
Maintenance + Other Receipts
CASH EXPENSES
Aircraft Operating Expenses.......... All operational costs related to the leasing of aircraft.
[20] Releasing and Other Overheads........ Costs associated with transferring an aircraft from one
lessee to another, costs of insurance and other
lessee-related overheads
SG&A Expenses
[21] Aircraft Servicer Fees............... Monthly and annual fees paid to the servicer
Retainer Fee......................... Fixed amount per month per aircraft
Minimum Incentive Fee................ Minimum annual fee paid to Servicer for performance above
an annually agreed target.
Core Cash Flow/Sales Incentive Fee Fees (in excess of Minimum Incentive Fee above) paid to the
Servicer for performance above an annually agreed target/on
sale of an aircraft.
[22] [21] Sub-total
[23] Other Servicer Fees and Other Administrative agent, trustee and professional fees paid to
Overheads............................ other service providers and other overheads
[24] [22]+[23] Sub-total
[25] [20]+[24] Total Cash Expenses.................. Aircraft Operating Expenses + SG&A Expenses
NET CASH COLLECTIONS
[26] [19] Total Cash Collections............... Line 19 above
[27] [25] Total Cash Expenses.................. Line 25 above
[28] Movement in Expense Account.......... Relates to reduction in accrued expense amounts
[29] Refinancing Expenses (accrued March Costs relating to the March 98 refinancing accrued on
98).................................. closing and paid post March 98
[30] Interest Payments.................... Interest paid on all outstanding debt
[31] Swap payments........................ Net swap payments (paid)/received
[32]k[26]...[31] Total
[33] PRINCIPAL PAYMENTS................... Principal payments on debt
7
AIRPLANES CASH FLOW PERFORMANCE FOR THE PERIOD FROM MARCH 11, 1998 TO FEBRUARY
15, 2001 (35 MONTHS)
COMPARISON OF ACTUAL CASH FLOWS VERSUS ADJUSTED 1998 BASE CASE CASH FLOWS
% OF LEASE RENTALS UNDER
THE ADJUSTED 1998 BASE CASE*
---------------------------------
ADJUSTED ADJUSTED
1998 BASE 1998 BASE
ACTUAL CASE* VARIANCE ACTUAL CASE* VARIANCE
------- --------- -------- ------ ------------- --------
$M $M $M
CASH COLLECTIONS
[1] Lease Rentals........................... 1,361.5.. 1,361.5 (0.0) 100.0% 100.0% 0.0%
[2] Renegotiated Leases..................... (2.6) 0.0 (2.6) (0.2%) 0.0% (0.2%)
[3] Rental Resets........................... (24.3) 0.0 (24.3) (1.8%) 0.0% (1.8%)
[4] Other................................... 0.0.... 0.0 0.0 0.0% 0.0% 0.0%
------- ------- ------ ------ ------ -----
[5] [1-4] CONTRACTED LEASE RENTALS................ 1,334.6.. 1,361.5 (26.9) 98.0% 100.0% (2.0%)
[6] Movement in Current Arrears Balance..... (20.9) 0.0 (20.9) (1.5%) 0.0% (1.5%)
[7] less Net Stress Related Costs
[8] Bad Debts............................... (5.2) (13.8) 8.6 (0.4%) (1.0%) 0.6%
[9] Deferred Arrears Balance................ 16.5... 15.4 1.1 1.2% 1.1% 0.1%
[10] AOG..................................... (48.2) (57.9) 9.7 (3.5%) (4.2%) 0.7%
[11] Other Leasing Income.................... 4.9.... 0.0 4.9 0.4% 0.0% 0.4%
[12] Repossession............................ (16.8) (11.0) (5.8) (1.2%) (0.8%) (0.4%)
------- ------- ------ ------ ------ -----
[13] [8-12] Sub-total............................... (48.8) (67.3) 18.5 (3.5%) (4.9%) 1.4%
[14] [5+6+13] NET LEASE RENTAL........................ 1,264.9.. 1,294.2 (29.3) 93.0% 95.1% (2.1%)
[15] Interest Earned......................... 34.6... 29.3 5.3 2.5% 2.1% 0.4%
[16] Aircraft Sales.......................... 160.0.. 160.0 (0.0) 11.7% 11.7% (0.0%)
[17] Net Maintenance......................... (41.4) 0.0 (41.4) (3.0%) 0.0% (3.0%)
[18] Other Receipts.......................... 9.4.... 0.0 9.4 0.7% 0.0% 0.7%
------- ------- ------ ------ ------ -----
[19] [14-18] Total Cash Collections.................. 1,427.5.. 1,483.5 (56.0) 104.9% 108.9% (4.0 %)
======= ======= ====== ====== ====== =====
CASH EXPENSES
Aircraft Operating Expenses
[20] Re-leasing and other overheads.......... (82.4) (27.6) (54.8) (6.0%) (2.0%) (4.0%)
SG&A Expenses
[21] Aircraft Servicer Fees
Retainer Fee............................ (62.8) (62.0) (0.8) (4.6%) (4.6%) (0.0%)
Minimum Incentive Fee................... (4.5) (4.4) (0.1) (0.3%) (0.3%) (0.0%)
Core Cash Flow/Sales Incentive Fee...... (3.5) 0.0 (3.5) (0.3%) 0.0% (0.3%)
------- ------- ------ ------ ------ -----
[22] [21] Sub-total............................... (70.8) (66.4) (4.4) (5.2%) (4.9%) (0.3%)
[23] Other Servicer Fees and Other (37.6) (35.7) (1.9) (2.8%) (2.6%) (0.2%)
Overheads...............................
------- ------- ------ ------ ------ -----
[24] [22+23] Sub-total............................... (108.4) (102.1) (6.3) (8.0%) (7.5%) (0.5%)
------- ------- ------ ------ ------ -----
[25] [24+20] Total Cash Expenses..................... (190.8) (129.7) (61.1) (14.0%) (9.5%) (4.5%)
======= ======= ====== ====== ====== =====
NET CASH COLLECTIONS
[26] [19] Total Cash Collections.................. 1,427.5.. 1,483.5 (56.0) 104.9% 108.9% (4.0%)
[27] [25] Total Cash Expenses..................... (190.8) (129.7) (61.1) (14.0%) (9.5%) (4.5%)
[28] Movement in Expense Account............. 20.7... 0.0 20.7 1.5% 0.0% 1.5%
[29] Refinancing Expenses (accrued Mar 98)... (16.8) 0.0 (16.8) (1.2%) 0.0% (1.2%)
[30] Interest Payments....................... (658.6) (661.5) 2.9 (48.4%) (48.6%) 0.2%
[31] Swap Payments........................... (1.1) (1.8) 0.7 (0.1%) (0.1%) 0.0%
------- ------- ------ ------ ------ -----
[32] [26-31] TOTAL................................... 580.9.. 690.5 (109.6) 42.7% 50.7% (8.0%)
------- ------- ------ ------ ------ -----
[33] PRINCIPAL PAYMENTS
Subclass A-5............................ 93.6... 93.6 (0.0) 6.9% 6.9% (0.0%)
Subclass A-6............................ 399.6.. 475.6 (76.0) 29.3% 34.9% (5.6%)
Subclass B.............................. 57.6... 72.0 (14.4) 4.2% 5.3% (1.1%)
Subclass C.............................. 25.2... 38.3 (13.1) 1.9% 2.8% (0.9%)
Subclass D.............................. 4.9.... 11.0 (6.1) 0.4% 0.8% (0.4%)
------- ------- ------ ------ ------ -----
Total................................... 580.9.. 690.5 (109.6) 42.7% 50.7% (8.0%)
======= ======= ====== ====== ====== =====
DEBT BALANCES AT FEBRUARY 15, 2001
Subclass A-4............................ 200.0 200.0 0.0
Subclass A-6............................ 450.4 374.4 76.0
Subclass A-7............................ 550.0 550.0 0.0
Subclass A-8............................ 700.0 700.0 0.0
Subclass B.............................. 279.4 265.0 14.4
Subclass C.............................. 349.8 336.7 13.1
Subclass D.............................. 395.1 389.0 6.1
------- ------- ------
2,924.7 2,815.1 109.6
======= ======= ======
8
MAR-98 ADJUSTED 1998
CLOSING ACTUAL BASE CASE*
------- ------- -------------
$M $M $M
NET CASH COLLECTIONS...................... 580.9 690.5
Add Back Interest and Swap Payments....... 659.7 663.3
------- -------
a Net Cash Collections (excl. interest and
swap payments)............................ 1,240.6 1,353.8
======= =======
b Swaps..................................... 1.1 1.8
c Class A Interest.......................... 381.2 375.8
d Class A Minimum........................... 0.0 0.0
e Class B Interest.......................... 58.7 57.5
f Class B Minimum........................... 52.4 31.7
g Class C Interest.......................... 86.0 85.1
h Class D Interest.......................... 126.3 125.9
i Class A Principal Adjustment.............. 368.6 0.0
j Class C Scheduled......................... 25.2 38.3
k Class D Scheduled......................... 4.9 11.0
l Permitted Aircraft Modifications.......... 0.0 0.0
m Step-up Interest.......................... 0.0 0.0
n Class E Minimum Interest.................. 6.4 17.2
o Class B Supplemental...................... 5.2 40.3
p Class A Supplemental...................... 124.6 569.2
------- -------
Total..................................... 1,240.6 1,353.8
======= =======
(1) INTEREST COVERAGE RATIO
Class A................................... 3.2 3.6 = a/(b+c)
Class B................................... 2.8 3.1 = a/(b+c+d+e)
Class C................................... 2.1 2.5 = a/(b+c+d+e+f+g)
Class D................................... 1.8 2.0 = a/(b+c+d+e+f+g+h)
(2) DEBT COVERAGE RATIO
Class A................................... 3.2 3.6 = a/(b+c+d)
Class B................................... 2.5 2.9 = a/(b+c+d+e+f)
Class C................................... 1.1 1.9 = a/(b+c+d+e+f+g+h+i+j)
Class D................................... 1.1 1.9 = a/(b+c+d+e+f+g+h+i+j+k)
LOAN TO VALUE RATIOS (IN US DOLLARS)
(3) Expected Portfolio Value.................. 4,073.0 3,424.3
(4) Adjusted Portfolio Value.................. 3,125.4
Liquidity Reserve Amount
Of which -- Cash.......................... 174.4 156.5 174.4
-- Accrued Expenses....................... 0.0 16.0 0.0
------- ------- -------
Subtotal.................................. 174.4 172.5 174.4
Less Lessee Security Deposits............. 54.4 36.5 54.4
------- ------- -------
Subtotal.................................. 120.0 136.0 120.0
------- ------- -------
(5) Total Asset Value......................... 4,193.0 3,261.4 3,544.3
======= ======= =======
MARCH 15, FEBRUARY 15, FEBRUARY 15,
1998 2001 2001
NOTE BALANCES AS AT: --------------- --------------- ---------------
Class A................................ 2,393.6 57.1% 1,900.4 58.3% 1,824.4 51.5%
Class B................................ 337.0 65.1% 279.4 66.8% 265.0 59.0%
Class C................................ 375.0 74.1% 349.8 77.6% 336.7 68.5%
Class D................................ 400.0 83.6% 395.1 89.7% 389.0 79.4%
------- -------
3,505.6 2,924.7 2,815.1
======= ======= =======
- ---------------
* Adjusted 1998 Base Case equals the 1998 Base Case as adjusted for aircraft
sales which have occurred and which were not anticipated in the 1998 Base
Case
(1) "INTEREST COVERAGE RATIO" is equal to Net Cash Collections (excluding
interest and swap payments) expressed as a ratio of the interest payable on
each subclass of notes plus the interest and minimum principal payments
payable on each subclass of notes that rank senior in priority of payment to
the relevant subclass of notes.
9
(2) "DEBT SERVICE RATIO" is equal to Net Cash Collections (excluding interest
and swap payments) expressed as a ratio of the interest and
Minimum/Scheduled Principal Payments payable on each subclass of notes plus
the interest and Minimum/Scheduled Principal Payments payable on each
subclass of notes that ranks equally with or senior to the relevant subclass
of notes in the priority of payments. In respect of the class A notes,
Principal Adjustment Amount payments have been excluded as they are a
function of aircraft values.
(3) "EXPECTED PORTFOLIO VALUE" represents the Initial Appraised Value of each
aircraft in our portfolio multiplied by the Depreciation Factor at payment
date divided by the Depreciation Factor at the March 1996 closing date.
(4) "ADJUSTED PORTFOLIO VALUE" represents the appraised value of each aircraft
in our portfolio as determined by the most recent appraisal multiplied by
the Depreciation Factor at payment date divided by the Depreciation Factor
as of the relevant appraisal date.
(5) "TOTAL ASSET VALUE" is equal to Total Expected/Adjusted Portfolio Value plus
Liquidity Reserve Amount minus lessee security deposits.