Annual report 2016/2017 - Nordic Aviation Capital

1 Annual report2016/ 2017 OrganizationBillundSingaporeLimerickToro ntoFort Lauderdale631382828 Track recordRating 21 yearsWe achieved a Business Performance result of USD and continued our track record of increasing received a BBB+ investment grade rating by Kroll Bond +Fleet age The average age of our fleet is solidified our position as the premier lessor of regional aircraft, expanding our fleet from 312 to 356 We lease aircraft to 69 customers in 46 on equity We achieved 22% return on equity. 22%Note: Nordic Aviation Capital DAC was created on 4 September 2015. References are made throughout this report to periods prior to its creation; historical performance relates to NAC A/S, a predecessor company.

2 Average fleet age is weighted by book details on Business Performance and return on equity on page : Number of employees at 30 June 2017 HighlightsAnnual report 2016 / 2017 Nordic Aviation Capital ( NAC ) is the premier lessor of regional aircraft in the world. We provide flexible, customised and competitive Aviation solutions to airlines globally. With offices in Ireland, Canada, Denmark, Singapore, and the United States, we are situated to serve each commercial Aviation market across the globe. Our team of energetic, dedicated and highly motivated individuals provides an unmatched level of knowledge and expertise to our client Global Leader in Regional Aircraft Leasing and Financing P04 Our Core Values P07 Our state-of-the-art maintenance and delivery facility P08 Review Management s review P10 Operating review P14 Finance Financial statements P22 Directors and other information P24 Directors report P25 Statement of Directors responsibilities P29 Independent auditor s report to the members of Nordic Aviation Capital DAC P30 Consolidated financial statements P35 Company financial statements P43 Notes

3 P49 The Global Leader in Regional Aircraft Leasing and Financing NAC Turbo Limited was established in Shannon, Ireland on 4 September 2015 to facilitate a partnership between Nordic Aviation Capital A/S founder and chairman, Martin M ller, EQT VI, a European private equity firm and KIRKBI Invest A/S, a Danish investment company. The company was renamed Nordic Aviation Capital DAC ( NAC ) in November 2016 . NAC initially acquired Nordic Aviation Capital A/S, the leading turboprop lessor and later acquired Jetscape Aviation Group Ltd.

4 ( Jetscape ) and Aldus Aviation Ltd. ( Aldus ), both of which concentrate on management services and leasing of Embraer our founding in 1990, NAC has strived to make a difference for our customers, our business partners and our people. Our passion for aircraft and leasing has translated into the success achieved today. We maintain the passion and remain committed to being agile and deal- driven. Even as we grow, we continue to cultivate our entrepreneurial spirit and our customer oriented approach to purpose is helping the world connect by enabling airlines to meet the fast-growing demand in regional air Aviation CapitalMellemrubrikIn the past fiscal year the global economic landscape continued to improve and business activities in many of our markets increased markedly.

5 As a result of the general improvement in global economies liquidity in financial markets is at his- torically high levels. Our long-standing and well-incorporated policies and values have enabled us to position ourselves favorably in growing markets, particularly in Asia and South America, while at the same time allowing us to strengthenour position in more mature markets. Our current global market share of the turboprop leasing market for aircraft with more than 40 seats is more than 30%.Working with our financial partners, including the unsecured term loan of230m USD from US institutional investors lead by Highbridge, we were able to strengthen our balance sheet and confidently add an order for 75 ATR 42-600 to the order for 135 ATR 72-600 we placed in 2013.

6 This skyline solidifies Nordic Aviation Capital s position in the market and enhances our platform for continued, profitable, long term pursuit of our goals to expand and diversify our customer base we added impor-tant new customers bringing our total number of lessees to 34. We are satisfied with this development as our business model builds on long-term relationships with customers and aims to foster an atmosphere for repeat business. We will grow our business based on referral sales and repeated sales (quote from NAC s vision and mission statements). We continue to deliver bespoke solutions to many of our cus-tomers. A clear testament to this is among others the 20 ATR 72-600 order to Garuda in purpose is to provide tailored and flexible aircraft lease and finance solutions.

7 In other words: we help the world connect. Our ambition is to be the globally preferred lessor and supplier of regional aircraft report 2016 / 2017 ReviewP07 Our Core ValuesAt NAC, our core values have laid the foundation for our company and its lasting success. As NAC continues to grow, the core values are the compass that helps us to navigate consistently. Our core values represent the essence of our beliefs, culture, and way of being. They mirror what we must always strive to be and are a small set of timeless guiding principles the essential and enduring beliefs of our company. Our founder, Martin M ller, has ingrained the core values into our corporate culture and they remain a vital part of the NAC TrustworthyStay HumbleBe true to your word keep your with integrity be respectful to CaringCare for our company, people, customers, and business PassionStrive to make a difference in Aviation CapitalReviewP8 Our state-of-the-art maintenance and delivery facility ReviewP981 Total number of deliveries during the year.

8 Billund Airport, Denmark is home to our state-of-the-art maintenance and delivery facility which gives NAC a unique and competitive edge. The facility covers more than 5,200 sqm and includes five hangars - one of which is dedicated to performing customer inspections and providing modification solutions. Our maintenance facility has both EASA Part 145 and FAA Repair Station Approvals allowing us to perform maintenance on ATR42/72s, DHC8-100/300/400s, CRJ-900/1000s and EMB 170/190s. We also hold an EASA Part M&GI approval to maintain the airworthiness of all our aircraft which are on European registry or not on lease. No third-party maintenance is under taken by facilities are the preferred delivery location for aircraft in our portfolio contracted for lease or sale.

9 Our customers can be assured that the very best quality of workmanship and finish is applied to every aircraft that passes through these facilities. Nordic Aviation CapitalP10 ReviewManagement s reviewDuring the past 12 months, we acquired 81 aircraft and remarketed and placed 81 aircraft on lease with new and existing customers. Our ability to remarket and place aircraft is one of the cornerstones to our consistent highlights Business Performance was USD as we continued expanding our global focus and developing the regional aircraft market adding more customers and more aircraft to our business. EBITDA increased 119% from USD to USD as a result of increased operating lease revenue following the continued expansion of our business platform.

10 Revenue grew 106% to USD EBIT increased from USD to USD Net finance costs increased from USD to USD following increased funding to finance the growing aircraft portfolio. We delivered a 22% Business Performance return on equity. We increased our total assets by 19% from USD 5,528m to USD 6,598m with the increase primarily attributable to investment in aircraft. Our equity increased from USD 1,263m to USD 1, We further strengthened our position as the global leader in regional aircraft leasing, expanding our fleet from 312 to 356 aircraft, representing approximately 23% of the world regional aircraft fleet owned by lessors.