Aircraft Finance: Leasing & Financial Evaluation

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1 Aircraft Finance: Leasing & Financial Evaluation This in-house course can also be presented in-house either on your premises or via live webinar for a group of 4 or more participants. Trusted By: The Banking and Corporate Finance Training Specialist

2 What Makes This Course Different Practical hands-on modelling under guidance of expert financial modeller Making financial maths simple Understand the principles behind buy vs lease decision Modelling of Maintenance Reserve accounts Exercises to put into practice what is covered in each module Course Overview Course Objectives The course is designed to support middle- and senior-level employees dealing with financial models from different sources, to enable them to assess risk, profile debt and sensitise modelled data for use in aircraft finance evaluations. Participants will: Briefly revise financial mathematics Learn about the lease against buy decision Learn about maintenance reserve accounts Work through advantages and disadvantages of lease vs buy Understand risk profiles Gain an appreciation of leveraged leasing Gain an understanding about evaluating options in aircraft finance Course Content Aims Session 1 - Introduction & Course Objectives Brief review of aircraft financial evaluations and their objectives Session 2 Brief Revision of Financial Mathematics Principles of time value of money Opportunity cost NPV & IRR - what do they mean? Use of residual values Impact of tax on financial calculations Exercise from a given set of cash flows, calculate NPV, IRR; then add the effect of a residual value and a given tax rate Session 3 The Lease vs Buy Decision for Aircraft Finance Cash flow Tax issues Certainty of cost Weak vs strong balance sheets Alternative investments Strategic reasons Session 4 The Lease vs Buy Analysis for Aircraft Finance How to work out the cost of finance Calculating cash flows Tax deductibility of payments Capital allowances for taxation

3 Applying financial maths to calculate and analyse the cash flows Exercise from a given set of criteria, perform a lease vs buy analysis Session 5 Maintenance Reserve Accounts in Aircraft Finance Principle underlying concept of MRAs Cash flow impact of MRAs Timing of payments Exercise from the previous calculations, add an MRA into the calculation and recalculate the results Session 6 Evaluation of Aircraft Finance Proposals Sensitivity analysis Set up and tools that make the analysis easier Cash available for debt service ("CFADS") and free cash flow ("FCF") Ratios used by banks: Debt service coverage reserve ratio ( DSCR ) Interest cover ratio ("ICR") Lease payment cover ratio Debt to EBITDA Exposure vs value calculations Exercise from a pair of given cash flows and debt profiles, calculate the above ratios and contrast the two deals Session 7 Leveraged Leasing in Aircraft Finance Use of debt and 3 rd -party participation Transfer of capital allowances to 3 rd parties Example - review an example of a leveraged lease Session 8 Risk Analysis in Aircraft Finance Identifying critical risks Using probabilities to assess risk Quantifying risk Calculating weighted average risk values Example of a risk model Statistical techniques eg Monte Carlo analysis Exercise from previous exercises, perform a risk analysis using the above format Session 9 - Wrap-Up Overall review Key points to re-iterate Final questions and issues to discuss

4 Background of the Trainer The trainer has over 30 years experience in a wide range of roles in finance. He has delivered training courses on behalf of a number of international training companies since He trained as a Chartered Accountant at KPMG in South Africa and New Zealand, before moving into industry with Ford Motor Company. He held various positions there in financial analysis, budgeting and forecasting, until he was appointed sales planning manager, responsible for forecasting models, production planning and supply logistics. He joined a multinational private consultancy group in Australia, as their general manager (finance); in this role, he guided the group through a period of major change and financial turnaround. For the past 17 years, the trainer has worked as a freelance financial modeller, trainer and analyst for a range of blue-chip clients. Assignments have included financial modelling for two major LNG projects in the Middle East, numerous renewable energy projects in both Europe and developing countries, structured financing for a large-scale property development, restructuring and outsourcing projects in the retail gas sector, and PPP transactions in the utilities, health and support services sectors. Course Summary Aims The principal aim of the course is enable participants to assess the cash flow profile, returns and risks in a financing proposal, and use these skills to support credit approvals, documentation and reviews. This will be done by reviewing the principles behind the buy vs lease decision, and using tools to highlight areas of risk and to perform sensitivity analysis. Methodology The learning methods used are a combination of the didactic and practical; the principles will be discussed with the aid of examples and new learning cemented effectively through practical exercises. Suggested solutions to each exercise will be provided and discussed, and participants will be encouraged to review their work independently. As the time available is very limited, each section will not be covered in depth, but supporting materials will be available for further in-depth learning and post-training refreshing.

5 Tailored Learning All of our training courses can be tailored to suit your company s exact training needs. We will work closely with you to help develop a training programme with content that is unique for your organisation. Please us on enquiries@redcliffetraining.co.uk for more information E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.