| [November 08, 2018] |
 |
Air Lease Corporation Announces Third Quarter 2018 Results
Air Lease Corporation (ALC) (NYSE: AL) announces financial results
for the three and nine months ended September 30, 2018.
-
Revenues:
-
$451 million for the three months ended September 30, 2018, an
increase of 19.6%
-
$1.2 billion for the nine months ended September 30, 2018, an
increase of 10.0%
-
Diluted earnings per share:
-
$1.32 for the three months ended September 30, 2018, an increase
of 46.7%
-
$3.36 for the nine months ended September 30, 2018, an increase of
29.7%
-
Adjusted diluted earnings per share before income taxes:
-
$1.73 for the three months ended September 30, 2018, an increase
of 15.3%
-
$4.55 for the nine months ended September 30, 2018, an increase of
4.8%
-
Margin:
-
Pre-tax margin of 39.8% for the three months ended September 30,
2018
-
Adjusted pre-tax margin of 42.7% for the three months ended
September 30, 2018
-
Return on equity:
-
Pre-tax return on equity of 15.6% for the trailing twelve months
ended September 30, 2018
-
Adjusted pre-tax return on equity of 16.8% for the trailing twelve
months ended September 30, 2018
Highlights
-
Took delivery of seven aircraft from our order book representing $682
million in capital expenditures, ending the quarter with $15.1 billion
in aircraft with a weighted average age of 3.8 years and a weighted
average lease term remaining of 6.8 years.
-
Sold 10 aircraft to Thunderbolt II Aircraft Lease Limited during the
quarter for sales proceeds of $244 million.
-
Ended the quarter with our aircraft order book 96% placed through 2019
and 82% placed through 2020 on long term leases.
-
Ended the quarter with $24.1 billion in committed minimum future
rental payments consisting of $11.4 billion in contracted minimum
rental payments on the aircraft in our existing fleet and $12.7
billion in minimum future rental payments related to aircraft on order.
-
Raised $1.6 billion in debt financing during the quarter, including
issuances of unsecured senior notes of $700 million at 3.500% due 2022
and $500 million at 4.625% due 2028.
-
Increased our quarterly cash dividend by 30%, from $0.10 per share to
$0.13 per share. The next quarterly dividend of $0.13 per share will
be paid on January 9, 2019 to holders of record of our Class A common
stock as of December 13, 2018.
"We had an excellent quarter achieving record revenues while delivering
consistent, strong pre-tax margins and returns on equity. Aircraft sales
into the Thunderbolt II platform progressed well, as did our forward
lease placements for the quarter. Aircraft leasing and sales demand
remain solid. Interest rate adjusters have been applied at our new
aircraft deliveries throughout 2018 as they were intended and contracted
in our leases. We are well prepared for the CapEx growth we envision
through 2019," said John L. Plueger, Chief Executive Officer and
President.
"In just nine years, Air Lease has grown into an industry leading lessor
with more than $17.5 billion in assets across 94 airline customers
worldwide. We are pleased with ALC's strong financial performance, and
believe our business model and our people continue to differentiate our
platform enabling us to produce extraordinary results. In recognition of
ALC's success, we are pleased to announce that the Board of Directors
has authorized a 30% increase in ALC's quarterly dividend to $0.13 per
share from $0.10 per share," said Steven F. Udvar-Házy, Executive
Chairman of the Board.
The following table summarizes our operating results for the three and
nine months ended September 30, 2018 and 2017 (in thousands, except per
share amounts and percentages):
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|
Revenues
|
|
$
|
450,698
|
|
|
$
|
376,765
|
|
|
$
|
73,933
|
|
|
19.6
|
%
|
|
$
|
1,229,721
|
|
|
$
|
1,117,909
|
|
|
$
|
111,812
|
|
|
10.0
|
%
|
|
Income before taxes
|
|
$
|
179,382
|
|
|
$
|
154,119
|
|
|
$
|
25,263
|
|
|
16.4
|
%
|
|
$
|
468,110
|
|
|
$
|
443,866
|
|
|
$
|
24,244
|
|
|
5.5
|
%
|
|
Net income
|
|
$
|
146,574
|
|
|
$
|
99,188
|
|
|
$
|
47,386
|
|
|
47.8
|
%
|
|
$
|
372,436
|
|
|
$
|
285,050
|
|
|
$
|
87,386
|
|
|
30.7
|
%
|
|
Adjusted net income before income taxes(1)
|
|
$
|
192,429
|
|
|
$
|
166,436
|
|
|
$
|
25,993
|
|
|
15.6
|
%
|
|
$
|
505,506
|
|
|
$
|
479,739
|
|
|
$
|
25,767
|
|
|
5.4
|
%
|
|
Diluted EPS
|
|
$
|
1.32
|
|
|
$
|
0.90
|
|
|
$
|
0.42
|
|
|
46.7
|
%
|
|
$
|
3.36
|
|
|
$
|
2.59
|
|
|
$
|
0.77
|
|
|
29.7
|
%
|
|
Adjusted diluted EPS before income taxes(1)
|
|
$
|
1.73
|
|
|
$
|
1.50
|
|
|
$
|
0.23
|
|
|
15.3
|
%
|
|
$
|
4.55
|
|
|
$
|
4.34
|
|
|
$
|
0.21
|
|
|
4.8
|
%
|
|
(1)
|
|
Adjusted net income before income taxes and adjusted diluted
earnings per share before income taxes have been adjusted to
exclude the effects of certain non-cash items, one-time or
non-recurring items, that are not expected to continue in the
future and certain other items. See note 1 under the Consolidated
Statements of Income included in this earnings release for a
discussion of the non-GAAP measures adjusted net income before
income taxes and adjusted diluted EPS before income taxes and a
reconciliation to their most comparable GAAP financial measures.
|
Revenues increased $74 million or 20% to $451 million for the three
months ended September 30, 2018, as compared to the three months ended
September 30, 2017. This increase was principally driven by the
continued growth of our fleet, as well as an increase in our sales and
trading activity. During the quarter we sold 10 aircraft generating $24
million in gains, as compared to the corresponding prior year quarter,
where we sold seven aircraft generating $7 million in gains.
Income before taxes increased $25 million or 16% to $179 million for the
three months ended September 30, 2018, as compared to the three months
ended September 30, 2017. This increase was principally driven by the
continued growth of our fleet and an increase in our sales and trading
activity, partially offset by increases in our interest expense, due to
the rise in our average debt balances and composite interest rate, and
selling general and administrative expenses resulting from increased
transactional expenses.
Net income increased $47 million or 48% to $147 million representing
$1.32 per diluted share for the three months ended September 30, 2018,
as compared to the three months ended September 30, 2017. This increase
was driven by the growth in revenues highlighted above, partially offset
by the increased expenses mentioned above. Furthermore, our lower tax
expense was primarily due to the effects from the U.S. Tax Cuts and Jobs
Act (the "Tax Reform Act"), which, among other things, lowered the
corporate tax rate from 35% to 21% effective January 1, 2018. In
addition to the effects of the Tax Reform Act, we recorded an $8.4
million tax benefit from the utilization of foreign tax credits in the
period.
Flight Equipment Portfolio
Our fleet grew by 14.1% to a net book value of $15.1 billion as of
September 30, 2018 compared to $13.3 billion as of December 31, 2017. As
of September 30, 2018, our fleet was comprised of 268 owned aircraft,
with a weighted-average age and remaining lease term of 3.8 years and
6.8 years, respectively, and 60 managed aircraft. We have a globally
diversified customer base of 94 airlines in 56 countries.
During the quarter ended September 30, 2018, we took delivery of seven
aircraft from our order book and sold 10 aircraft ending the quarter
with 268 owned aircraft in our operating lease portfolio.
The following table summarizes the key portfolio metrics of our fleet as
of September 30, 2018 and December 31, 2017:
|
|
|
|
|
|
September 30, 2018
|
|
|
December 31, 2017
|
|
|
|
|
Aggregate fleet net book value
|
|
$
|
15.1 billion
|
|
|
$
|
13.3 billion
|
|
|
|
|
Weighted-average fleet age(1)
|
|
3.8 years
|
|
|
3.8 years
|
|
|
|
|
Weighted-average remaining lease term(1)
|
|
6.8 years
|
|
|
6.8 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet size
|
|
268
|
|
|
244
|
|
|
|
|
Managed fleet
|
|
60
|
|
|
50
|
|
|
|
|
Aircraft on order
|
|
384
|
|
|
368
|
|
|
|
|
Aircraft purchase options(2)
|
|
50
|
|
|
5
|
|
|
|
|
Total
|
|
762
|
|
|
667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current fleet contracted rentals
|
|
$11.4 billion
|
|
|
$10.1 billion
|
|
|
|
|
Committed fleet rentals
|
|
$12.7 billion
|
|
|
$13.3 billion
|
|
|
|
|
Total committed rentals
|
|
$24.1 billion
|
|
|
$23.4 billion
|
|
|
|
(1)
|
|
Weighted-average fleet age and remaining lease term calculated
based on net book value.
|
|
|
|
(2)
|
|
As of September 30, 2018, we had options to acquire up to five
Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. As of
December 31, 2017, we had options to acquire up to five Airbus
A350-1000 aircraft.
|
The following table details the region concentration of our fleet:
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
|
|
|
|
|
|
Region
|
|
% of Net Book Value
|
|
% of Net Book Value
|
|
|
|
|
|
|
|
Europe
|
|
29.5
|
%
|
|
31.7
|
%
|
|
|
|
|
|
|
|
Asia (excluding China)
|
|
25.0
|
%
|
|
22.4
|
%
|
|
|
|
|
|
|
|
China
|
|
17.8
|
%
|
|
20.5
|
%
|
|
|
|
|
|
|
|
The Middle East and Africa
|
|
13.0
|
%
|
|
11.2
|
%
|
|
|
|
|
|
|
|
Central America, South America and Mexico
|
|
6.9
|
%
|
|
7.0
|
%
|
|
|
|
|
|
|
|
U.S. and Canada
|
|
4.5
|
%
|
|
4.5
|
%
|
|
|
|
|
|
|
|
Pacific, Australia and New Zealand
|
|
3.3
|
%
|
|
2.7
|
%
|
|
|
|
|
|
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
The following table details the composition of our fleet by aircraft
type:
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
|
|
|
|
|
|
Aircraft type
|
|
Number of
Aircraft
|
|
% of Total
|
|
Number of
Aircraft
|
|
% of Total
|
|
|
|
|
|
|
|
Airbus A319-100
|
|
1
|
|
|
0.4
|
%
|
|
1
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
Airbus A320-200
|
|
37
|
|
|
13.8
|
%
|
|
40
|
|
|
16.4
|
%
|
|
|
|
|
|
|
|
Airbus A320-200neo
|
|
6
|
|
|
2.2
|
%
|
|
5
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
Airbus A321-200
|
|
32
|
|
|
11.9
|
%
|
|
29
|
|
|
11.9
|
%
|
|
|
|
|
|
|
|
Airbus A321-200neo
|
|
11
|
|
|
4.1
|
%
|
|
5
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
Airbus A330-200
|
|
15
|
|
|
5.6
|
%
|
|
15
|
|
|
6.2
|
%
|
|
|
|
|
|
|
|
Airbus A330-300
|
|
5
|
|
|
1.9
|
%
|
|
5
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
Airbus A350-900
|
|
6
|
|
|
2.2
|
%
|
|
2
|
|
|
0.9
|
%
|
|
|
|
|
|
|
|
Boeing 737-700
|
|
4
|
|
|
1.5
|
%
|
|
3
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
Boeing 737-800
|
|
100
|
|
|
37.3
|
%
|
|
102
|
|
|
41.8
|
%
|
|
|
|
|
|
|
|
Boeing 737-8 MAX
|
|
11
|
|
|
4.1
|
%
|
|
2
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
Boeing 767-300ER
|
|
1
|
|
|
0.4
|
%
|
|
1
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
Boeing 777-200ER
|
|
1
|
|
|
0.4
|
%
|
|
1
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
Boeing 777-300ER
|
|
24
|
|
|
8.9
|
%
|
|
24
|
|
|
9.7
|
%
|
|
|
|
|
|
|
|
Boeing 787-9
|
|
13
|
|
|
4.9
|
%
|
|
8
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
Embraer E190
|
|
1
|
|
|
0.4
|
%
|
|
1
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
Total
|
|
268
|
|
|
100.0
|
%
|
|
244
|
|
|
100.0
|
%
|
Debt Financing Activities
We ended the third quarter of 2018 with total debt financing, net of
discounts and issuance costs, of $11.1 billion, resulting in a debt to
equity ratio of 2.48:1.
Our debt financing was comprised of unsecured debt of $10.8 billion
representing 96.1% of our debt portfolio as of September 30, 2018 as
compared to 94.6% as of December 31, 2017. Our fixed rate debt
represented 91.7% of our debt portfolio as of September 30, 2018 as
compared to 85.4% as of December 31, 2017. Our composite cost of funds
increased to 3.45% as of September 30, 2018 as compared to 3.20% as of
December 31, 2017.
In the third quarter of 2018, we raised $1.6 billion in debt financing,
including issuances of unsecured senior notes of $700 million at 3.500%
due 2022 and $500 million at 4.625% due 2028.
Our debt financing was comprised of the following at September 30, 2018
and December 31, 2017 (dollars in thousands):
|
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
|
|
Unsecured
|
|
|
|
|
|
|
|
|
Senior notes
|
|
$
|
9,968,445
|
|
|
$
|
8,019,871
|
|
|
|
|
|
Term financings
|
|
616,230
|
|
|
203,704
|
|
|
|
|
|
Convertible senior notes
|
|
199,950
|
|
|
199,983
|
|
|
|
|
|
Revolving credit facility
|
|
-
|
|
|
847,000
|
|
|
|
|
|
Total unsecured debt financing
|
|
10,784,625
|
|
|
9,270,558
|
|
|
|
|
|
Secured
|
|
|
|
|
|
|
|
|
Term financings
|
|
399,722
|
|
|
484,036
|
|
|
|
|
|
Export credit financing
|
|
39,929
|
|
|
44,920
|
|
|
|
|
|
Total secured debt financing
|
|
439,651
|
|
|
528,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt financing
|
|
11,224,276
|
|
|
9,799,514
|
|
|
|
|
|
Less: Debt discounts and issuance costs
|
|
(129,939
|
)
|
|
(100,729
|
)
|
|
|
|
|
Debt financing, net of discounts and issuance costs
|
|
$
|
11,094,337
|
|
|
$
|
9,698,785
|
|
|
|
|
|
Selected interest rates and ratios:
|
|
|
|
|
|
|
|
|
Composite interest rate(1)
|
|
3.45
|
%
|
|
3.20
|
%
|
|
|
|
|
Composite interest rate on fixed-rate debt(1)
|
|
3.43
|
%
|
|
3.27
|
%
|
|
|
|
|
Percentage of total debt at fixed-rate
|
|
91.65
|
%
|
|
85.42
|
%
|
|
|
|
|
(1)
|
|
This rate does not include the effect of upfront fees, undrawn fees
or amortization of debt discounts and issuance costs.
|
Conference Call
In connection with this earnings release, Air Lease Corporation will
host a conference call on November 8, 2018 at 4:30 PM Eastern Time to
discuss the Company's financial results for the third quarter of 2018.
Investors can participate in the conference call by dialing (855)
308-8321 domestic or (330) 863-3465 international. The passcode for the
call is 2458797.
The conference call will also be broadcast live through a link on the
Investor Relations page of the Air Lease Corporation website at www.airleasecorp.com.
Please visit the website at least 15 minutes prior to the call to
register, download and install any necessary audio software. A replay of
the broadcast will be available on the Investor Relations page of the
Air Lease Corporation website.
For your convenience, the conference call can be replayed in its
entirety beginning at 7:30 PM ET on November 8, 2018 until 7:30 PM ET on
November 15, 2018. If you wish to listen to the replay of this
conference call, please dial (855) 859-2056 domestic or (404) 537-3406
international and enter passcode 2458797.
About Air Lease Corporation (NYSE: AL)
Air Lease Corporation is a leading aircraft leasing company based in Los
Angeles, California that has airline customers throughout the world. ALC
and its team of dedicated and experienced professionals are principally
engaged in purchasing commercial aircraft and leasing them to its
airline customers worldwide through customized aircraft leasing and
financing solutions. For more information, visit ALC's website at www.airleasecorp.com.
Forward-Looking Statements
Statements in this press release that are not historical facts are
hereby identified as "forward-looking statements," including any
statements about our expectations, beliefs, plans, predictions,
forecasts, objectives, assumptions or future events or performance.
These statements are often, but not always, made through the use of
words or phrases such as "anticipate," "believes," "can," "could,"
"may," "predicts," "potential," "should," "will," "estimate," "plans,"
"projects," "continuing," "ongoing," "expects," "intends" and similar
words or phrases. These statements are only predictions and involve
estimates, known and unknown risks, assumptions and uncertainties that
could cause actual results to differ materially from those expressed in
such statements, including as a result of the following factors, among
others:
-
our inability to make acquisitions of, or lease, aircraft on favorable
terms;
-
our inability to sell aircraft on favorable terms or to predict the
timing of such sales;
-
our inability to obtain additional financing on favorable terms, if
required, to complete the acquisition of sufficient aircraft as
currently contemplated or to fund the operations and growth of our
business;
-
our inability to effectively oversee our managed fleet;
-
our inability to obtain refinancing prior to the time our debt matures;
-
impaired financial condition and liquidity of our lessees;
-
deterioration of economic conditions in the commercial aviation
industry generally;
-
increased maintenance, operating or other expenses or changes in the
timing thereof;
-
changes in the regulatory environment, including tariffs and other
restrictions on trade;
-
unanticipated impacts of the Tax Cuts and Jobs Act of 2017 (the "Tax
Reform Act"), including as a result of changes in assumptions we make
in our interpretation of the Tax Reform Act, guidance related to
application of the Tax Reform Act that may be issued in the future,
and actions that we may take as a result of our expected impact of the
Tax Reform Act;
-
potential natural disasters and terrorist attacks and the amount of
our insurance coverage, if any, relating thereto; and
-
the factors discussed under "Part I - Item 1A. Risk Factors," in our
Annual Report on Form 10-K for the year ended December 31, 2017, and
other SEC filings, including future SEC filings.
All forward-looking statements are necessarily only estimates of future
results, and there can be no assurance that actual results will not
differ materially from expectations. You are therefore cautioned not to
place undue reliance on such statements. Any forward-looking statement
speaks only as of the date on which it is made, and we undertake no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.
|
|
|
Air Lease Corporation and Subsidiaries
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands, except share and par value amounts)
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
|
|
(unaudited)
|
|
Assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
228,502
|
|
|
$
|
292,204
|
|
|
Restricted cash
|
|
20,417
|
|
|
16,078
|
|
|
Flight equipment subject to operating leases
|
|
17,309,576
|
|
|
15,100,040
|
|
|
Less accumulated depreciation
|
|
(2,161,154
|
)
|
|
(1,819,790
|
)
|
|
|
|
15,148,422
|
|
|
13,280,250
|
|
|
Deposits on flight equipment purchases
|
|
1,573,729
|
|
|
1,562,776
|
|
|
Other assets
|
|
596,233
|
|
|
462,856
|
|
|
Total assets
|
|
$
|
17,567,303
|
|
|
$
|
15,614,164
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
Accrued interest and other payables
|
|
$
|
310,240
|
|
|
$
|
309,182
|
|
|
Debt financing, net of discounts and issuance costs
|
|
11,094,337
|
|
|
9,698,785
|
|
|
Security deposits and maintenance reserves on flight equipment leases
|
|
962,904
|
|
|
856,140
|
|
|
Rentals received in advance
|
|
109,156
|
|
|
104,820
|
|
|
Deferred tax liability
|
|
611,748
|
|
|
517,795
|
|
|
Total liabilities
|
|
$
|
13,088,385
|
|
|
$
|
11,486,722
|
|
|
Shareholders' Equity
|
|
|
|
|
|
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no
shares issued or outstanding
|
|
-
|
|
|
-
|
|
|
Class A common stock, $0.01 par value; 500,000,000 shares
authorized; 104,068,079 and 103,621,629 shares issued and
outstanding at September 30, 2018 and December 31, 2017, respectively
|
|
1,041
|
|
|
1,036
|
|
|
Class B non-voting common stock, $0.01 par value; authorized
10,000,000 shares; no shares issued or outstanding
|
|
-
|
|
|
-
|
|
|
Paid-in capital
|
|
2,270,302
|
|
|
2,260,064
|
|
|
Retained earnings
|
|
2,207,575
|
|
|
1,866,342
|
|
|
Total shareholders' equity
|
|
$
|
4,478,918
|
|
|
$
|
4,127,442
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
17,567,303
|
|
|
$
|
15,614,164
|
|
|
|
|
Air Lease Corporation and Subsidiaries
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
(In thousands, except share, per share amounts and percentages)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
(unaudited)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Rental of flight equipment
|
|
$
|
422,763
|
|
|
$
|
359,487
|
|
|
$
|
1,194,104
|
|
|
$
|
1,072,254
|
|
|
Aircraft sales, trading and other
|
|
27,935
|
|
|
17,278
|
|
|
35,617
|
|
|
45,655
|
|
|
Total revenues
|
|
450,698
|
|
|
376,765
|
|
|
1,229,721
|
|
|
1,117,909
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Interest
|
|
82,189
|
|
|
63,514
|
|
|
224,584
|
|
|
193,591
|
|
|
Amortization of debt discounts and issuance costs
|
|
8,199
|
|
|
6,959
|
|
|
24,231
|
|
|
22,388
|
|
|
Interest expense
|
|
90,388
|
|
|
70,473
|
|
|
248,815
|
|
|
215,979
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of flight equipment
|
|
149,703
|
|
|
127,553
|
|
|
428,437
|
|
|
377,952
|
|
|
Selling, general and administrative
|
|
26,377
|
|
|
19,262
|
|
|
71,194
|
|
|
65,677
|
|
|
Stock-based compensation
|
|
4,848
|
|
|
5,358
|
|
|
13,165
|
|
|
14,435
|
|
|
Total expenses
|
|
271,316
|
|
|
222,646
|
|
|
761,611
|
|
|
674,043
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
179,382
|
|
|
154,119
|
|
|
468,110
|
|
|
443,866
|
|
|
Income tax expense
|
|
(32,808
|
)
|
|
(54,931
|
)
|
|
(95,674
|
)
|
|
(158,816
|
)
|
|
Net income
|
|
$
|
146,574
|
|
|
$
|
99,188
|
|
|
$
|
372,436
|
|
|
$
|
285,050
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share of Class A and B common stock
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.41
|
|
|
$
|
0.96
|
|
|
$
|
3.58
|
|
|
$
|
2.76
|
|
|
Diluted
|
|
$
|
1.32
|
|
|
$
|
0.90
|
|
|
$
|
3.36
|
|
|
$
|
2.59
|
|
|
Weighted-average shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
104,066,785
|
|
|
103,221,692
|
|
|
103,940,723
|
|
|
103,117,695
|
|
|
Diluted
|
|
112,509,612
|
|
|
111,709,545
|
|
|
112,377,870
|
|
|
111,558,125
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial data
|
|
|
|
|
|
|
|
|
|
Pre-tax profit margin
|
|
39.8
|
%
|
|
40.9
|
%
|
|
38.1
|
%
|
|
39.7
|
%
|
|
Adjusted net income before income taxes(1)
|
|
$
|
192,429
|
|
|
$
|
166,436
|
|
|
$
|
505,506
|
|
|
$
|
479,739
|
|
|
Adjusted margin before income taxes(1)
|
|
42.7
|
%
|
|
44.2
|
%
|
|
41.1
|
%
|
|
43.0
|
%
|
|
Adjusted diluted earnings per share before income taxes(1)
|
|
$
|
1.73
|
|
|
$
|
1.50
|
|
|
$
|
4.55
|
|
|
$
|
4.34
|
|
|
Pre-tax return on equity (TTM)
|
|
15.6
|
%
|
|
17.1
|
%
|
|
15.6
|
%
|
|
17.1
|
%
|
|
Adjusted pre-tax return on equity (TTM)(1)
|
|
16.8
|
%
|
|
18.5
|
%
|
|
16.8
|
%
|
|
18.5
|
%
|
|
(1)
|
|
Adjusted net income before income taxes (defined as net income
excluding the effects of certain non-cash items, one-time or
non-recurring items, that are not expected to continue in the
future and certain other items), adjusted margin before income
taxes (defined as adjusted net income before income taxes divided
by total revenues, excluding insurance recovery on settlement),
adjusted pre-tax return on equity (defined as adjusted net income
before income taxes divided by average shareholders' equity) and
adjusted diluted earnings per share before income taxes (defined
as adjusted net income before income taxes divided by the weighted
average diluted common shares outstanding) are measures of
operating performance that are not defined by GAAP and should not
be considered as an alternative to net income, pre-tax profit
margin, earnings per share, pre-tax return on equity, and diluted
earnings per share, or any other performance measures derived in
accordance with GAAP. Adjusted net income before income taxes,
adjusted margin before income taxes, adjusted pre-tax return on
equity and adjusted diluted earnings per share before income
taxes, are presented as supplemental disclosure because management
believes they provide useful information on our earnings from
ongoing operations.
Management and our board of directors use adjusted net income
before income taxes, adjusted margin before income taxes, adjusted
pre-tax return on equity and adjusted diluted earnings per share
before income taxes to assess our consolidated financial and
operating performance. Management believes these measures are
helpful in evaluating the operating performance of our ongoing
operations and identifying trends in our performance, because they
remove the effects of certain non-cash items, one-time or
non-recurring items that are not expected to continue in the
future and certain other items from our operating results.
Adjusted net income before income taxes, adjusted margin before
income taxes, adjusted pre-tax return on equity and adjusted
diluted earnings per share before income taxes, however, should
not be considered in isolation or as a substitute for analysis of
our operating results or cash flows as reported under GAAP.
Adjusted net income before income taxes, adjusted margin before
income taxes, adjusted pre-tax return on equity and adjusted
diluted earnings per share before income taxes do not reflect our
cash expenditures or changes in our cash requirements for our
working capital needs. In addition, our calculation of adjusted
net income before income taxes, adjusted margin before income
taxes, adjusted pre-tax return on equity and adjusted diluted
earnings per share before income taxes may differ from the
adjusted net income before income taxes, adjusted margin before
income taxes, adjusted pre-tax return on equity and adjusted
diluted earnings per share before income taxes or analogous
calculations of other companies in our industry, limiting their
usefulness as a comparative measure.
The following tables show the reconciliation of net income to
adjusted net income before income taxes and adjusted margin before
income taxes (in thousands, except percentages):
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Reconciliation of net income to adjusted net income before income
taxes:
|
|
(unaudited)
|
|
Net income
|
|
$
|
146,574
|
|
|
$
|
99,188
|
|
|
$
|
372,436
|
|
|
$
|
285,050
|
|
|
Amortization of debt discounts and issuance costs
|
|
8,199
|
|
|
6,959
|
|
|
24,231
|
|
|
22,388
|
|
|
Stock-based compensation
|
|
4,848
|
|
|
5,358
|
|
|
13,165
|
|
|
14,435
|
|
|
Insurance recovery on settlement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(950
|
)
|
|
Provision for income taxes
|
|
32,808
|
|
|
54,931
|
|
|
95,674
|
|
|
158,816
|
|
|
Adjusted net income before income taxes
|
|
$
|
192,429
|
|
|
$
|
166,436
|
|
|
$
|
505,506
|
|
|
$
|
479,739
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of denominator of adjusted margin before income
taxes:
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
450,698
|
|
|
$
|
376,765
|
|
|
$
|
1,229,721
|
|
|
$
|
1,117,909
|
|
|
Insurance recovery on settlement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(950
|
)
|
|
Total revenues, excluding insurance recovery on settlement
|
|
$
|
450,698
|
|
|
$
|
376,765
|
|
|
$
|
1,229,721
|
|
|
$
|
1,116,959
|
|
|
Adjusted margin before income taxes(1)
|
|
42.7
|
%
|
|
44.2
|
%
|
|
41.1
|
%
|
|
43.0
|
%
|
|
|
|
(1)
|
|
Adjusted margin before income taxes is adjusted net income before
income taxes divided by total revenues, excluding insurance
recovery on settlement.
The following table shows the reconciliation of net income to
adjusted diluted earnings per share before income taxes (in
thousands, except share and per share amounts):
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Reconciliation of net income to adjusted diluted earnings per
share before income taxes:
|
|
(unaudited)
|
|
Net income
|
|
$
|
146,574
|
|
|
$
|
99,188
|
|
|
$
|
372,436
|
|
|
$
|
285,050
|
|
|
Amortization of debt discounts and issuance costs
|
|
8,199
|
|
|
6,959
|
|
|
24,231
|
|
|
22,388
|
|
|
Stock-based compensation
|
|
4,848
|
|
|
5,358
|
|
|
13,165
|
|
|
14,435
|
|
|
Insurance recovery on settlement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(950
|
)
|
|
Provision for income taxes
|
|
32,808
|
|
|
54,931
|
|
|
95,674
|
|
|
158,816
|
|
|
Adjusted net income before income taxes
|
|
$
|
192,429
|
|
|
$
|
166,436
|
|
|
$
|
505,506
|
|
|
$
|
479,739
|
|
|
Assumed conversion of convertible senior notes
|
|
1,823
|
|
|
1,426
|
|
|
5,309
|
|
|
4,263
|
|
|
Adjusted net income before income taxes plus assumed conversions
|
|
$
|
194,252
|
|
|
$
|
167,862
|
|
|
$
|
510,815
|
|
|
$
|
484,002
|
|
|
Weighted-average diluted shares outstanding
|
|
112,509,612
|
|
|
111,709,545
|
|
|
112,377,870
|
|
|
111,558,125
|
|
|
Adjusted diluted earnings per share before income taxes
|
|
$
|
1.73
|
|
|
$
|
1.50
|
|
|
$
|
4.55
|
|
|
$
|
4.34
|
|
|
|
|
|
|
The following table shows the reconciliation of net income to
adjusted pre-tax return on equity (in thousands, except percentages):
|
|
|
|
Trailing Twelve Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
|
|
(unaudited)
|
|
Reconciliation of net income to adjusted pre-tax return on equity:
|
|
|
|
Net income
|
|
$
|
843,538
|
|
|
$
|
382,038
|
|
|
Amortization of debt discounts and issuance costs
|
|
31,297
|
|
|
30,700
|
|
|
Stock-based compensation
|
|
18,534
|
|
|
19,034
|
|
|
Insurance recovery on settlement
|
|
-
|
|
|
(950
|
)
|
|
Provision for income taxes
|
|
(209,764
|
)
|
|
211,231
|
|
|
Adjusted net income before income taxes
|
|
$
|
683,605
|
|
|
$
|
642,053
|
|
|
|
|
|
|
|
|
Shareholders' equity as of September 30, 2017 and 2016, respectively
|
|
$
|
3,655,583
|
|
|
$
|
3,288,289
|
|
|
Shareholders' equity as of September 30, 2018 and 2017, respectively
|
|
$
|
4,478,918
|
|
|
$
|
3,655,583
|
|
|
Average shareholders' equity
|
|
$
|
4,067,251
|
|
|
$
|
3,471,936
|
|
|
|
|
|
|
|
|
Adjusted pre-tax return on equity (TTM)
|
|
16.8
|
%
|
|
18.5
|
%
|
|
|
|
Air Lease Corporation and Subsidiaries
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
|
|
(unaudited)
|
|
Operating Activities
|
|
|
|
|
|
Net income
|
|
$
|
372,436
|
|
|
$
|
285,050
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Depreciation of flight equipment
|
|
428,437
|
|
|
377,952
|
|
|
Stock-based compensation
|
|
13,165
|
|
|
14,435
|
|
|
Deferred taxes
|
|
95,674
|
|
|
158,816
|
|
|
Amortization of debt discounts and issuance costs
|
|
24,231
|
|
|
22,388
|
|
|
Amortization of prepaid lease costs
|
|
18,713
|
|
|
14,303
|
|
|
Gain on aircraft sales, trading and other activity
|
|
(24,469
|
)
|
|
(37,591
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Other assets
|
|
(62,528
|
)
|
|
(81,006
|
)
|
|
Accrued interest and other payables
|
|
110
|
|
|
(5,768
|
)
|
|
Rentals received in advance
|
|
4,335
|
|
|
3,057
|
|
|
Net cash provided by operating activities
|
|
870,104
|
|
|
751,636
|
|
|
Investing Activities
|
|
|
|
|
|
Acquisition of flight equipment under operating lease
|
|
(1,874,094
|
)
|
|
(1,304,317
|
)
|
|
Payments for deposits on flight equipment purchases
|
|
(548,225
|
)
|
|
(565,343
|
)
|
|
Proceeds from aircraft sales, trading and other activity
|
|
239,067
|
|
|
595,796
|
|
|
Acquisition of aircraft furnishings, equipment and other assets
|
|
(204,449
|
)
|
|
(134,709
|
)
|
|
Net cash used in investing activities
|
|
(2,387,701
|
)
|
|
(1,408,573
|
)
|
|
Financing Activities
|
|
|
|
|
|
Issuance of common stock upon exercise of options and warrants
|
|
4,188
|
|
|
2,214
|
|
|
Cash dividends paid
|
|
(31,155
|
)
|
|
(23,191
|
)
|
|
Tax withholdings on stock-based compensation
|
|
(7,141
|
)
|
|
(5,600
|
)
|
|
Net change in unsecured revolving facility
|
|
(847,000
|
)
|
|
670,000
|
|
|
Proceeds from debt financings
|
|
3,358,885
|
|
|
1,101,673
|
|
|
Payments in reduction of debt financings
|
|
(1,131,206
|
)
|
|
(1,266,440
|
)
|
|
Debt issuance costs
|
|
(9,327
|
)
|
|
(4,164
|
)
|
|
Security deposits and maintenance reserve receipts
|
|
173,754
|
|
|
173,879
|
|
|
Security deposits and maintenance reserve disbursements
|
|
(52,764
|
)
|
|
(36,806
|
)
|
|
Net cash provided by financing activities
|
|
1,458,234
|
|
|
611,565
|
|
|
Net decrease in cash
|
|
(59,363
|
)
|
|
(45,372
|
)
|
|
Cash, cash equivalents and restricted cash at beginning of period
|
|
308,282
|
|
|
290,802
|
|
|
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
248,919
|
|
|
$
|
245,430
|
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
Cash paid during the period for interest, including capitalized
interest of $38,947 and $33,618 at September 30, 2018 and 2017,
respectively
|
|
$
|
278,297
|
|
|
$
|
252,806
|
|
|
Supplemental Disclosure of Noncash Activities
|
|
|
|
|
|
Buyer furnished equipment, capitalized interest, deposits on flight
equipment purchases and seller financing applied to acquisition of
flight equipment and other assets applied to payments for deposits
on flight equipment purchases
|
|
$
|
663,223
|
|
|
$
|
398,024
|
|
|
Cash dividends declared, not yet paid
|
|
$
|
10,407
|
|
|
$
|
7,742
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181108005956/en/
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