Air Lease Corporation (ALC) (NYSE: AL) announced record
quarterly financial results for the three months ended
March 31, 2016. Items of note include:
- Generated record quarterly adjusted
diluted EPS of $1.38 for the three months ended March 31,
2016, an increase of 34.0% as compared to $1.03 for the three
months ended March 31, 2015.
- Generated record quarterly revenues of
$343.3 million for the three months ended March 31, 2016, an
increase of 23.4% or $65.0 million as compared to $278.3 million
for the three months ended March 31, 2015.
- Generated record quarterly adjusted net
income of $151.1 million with an adjusted margin of 44.4% for the
three months ended March 31, 2016 as compared to $112.8
million with an adjusted margin of 40.5% for the three months ended
March 31, 2015.
- Placed 85% of our order book on
long-term leases for aircraft delivering through 2018. Maintained
100% utilization of our current fleet with only 10% of our leases
due to expire over the next three years.
- Purchased $731.6 million in aircraft
during the quarter, including 10 aircraft from our order book and
one incremental aircraft.
- Sold $221.5 million in aircraft,
comprised of 12 ATR aircraft, during the three months ended
March 31, 2016. Expect to complete the sale of our existing
ATR fleet during the next quarter and to sell at delivery the
remaining five ATR aircraft from our order book over the next two
quarters.
- Completed a senior unsecured notes
offering in April 2016, issuing $600 million at 3.375%, maturing in
2021.
- Declared a quarterly cash dividend of
$0.05 per share on our outstanding common stock to be paid on July
7, 2016, to holders of record of our common stock as of June 13,
2016.
The following table summarizes the results for the three months
ended March 31, 2016 and 2015 (in thousands, except share
amounts):
Three Months Ended March
31,
2016 2015
$ change
% change
Revenues $ 343,328 $ 278,315 $ 65,013 23.4 % Income before taxes $
143,991 $ 29,974 $ 114,017 380.4 % Net income $ 92,858 $ 19,332 $
73,526 380.3 % Adjusted net income(1) $ 151,141 $ 112,802 $ 38,339
34.0 % Diluted EPS $ 0.85 $ 0.19 $ 0.66 347.4 % Adjusted diluted
EPS(1) $ 1.38 $ 1.03 $ 0.35 34.0 % (1) Adjusted net income
and adjusted diluted earnings per share have been adjusted to
exclude the effects of certain non-cash items, one-time or
non-recurring items, such as settlement expense, net of recoveries,
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 and adjusted diluted EPS.
"Passenger traffic grew 7% system-wide through the first quarter
of the year and airline health remains on a good footing globally,
driven by passenger demand and low fuel prices, and capacity
discipline. ALC’s business model continues to produce the highest
operating margin of any publicly traded aircraft lessor. We see the
manufacturers adjusting production rates in line with forward
market projections of aircraft demand, which contributes to a
healthy long-term balance in the marketplace,” said Steven F.
Udvar-Házy, Chairman and Chief Executive Officer.
“During the quarter, we found buying opportunities originating
in South America that will add to our growth outside the region.
Globally, we’ve now achieved 85% placement of our new aircraft
delivering through 2018. We continue to see good activity in our
new aircraft lease placements and campaigns, and our lease yields
remain steady. Buyer demand for our used aircraft portfolios
remains solid,” said John L. Plueger, President and Chief Operating
Officer.
Flight Equipment
Portfolio
As of March 31, 2016, our fleet was comprised of 239 owned
aircraft, with a weighted-average age and remaining lease term of
3.6 years and 7.2 years, respectively, and 29 managed aircraft. We
have a globally diversified customer base of 88 airlines in 50
countries.
During the quarter ended March 31, 2016, we took delivery
of ten aircraft from our order book, acquired one incremental
aircraft and sold 12 ATR aircraft from our operating lease
portfolio.
Below are the key portfolio metrics of our fleet:
March 31, 2016 December 31, 2015
Owned fleet 239 240 Managed fleet 29 29 Order book 386 389
Weighted-average fleet age(1) 3.6 years 3.6 years Weighted-average
remaining lease term(1) 7.2 years 7.2 years Aggregate fleet net
book value $11.2 billion $10.8 billion
(1) Weighted-average fleet age and
remaining lease term calculated based on net book value.
The following table details the regional concentration of our
fleet:
March 31, 2016 December 31, 2015
Region % of Net Book Value % of Net Book Value
Europe 30.7 % 30.0 % Asia (excluding China) 22.0 % 21.4 % China
21.6 % 22.6 % The Middle East and Africa 9.0 % 9.5 % Central
America, South America and Mexico 8.2 % 8.5 % U.S. and Canada 4.3 %
4.1 % Pacific, Australia, New Zealand 4.2 % 3.9 % Total 100.0 %
100.0 %
The following table details the composition of our fleet by
aircraft type:
March 31, 2016 December 31, 2015
Aircraft type Number ofAircraft % of
Total Number ofAircraft % of Total
Airbus A319/320/321 69 28.9 % 68 28.5 % Airbus A330-200/300 21 8.8
% 21 8.8 % Boeing 737-700/800 95 39.7 % 87 36.2 % Boeing 767-300ER
1 0.4 % 1 0.4 % Boeing 777-200ER 1 0.4 % 1 0.4 % Boeing 777-300ER
19 8.0 % 17 7.1 % Embraer E175/190 26 10.9 % 26 10.8 % ATR
42/72-600 7 2.9 % 19 7.8 % Total 239 100.0 %
240 100.0 %
Debt Financing
Activities
We ended the first quarter of 2016 with total debt, net of
discounts and issuance costs, of $8.0 billion resulting in a debt
to equity ratio of 2.58:1 and available liquidity of $1.8
billion.
Our debt financing was comprised of unsecured debt of $7.3
billion, representing 89.7% of our debt portfolio as of
March 31, 2016 as compared to 88.4% as of December 31,
2015. Our fixed rate debt represented 69.2% of our debt portfolio
as of March 31, 2016 as compared to 78.7% as of December 31,
2015. Our composite cost of funds decreased to 3.34% as of
March 31, 2016 as compared to 3.59% as of December 31,
2015.
The Company’s debt financing was comprised of the following at
March 31, 2016 and December 31, 2015 (dollars in
thousands):
March 31, 2016
December 31,2015
Unsecured Senior notes $ 5,176,343 $ 5,677,769 Revolving
credit facility 1,599,000 720,000 Term financings 283,540 292,788
Convertible senior notes 200,000 200,000 Total
unsecured debt financing 7,258,883 6,890,557
Secured Term
financings 440,287 477,231 Warehouse facility 340,820 372,423
Export credit financing 56,566 58,229 Total secured
debt financing 837,673 907,883 Total debt financing
8,096,556 7,798,440 Less: Debt discounts and issuance costs (79,055
) (86,019 ) Debt financing, net of discounts and issuance costs $
8,017,501 $ 7,712,421
Selected interest rates and
ratios: Composite interest rate(1) 3.34 % 3.59 % Composite
interest rate on fixed-rate debt(1) 4.00 % 4.04 % Percentage of
total debt at fixed-rate 69.24 % 78.70 %
(1) This rate does not include the effect
of upfront fees, undrawn fees or issuance cost amortization.
Conference Call
In connection with the earnings release, Air Lease Corporation
will host a conference call on May 5, 2016 at 4:30 PM Eastern
Time to discuss the Company's financial results for the first
quarter of 2016.
Investors can participate in the conference call by dialing
(855) 308-8321 domestic or (330) 863-3465 international. The
passcode for the call is 90607465.
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 May 5, 2016 until 7:30 PM
ET May 12, 2016. 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 90607465.
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;
- 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 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;
- 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, 2015 and other 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)
March 31,2016
December 31,2015
(unaudited) Assets Cash and cash equivalents $
162,814 $ 156,675 Restricted cash 16,490 16,528 Flight equipment
subject to operating leases 12,550,836 12,026,798 Less accumulated
depreciation (1,311,215 ) (1,213,323 ) 11,239,621 10,813,475
Deposits on flight equipment purchases 1,079,690 1,071,035 Other
assets 284,795 297,385
Total assets $
12,783,410 $ 12,355,098
Liabilities and
Shareholders’ Equity Accrued interest and other payables $
192,389 $ 215,983 Debt financing, net of discounts and issuance
costs 8,017,501 7,712,421 Security deposits and maintenance
reserves on flight equipment leases 865,206 853,330 Rentals
received in advance 90,281 91,485 Deferred tax liability 513,630
461,967
Total liabilities $ 9,679,007 $
9,335,186
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; authorized
500,000,000 shares; issued and outstanding 102,829,369 and
102,582,669 shares at March 31, 2016 and December 31, 2015,
respectively 1,010 1,010 Class B Non-Voting common stock, $0.01 par
value; authorized 10,000,000 shares; no shares issued or
outstanding — — Paid-in capital 2,224,151 2,227,376 Retained
earnings 879,242 791,526
Total shareholders’
equity $ 3,104,403 $ 3,019,912
Total
liabilities and shareholders’ equity $ 12,783,410 $
12,355,098
Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (In thousands, except
share, per share amounts and percentages)
Three Months Ended March
31,
2016 2015 (unaudited) Revenues
Rental of flight equipment $ 317,198 $ 269,256 Aircraft sales,
trading and other 26,130 9,059 Total revenues 343,328
278,315
Expenses Interest 60,960 55,403 Amortization of debt
discounts and issuance costs 7,161 7,682 Interest
expense 68,121 63,085 Depreciation of flight equipment 108,575
91,012 Settlement — 72,000 Selling, general and administrative
19,402 19,098 Stock-based compensation 3,239 3,146
Total expenses 199,337 248,341 Income before taxes
143,991 29,974 Income tax expense (51,133 ) (10,642 ) Net income $
92,858 $ 19,332
Net income per share of
Class A and B common stock Basic $ 0.90 $ 0.19 Diluted $ 0.85 $
0.19
Weighted-average shares outstanding Basic 102,679,411
102,455,040 Diluted 110,563,526 110,558,709
Other
financial data Pre-tax profit margin 41.9 % 10.8 % Adjusted net
income(1) $ 151,141 $ 112,802 Adjusted margin(1) 44.4 % 40.5 %
Adjusted diluted earnings per share(1) $ 1.38 $ 1.03 (1)
Adjusted net income (defined as net income
excluding the effects of certain non-cash items, one-time or
non-recurring items, such as settlement expense, net of recoveries,
that are not expected to continue in the future and certain other
items), adjusted margin (defined as adjusted net income divided by
total revenues, excluding insurance recoveries) and adjusted
diluted earnings per share (defined as adjusted net income 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, and diluted earnings per share,
or any other performance measures derived in accordance with GAAP.
Adjusted net income, adjusted margin and adjusted diluted earnings
per share, 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, adjusted margin and adjusted diluted earnings
per share 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, adjusted
margin and adjusted diluted earnings per share, 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, adjusted margin and adjusted diluted earnings per share
do not reflect our cash expenditures or changes in or cash
requirements for our working capital needs. In addition, our
calculation of adjusted net income, adjusted margin and adjusted
diluted earnings per share may differ from the adjusted net income,
adjusted margin and adjusted diluted earnings per share 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 and adjusted
margin (in thousands, except percentages):
Three Months Ended March 31, 2016
2015 Reconciliation of net income to adjusted net
income: (unaudited) Net income $ 92,858 $ 19,332
Amortization of debt discounts and issuance costs 7,161 7,682
Stock-based compensation 3,239 3,146 Settlement — 72,000 Insurance
recovery on settlement (3,250 ) — Provision for income taxes 51,133
10,642 Adjusted net income $ 151,141 $ 112,802
Adjusted margin(1) 44.4 % 40.5 % (1) Adjusted margin is
adjusted net income divided by total revenues, excluding insurance
recoveries. The following table shows the
reconciliation of net income to adjusted diluted earnings per share
(in thousands, except share and per share amounts):
Air Lease
Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF
INCOME (In thousands, except share, per share amounts and
percentages) Three Months Ended March 31,
2016 2015 Reconciliation of net income to
adjusted diluted earnings per share: (unaudited) Net
income $ 92,858 $ 19,332 Amortization of debt discounts and
issuance costs 7,161 7,682 Stock-based compensation 3,239 3,146
Settlement — 72,000 Insurance recovery on settlement (3,250 ) —
Provision for income taxes 51,133 10,642 Adjusted net income
$ 151,141 $ 112,802 Assumed conversion of convertible senior notes
1,454 1,433 Adjusted net income plus assumed conversions $
152,595 $ 114,235 Weighted-average diluted shares outstanding
110,563,526 110,558,709 Adjusted diluted earnings per share
$ 1.38 $ 1.03
Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Three Months Ended March 31, 2016
2015 (unaudited) Operating Activities Net
income $ 92,858 $ 19,332 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation of flight
equipment 108,575 91,012 Settlement — 72,000 Stock-based
compensation 3,239 3,146 Deferred taxes 51,133 10,642 Amortization
of debt discounts and issuance costs 7,161 7,682 Gain on aircraft
sales, trading and other activity (20,979 ) (8,030 ) Changes in
operating assets and liabilities: Other assets 9,446 20,005 Accrued
interest and other payables (22,483 ) (7,476 ) Rentals received in
advance (1,204 ) 1,188 Net cash provided by operating
activities 227,746 209,501
Investing
Activities Acquisition of flight equipment under operating
lease (458,435 ) (488,175 ) Payments for deposits on flight
equipment purchases (200,908 ) (162,660 ) Proceeds from aircraft
sales, trading and other activity 191,824 102,423 Acquisition of
furnishings, equipment and other assets (52,845 ) (65,174 ) Net
cash used in investing activities (520,364 ) (613,586 )
Financing Activities Cash dividends paid (5,129 ) (4,094 )
Tax withholdings on stock-based compensation (5,877 ) (5,302 ) Net
change in unsecured revolving facilities 879,000 (231,000 )
Proceeds from debt financings 100,000 692,134 Payments in reduction
of debt financings (680,885 ) (144,034 ) Net change in restricted
cash 38 (9,510 ) Debt issuance costs (198 ) (978 ) Security
deposits and maintenance reserve receipts 26,920 37,226 Security
deposits and maintenance reserve disbursements (15,112 ) (3,020 )
Net cash provided by financing activities 298,757 331,422
Net increase/(decrease) in cash 6,139 (72,663 ) Cash and
cash equivalents at beginning of period 156,675 282,819
Cash and cash equivalents at end of period $ 162,814
$ 210,156
Supplemental Disclosure of Cash Flow
Information Cash paid during the period for interest, including
capitalized interest of $9,470 and $10,704 at March 31, 2016 and
2015, respectively $ 86,481 $ 62,472
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 $ 290,195 $ 239,276 Cash dividends declared, not yet paid
$ 5,142 $ 4,101
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version on businesswire.com: http://www.businesswire.com/news/home/20160505006580/en/
Air Lease CorporationInvestors:Ryan McKennaVice
President310-553-0555rmckenna@airleasecorp.comorMedia:Laura
St. JohnManager, Media and Investor
Relations310-553-0555lstjohn@airleasecorp.com
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