Air Lease Corporation (NYSE: AL):
Fourth Quarter 2011 Highlights
Fourth consecutive quarter of profitability growth:
• Basic EPS increased 39% to $0.25 per
share compared to $0.18 per share for Q3 2011
• Pretax profit margin increased to 33.6%
compared to 30.8% for Q3 2011
• Revenues increased 25% to $115.1 million
and pretax income increased 37% to $38.7 million compared to Q3
2011
• Net income increased 36% to $24.8
million, compared to Q3 2011
• Adjusted net income(1) increased 26% to
$31.7 million and adjusted EBITDA(1) increased 28% to $102.2
million, compared to Q3 2011
• Quarterly cash from operations increased
22% to $101.0 million, compared to Q3 2011
Grew our fleet and signed lease placements for deliveries from our
order book:
• From 79 aircraft at the end of Q3 2011,
we purchased 23 aircraft, growing our fleet by 29% to 102 aircraft
at the end of Q4 2011 exceeding our goal of 100 aircraft by the end
of 2011
• Entered into lease transactions covering
34 aircraft with four customers
Air Lease Corporation (ALC) (NYSE: AL) announced today the
results of its operations for the quarter and fiscal year ended
December 31, 2011. ALC also announced the appointment of Gregory B.
Willis as its new Senior Vice President and Chief Financial
Officer, and certain other promotions.
“ALC surpassed its fleet size goal by finishing the quarter with
a fleet of 102 aircraft. As we have grown the fleet, we have also
increased our profitability in four successive quarters posting our
highest quarterly pre-tax profit margin of 33.6%. It truly took a
team effort to achieve these results in less than 2 full years of
operation,” said Steven F. Udvar-Házy, Chairman and CEO of Air
Lease Corporation.
“ALC expanded its business during the fourth quarter of 2011 by
increasing its fleet size by 29% and adding 6 more customers in 3
more countries. Additionally, ALC successfully broadened our
capital base through capital markets transactions, additional
banking relationships, and private placements. Our focus remains on
building a strong balance sheet that will support the commercial
success of our business,” said John L. Plueger, President and Chief
Operating Officer of Air Lease Corporation.
The following table summarizes the results for Q4 2011 and Q3
2011:
(in thousands, except per share amounts)
Q4
2011 Q3 2011 % change
Revenues $ 115,057 $ 92,125
25 % Pretax income $ 38,687 $ 28,341 37 % Net income $
24,762 $ 18,271 36 % Cash provided by operating activities $
100,969 $ 83,076 22 % Adjusted net income(1) $ 31,724 $ 25,122 26 %
Adjusted EBITDA(1) $ 102,167 $ 79,954 28 % Net income per share:
Basic $ 0.25 $ 0.18 39 % Diluted $ 0.24
$ 0.18 33 % (1) See notes 1 and 2 to the
Consolidated Statements of Operations included in this earnings
release for a discussion of the non-GAAP measures adjusted net
income and adjusted EBITDA.
Fleet Growth
Building on our base of 79 aircraft at September 30, 2011, we
added 23 aircraft during the fourth quarter of 2011 and ended the
year with 102 aircraft spread across a diverse and balanced
customer base of 55 airlines based in 33 countries.
Below are portfolio metrics of our fleet as of December 31, 2011
and December 31, 2010:
(dollars in
thousands)
December 31, 2011
December 31, 2010 Fleet size 102
40 Weighted average fleet age 3.6 years 3.8 years
Weighted average remaining lease term 6.6 years 5.6 years Aggregate
fleet cost $ 4,368,985 $
1,649,071
Over 90% of our aircraft are operated internationally based on
net book value. The following table sets forth the percentage of
net book value of our aircraft portfolio in the indicated regions
as of December 31, 2011 and December 31, 2010:
(dollars in
thousands)
December 31, 2011
December 31, 2010 Region % of
net book value % of net book value
Europe 42.1 % 42.3 % Asia/Pacific 32.0 26.1 Central
America, South America and Mexico 12.2 10.0 U.S. and Canada 9.1
15.6 The Middle East and Africa 4.6 6.0 Total
100.0 % 100.0 %
The following table sets forth the number of aircraft we leased
by aircraft type as of December 31, 2011 and December 31, 2010:
(dollars in thousands)
December 31,
2011
December 31, 2010
Aircraft type
Number ofaircraft
% oftotal
Number ofaircraft
% oftotal
Airbus A319/320/321
31 30.4 % 17 42.5 %
Airbus A330-200 11 10.8 2 5.0 Boeing 737-700/800 38 37.2 19 47.5
Boeing 767-300ER 3 2.9 � �
Boeing 777-200/300ER
5 4.9 2 5.0
Embraer E175/190
12 11.8
�
�
ATR 72-600
2 2.0 � � Total
102 100.0 % 40
100.0 %
We have made further progress in placing our aircraft. As of
December 31, 2011, we have entered into contracts for the lease of
all 45 new aircraft delivering in 2012, for 28 out of 31 new
aircraft delivering in 2013, for 22 out of 26 new aircraft
delivering in 2014 and five out of 24 new aircraft delivering in
2014.
Debt Financing
Activities
During 2011, the Company raised an incremental $1.2 billion in
debt financing. This balance was comprised of $587.6 million in
unsecured financing, which included $120.0 million in senior
unsecured notes issued in a private placement to institutional
investors and $200.0 million in convertible senior notes, ending
the year with total unsecured debt outstanding of $826.2 million.
The Company increased its unsecured debt as a percentage of total
debt from 14.6% at December 31, 2010 to 31.7% at December 31, 2011,
while maintaining a composite cost of funds of 3.14% at December
31, 2011 compared to 3.32% at December 31, 2010.
In the first quarter of 2012 the Company entered into debt
facilities and obtained financing commitments for $855.0 million.
This included eight unsecured debt facilities totaling $522.0
million, comprised of; $155.0 million in senior unsecured notes
issued in a private placement to institutional investors; $200.0
million in short-term unsecured bridge financing from two members
of our banking group in connection with the closing of four
aircraft deliveries supported by the European Export Credit
Agencies; $105.0 million in unsecured term financing and $62.0
million of seller financing. We will continue to place an emphasis
on raising additional unsecured financing through the balance of
2012.
As of December 31, 2011, we had established a diverse lending
group consisting of 23 banks across four general types of lending
facilities. The Company’s debt financing was comprised of the
following at December 31, 2011 and 2010:
(dollars in
thousands)
December 31, 2011
December 31, 2010
Secured
Term financings
$ 735,285 $ 223,981
Warehouse facility
1,048,222 554,915 Total secured debt
financing 1,783,507 778,896
Unsecured
Term financings
268,209 13,085 Convertible senior notes 200,000 � Revolving credit
facilities 358,000 120,000 Total
unsecured debt financing 826,209
133,085
Total secured and unsecured debt financing 2,609,716
911,981
Less: Deferred debt discount
(6,917 ) �
Total debt
$ 2,602,799 $ 911,981
Selected interest rates and
ratios:
Composite interest rate(1)
3.14 % 3.32 % Composite interest rate on fixed debt(1) 4.28 % 3.83
%
Percentage of total debt at fixed rate
24.3 % 1.40 %
(1)
This rate does not include the effect of upfront fees,
undrawn fees or issuance cost amortization.
Q4 Financial Highlights
Rental revenueThe Company reported rental revenues of $113.6
million for the fourth quarter of 2011, which included overhaul
revenue of $3.4 million. The Company reported $36.7 million in
rental revenue for the fourth quarter of 2010, which included
overhaul revenue of $1.8 million. The increase in rental revenue
was attributable to the acquisition and lease of additional
aircraft. The full impact on rental revenue for aircraft acquired
during the period will be reflected in subsequent periods.
Interest and other incomeInterest and other income totaled $1.4
million for the fourth quarter of 2011 compared to $175,000 for the
fourth quarter of 2010. During 2011, the Company provided
short-term bridge financing for the acquisition of an aircraft for
which we earned $0.8 million in fee and interest income during the
fourth quarter of 2011.
Interest expenseInterest expense totaled $17.2 million for the
fourth quarter of 2011 compared to $7.4 million for the fourth
quarter of 2010. The increase was primarily due to higher
outstanding debt balances resulting in an $9.4 million increase in
interest and an increase of $0.4 million in amortization of
discounts and deferred debt issue costs.
Depreciation expenseWe recorded $38.9 million in depreciation
expense of flight equipment for the fourth quarter of 2011 compared
to $12.6 million for the fourth quarter of 2010. The increase in
depreciation expense for 2011, compared to 2010, was attributable
to the acquisition of additional aircraft.
The full impact on depreciation expense for aircraft added
during the quarter will be reflected in subsequent periods.
Selling, general and administrative expensesWe recorded selling,
general and administrative expenses of $11.9 million for the fourth
quarter of 2011 compared to $10.1 million for the fourth quarter of
2010. Selling, general and administrative expense represents a
disproportionately higher percentage of revenues during our initial
years of operation. As we continue to add new aircraft to our
portfolio, we expect selling, general and administrative expense to
continue decreasing as a percentage of our revenue.
Stock-based compensation expenseStock-based compensation expense
totaled $8.4 million for the fourth quarter of 2011 compared to
$10.8 million for the fourth quarter of 2010. This decrease is
primarily a result of the expense recognition pattern related to
our grants of restricted stock units, which are amortized on an
accelerated basis over the vesting period.
TaxesThe effective tax rate for the fourth quarter of 2011 was
36.0% compared to 34.1% for the fourth quarter of 2010.
Net income (loss)For the fourth quarter of 2011, the Company
reported consolidated net income of $24.8 million, or $0.24 per
diluted share, compared to a consolidated net loss of $2.7 million,
or $0.04 per diluted share, for the fourth quarter of 2010. The
increase in net income for 2011, compared to 2010, was primarily
attributable to the acquisition and lease of additional
aircraft.
2011 Financial
Highlights
Rental revenueThe Company reported rental revenues of $332.7
million the year ended December 31, 2011, which included overhaul
revenue of $11.0 million. In the prior year, the Company reported
$57.1 million in rental revenue for the period from inception to
December 31, 2010, which included overhaul revenue of $3.6 million.
The increase in rental revenue was attributable to the acquisition
and lease of additional aircraft. The full impact on rental revenue
for aircraft acquired during the period will be reflected in
subsequent periods.
Interest and other incomeInterest and other income totaled $4.0
million for the year ended December 31, 2011 compared to $1.3
million for the period from inception to December 31, 2010. During
2011, the Company provided short-term bridge financing for the
acquisition of an aircraft for which we earned $1.9 million in fee
and interest income. In addition, the Company earned $0.5 million
in servicing fee revenue with respect to the two aircraft we
manage.
Interest expenseInterest expense totaled $57.7 million for the
year ended December 31, 2011 compared to $51.7 million for the
period from inception to December 31, 2010. The change was
primarily due to an increase in our outstanding debt balances
resulting in a $33.8 million increase in interest, an increase of
$4.6 million in amortization of our deferred debt issue costs and a
$3.3 million charge for the extinguishment of debt associated with
the modification of the Warehouse Facility, offset by a one-time
$35.8 million charge for the amortization of convertible debt
discounts recorded during 2010.
Depreciation expenseWe recorded $112.3 million in depreciation
expense of flight equipment for the year ended December 31, 2011
compared to $19.3 million for the period from inception to December
31, 2010. The increase in depreciation expense for 2011, compared
to 2010, was attributable to the acquisition of additional
aircraft.
The full impact on depreciation expense for aircraft added
during the year will be reflected in subsequent periods.
Selling, general and administrative expensesWe recorded selling,
general and administrative expenses of $44.6 million for the year
ended December 31, 2011 compared to $24.2 million for the period
from inception to December 31, 2010. Selling, general and
administrative expense represents a disproportionately higher
percentage of revenues during our initial years of operation. As we
continue to add new aircraft to our portfolio, we expect selling,
general and administrative expense to continue decreasing as a
percentage of our revenue.
Stock-based compensation expenseStock-based compensation expense
totaled $39.3 million for the year ended December 31, 2011 compared
to $24.0 million for the period from inception to December 31,
2010. This increase is primarily a result of timing as the full
impact on stock-based compensation expense for grants made during
the second quarter of 2010, partially offset by the effects of the
expense recognition pattern related to our grants of restricted
stock units, which are amortized on an accelerated basis over the
vesting period.
TaxesThe effective tax rate for the year ended December 31, 2011
was 35.7% compared to 14.6% for the period from inception to
December 31, 2010. The change in effective tax rate for the
respective periods is primarily a result of a one-time $35.8
million charge for the amortization of convertible debt discounts
recorded in 2010 which is not deductible for tax purposes.
Net income (loss)For the year ended December 31, 2011, the
Company reported consolidated net income of $53.2 million, or $0.59
per diluted share, compared to a consolidated net loss of $52.0
million, or $1.32 per diluted share, for the period from inception
to December 31, 2010. The increase in net income for 2011, compared
to 2010, was primarily attributable to the acquisition and lease of
additional aircraft.
Air Lease Corporation Appoints Gregory B. Willis as New
Senior Vice President and Chief Financial Officer and Announces
Additional Promotions
The Company announced today that the Board of Directors of the
Company has appointed Gregory B. Willis, the Company’s current Vice
President, Finance, and Chief Accounting Officer, as its new Senior
Vice President and Chief Financial Officer, effective immediately.
Mr. Willis succeeds James C. Clarke, who resigned as Senior Vice
President and Chief Financial Officer of the Company, effective
March 6, 2012, to pursue other interests. Mr. Clarke’s resignation
was not due to any disagreement with the Company on any matter
relating to the Company’s financial condition or financial
reporting.
Mr. Willis has served as the Company’s Vice President, Finance,
and Chief Accounting Officer since March 2010. From 2007 to 2010,
he served as the Director of Accounting Policy at International
Lease Finance Corporation (“ILFC”). Prior to ILFC, he served as the
Vice President of Alternative Investments at Mellon Financial
Corporation from 2005 to 2007, where he was responsible for
administering the accounting and tax functions for private equity
and distressed debt funds.
ALC has a deep and strong financial and accounting team and is
pleased to announce the following promotions as part of Mr.
Willis’s leadership team:
- Jennifer Munro, from Assistant Vice
President, Finance & Accounting, to Vice President &
Controller
- Ardy Ghanbar, from Director of
Financial Reporting, to Assistant Vice President, Finance
- Ryan McKenna, from Director, Strategic
Planning & Investor Relations, to Assistant Vice President,
Strategic Planning & Investor Relations
- Sabrina Lemmens, from Manager, Finance
& Accounting, to Director, Finance & Accounting
- Jason Marcotte, from Manager of
Finance, to Senior Manager, Finance & Accounting
ALC is also pleased to announce the following promotions in its
Legal and Technical Departments, as follows:
- Czar Vigil, from Assistant Vice
President & Corporate Counsel, to Vice President &
Corporate Counsel
- Eric Hoogenkamp, from Senior Director,
Technical Asset Management, to Assistant Vice President, Technical
Asset Management
Conference Call
In connection with the earnings release, Air Lease Corporation
will host a conference call on March 12, 2012 at 4:30 PM Eastern
Time to discuss the Company's year-end financial results for
2011.
Investors can participate in the conference call by dialing
(800) 510-0178 domestic or (617) 614-3450 international. The
passcode for the call is 38106794.
For your convenience, the conference call can be replayed in its
entirety beginning at 6:30 PM ET on March 12, 2012 until 11:59 PM
ET March 19, 2012. If you wish to listen to the replay of this
conference call, please dial (888) 286-8010 domestic or (617)
801-6888 international and enter passcode 20363311.
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.
About Air Lease Corporation
Launched in 2010, Air Lease Corporation is an 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
partners 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
that are not historical facts and may be forward-looking. 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 status as a recently organized
corporation with a limited operating history;
- our inability to make acquisitions of,
or lease, 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;
- our inability to effectively deploy the
net proceeds from our capital raising activities; and
- potential natural disasters and
terrorist attacks and the amount of our insurance coverage, if any,
relating thereto.
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 data)
December 31, 2011
December 31, 2010
Assets Cash and cash equivalents $ 281,805 $ 328,821
Restricted cash 96,157 48,676
Flight equipment subject to operating
leases
4,368,985 1,649,071
Less accumulated depreciation
(131,569 )
(19,262 ) 4,237,416 1,629,809 Deposits on
flight equipment purchases 405,549 183,367
Deferred debt issue costs—less accumulated
amortization of $17,500 and $4,754 as of December 31, 2011 and
December 31, 2010, respectively
47,609 46,422 Deferred tax asset — 8,875
Other assets
96,057 30,312
Total assets
$ 5,164,593 $
2,276,282 Liabilities and Shareholders’
Equity Accrued interest and other payables $ 54,648 $ 22,054
Debt financing 2,602,799 911,981 Security deposits and maintenance
reserves on flight equipment leases 284,154 109,274
Rentals received in advance
26,017 8,038
Deferred tax liability
20,692 —
Total liabilities
$ 2,988,310 $
1,051,347 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 98,885,131
and 63,563,810 shares at December 31, 2011 and December 31, 2010,
respectively 984 636 Class B Non-Voting Common Stock, $0.01 par
value; authorized 10,000,000 shares; issued and outstanding
1,829,339 shares 18 18 Paid-in capital 2,174,089 1,276,321 Retained
earnings (accumulated deficit)
1,192
(52,040 ) Total shareholders’
equity 2,176,283
1,224,935
Total liabilities and shareholders’
equity
$ 5,164,593 $
2,276,282
Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
For the periodfrom Inception
to
(in thousands, except share data)
December 31, 2011
December 31, 2010 Revenues Rental of
flight equipment $ 332,719 $ 57,075 Interest and other
4,022 1,291 Total
revenues 336,741 58,366
Expenses Interest 44,862
11,062 Amortization of discounts and deferred debt issue costs
9,481 4,883 Extinguishment of debt 3,349 — Amortization of
convertible debt discounts
—
35,798 Interest expense 57,692 51,743
Depreciation of flight equipment 112,307 19,262 Selling, general
and administrative 44,559 24,232 Stock-based compensation
39,342 24,044 Total
expenses
253,900
119,281 Income (loss) before taxes
82,841 (60,915 )
Income tax (expense) benefit
(29,609 )
8,875
Net income (loss)
$ 53,232 $
(52,040 )
Net income (loss) attributable to common
shareholders per share Net loss Basic $ 0.59 $ (1.32 ) Diluted
$ 0.59 $ (1.32 ) Weighted-average shares outstanding Basic
89,592,945 39,511,045
Diluted
90,416,346 39,511,045
Other financial data
Adjusted net income(1) $ 87,954 $ 2,520
Adjusted EBITDA(2)
$ 290,168 $ 32,973 (1)
Adjusted net income (defined as net income
before stock-based compensation expense and non-cash interest
expense, which includes the amortization of debt issuance costs,
extinguishment of debt and convertible debt discounts) is a measure
of both operating performance and liquidity that is not defined by
United States generally accepted accounting principles (“GAAP”) and
should not be considered as an alternative to net income, income
from operations or any other performance measures derived in
accordance with GAAP. Adjusted net income is presented as a
supplemental disclosure because management believes that it may be
a useful performance measure that is used within our industry. We
believe adjusted net income provides useful information on our
earnings from ongoing operations, our ability to service our
long-term debt and other fixed obligations, and our ability to fund
our expected growth with internally generated funds. Set forth
below is additional detail as to how we use adjusted net income as
a measure of both operating performance and liquidity, as well as a
discussion of the limitations of adjusted net income as an
analytical tool and a reconciliation of adjusted net income to our
GAAP net loss and cash flow from operating activities.
Operating Performance: Management and our
board of directors use adjusted net income in a number of ways to
assess our consolidated financial and operating performance, and we
believe this measure is helpful in identifying trends in our
performance. We use adjusted net income as a measure of our
consolidated operating performance exclusive of income and expenses
that relate to the financing, income taxes, and capitalization of
the business. Also, adjusted net income assists us in comparing our
operating performance on a consistent basis as it removes the
impact of our capital structure (primarily one-time amortization of
convertible debt discounts) and stock-based compensation expense
from our operating results. In addition, adjusted net income helps
management identify controllable expenses and make decisions
designed to help us meet our current financial goals and optimize
our financial performance. Accordingly, we believe this metric
measures our financial performance based on operational factors
that we can influence in the short term, namely the cost structure
and expenses of the organization.
Liquidity: In addition to the uses
described above, management and our board of directors use adjusted
net income as an indicator of the amount of cash flow we have
available to service our debt obligations, and we believe this
measure can serve the same purpose for our investors.
Limitations: Adjusted net income has
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for analysis of our operating
results or cash flows as reported under GAAP. Some of these
limitations are as follows:
• adjusted net income does not reflect (i)
our cash expenditures or future requirements for capital
expenditures or contractual commitments, or (ii) changes in or cash
requirements for our working capital needs; and
• our calculation of adjusted net income
may differ from the adjusted net income or analogous calculations
of other companies in our industry, limiting its usefulness as a
comparative measure.
The following tables show the reconciliation of net income
and cash flows from operating activities, the most directly
comparable GAAP measures of performance and liquidity, to adjusted
net income.
Year Ended
For the periodFrom Inception
to
(in thousands)
December 31, 2011
December 31, 2010 Reconciliation of cash
flows from operating activities to adjusted net income: Net
cash provided by operating activities $ 267,166 $ 41,934
Depreciation of flight equipment (112,307 ) (19,262 ) Stock-based
compensation (39,342 ) (24,044 ) Deferred taxes (29,567 ) 8,875
Amortization of discounts and deferred debt issue costs (9,481 )
(4,883 ) Extinguishment of debt (3,349 ) — Amortization of
convertible debt discounts — (35,798 ) Changes in operating assets
and liabilities: Other assets 17,438 8,040 Accrued interest and
other payables (19,347 ) (18,864 ) Rentals received in advance
(17,979 ) (8,038 ) Net income (loss) 53,232 (52,040 )
Amortization of discounts and deferred debt issue costs 9,481 4,883
Extinguishment of debt 3,349 — Amortization of convertible debt
discounts — 35,798 Stock-based compensation 39,342 24,044
Tax effect
(17,450
)
(10,165 )
Adjusted net income
$
87,954
$ 2,520
Year Ended
For the periodFrom Inception
to
(in thousands)
December 31, 2011
December 31, 2010
Reconciliation of net income (loss) to adjusted net income:
Net income (loss) $ 53,232 $ (52,040 ) Amortization of discounts
and deferred debt issue costs 9,481 4,883 Extinguishment of debt
3,349 — Amortization of convertible debt discounts — 35,798
Stock-based compensation 39,342 24,044 Tax effect (17,450 )
(10,165 ) Adjusted net income $ 87,954
$ 2,520 (2) Adjusted EBITDA (defined as
net income (loss) before net interest expense, stock-based
compensation expense, income tax expense (benefit), and
depreciation and amortization expense) is a measure of both
operating performance and liquidity that is not defined by GAAP and
should not be considered as an alternative to net income, income
from operations or any other performance measures derived in
accordance with GAAP. Adjusted EBITDA is presented as a
supplemental disclosure because management believes that it may be
a useful performance measure that is used within our industry. We
believe adjusted EBITDA provides useful information on our earnings
from ongoing operations, our ability to service our long-term debt
and other fixed obligations, and our ability to fund our expected
growth with internally generated funds. Set forth below is
additional detail as to how we use adjusted EBITDA as a measure of
both operating performance and liquidity, as well as a discussion
of the limitations of adjusted EBITDA as an analytical tool and a
reconciliation of adjusted EBITDA to our GAAP net loss and cash
flow from operating activities.
Operating Performance: Management and our
board of directors use adjusted EBITDA in a number of ways to
assess our consolidated financial and operating performance, and we
believe this measure is helpful in identifying trends in our
performance. We use adjusted EBITDA as a measure of our
consolidated operating performance exclusive of income and expenses
that relate to the financing, income taxes, and capitalization of
the business. Also, adjusted EBITDA assists us in comparing our
operating performance on a consistent basis as it removes the
impact of our capital structure (primarily one-time amortization of
convertible debt discounts) and stock-based compensation expense
from our operating results. In addition, adjusted EBITDA helps
management identify controllable expenses and make decisions
designed to help us meet our current financial goals and optimize
our financial performance. Accordingly, we believe this metric
measures our financial performance based on operational factors
that we can influence in the short term, namely the cost structure
and expenses of the organization.
Liquidity: In addition to the uses
described above, management and our board of directors use adjusted
EBITDA as an indicator of the amount of cash flow we have available
to service our debt obligations, and we believe this measure can
serve the same purpose for our investors.
Limitations: Adjusted EBITDA has
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for analysis of our operating
results or cash flows as reported under GAAP. Some of these
limitations are as follows:
• adjusted EBITDA does not reflect our
cash expenditures or future requirements for capital expenditures
or contractual commitments;
• adjusted EBITDA does not reflect changes in or cash
requirements for our working capital needs; • adjusted
EBITDA does not reflect interest expense or cash requirements
necessary to service interest or principal payments on our debt;
and • other companies in our industry may calculate these
measures differently from how we calculate these measures, limiting
their usefulness as comparative measures. The following
tables show the reconciliation of net income (loss) and cash flows
from operating activities, the most directly comparable GAAP
measures of performance and liquidity, to adjusted EBITDA.
Year Ended
For the periodFrom Inception
to
(in thousands)
December 31, 2011
December 31, 2010 Reconciliation of cash
flows from operating activities to adjusted EBITDA: Net cash
provided by operating activities $ 267,166 $ 41,934 Depreciation of
flight equipment (112,307 ) (19,262 ) Stock-based compensation
(39,342 ) (24,044 ) Deferred taxes (29,567 ) 8,875 Amortization of
discounts and deferred debt issue costs (9,481 ) (4,883 )
Extinguishment of debt (3,349 ) — Amortization of convertible debt
discounts — (35,798 ) Changes in operating assets and liabilities:
Other assets 17,438 8,040 Accrued interest and other payables
(19,347 ) (18,864 ) Rentals received in advance (17,979 )
(8,038 ) Net income (loss) 53,232 (52,040 ) Net interest
expense 55,678 50,582 Income taxes 29,609 (8,875 )
Depreciation
112,307 19,262 Stock-based compensation 39,342
24,044
Adjusted EBITDA
$ 290,168
$
32,973
Year Ended
For the periodFrom Inception
to
(in thousands)
December 31, 2011
December 31, 2010
Reconciliation of net income (loss) to adjusted EBITDA: Net
income (loss) $ 53,232 $ (52,040 ) Net interest expense 55,678
50,582 Income taxes 29,609 (8,875 ) Depreciation 112,307 19,262
Stock-based compensation
39,342 24,044 Adjusted EBITDA
$ 290,168 $ 32,973
Air
Lease Corporation and Subsidiaries CONSOLIDATED STATEMENTS
OF CASH FLOWS
Year Ended
For the periodfrom Inception
to
(dollars in thousands)
December 31, 2011
December 31, 2010
Operating Activities Net income (loss) $ 53,232 $ (52,040 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation of flight equipment 112,307
19,262 Stock-based compensation 39,342 24,044 Deferred taxes 29,567
(8,875 ) Amortization of discounts and deferred debt issue costs
9,481 4,883 Extinguishment of debt 3,349 — Amortization of
convertible debt discounts — 35,798 Changes in operating assets and
liabilities: Other assets (17,438 ) (8,040 ) Accrued interest and
other payables 19,347 18,864 Rentals received in advance
17,979 8,038 Net
cash provided by operating activities
267,166
41,934 Investing
Activities Acquisition of flight equipment under operating
lease (2,529,901 ) (1,649,071 ) Payments for deposits on flight
equipment purchases (360,587 ) (183,367 ) Acquisition of
furnishings, equipment and other assets
(86,668
) (19,082 ) Net cash
used in investing activities
(2,977,156
) (1,851,520 )
Financing Activities Issuance of common stock and warrants
867,230 1,157,133 Tax withholdings on stock based compensation
(8,456 ) — Issuance of convertible notes 193,000 60,000 Net change
in unsecured revolving facilities 238,000 120,000 Proceeds from
debt financings 1,344,530 796,921 Payments in reduction of debt
financings (84,796 ) (4,940 ) Restricted cash (47,481 ) (48,676 )
Debt issue costs (13,933 ) (51,305 ) Security deposits and
maintenance reserve receipts 180,862 109,274 Security deposits and
maintenance reserve disbursements
(5,982
) — Net cash provided by
financing activities
2,662,974
2,138,407 Net increase (decrease) in cash
(47,016 ) 328,821 Cash at beginning of period
328,821 — Cash at
end of period
$ 281,805
$ 328,821 Supplemental
Disclosure of Cash Flow Information Cash paid during the period
for interest, including capitalized interest of $10,390 at December
31, 2011 and capitalized interest of $1,769 at December 31, 2010 $
51,986 $ 12,723
Supplemental Disclosure of Noncash
Activities Buyer furnished equipment, capitalized interest and
deposits on flight equipment purchases applied to acquisition of
flight equipment under operating leases $ 190,013 $ — Conversion of
convertible notes to Class A Common Stock $ —
$ 60,000
Air Lease (NYSE:AL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Air Lease (NYSE:AL)
Historical Stock Chart
From Apr 2023 to Apr 2024