Air Lease Corporation (ALC) (NYSE: AL) announces financial
results for the three months and year ended December 31,
2023.
“Fourth quarter and full-year performance at ALC was very
strong. With the exception of the benefit of tax reform in 2017, we
achieved record revenues and profits for the 4th quarter, with net
income increasing 56% and revenues increasing 19% over the prior
year’s quarter. Similarly, for the full year 2023 we enjoyed record
revenues, aircraft sales, and total assets which exceeded $30
billion for the first time. Looking forward, the commercial
aircraft supply/demand backdrop remains highly favorable for our
current fleet and our $22 billion forward orderbook scheduled to
deliver over the next 4-5 years,” said John L. Plueger, Chief
Executive Officer and President, and Steven F. Udvar-Házy,
Executive Chairman of the Board.
Fourth Quarter and Fiscal Year 2023
Results
The following table summarizes our operating results for the
three months and year ended December 31, 2023 and 2022 (in
millions, except per share amounts and percentages):
Operating Results
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
$ change
% change
2023
2022
$ change
% change
Revenues
$
716.6
$
601.6
$
115.0
19.1
%
$
2,685.0
$
2,317.3
$
367.7
15.9
%
Operating expenses
(517.2
)
(452.3
)
(64.9
)
14.3
%
(1,998.4
)
(1,684.6
)
(313.8
)
18.6
%
(Write-off) of Russian fleet, net of
recoveries
67.0
30.9
36.1
116.8
%
67.0
(771.5
)
838.5
—
%
Income/(loss) before taxes
266.4
180.2
86.2
47.8
%
753.6
(138.8
)
892.4
—
%
Net income/(loss) attributable to common
stockholders
$
210.6
$
134.9
$
75.7
56.1
%
$
572.9
$
(138.7
)
$
711.6
—
%
Diluted earnings/(loss) per share
$
1.89
$
1.21
$
0.68
56.2
%
$
5.14
$
(1.24
)
$
6.38
—
%
Adjusted net income before income
taxes(1)
$
213.9
$
158.2
$
55.7
35.2
%
$
733.6
$
659.9
$
73.7
11.2
%
Adjusted diluted earnings per share before
income taxes(1)
$
1.92
$
1.42
$
0.50
35.2
%
$
6.58
$
5.89
$
0.69
11.7
%
Key Financial Ratios
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Pre-tax margin
37.2%
29.9%
28.1%
(6.0)%
Adjusted pre-tax margin(1)
29.8%
26.3%
27.3%
28.5%
Pre-tax return on common equity (trailing
twelve months)
11.8%
(3.0)%
Adjusted pre-tax return on common equity
(trailing twelve months)(1)
12.1%
11.0%
——————————————————————
(1)
Adjusted net income before income taxes,
adjusted diluted earnings per share before income taxes, adjusted
pre-tax margin and adjusted pre-tax return on common equity have
been adjusted to exclude the effects of certain non-cash items,
one-time or non-recurring items, such as net write-offs and
recoveries of our Russian fleet, that are not expected to continue
in the future and certain other items. See note 1 under the
Consolidated Statements of Operations included in this earnings
release for a discussion of the non-GAAP measures and a
reconciliation to their most comparable GAAP financial
measures.
Highlights
- During the fourth quarter, we took delivery of 22 aircraft from
our order book, representing approximately $1.2 billion in aircraft
investments, ending the period with 463 aircraft in our owned fleet
and over $30 billion in total assets.
- We recognized a net benefit of approximately $67 million from
the settlement of insurance claims with respect to four aircraft in
our owned fleet and our equity interest in certain aircraft in our
managed fleet that were previously on lease to JSC Siberia Airline
(“S7”), a Russian airline.
- Sold eight aircraft1 during the fourth quarter for
approximately $440 million in sales proceeds.
- We have $1.5 billion of aircraft in our sales pipeline in 2024,
which includes $605 million in flight equipment held for sale as of
December 31, 2023 and $892 million of aircraft subject to letters
of intent.
- We have placed 100% of our committed orderbook on long-term
leases for aircraft delivering through the end of 2025 and have
placed approximately 65% of our entire orderbook delivering through
2028.
- We ended the year with $31.0 billion in committed minimum
future rental payments consisting of $16.4 billion in contracted
minimum rental payments on the aircraft in our existing fleet and
$14.6 billion in minimum future rental payments related to aircraft
which will deliver between 2024 through 2027.
- In 2023, we raised approximately $3.6 billion in committed debt
financings and ended the year with total liquidity of $6.8
billion.
- On February 13, 2024, our board of directors declared a
quarterly cash dividend of $0.21 per share on our outstanding Class
A common stock. The next quarterly dividend of $0.21 per share will
be paid on April 10, 2024 to holders of record of our Class A
common stock as of March 15, 2024.
Financial Overview
Fourth Quarter 2023 vs. Fourth Quarter 2022
Our total revenues for the three months ended December 31, 2023
increased by 19% to $717 million as compared to the three months
ended December 31, 2022. The increase in total revenues was
primarily driven by the continued growth in our fleet, an increase
in sales activity and higher end of lease revenue. During the three
months ended December 31, 2023, we recognized $59 million in gains
from the sale of eight aircraft. We also recognized $60 million in
end of lease revenue related to the return of seven aircraft.
During the three months ended December 31, 2022, we recorded
approximately $28 million in gains from the sale of six
aircraft1.
Our net income attributable to common stockholders for the three
months ended December 31, 2023 was $211 million, or $1.89 per
diluted share, compared to $135 million, or $1.21 per diluted
share, for the three months ended December 31, 2022. The increase
from the prior year period was primarily driven by the increase in
revenue as discussed above, partially offset by higher interest
expense as a result of the increase in our composite cost of funds.
In addition, we recognized a net benefit of approximately $67
million from the settlement of insurance claims under S7’s
insurance policies related to four aircraft in our owned fleet and
our equity interest in certain aircraft in our managed fleet that
were previously on lease to S7.
Adjusted net income before income taxes during the three months
ended December 31, 2023 was $214 million or $1.92 per adjusted
diluted share, as compared to $158 million, or $1.42 per adjusted
diluted share, for the three months ended December 31, 2022. The
increase in our adjusted net income before income taxes primarily
relates to the increase in revenues as discussed above, partially
offset by higher interest expense.
Full Year 2023 vs. Full Year 2022
Our total revenues for the year ended December 31, 2023
increased by 16% to $2.7 billion as compared to the year ended
December 31, 2022. The increase in total revenues was primarily
driven by the continued growth in our fleet, an increase in sales
activity and higher end of lease revenue. During the year ended
December 31, 2023, we recognized $156 million in gains from the
sale of 27 aircraft1 and also recognized $124 million in end of
lease revenue from the return of 22 aircraft. During the year ended
December 31, 2022, we recognized $48 million in gains from the sale
of 15 aircraft1. In addition, in 2022, we recorded $76.6 million in
income related to security deposit forfeitures and maintenance
reserve revenue from the return of 12 aircraft as well as the
termination of our leasing activities in Russia.
Our net income attributable to common stockholders for the year
ended December 31, 2023 was $573 million, or $5.14 per diluted
share, as compared to a net loss attributable to common
stockholders of $139 million, or $1.24 loss per diluted share, for
the year ended December 31, 2022. The increase from the prior year
was primarily due to an increase in revenues as discussed above
partially offset by higher interest expense, which resulted from an
increase in our composite cost of funds. In addition, in 2023, we
recognized a net benefit of approximately $67 million from the
settlement of insurance claims mentioned above, while in 2022, we
recognized a net write-off of $772 million related to our Russian
fleet.
Adjusted net income before income taxes during the year ended
December 31, 2023 was $734 million or $6.58 per adjusted diluted
share, as compared to $660 million, or $5.89 per adjusted diluted
share, for the year ended December 31, 2022. The increase in our
adjusted net income before income taxes primarily relates to the
increase in revenues as discussed above, partially offset by higher
interest expense.
——————————————————————
1 Aircraft sales include one sales-type
lease transaction and two sales-type lease transactions during the
quarter and year ended December 31, 2023, respectively. During the
quarter and year ended December 31, 2022, aircraft sales includes
one sales-type lease transaction and nine sales-type lease
transactions, respectively.
Flight Equipment
Portfolio
As of December 31, 2023, the net book value of our fleet
increased to $26.2 billion, compared to $24.5 billion as of
December 31, 2022. As of December 31, 2023, we owned 463 aircraft
in our aircraft portfolio, comprised of 345 narrowbody aircraft and
118 widebody aircraft, and we managed 78 aircraft. The weighted
average fleet age and weighted average remaining lease term of
flight equipment subject to operating lease as of December 31, 2023
was 4.6 years and 7.0 years, respectively. We have a globally
diversified customer base comprised of 119 airlines in 62 countries
as of December 31, 2023.
The following table summarizes the key portfolio metrics of our
fleet as of December 31, 2023 and December 31, 2022:
December 31, 2023
December 31, 2022
Net book value of flight equipment subject
to operating lease
$
26.2 billion
$
24.5 billion
Weighted-average fleet age(1)
4.6 years
4.5 years
Weighted-average remaining lease
term(1)
7.0 years
7.1 years
Owned fleet(2)
463
417
Managed fleet
78
85
Aircraft on order
334
398
Total
875
900
Current fleet contracted rentals
$
16.4 billion
$
15.6 billion
Committed fleet rentals
$
14.6 billion
$
15.8 billion
Total committed rentals
$
31.0 billion
$
31.4 billion
(1) Weighted-average fleet age and
remaining lease term calculated based on net book value of our
flight equipment subject to operating lease.
(2) As of December 31, 2023, our owned
fleet count included 14 aircraft classified as flight equipment
held for sale and 12 aircraft classified as net investments in
sales-type leases, which are both included in Other assets on the
Consolidated Balance Sheet.
The following table details the regional concentration of our
flight equipment subject to operating leases:
December 31, 2023
December 31, 2022
Region
% of Net Book Value
% of Net Book Value
Asia Pacific
39.8
%
44.1
%
Europe
37.7
%
32.5
%
Central America, South America, and
Mexico
9.0
%
7.8
%
The Middle East and Africa
7.9
%
9.3
%
U.S. and Canada
5.6
%
6.3
%
Total(1)
100.0
%
100.0
%
(1) As of December 31, 2022, we had four
aircraft classified as held for sale with a carrying value of
$153.5 million included in the table above.
The following table details the composition of our owned fleet
by aircraft type:
December 31, 2023
December 31, 2022
Aircraft type
Number of
Aircraft
% of Total
Number of
Aircraft
% of Total
Airbus A220-100
2
0.4
%
—
—
%
Airbus A220-300
13
2.8
%
4
1.0
%
Airbus A319-100
1
0.2
%
1
0.2
%
Airbus A320-200
28
6.0
%
28
6.7
%
Airbus A320-200neo
25
5.4
%
23
5.5
%
Airbus A321-200
23
5.0
%
23
5.5
%
Airbus A321-200neo
95
20.6
%
78
18.7
%
Airbus A330-200(1)
13
2.8
%
13
3.1
%
Airbus A330-300
5
1.1
%
5
1.2
%
Airbus A330-900neo
23
5.0
%
16
3.8
%
Airbus A350-900
14
3.0
%
13
3.1
%
Airbus A350-1000
7
1.5
%
6
1.4
%
Boeing 737-700
3
0.6
%
4
1.0
%
Boeing 737-800
73
15.8
%
82
19.7
%
Boeing 737-8 MAX
52
11.2
%
47
11.3
%
Boeing 737-9 MAX
29
6.3
%
15
3.7
%
Boeing 777-200ER
1
0.2
%
1
0.2
%
Boeing 777-300ER
24
5.2
%
24
5.8
%
Boeing 787-9
25
5.4
%
27
6.5
%
Boeing 787-10
6
1.3
%
6
1.4
%
Embraer E190
1
0.2
%
1
0.2
%
Total(2)
463
100.0
%
417
100.0
%
(1) As of December 31, 2023, aircraft
count includes two Airbus A330-200 aircraft classified as
freighters.
(2) As of December 31, 2023, our owned
fleet count included 14 aircraft classified as flight equipment
held for sale and 12 aircraft classified as net investments in
sales-type leases, which are both included in Other assets on the
Consolidated Balance Sheet.
Debt Financing
Activities
We ended the fourth quarter of 2023 with total debt financing,
net of discounts and issuance costs, of $19.2 billion. As of
December 31, 2023, 84.7% of our total debt financing was at a fixed
rate and 98.4% was unsecured. As of December 31, 2023, our
composite cost of funds was 3.77%. We ended the year with total
liquidity of $6.8 billion.
As of the end of the periods presented, our debt portfolio was
comprised of the following components (dollars in millions, except
percentages):
December 31, 2023
December 31, 2022
Unsecured
Senior unsecured securities
$
16,330
$
17,095
Term financings
1,628
583
Revolving credit facility
1,100
1,020
Total unsecured debt financing
19,058
18,698
Secured
Export credit financing
205
11
Term financings
101
114
Total secured debt financing
306
125
Total debt financing
19,364
18,823
Less: Debt discounts and issuance
costs
(181
)
(182
)
Debt financing, net of discounts and
issuance costs
$
19,183
$
18,641
Selected interest rates and
ratios:
Composite interest rate(1)
3.77
%
3.07
%
Composite interest rate on fixed-rate
debt(1)
3.26
%
2.98
%
Percentage of total debt at a
fixed-rate
84.71
%
91.34
%
(1) This rate does not include the effect
of upfront fees, facility 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 February 15, 2024 at 4:30 PM Eastern
Time to discuss the Company's financial results for the fourth
quarter and year ended 2023.
Investors can participate in the conference call by dialing 1
(888) 660-6652 domestic or 1 (646) 960-0554 international. The
passcode for the call is 5952437.
The conference call will also be broadcast live through a link
on the Investors 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
Investors page of the Air Lease Corporation website.
For your convenience, the conference call can be replayed in its
entirety beginning on February 15, 2024 until 11:59 PM ET on
February 22, 2024. If you wish to listen to the replay of this
conference call, please dial 1 (800) 770-2030 domestic or 1 (647)
362-9199 international and enter passcode 5952437.
About Air Lease Corporation (NYSE: AL)
Air Lease Corporation is a leading global aircraft leasing
company based in Los Angeles, California that has airline customers
throughout the world. Air Lease Corporation and its team of
dedicated and experienced professionals are principally engaged in
purchasing new commercial aircraft and leasing them to its airline
customers worldwide through customized aircraft leasing and
financing solutions. Air Lease Corporation routinely posts
information that may be important to investors in the “Investors”
section of its website at www.airleasecorp.com. Investors and
potential investors are encouraged to consult Air Lease
Corporation’s website regularly for important information. The
information contained on, or that may be accessed through, Air
Lease Corporation's website is not incorporated by reference into,
and is not a part of, this press release.
Forward-Looking Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Those statements appear
in a number of places in this press release and include statements
regarding, among other matters, the state of the airline industry,
our access to the capital and debt markets, the impact of Russia’s
invasion of Ukraine and the impact of sanctions imposed on Russia,
the impact of the Israel Hamas conflict, aircraft and engine
delivery delays and manufacturing flaws, our aircraft sales
pipeline and expectations, changes in inflation and interest rates
and other macroeconomic conditions and other factors affecting our
financial condition or results of operations. Words such as “can,”
“could,” “may,” “predicts,” “potential,” “will,” “projects,”
“continuing,” “ongoing,” “expects,” “anticipates,” “intends,”
“plans,” “believes,” “seeks,” “estimates” and “should,” and
variations of these words and similar expressions, are used in many
cases to identify these forward-looking statements. Any such
forward-looking statements are not guarantees of future performance
and involve risks, uncertainties, and other factors that may cause
our actual results, performance or achievements, or industry
results to vary materially from our future results, performance or
achievements, or those of our industry, expressed or implied in
such forward-looking statements. Such factors include, among
others:
- our inability to obtain additional capital on favorable terms,
or at all, to acquire aircraft, service our debt obligations and
refinance maturing debt obligations;
- increases in our cost of borrowing, decreases in our credit
ratings, or changes in interest rates;
- our inability to generate sufficient returns on our aircraft
investments through strategic acquisition and profitable
leasing;
- the failure of an aircraft or engine manufacturer to meet its
contractual obligations to us, including or as a result of
manufacturing defects and technical or other difficulties with
aircraft or engines before or after delivery;
- our ability to recover losses related to aircraft detained in
Russia, including through insurance claims and related
litigation;
- obsolescence of, or changes in overall demand for, our
aircraft;
- changes in the value of, and lease rates for, our aircraft,
including as a result of aircraft oversupply, manufacturer
production levels, our lessees’ failure to maintain our aircraft,
inflation, and other factors outside of our control;
- impaired financial condition and liquidity of our lessees,
including due to lessee defaults and reorganizations, bankruptcies
or similar proceedings;
- increased competition from other aircraft lessors;
- the failure by our lessees to adequately insure our aircraft or
fulfill their contractual indemnity obligations to us, or the
failure of such insurers to fulfill their contractual
obligations;
- increased tariffs and other restrictions on trade;
- changes in the regulatory environment, including changes in tax
laws and environmental regulations;
- other events affecting our business or the business of our
lessees and aircraft manufacturers or their suppliers that are
beyond our or their control, such as the threat or realization of
epidemic diseases, natural disasters, terrorist attacks, war or
armed hostilities between countries or non-state actors; and
- any additional factors discussed under “Part I — Item 1A. Risk
Factors,” in our Annual Report on Form 10-K for the year ended
December 31, 2023, and other Securities and Exchange Commission
(“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 do not intend and undertake no obligation to update
any forward-looking information to reflect actual results or 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)
December 31, 2023
December 31, 2022
(unaudited)
Assets
Cash and cash equivalents
$
460,870
$
766,418
Restricted cash
3,622
13,599
Flight equipment subject to operating
leases
31,787,241
29,466,888
Less accumulated depreciation
(5,556,033
)
(4,928,503
)
26,231,208
24,538,385
Deposits on flight equipment purchases
1,203,068
1,344,973
Other assets
2,553,484
1,733,330
Total assets
$
30,452,252
$
28,396,705
Liabilities and Shareholders’
Equity
Accrued interest and other payables
$
1,164,140
$
696,899
Debt financing, net of discounts and
issuance costs
19,182,657
18,641,063
Security deposits and maintenance reserves
on flight equipment leases
1,519,719
1,293,929
Rentals received in advance
143,861
147,654
Deferred tax liability
1,281,837
970,797
Total liabilities
$
23,292,214
$
21,750,342
Shareholders’ Equity
Preferred Stock, $0.01 par value;
50,000,000 shares authorized; 10,600,000 (aggregate liquidation
preference of $850,000) shares issued and outstanding at December
31, 2023 and December 31, 2022, respectively
$
106
$
106
Class A common stock, $0.01 par value;
500,000,000 shares authorized; 111,027,252 and 110,892,097 shares
issued and outstanding at December 31, 2023 and December 31, 2022,
respectively
1,110
1,109
Class B Non-Voting common stock, $0.01 par
value; authorized 10,000,000 shares; no shares issued or
outstanding
—
—
Paid-in capital
3,287,234
3,255,973
Retained earnings
3,869,813
3,386,820
Accumulated other comprehensive income
1,775
2,355
Total shareholders’ equity
$
7,160,038
$
6,646,363
Total liabilities and shareholders’
equity
$
30,452,252
$
28,396,705
Air Lease Corporation and
Subsidiaries
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share,
per share amounts and percentages)
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
(unaudited)
Revenues
Rental of flight equipment
$
644,074
$
561,285
$
2,477,607
$
2,214,508
Aircraft sales, trading and other
72,494
40,325
207,370
102,794
Total revenues
716,568
601,610
2,684,977
2,317,302
Expenses
Interest
169,355
134,303
654,910
492,924
Amortization of debt discounts and
issuance costs
13,639
13,482
54,053
53,254
Interest expense
182,994
147,785
708,963
546,178
Depreciation of flight equipment
273,113
252,860
1,068,772
965,955
Write-off of Russian fleet, net of
(recoveries)
(67,022
)
(30,877
)
(67,022
)
771,476
Selling, general and administrative
49,798
45,862
186,015
156,855
Stock-based compensation expense
11,285
5,804
34,615
15,603
Total expenses
450,168
421,434
1,931,343
2,456,067
Income/(loss) before taxes
266,400
180,176
753,634
(138,765
)
Income tax (expense)/benefit
(45,349
)
(34,865
)
(139,012
)
41,741
Net income/(loss)
$
221,051
$
145,311
$
614,622
$
(97,024
)
Preferred stock dividends
(10,425
)
(10,425
)
(41,700
)
(41,700
)
Net income/(loss) attributable to
common stockholders
$
210,626
$
134,886
$
572,922
$
(138,724
)
Earnings/(Loss) per share of common
stock:
Basic
$
1.90
$
1.22
$
5.16
$
(1.24
)
Diluted
$
1.89
$
1.21
$
5.14
$
(1.24
)
Weighted-average shares of common stock
outstanding
Basic
111,027,252
110,892,097
111,005,088
111,626,508
Diluted
111,410,767
111,162,063
111,438,589
111,626,508
Other financial data
Pre-tax margin
37.2
%
29.9
%
28.1
%
(6.0
)%
Pre-tax return on common equity (trailing
twelve months)
11.8
%
(3.0
)%
11.8
%
(3.0
)%
Adjusted net income before income
taxes(1)
$
213,877
$
158,160
$
733,580
$
659,868
Adjusted diluted earnings per share before
income taxes(1)
$
1.92
$
1.42
$
6.58
$
5.89
Adjusted pre-tax margin(1)
29.8
%
26.3
%
27.3
%
28.5
%
Adjusted pre-tax return on common equity
(trailing twelve months)(1)
12.1
%
11.0
%
12.1
%
11.0
%
(1)
Adjusted net income before income taxes
(defined as net income/(loss) attributable to common stockholders
excluding the effects of certain non-cash items, one-time or
non-recurring items, such as net write-offs and recoveries of our
Russian fleet, that are not expected to continue in the future and
certain other items), adjusted pre-tax margin (defined as adjusted
net income before income taxes divided by total revenues), 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) and adjusted pre-tax return on
common equity (defined as adjusted net income before income taxes
divided by average common shareholders' equity) are measures of
operating performance that are not defined by GAAP and should not
be considered as an alternative to net income/(loss) attributable
to common stockholders, pre-tax margin, earnings/(loss) per share,
diluted earnings/(loss) per share and pre-tax return on common
equity, or any other performance measures derived in accordance
with GAAP. Adjusted net income before income taxes, adjusted
pre-tax margin, adjusted diluted earnings per share before income
taxes and adjusted pre-tax return on common equity 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 pre-tax margin,
adjusted diluted earnings per share before income taxes and
adjusted pre-tax return on common equity 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 pre-tax margin, adjusted
diluted earnings per share before income taxes and adjusted pre-tax
return on common equity, 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 pre-tax margin, adjusted diluted earnings
per share before income taxes and adjusted pre-tax return on common
equity 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
pre-tax margin, adjusted diluted earnings per share before income
taxes and adjusted pre-tax return on common equity may differ from
the adjusted net income before income taxes, adjusted pre-tax
margin, adjusted diluted earnings per share before income taxes and
adjusted pre-tax return on common equity or analogous calculations
of other companies in our industry, limiting their usefulness as a
comparative measure.
The following table shows the
reconciliation of the numerator for adjusted pre-tax margin (in
thousands, except percentages):
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
(unaudited)
Reconciliation of the numerator for
adjusted pre-tax margin (net income/(loss) attributable to common
stockholders to adjusted net income before income taxes):
Net income/(loss) attributable to common
stockholders
$
210,626
$
134,886
$
572,922
$
(138,724
)
Amortization of debt discounts and
issuance costs
13,639
13,482
54,053
53,254
Write-off of Russian fleet, net of
(recoveries)
(67,022
)
(30,877
)
(67,022
)
771,476
Stock-based compensation expense
11,285
5,804
34,615
15,603
Income tax expense/(benefit)
45,349
34,865
139,012
(41,741
)
Adjusted net income before income
taxes
$
213,877
$
158,160
$
733,580
$
659,868
Denominator for adjusted pre-tax
margin:
Total revenues
$
716,568
$
601,610
$
2,684,977
$
2,317,302
Adjusted pre-tax margin(a)
29.8
%
26.3
%
27.3
%
28.5
%
(a) Adjusted pre-tax margin is adjusted
net income before income taxes divided by total revenues
The following table shows the
reconciliation of the numerator for adjusted diluted earnings per
share before income taxes (in thousands, except share and per share
amounts):
Three Months Ended
December 31,
Year Ended December
31,
2023
2022
2023
2022
(unaudited)
Reconciliation of the numerator for
adjusted diluted earnings per share (net income/(loss) attributable
to common stockholders to adjusted net income before income
taxes):
Net income/(loss) attributable to common
stockholders
$
210,626
$
134,886
$
572,922
$
(138,724
)
Amortization of debt discounts and
issuance costs
13,639
13,482
54,053
53,254
Write-off of Russian fleet, net of
(recoveries)
(67,022
)
(30,877
)
(67,022
)
771,476
Stock-based compensation expense
11,285
5,804
34,615
15,603
Income tax expense/(benefit)
45,349
34,865
139,012
(41,741
)
Adjusted net income before income
taxes
$
213,877
$
158,160
$
733,580
$
659,868
Denominator for adjusted diluted
earnings per share:
Weighted-average diluted common shares
outstanding
111,410,767
111,162,063
111,438,589
111,626,508
Potentially dilutive securities, whose
effect would have been anti-dilutive
—
—
—
361,186
Adjusted weighted-average diluted common
shares outstanding
111,410,767
111,162,063
111,438,589
111,987,694
Adjusted diluted earnings per share before
income taxes(b)
$
1.92
$
1.42
$
6.58
$
5.89
(b) Adjusted diluted earnings per share
before income taxes is adjusted net income before income taxes
divided by adjusted weighted-average diluted common shares
outstanding
The following table shows the
reconciliation of pre-tax return on common equity to adjusted
pre-tax return on common equity (in thousands, except
percentages):
Year Ended December
31,
2023
2022
(unaudited)
Reconciliation of the numerator for
adjusted pre-tax return on common equity (net income/(loss)
attributable to common stockholders to adjusted net income before
income taxes):
Net income/(loss) attributable to common
stockholders
$
572,922
$
(138,724
)
Amortization of debt discounts and
issuance costs
54,053
53,254
Write-off of Russian fleet, net of
(recoveries)
(67,022
)
771,476
Stock-based compensation expense
34,615
15,603
Income tax expense/(benefit)
139,012
(41,741
)
Adjusted net income before income
taxes
$
733,580
$
659,868
Reconciliation of denominator for
pre-tax return on common equity to adjusted pre-tax return on
common equity:
Common shareholders' equity as of
beginning of the period
$
5,796,363
$
6,158,568
Common shareholders' equity as of end of
the period
$
6,310,038
$
5,796,363
Average common shareholders' equity
$
6,053,201
$
5,977,466
Adjusted pre-tax return on common
equity(c)
12.1
%
11.0
%
(c) Adjusted pre-tax return on common
equity is adjusted net income before income taxes divided by
average common shareholders’ equity
Air Lease Corporation and
Subsidiaries
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Year Ended December
31,
2023
2022
(unaudited)
Operating Activities
Net income/(loss)
$
614,622
$
(97,024
)
Adjustments to reconcile net income/(loss)
to net cash provided by operating activities:
Depreciation of flight equipment
1,068,772
965,955
Write-off of Russian fleet, net of
(recoveries)
(67,022
)
771,476
Stock-based compensation expense
34,615
15,603
Deferred taxes
133,358
(43,492
)
Amortization of prepaid lease costs
75,389
47,849
Amortization of discounts and debt
issuance costs
54,053
53,254
Gain on aircraft sales, trading and other
activity
(226,945
)
(113,103
)
Changes in operating assets and
liabilities:
Other assets
48,310
(232,613
)
Accrued interest and other payables
13,333
255
Rentals received in advance
(1,605
)
13,990
Net cash provided by operating
activities
1,746,880
1,382,150
Investing Activities
Acquisition of flight equipment under
operating lease
(3,789,113
)
(2,904,723
)
Payments for deposits on flight equipment
purchases
(433,452
)
(518,270
)
Proceeds from aircraft sales, trading and
other activity
1,684,814
235,424
Proceeds from settlement of insurance
claim
64,714
—
Acquisition of aircraft furnishings,
equipment and other assets
(305,346
)
(216,635
)
Net cash used in investing activities
(2,778,383
)
(3,404,204
)
Financing Activities
Cash dividends paid on Class A common
stock
(88,792
)
(83,253
)
Common shares repurchased
—
(150,000
)
Cash dividends paid on preferred stock
(41,700
)
(41,700
)
Tax withholdings on stock-based
compensation
(3,354
)
(8,903
)
Net change in unsecured revolving
facility
80,000
1,020,000
Proceeds from debt financings
2,993,732
2,659,996
Payments in reduction of debt
financings
(2,593,338
)
(2,085,898
)
Debt issuance costs
(13,052
)
(6,827
)
Security deposits and maintenance reserve
receipts
398,345
417,224
Security deposits and maintenance reserve
disbursements
(15,863
)
(26,860
)
Net cash provided by financing
activities
715,978
1,693,779
Net (decrease)/increase in cash
(315,525
)
(328,275
)
Cash, cash equivalents and restricted cash
at beginning of period
780,017
1,108,292
Cash, cash equivalents and restricted cash
at end of period
$
464,492
$
780,017
Supplemental Disclosure of Cash Flow
Information
Cash paid during the period for interest,
including capitalized interest of $43,093 and $39,655 at December
31, 2023 and 2022, respectively
$
693,826
$
533,897
Cash paid for income taxes
$
7,801
$
6,362
Supplemental Disclosure of Noncash
Activities
Buyer furnished equipment, capitalized
interest and deposits on flight equipment purchases applied to
acquisition of flight equipment and other assets
$
827,377
$
914,501
Flight equipment subject to operating
leases reclassified to flight equipment held for sale
$
1,730,212
$
377,131
Flight equipment subject to operating
leases reclassified to investment in sales-type lease
$
66,907
$
255,205
Cash dividends declared on Class A common
stock, not yet paid
$
23,316
$
22,178
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214543566/en/
Investors: Jason Arnold Vice President, Investor
Relations Email: investors@airleasecorp.com
Media: Laura Woeste Senior Manager, Media and Investor
Relations Email: press@airleasecorp.com
Ashley Arnold Senior Manager, Media and Investor Relations
Email: press@airleasecorp.com
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