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Air Lease Corporation Announces Fiscal Year & Fourth Quarter 2019 Results

Air Lease Corporation ("ALC") (NYSE: AL) announces financial results for the year and three months ended December 31, 2019.

  • Revenues:
    • $549 million for the three months ended December 31, 2019, an increase of 21.9%
    • $2.0 billion for the full year 2019, an increase of 20.1%
  • Diluted earnings per share:
    • $1.42 for the three months ended December 31, 2019, an increase of 14.5%
    • $5.09 for the full year 2019, an increase of 10.7%
  • Adjusted diluted earnings per share before income taxes:
    • $1.92 for the three months ended December 31, 2019, an increase of 16.4%
    • $6.91 for the full year 2019, an increase of 11.5%
  • Margin:
    • Pre-tax profit margin of 36.5% for the full year 2019
    • Adjusted pre-tax profit margin of 38.7% for the full year 2019
  • Return on common equity:
    • Pre-tax return on common equity of 14.2% for the full year 2019
    • Adjusted pre-tax return on common equity of 15.4% for the full year 2019

Highlights

  • Since our inception in 2010, we have built a leasing platform in size and scale exceeding $50 billion, consisting of approximately $22 billion in assets, $27 billion in aircraft orders and $3 billion in managed aircraft.
  • During the fourth quarter of 2019, we took delivery of 11 aircraft from our order book and purchased one aircraft from the secondary market, representing $825 million in aircraft investments. As of December 31, 2019, we owned 292 aircraft in our operating lease portfolio, with a net book value of $18.7 billion, a weighted average age of 3.5 years and a weighted average lease term remaining of 7.2 years.
  • Finalized agreements to purchase an additional 102 aircraft comprised of 25 Airbus A321neo aircraft, 27 Airbus A321neo XLR and 50 Airbus A220 aircraft, with a purchase option for an additional 25 Airbus A220 aircraft.
  • Entered into 145 leases, lease extensions and letters of intent in 2019, ending the year with a customer base of 106 airlines in 59 countries.
  • To date, we placed 89% of our contracted order book positions on long-term leases for aircraft delivering through 2021 and 79% through 2022.
  • Ended the year with $29.1 billion in committed minimum future rental payments consisting of $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and $15.0 billion in minimum future rental payments related to aircraft on order.
  • Issued approximately $3.2 billion of senior unsecured medium-term notes in 2019 and ended the year with total liquidity of $6.3 billion.
  • Declared a quarterly cash dividend of $0.15 per share on our outstanding common stock for the fourth quarter of 2019. The dividend will be paid on April 8, 2020 to holders of record of our common stock as of March 20, 2020.

"I am extremely proud of Air Lease’s achievements in 2019 – our owned, managed, and on-order fleet now exceeds $50 billion, which is especially significant considering we are celebrating ALC’s tenth anniversary this month. 20% revenue growth, mid-teens ROE, and 37% pre-tax profit margin in 2019 reflect the strength and stability of our business. I commend the entire ALC team on our first ten years of success, and look forward to our next ten years," said John L. Plueger, Chief Executive Officer and President.

"Reflecting back to our start in February of 2010, we had no aircraft in our fleet but a clear vision of what we could achieve, and I’m pleased to say we’ve exceeded our expectations. ALC’s accomplishments represent our long term view of how to manage our company, and provide strong returns to our shareholders, through all conditions and environments, and gives us strong confidence in our future," said Steven F. Udvar-Házy, Executive Chairman of the Board.

The following table summarizes our operating results for the three and twelve months ended December 31, 2019 and 2018 (in thousands, except per share amounts and percentages):

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

 

2019

 

2018

 

$ change

 

% change

 

2019

 

2018

 

$ change

 

% change

 

Revenues

 

$

548,556

 

$

449,981

 

$

98,575

 

21.9

%

$

2,016,904

 

$

1,679,702

 

$

337,202

 

20.1

%

Income before taxes

 

$

206,417

 

$

172,028

 

$

34,389

 

20.0

%

$

735,685

 

$

640,138

 

$

95,547

 

14.9

%

Net income available to common stockholders

 

$

161,092

 

$

138,399

 

$

22,693

 

16.4

%

$

575,163

 

$

510,835

 

$

64,328

 

12.6

%

Adjusted net income before income taxes(1)

 

$

218,747

 

$

184,816

 

$

33,931

 

18.4

%

$

781,163

 

$

690,322

 

$

90,841

 

13.2

%

Diluted earnings per share

 

$

1.42

 

$

1.24

 

$

0.18

 

14.5

%

$

5.09

 

$

4.60

 

$

0.49

 

10.7

%

Adjusted diluted earnings per share before income taxes(1)

 

$

1.92

 

$

1.65

 

$

0.27

 

16.4

%

$

6.91

 

$

6.20

 

$

0.71

 

11.5

%

(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 earnings per share before income taxes and a reconciliation to their most comparable GAAP financial measures.

Flight Equipment Portfolio

Our owned fleet grew by 19.1% to a net book value of $18.7 billion as of December 31, 2019 compared to $15.7 billion as of December 31, 2018. As of December 31, 2019, our fleet was comprised of 292 owned aircraft in our operating lease portfolio, with a weighted-average age and remaining lease term of 3.5 years and 7.2 years, respectively, and 83 managed aircraft. We have a globally diversified customer base of 106 airlines in 59 countries.

During the quarter ended December 31, 2019, we took delivery of 11 new aircraft and purchased one aircraft from the secondary market, sold 19 aircraft and transferred eight aircraft to flight equipment held for sale which is included in Other assets on the Consolidated Balance Sheet.

The following table summarizes the key portfolio metrics of our fleet as of December 31, 2019 and 2018:

 

 

 

December 31, 2019

 

December 31, 2018

 

Aggregate fleet net book value

 

$

18.7 billion

 

$

15.7 billion

 

Weighted-average fleet age(1)

 

 

3.5 years

 

 

3.8 years

 

Weighted-average remaining lease term(1)

 

 

7.2 years

 

 

6.8 years

 

 

 

 

 

 

 

 

 

Owned fleet(2)

 

 

292

 

 

275

 

Managed fleet(2)

 

 

83

 

 

61

 

Aircraft on order

 

 

413

 

 

372

 

Aircraft purchase options(3)

 

 

70

 

 

50

 

Total

 

 

858

 

 

758

 

 

 

 

 

 

 

 

 

Current fleet contracted rentals

 

$

14.1 billion

 

$

11.8 billion

 

Committed fleet rentals

 

$

15.0 billion

 

$

13.9 billion

 

Total committed rentals

 

$

29.1 billion

 

$

25.7 billion

 

(1)

 

Weighted-average fleet age and remaining lease term calculated based on net book value of our operating lease portfolio.

(2)

 

As of December 31, 2019, we transferred eight aircraft to flight equipment held for sale which is included in Other assets on the Consolidated Balance Sheet. All of these aircraft are excluded from the owned fleet count and included in our managed fleet count.

(3)

 

As of December 31, 2019, we had options to acquire up to 45 Boeing 737-8 MAX aircraft and up to 25 Airbus A220 aircraft. As of December 31, 2018, we had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft.

The following table details the region concentration of our flight equipment subject to operating leases:

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

Region

 

% of Net Book Value

 

% of Net Book Value(1)

 

Europe

 

29.0

%

29.9

%

Asia (excluding China)

 

26.7

%

24.5

%

China

 

15.7

%

17.0

%

The Middle East and Africa

 

12.0

%

12.4

%

Central America, South America, and Mexico

 

6.0

%

6.9

%

U.S. and Canada

 

5.3

%

4.8

%

Pacific, Australia, and New Zealand

 

5.3

%

4.5

%

Total

 

100.0

%

100.0

%

(1)

As of December 31, 2018, we had six aircraft held for sale included in the calculations in the table above.

The following table details the composition of our flight equipment subject to operating leases by aircraft type:

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

Aircraft type

 

Number
of Aircraft

 

% of Total

 

Number of
Aircraft(1)

 

% of Total

 

Airbus A319-100

 

1

 

0.3

%

1

 

0.4

%

Airbus A320-200

 

21

 

7.2

%

35

 

12.7

%

Airbus A320-200neo

 

13

 

4.5

%

6

 

2.2

%

Airbus A321-200

 

28

 

9.6

%

34

 

12.4

%

Airbus A321-200neo

 

35

 

12.0

%

14

 

5.1

%

Airbus A330-200

 

12

 

4.1

%

15

 

5.4

%

Airbus A330-300

 

7

 

2.4

%

5

 

1.8

%

Airbus A330-900neo

 

7

 

2.4

%

1

 

0.4

%

Airbus A350-900

 

10

 

3.4

%

6

 

2.2

%

Boeing 737-700

 

4

 

1.4

%

4

 

1.4

%

Boeing 737-800

 

85

 

29.1

%

98

 

35.6

%

Boeing 737-8 MAX

 

15

 

5.1

%

14

 

5.1

%

Boeing 767-300ER

 

1

 

0.3

%

1

 

0.4

%

Boeing 777-200ER

 

1

 

0.3

%

1

 

0.4

%

Boeing 777-300ER

 

24

 

8.2

%

24

 

8.7

%

Boeing 787-9

 

23

 

8.0

%

15

 

5.4

%

Boeing 787-10

 

4

 

1.4

%

 

0.0

%

Embraer E190

 

1

 

0.3

%

1

 

0.4

%

Total

 

292

 

100.0

%

275

 

100.0

%

(1)

 

As of December 31, 2018, we had six aircraft held for sale included in the table above.

Debt Financing Activities

We ended the fourth quarter of 2019 with total debt financing, net of discounts and issuance costs, of $13.6 billion, resulting in a debt to equity ratio of 2.41:1.

Our debt financing was comprised of unsecured debt of $13.3 billion and such unsecured debt represented 96.6% of our debt portfolio as of December 31, 2019 as compared to 96.5% as of December 31, 2018. Our fixed rate debt represented 88.4% of our debt portfolio as of December 31, 2019 as compared to 86.4% as of December 31, 2018. Our composite cost of funds decreased to 3.34% as of December 31, 2019 as compared to 3.46% as of December 31, 2018.

In December 2019, the Company issued Canadian dollar ("C$") denominated debt of C$400.0 million in aggregate principal amount of 2.625% notes due 2024. The Company effectively hedged its foreign currency exposure on this transaction through a cross-currency swap that converts the borrowing rate to a fixed 2.535% U.S. dollar denominated rate.

Our debt financing was comprised of the following at December 31, 2019 and December 31, 2018 (in thousands, except percentages):

 

 

 

December 31,
2019

 

December 31,
2018

 

Unsecured

 

 

 

 

 

 

 

Senior notes

 

$

12,357,811

 

$

10,043,445

 

Term financings

 

 

883,050

 

 

607,340

 

Revolving credit facilities

 

 

20,000

 

 

602,000

 

Total unsecured debt financing

 

 

13,260,861

 

 

11,252,785

 

Secured

 

 

 

 

 

 

 

Term financings

 

 

428,824

 

 

371,203

 

Export credit financing

 

 

31,610

 

 

38,265

 

Total secured debt financing

 

 

460,434

 

 

409,468

 

 

 

 

 

 

 

 

 

Total debt financing

 

 

13,721,295

 

 

11,662,253

 

Less: Debt discounts and issuance costs

 

 

(142,429)

 

 

(123,348)

 

Debt financing, net of discounts and issuance costs

 

$

13,578,866

 

$

11,538,905

 

Selected interest rates and ratios:

 

 

 

 

 

 

 

Composite interest rate(1)

 

 

3.34

%

 

3.46

%

Composite interest rate on fixed rate debt(1)

 

 

3.39

%

 

3.42

%

Percentage of total debt at fixed rate

 

 

88.40

%

 

86.41

%

(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 14, 2020 at 4:30 PM Eastern Time to discuss the Company's financial results for the fourth quarter and year end 2019.

Investors can participate in the conference call by dialing (855) 308-8321 domestic or (330) 863-3465 international. The passcode for the call is 5634829.

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 February 14, 2020 until 7:30 PM ET on February 21, 2020. 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 5634829.

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. ALC routinely posts information that may be important to investors in the "Investors" section of ALC’s website at www.airleasecorp.com. Investors and potential investors are encouraged to consult the ALC website regularly for important information about ALC. The information contained on, or that may be accessed through, ALC’s website is not incorporated by reference into, and is not a part of, this press release.

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," "seeks," "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 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;
  • 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;
  • impaired financial condition and liquidity of our lessees;
  • changes in overall demand for commercial aircraft leasing and aircraft management services;
  • deterioration of economic conditions in the commercial aviation industry generally;
  • potential natural disasters and terrorist attacks and the amount of our insurance coverage, if any, relating thereto;
  • increased maintenance, operating or other expenses or changes in the timing thereof;
  • changes in the regulatory environment, including tariffs and other restrictions on trade;
  • our inability to effectively oversee our managed fleet;
  • the failure of any manufacturer to meet its contractual aircraft delivery obligations to us, including or as a result of technical or other difficulties with aircraft before or after delivery, resulting in our inability to deliver the aircraft to our lessees; 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, 2019, 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)

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

317,488

 

$

300,127

 

Restricted cash

 

 

20,573

 

 

22,871

 

Flight equipment subject to operating leases

 

 

21,286,154

 

 

17,985,324

 

Less accumulated depreciation

 

 

(2,581,817)

 

 

(2,278,214)

 

 

 

 

18,704,337

 

 

15,707,110

 

Deposits on flight equipment purchases

 

 

1,564,188

 

 

1,809,260

 

Other assets

 

 

1,102,569

 

 

642,440

 

Total assets

 

$

21,709,155

 

$

18,481,808

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Accrued interest and other payables

 

$

516,497

 

$

382,132

 

Debt financing, net of discounts and issuance costs

 

 

13,578,866

 

 

11,538,905

 

Security deposits and maintenance reserves on flight equipment leases

 

 

1,097,061

 

 

990,578

 

Rentals received in advance

 

 

143,692

 

 

119,526

 

Deferred tax liability

 

 

749,495

 

 

643,767

 

Total liabilities

 

$

16,085,611

 

$

13,674,908

 

Shareholders’ Equity

 

 

 

 

 

 

 

Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,000,000 shares of 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (aggregate liquidation preference of $250,000) issued and outstanding at December 31, 2019 and no shares issued or outstanding at December 31, 2018

 

 

100

 

 

 

Class A common stock, $0.01 par value; 500,000,000 shares authorized; 113,350,267 and 110,949,850 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively

 

 

1,134

 

 

1,110

 

Class B Non-Voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding

 

 

 

 

 

Paid-in capital

 

 

2,777,601

 

 

2,474,238

 

Retained earnings

 

 

2,846,106

 

 

2,331,552

 

Accumulated other comprehensive loss

 

$

(1,397)

 

$

 

Total shareholders’ equity

 

$

5,623,544

 

$

4,806,900

 

Total liabilities and shareholders’ equity

 

$

21,709,155

 

$

18,481,808

 

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts and percentages)

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental of flight equipment

 

$

504,391

 

$

437,096

 

$

1,916,869

 

$

1,631,200

 

Aircraft sales, trading and other

 

 

44,165

 

 

12,885

 

 

100,035

 

 

48,502

 

Total revenues

 

 

548,556

 

 

449,981

 

 

2,016,904

 

 

1,679,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

106,639

 

 

85,442

 

 

397,320

 

 

310,026

 

Amortization of debt discounts and issuance costs

 

 

10,361

 

 

8,475

 

 

36,691

 

 

32,706

 

Interest expense

 

 

117,000

 

 

93,917

 

 

434,011

 

 

342,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation of flight equipment

 

 

187,862

 

 

153,548

 

 

702,810

 

 

581,985

 

Selling, general and administrative

 

 

31,465

 

 

26,175

 

 

123,653

 

 

97,369

 

Stock-based compensation

 

 

5,812

 

 

4,313

 

 

20,745

 

 

17,478

 

Total expenses

 

 

342,139

 

 

277,953

 

 

1,281,219

 

 

1,039,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

 

206,417

 

 

172,028

 

 

735,685

 

 

640,138

 

Income tax expense

 

 

(41,482)

 

 

(33,629)

 

 

(148,564)

 

 

(129,303)

 

Net income

 

 

164,935

 

 

138,399

 

 

587,121

 

 

510,835

 

Preferred stock dividends

 

 

(3,843)

 

 

 

 

(11,958)

 

 

 

Net income available to common stockholders

 

$

161,092

 

$

138,399

 

$

575,163

 

$

510,835

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.43

 

$

1.29

 

$

5.14

 

$

4.88

 

Diluted

 

$

1.42

 

$

1.24

 

$

5.09

 

$

4.60

 

Weighted-average shares of common stock outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

113,033,348

 

 

107,017,743

 

 

111,895,433

 

 

104,716,301

 

Diluted

 

 

113,728,058

 

 

112,325,696

 

 

113,086,323

 

 

112,363,331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other financial data

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax profit margin

 

 

37.6

%

 

38.2

%

 

36.5

%

 

38.1

%

Adjusted net income before income taxes(1)

 

$

218,747

 

$

184,816

 

$

781,163

 

$

690,322

 

Adjusted pre-tax profit margin(1)

 

 

39.9

%

 

41.1

%

 

38.7

%

 

41.1

%

Adjusted diluted earnings per share before income taxes(1)(2)

 

$

1.92

 

$

1.65

 

$

6.91

 

$

6.20

 

Pre-tax return on common equity (trailing twelve months)

 

 

14.2

%

 

14.3

%

 

14.2

%

 

14.3

%

Adjusted pre-tax return on common equity (trailing twelve months)(1)

 

 

15.4

%

 

15.5

%

 

15.4

%

 

15.5

%

(1)

Adjusted net income before income taxes (defined as net income available to common stockholders 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 pre-tax profit 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 plus assumed conversions 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 available to common stockholders, pre-tax profit margin, earnings per share, diluted earnings 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 profit 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 profit 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 profit 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 profit 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 profit 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 profit 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 tables show the reconciliation of net income available to common stockholders to adjusted net income before income taxes and adjusted pre-tax profit margin (in thousands, except percentages):

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

(unaudited)

 

Reconciliation of net income available to common stockholders to adjusted net income before income taxes and adjusted pre-tax profit margin:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

161,092

 

$

138,399

 

$

575,163

 

$

510,835

 

Amortization of debt discounts and issuance costs

 

 

10,361

 

 

8,475

 

 

36,691

 

 

32,706

 

Stock-based compensation

 

 

5,812

 

 

4,313

 

 

20,745

 

 

17,478

 

Provision for income taxes

 

 

41,482

 

 

33,629

 

 

148,564

 

 

129,303

 

Adjusted net income before income taxes

 

$

218,747

 

$

184,816

 

$

781,163

 

$

690,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

548,556

 

$

449,981

 

$

2,016,904

 

$

1,679,702

 

Adjusted pre-tax profit margin

 

 

39.9

%

 

41.1

%

 

38.7

%

 

41.1

%

The following table shows the reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

(unaudited)

 

Reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

161,092

 

$

138,399

 

$

575,163

 

$

510,835

 

Amortization of debt discounts and issuance costs

 

 

10,361

 

 

8,475

 

 

36,691

 

 

32,706

 

Stock-based compensation

 

 

5,812

 

 

4,313

 

 

20,745

 

 

17,478

 

Provision for income taxes

 

 

41,482

 

 

33,629

 

 

148,564

 

 

129,303

 

Adjusted net income before income taxes

 

$

218,747

 

$

184,816

 

$

781,163

 

$

690,322

 

Assumed conversion of convertible senior notes

 

 

 

 

914

 

 

 

 

6,219

 

Adjusted net income before income taxes plus assumed conversions

 

$

218,747

 

$

185,730

 

$

781,163

 

$

696,541

 

Weighted-average diluted shares of common stock outstanding

 

 

113,728,058

 

 

112,325,696

 

 

113,086,323

 

 

112,363,331

 

Adjusted diluted earnings per share before income taxes

 

$

1.92

 

$

1.65

 

$

6.91

 

$

6.20

 

The following table shows the reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity (in thousands, except percentages):

 

 

 

Twelve Months
December 31,

 

 

 

2019

 

2018

 

 

 

(unaudited)

 

Reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity:

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

575,163

 

$

510,835

 

Amortization of debt discounts and issuance costs

 

 

36,691

 

 

32,706

 

Stock-based compensation

 

 

20,745

 

 

17,478

 

Provision for income taxes

 

 

148,564

 

 

129,303

 

Adjusted net income before income taxes

 

$

781,163

 

$

690,322

 

 

 

 

 

 

 

 

 

Common shareholders' equity as of the beginning of the period

 

$

4,806,900

 

$

4,127,442

 

Common shareholders' equity as of the end of the period

 

$

5,373,544

 

$

4,806,900

 

Average common shareholders' equity

 

$

5,090,222

 

$

4,467,171

 

 

 

 

 

 

 

 

 

Adjusted pre-tax return on common equity

 

 

15.4

%

 

15.5

%

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended
December 31,

 

 

 

2019

 

2018

 

 

 

(unaudited)

 

Operating Activities

 

 

 

 

 

 

 

Net income

 

$

587,121

 

$

510,835

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation of flight equipment

 

 

702,810

 

 

581,985

 

Stock-based compensation

 

 

20,745

 

 

17,478

 

Deferred taxes

 

 

92,049

 

 

129,303

 

Amortization of prepaid lease costs

 

 

32,849

 

 

24,579

 

Amortization of discounts and debt issuance costs

 

 

36,691

 

 

32,706

 

Gain on aircraft sales, trading and other activity

 

 

(81,994)

 

 

(34,442)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Other assets

 

 

(161,302)

 

 

(74,223)

 

Accrued interest and other payables

 

 

139,337

 

 

51,175

 

Rentals received in advance

 

 

24,166

 

 

14,705

 

Net cash provided by operating activities

 

 

1,392,472

 

 

1,254,101

 

Investing Activities

 

 

 

 

 

 

 

Acquisition of flight equipment under operating lease

 

 

(3,663,605)

 

 

(2,512,582)

 

Payments for deposits on flight equipment purchases

 

 

(884,459)

 

 

(976,101)

 

Proceeds from aircraft sales, trading and other activity

 

 

995,345

 

 

391,372

 

Acquisition of aircraft furnishings, equipment and other assets

 

 

(291,258)

 

 

(287,509)

 

Net cash used in investing activities

 

 

(3,843,977)

 

 

(3,384,820)

 

Financing Activities

 

 

 

 

 

 

 

Issuance of common stock upon exercise of options and warrants

 

 

44,885

 

 

4,826

 

Issuance of preferred stock

 

 

242,130

 

 

 

Cash dividends paid on Class A common stock

 

 

(58,026)

 

 

(41,563)

 

Preferred dividends paid

 

 

(11,958)

 

 

 

Tax withholdings on stock-based compensation

 

 

(4,272)

 

 

(7,548)

 

Net change in unsecured revolving facilities

 

 

(582,000)

 

 

(245,000)

 

Proceeds from debt financings

 

 

3,567,728

 

 

3,533,885

 

Payments in reduction of debt financings

 

 

(978,369)

 

 

(1,270,505)

 

Debt issuance costs

 

 

(11,280)

 

 

(11,475)

 

Security deposits and maintenance reserve receipts

 

 

310,220

 

 

242,524

 

Security deposits and maintenance reserve disbursements

 

 

(52,490)

 

 

(59,709)

 

Net cash provided by financing activities

 

 

2,466,568

 

 

2,145,435

 

Net increase in cash

 

 

15,063

 

 

14,716

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

322,998

 

 

308,282

 

Cash, cash equivalents and restricted cash at end of period

 

$

338,061

 

$

322,998

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

 

 

Cash paid during the period for interest, including capitalized interest of $59,358 and $52,817 at December 31, 2019 and 2018, respectively

 

$

442,132

 

$

332,426

 

Cash paid for income taxes

 

$

16,657

 

$

4,264

 

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

 

$

1,399,136

 

$

912,075

 

Cash dividends declared, not yet paid

 

$

17,003

 

$

14,421

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200214005463/en/

Contacts

Investors:
Mary Liz DePalma
Assistant Vice President, Investor Relations
Email: investors@airleasecorp.com

Jason Arnold
Assistant Vice President, Finance
Email: investors@airleasecorp.com

Media:
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Senior Manager, Media and Investor Relations
Email: press@airleasecorp.com