Air Lease Corporation Announces First Quarter 2012 Results
Air Lease Corporation (ALC)AL?-1.21%?announced today the results of its operations for the quarter ended March 31, 2012.
Q1 Highlights
Air Lease Corporation reports another quarter of consecutive fleet, profitability and financing growth:
? Basic EPS increased to $0.27 per share in the first quarter of 2012 compared to $0.25 in the fourth quarter of 2011 and $0.05 in the first quarter of 2011.
? Pretax profit margin of 31.4%, marking the third consecutive quarter with a pretax profit margin in excess of 30%.
? Revenues increased to $133 million in the first quarter of 2012 compared to $115 million in the fourth quarter of 2011 and $55 million in the first quarter of 2011. Pretax income increased to $42 million in the first quarter of 2012 compared to $39 million in the fourth quarter of 2011 and $5 million in the first quarter of 2011.
? Raised $1.7 billion of incremental debt financing in the first quarter of 2012.
? Completed our debut $1 billion senior unsecured notes offering, which priced to yield 5.625% at par, maturing in 2017.
? Took delivery of 12 additional aircraft from our pipeline growing our fleet to 114 aircraft at the end of the first quarter of 2012.
? Reduced the weighted-average age of our fleet to 3.4 years compared to 3.6 years at the end of the fourth quarter of 2011 and 3.5 years at the end of the first quarter of 2011.
The following table summarizes the results for Q1 2012, Q4 2011 and Q1 2011 (in thousands, except share amounts):
Q1 2012 Q4 2011 Q1 2011 ------------ ------------ ----------- Revenues $ 132,553 $ 115,057 $ 55,215 Pretax income $ 41,610 $ 38,688 $ 4,924 Net income $ 26,927 $ 24,762 $ 3,176 Cash provided by operating activities $ 101,522 $ 100,969 $ 38,732 Adjusted net income(1) $ 34,100 $ 31,724 $ 11,713 Adjusted EBITDA(1) $ 118,317 $ 102,167 $ 45,249 Net income per share: Basic $ 0.27 $ 0.25 $ 0.05 Diluted $ 0.26 $ 0.24 $ 0.05
(1) See notes 1 and 2 to the Consolidated Statements of Income included in this earnings release for a discussion of the non-GAAP measures adjusted net income and adjusted EBITDA.
?ALC saw demand holding up for new aircraft lease placements in the 2013 ? 2015 delivery time frame, particularly in Asia. Global passenger traffic continued to grow, which partially offset the higher fuel costs that drove lower airline financial performance during the first quarter. Our forward lease placements have been balanced across airlines with strong credit quality and competitive operating strategies,? said Steven F. Udvar-Hazy, Chairman and Chief Executive Officer of Air Lease Corporation.
?During Q1 we executed our growth plan by taking delivery of 12 aircraft from our pipeline, finishing the quarter with 114 aircraft spread across a diverse customer base of 59 airlines based in 34 countries. ALC?s overall portfolio maintained consistent lease yields and once again delivered a pre-tax operating margin exceeding 30%,? said John L. Plueger, President and Chief Operating Officer of Air Lease Corporation.
?In 2012 we have continued to strengthen our balance sheet with landmark transactions including our $1 billion unsecured bond issuance and our $850 million agented unsecured revolving credit facility. These financings provide us with ample liquidity and the operational flexibility to execute our growth plan,? said Gregory B. Willis, Senior Vice President and Chief Financial Officer of Air Lease Corporation.
Fleet Growth
Building on our base of 102 aircraft at December 31, 2011, we added 12 aircraft during the first quarter of 2012 and ended the quarter with 114 aircraft spread across a diverse and balanced customer base of 59 airlines based in 34 countries.
Below are portfolio metrics of our fleet as of March 31, 2012 and December 31, 2011 (dollars in thousands):
March 31, 2012 December 31, 2011 ------------------ ------------------- Fleet size 114 102 Weighted-average fleet age(1) 3.4 years 3.6 years Weighted-average remaining lease term(1) 6.9 years 6.6 years Aggregate fleet cost $ 4,933,285 $ 4,368,985 (1) Weighted-average fleet age and remaining lease term calculated based on net book value.
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 March 31, 2012 and December 31, 2011:
March 31, 2012 December 31, 2011 -------------------- -------------------- Region % of net book value % of net book value ----------------------------------------- ------------------ ------------------ Europe 42.9 % 40.6 % Asia/Pacific 33.6 33.5 Central America, South America and Mexico 11.4 12.2 U.S. and Canada 8.0 9.1 The Middle East and Africa 4.1 4.6 --------- --------- Total 100.0 % 100.0 % --------- --------- --------- ---------
The following table sets forth the number of aircraft we leased by aircraft type as of March 31, 2012 and December 31, 2011:
March 31, 2012 December 31, 2011 ----------------------- ------------------------ Number of % of Number of % of Aircraft type aircraft total aircraft total --------- ------- --------- ------- Airbus A319/320/321 34 29.8 % 31 30.4 % Airbus A330-200/300 14 12.3 11 10.8 Boeing 737-700/800 38 33.3 38 37.2 Boeing 767-300ER 3 2.6 3 2.9 Boeing 777-200/300ER 5 4.4 5 4.9 Embraer E175/190 16 14.1 12 11.8 ATR 72-600 4 3.5 2 2.0 --------- ----- --------- ----- Total 114 100.0 % 102 100.0 % --------- ----- -- --------- ----- --
We have made further progress in placing our aircraft. As of March 31, 2012, we have entered into contracts for the lease of all 35 aircraft delivering in 2012, for 28 out of 30 new aircraft delivering in 2013, for 22 out of 26 new aircraft delivering in 2014 and five out of 24 new aircraft delivering in 2015.
Debt Financing Activities
During the first quarter of 2012, the Company raised an incremental $1.7 billion in debt financing. Of this amount $1.5 billion, or 88.5%, is unsecured, comprised of: $1.0 billion in senior unsecured notes issued in reliance upon Rule 144A under the Securities Act, $155.0 million in senior unsecured notes issued in a private placement in reliance upon Rule 144A under the Securities Act, $200.0 million in short-term unsecured bridge financing from two members of our banking group in connection with the closing of four European Export Credit Agency (?ECA?) supported aircraft deliveries, $115.0 million in unsecured term financing and $12.5 million of seller financing. We ended the quarter with total unsecured debt outstanding of $1.9 billion. The Company?s unsecured debt as a percentage of total debt increased to 50.5% as of March 31, 2012 from 31.7% as of December 31, 2011. The Company?s fixed debt as a percentage of total debt increased to 51.5% as of March 31, 2012 from 24.3% as of December 31, 2011. We ended the first quarter of 2012 with a conservative balance sheet with low leverage and ample liquidity of $1.6 billion.
In the second quarter of 2012, the Company entered into a three-year senior unsecured revolving credit facility in excess of $850 million (the ?Syndicated Unsecured Revolving Credit Facility?) with a borrowing rate of LIBOR plus 1.75% with no LIBOR floor. The Syndicated Unsecured Revolving Credit Facility was arranged by six joint lead arrangers and joint book runners, including J.P. Morgan Securities LLC, Citigroup Global Markets Inc., RBC Capital Markets, BMO Capital Markets, Commonwealth Bank of Australia and Wells Fargo Securities, LLC.
We will continue to focus our financing efforts throughout 2012 on continuing to raise unsecured debt through international and domestic capital markets transactions and in the global bank market, reinvesting cash flow from operations and through optional financings including government guaranteed loan programs from the ECAs in support of our new Airbus aircraft deliveries, Ex-Im Bank in support of our new Boeing aircraft deliveries and direct financing from BNDES/SBCE in support of our new Embraer aircraft deliveries.
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