Air Lease Corporation Q1 2014 Results

Dino D'Amore
By Dino D'Amore May 12, 2014 15:48

Air Lease Corporation Q1 2014 Results

During the three months to March 31, 2014, Air Lease Corporation (ALC) has reported diluted EPS up by 50% to $0.57 per share compared to $0.38 per share for the same period last year. Revenues increased 28% to $246 million, compared to $192 million in the 2013 period. Income before taxes increased 54% to $95 million with a pretax margin of 39% compared to income before taxes of $62 million with a pretax margin of 32% for the three months ended March 31, 2013.

ALC recorded $15.9 million in gains on aircraft sales, trading and other activity, and placed orders for nine additional aircraft from Airbus and Boeing to deliver in 2014 through 2017.

ALC signed forward lease placements with four new airlines further diversifying its global customer base.

On May 5, 2014, ALC amended its Syndicated Unsecured Revolving Credit Facility increasing the aggregate capacity by $100 million to $2.1 billion and extended the availability period by one year to May 2018.

The lessor completed a senior unsecured notes offering in March 2014, issuing $500 million with a coupon of 3.875%, maturing in 2021.

ALC has declared a quarterly cash dividend of $0.03 per share on its outstanding common stock.

“ALC started off 2014 with another record quarter of profitability. Globally, all indications point to continued strength in overall airline financial health, profitability, and better capacity management. The demand from airlines is outpacing ALC’s existing order pipeline of new aircraft and therefore we topped up orders at Airbus, Boeing, and ATR to facilitate customer needs,” said Steven F. Udvar-Házy, Chairman and Chief Executive Officer of Air Lease Corporation.

“We continue to diversify our portfolio by adding new customers to our fleet with long leases attached. We took advantage of a healthy secondary market for aircraft trading and we sold four mid-life aircraft for gains. The capital markets have remained very receptive to our strengthening credit profile and have allowed us to drive credit spreads tighter with each successive debt issuance,” said John L. Plueger, President and Chief Operating Officer of Air Lease Corporation.

ALC ended the first quarter of 2014 with total debt outstanding of $5.94 billion as compared to $5.85 billion as of December 31, 2013.

Its diversified banking group has provided ALC in excess of $4.3 billion in financing and ALC has successfully accessed the debt capital markets for $3.8 billion in unsecured financing. ALC ended the first quarter of 2014 with total unsecured debt outstanding of $4.6 billion compared to $4.3 billion as of December 31, 2013, increasing the Company’s unsecured debt as a percentage of total debt to 77.0% as of March 31, 2014 compared to 73.5% as of December 31, 2013. The Company’s fixed rate debt as a percentage of total debt increased to 69.4% as of March 31, 2014 from 62.0% as of December 31, 2013.

In the first quarter 2014, ALC raised additional debt financing aggregating $525.0 million, which included $500.0 million in senior unsecured notes due 2021 that bear interest at a rate of 3.875% and $25.0 million in senior unsecured notes due 2024 that bear interest at a rate of 4.85%.

ALC ended the first quarter of 2014 with a debt to equity ratio of 2.3:1 and available liquidity of $2.1 billion which is comprised of unrestricted cash of $256.1 million and undrawn balances under our warehouse facilities and unsecured revolving credit facilities of $1.8 billion. ALC comments that its financing strategy “remains focused on raising unsecured debt in the global bank and capital markets”.

Dino D'Amore
By Dino D'Amore May 12, 2014 15:48
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