ALC issues full year results

Lauren Eldershaw
By Lauren Eldershaw February 25, 2019 10:35

ALC issues full year results

Air Lease Corporation (ALC) has reported revenue of $450 million for the three months ended December 31, 2018, an increase of 12.9%, and has booked $1.7 billion revenues for the full year 2018, an increase of 10.8%. The increase was credited principally to the continued growth of its fleet, partially offset by a decrease in ALC’s sales and trading activity.

Income before taxes increased $6 million or 3.8% to $172 million for the three months ended December 31, 2018, as compared to the three months ended December 31, 2017. This increase was principally driven by the continued growth of the fleet, partially offset by a decrease in aircraft sales and trading activity.

Net income decreased $333 million or 70.6% to $138 million representing $1.24 per diluted share for the three months ended December 31, 2018, as compared to the three months ended December 31, 2017. The decrease primarily resulted from the enactment of the Tax Reform Act, which resulted in a tax benefit of $354.1 million, or $3.16 per diluted share during the three months ended December 31, 2017. This decrease was partially offset by the growth in revenues highlighted above.

“We had a solid fourth quarter, concluding another successful year for ALC generating pre-tax return on equity of 14.3% and $1.25 billion of operating cash flow for the full year 2018. We are now in our tenth year of operation and expect to reach $20 billion in assets in 2019 with a strong balance sheet. We have good momentum on lease placements and a strong outlook on aircraft sales and financing, already issuing $700 million of senior unsecured notes in January. We remain confident and optimistic looking forward,” said John L. Plueger, Chief Executive Officer and President.

“Air Lease once again continued its steady growth in 2018 with 336 owned and managed aircraft as of year-end, a 14% increase over 2017. Our order book now stands at 91% placed through 2020, and we continue to see strong demand for our modern, fuel efficient aircraft driven by replacement needs and passenger traffic trends. We are pleased with our financial results, which are the outcome of our team’s dedication to serving our airline customers and adherence to our core operating principles,” said Steven F. Udvar-Házy, Executive Chairman of the Board.

During the fourth quarter, ALC took delivery of 12 aircraft from its order book, representing $881 million in aircraft investments, ending the quarter with an operating portfolio net book value of $15.7 billion with a weighted average age of 3.8 years and a weighted average lease term remaining of 6.8 years.

ALC sold five aircraft during the quarter for sales proceeds of $164 million. The lessor has placed 91% of its order book on long-term leases for aircraft delivering through 2020 and 72% through 2021.

ALC ended the year with $25.7 billion in committed minimum future rental payments consisting of $11.8 billion in contracted minimum rental payments on the aircraft in our existing fleet and $13.9 billion in minimum future rental payments related to aircraft on order.

In 2018, ALC issued a total of $3.03 billion of senior unsecured notes and ended the year with liquidity of $4.3 billion.
In January 2019, ALC issued $700.0 million in aggregate principal amount of senior unsecured medium-term notes due 2024 that bear interest at a rate of 4.250%.

ALC has declared a quarterly cash dividend of $0.13 per share on its outstanding common stock for the fourth quarter of 2018. The dividend will be paid on April 10, 2019.

Lauren Eldershaw
By Lauren Eldershaw February 25, 2019 10:35