ALC reports quarterly results

Dino D'Amore
By Dino D'Amore August 11, 2015 14:54

ALC reports quarterly results

Air Lease Corporation (ALC) has reported financial results for the three and six months ended June 30, 2015. Revenues increased 19% to $305 million for the three months ended June 30, 2015 as compared to $256 million for the three months ended June 30, 2014. Income before taxes increased 23% to $118 million for the three months ended June 30, 2015 as compared to $96 million for the three months ended June 30, 2014.

ALC recorded its highest quarterly pretax profit margin to date which was 39% for the three months ended June 30, 2015 compared to a pretax profit margin of 37% for the three months ended June 30, 2014. The lessor recorded $457 million in proceeds from the sale of 14 aircraft resulting in a gain of $16 million for the three months ended June 30, 2015.

Diluted EPS increased 21% to $0.70 for the three months ended June 30, 2015 as compared to $0.58 for the three months ended June 30, 2014.

ALC completed an amendment to its Syndicated Unsecured Revolving Credit Facility increasing the capacity by $350 million to $2.7 billion and extending the final maturity to May 2019 with an interest rate of LIBOR plus 1.25%.
ALC’s Board of Directors declared a quarterly cash dividend of $0.04 per share on our outstanding common stock. The dividend will be paid on October 6, 2015 to holders of record of our common stock as of September 10, 2015.

“ALC generated a 39% pretax profit margin during the second quarter, its highest since inception. This strong result reflects the growing earnings stream from our diversified customer base, our healthy lease yields, sales proceeds and our investment grade capital structure. Global passenger demand has continued to grow at 6.3% through the first half of the year, which continues to provide a positive environment for airline performance. Demand for modern, fuel efficient jets remains robust and provides a solid underpinning of aircraft values,” said Steven F. Udvar-Házy, Chairman and Chief Executive Officer of Air Lease Corporation.

“We had our largest quarter of aircraft deliveries to date at $1.3 billion of aircraft and also increased the sales of aircraft to $457 million due to continued strength in the secondary markets. Low fuel prices have prompted more early inquiries from our airline customers about lease extensions on current generation aircraft. The lease rate factor on our overall portfolio remains healthy and consistent,” said John L. Plueger, President and Chief Operating Officer of Air Lease Corporation.

As of June 30, 2015, ALC owned 223 aircraft in our operating lease portfolio and leased the aircraft to a globally diversified customer base of 84 airlines in 47 countries. During the quarter ended June 30, 2015, the lessor took delivery of 18 aircraft from its order book. In addition, it sold 14 aircraft from its operating lease portfolio and transferred four aircraft to flight equipment held for sale during the quarter ended June 30, 2015. ALC added five aircraft to our managed fleet portfolio ending the quarter with 24 aircraft managed for third parties as of June 30, 2015.

ALC ended the second quarter of 2015 with total debt, net of discounts and issuance costs, of $7.2 billion as compared to $6.6 billion as of December 31, 2014. Total debt was comprised of $6.4 billion of unsecured debt, representing 87% of its debt portfolio as of June 30, 2015 from 82% as of December 31, 2014. In addition, ALC’s fixed rate debt increased to 77% as of June 30, 2015 from 75% as of December 31, 2014.

During the quarter, the company completed an amendment to its Syndicated Unsecured Revolving Credit Facility increasing the capacity to $2.7 billion and extending the availability period to May 2019. ALC ended the quarter with $2.5 billion in liquidity and a debt to equity ratio of 2.5:1.

Dino D'Amore
By Dino D'Amore August 11, 2015 14:54