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Air Lease Corporation Announces First Quarter 2023 Results

Air Lease Corporation (ALC) (NYSE: AL) announces financial results for the three months ended March 31, 2023.

“We’re pleased to report strong first quarter 2023 results, which benefitted from robust fleet growth. Global air travel demand continues to expand meaningfully with healthy airline yields, while aircraft capacity remains constrained. The need for new fuel-efficient commercial aircraft continues to rise, bolstering the value of our orderbook positions and existing fleet. While our deliveries exceeded expectations this quarter, we do foresee OEM delivery delays persisting for several years ahead,” said John L. Plueger, Chief Executive Officer and President, and Steven F. Udvar-Házy, Executive Chairman of the Board.

First Quarter 2023 Results

The following table summarizes our operating results for the three months ended March 31, 2023 and 2022 (in millions, except per share amounts and percentages):

Operating Results

 

Three Months Ended

March 31,

 

 

2023

 

 

 

2022

 

 

$ change

 

% change

Revenues

$

636.1

 

 

$

596.7

 

 

$

39.4

 

 

6.6

%

Operating expenses

 

(477.9

)

 

 

(396.0

)

 

 

(81.9

)

 

20.7

%

Write-off of Russian fleet

 

 

 

 

(802.4

)

 

 

802.4

 

 

%

Income/(loss) before taxes

 

158.3

 

(601.7

)

 

760.0

%

Net income/(loss) attributable to common stockholders

$

118.3

 

 

$

(479.4

)

 

$

597.7

 

 

%

Diluted earnings/(loss) per share

$

1.06

 

 

$

(4.21

)

 

$

5.27

 

 

%

Adjusted net income before income taxes(1)

$

166.8

 

 

$

200.9

 

 

$

(34.1

)

 

(17.0

)%

Adjusted diluted earnings per share before income taxes(1)

$

1.50

 

 

$

1.76

 

 

$

(0.26

)

 

(14.8

)%

Key Financial Ratios

Three Months Ended

March 31,

2023

 

 

2022

 

Pre-tax margin

24.9

%

 

(100.8

)%

Adjusted pre-tax margin(1)

26.2

%

 

33.7

%

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

10.2

%

 

(3.5

)%

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

11.0

%

 

11.8

%

 
 

(1)

Adjusted net income before income taxes, adjusted diluted earnings per share before income taxes, adjusted pre-tax margin and adjusted pre-tax return on common equity have been adjusted to exclude the effects of certain non-cash items, one-time or non-recurring items, such as write-offs of our Russian fleet, that are not expected to continue in the future and certain other items. See note 1 under the Consolidated Statements of Operations included in this earnings release for a discussion of the non-GAAP measures and a reconciliation to their most comparable GAAP financial measures.

Highlights

  • As of March 31, 2023, we had 437 aircraft in our owned fleet, with a net book value of $25.7 billion, a weighted average age of 4.5 years and a weighted average lease term remaining of 7.1 years. During the first quarter, we took delivery of 22 aircraft from our orderbook, representing approximately $1.4 billion in aircraft investments, ending the period with over $29 billion in total assets.
  • Placed 93% of our contracted orderbook positions on long-term leases for aircraft delivering through the end of 2024 and have placed 57% of our entire orderbook.
  • Ended the year with $30.5 billion in committed minimum future rental payments consisting of $16.3 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.2 billion in minimum future rental payments related to aircraft on order.
  • In January 2023, we issued $700.0 million of 5.30% Medium-Term Notes due 2028 and in March 2023, we completed the successful inaugural $600.0 million issuance of 5.85% trust certificates due 2028 in a Sukuk financing. Our Sukuk issuance represents the first ever offering of its kind into the Middle East market from a North American corporate issuer and the largest Sukuk offering from a U.S.-based borrower in history.
  • In April 2023, with the support of 49 financial institutions, we extended the final maturity of our $7.2 billion syndicated unsecured revolving credit facility by one year to May 5, 2027.
  • On April 28, 2023, our board of directors declared a quarterly cash dividend of $0.20 per share on our outstanding common stock. The next quarterly dividend of $0.20 per share will be paid on July 7, 2023 to holders of record of our common stock as of June 6, 2023.

Financial Overview

Our total revenues for the three months ended March 31, 2023 increased by 6.6% to $636.1 million as compared to the three months ended March 31, 2022. The increase in total revenues was primarily driven by the continued growth in our fleet partially offset by a net decrease in end of lease revenue. During the first quarter of 2023, we recognized $34.7 million in end of lease revenue from lease terminations as compared to approximately $59.6 million in end of lease revenue from the termination of our leasing activities in Russia in the prior year period.

Our net income attributable to common stockholders for the three months ended March 31, 2023 was $118.3 million, or $1.06 per diluted share compared to net loss of $479.4 million, or net loss of $4.21 per diluted share, for the three months ended March 31, 2022. The increase was due to the growth of our fleet and the effect of the write-off of our Russian fleet in the first quarter of 2022. The increase was partially offset by an increase in interest expense due to the increases in our composite cost of funds, aircraft transition costs and insurance expense in the current year period.

Our adjusted net income before income taxes during the three months ended March 31, 2023 was $166.8 million or $1.50 per adjusted diluted share as compared to $200.9 million or $1.76 per adjusted diluted share for the three months ended March 31, 2022. Despite the continued growth of our fleet, the decrease in our adjusted net income before income taxes for the three months ended March 31, 2023 as compared to 2022 was mainly driven by lower end of lease revenue recognized as discussed above and an increase in interest expense, aircraft transition costs and insurance expense.

Flight Equipment Portfolio

As of March 31, 2023 the net book value of our fleet increased to $25.7 billion, compared to $24.5 billion as of December 31, 2022. As of March 31, 2023, we owned 437 aircraft in our aircraft portfolio, comprised of 323 narrowbody aircraft and 114 widebody aircraft, and we managed 86 aircraft. The weighted average fleet age and weighted average remaining lease term of our fleet as of March 31, 2023 was 4.5 years and 7.1 years, respectively. We have a globally diversified customer base of 118 airlines in 63 countries as of March 31, 2023.

The following table summarizes the key portfolio metrics of our fleet as of March 31, 2023 and December 31, 2022:

 

March 31, 2023

 

December 31, 2022

Net book value of flight equipment subject to operating lease

$ 25.7 billion

 

$ 24.5 billion

Weighted-average fleet age(1)

4.5 years

 

4.5 years

Weighted-average remaining lease term(1)

7.1 years

 

7.1 years

 

 

 

 

Owned fleet

437

 

417

Managed fleet

86

 

85

Aircraft on order

376

 

398

Total

899

 

900

 

 

 

 

Current fleet contracted rentals

$ 16.3 billion

 

$ 15.6 billion

Committed fleet rentals

$ 14.2 billion

 

$ 15.8 billion

Total committed rentals

$ 30.5 billion

 

$ 31.4 billion

 

 

 

 

 

 

 

 

(1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease.

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

 

 

March 31, 2023

 

December 31, 2022

Region

 

% of Net Book Value

 

% of Net Book Value

Europe

 

33.0 %

 

32.5 %

Asia (excluding China)

 

29.4 %

 

29.1 %

China

 

10.8 %

 

11.4 %

The Middle East and Africa

 

8.6 %

 

9.3 %

Central America, South America, and Mexico

 

8.3 %

 

7.8 %

U.S. and Canada

 

6.5 %

 

6.3 %

Pacific, Australia, and New Zealand

 

3.4 %

 

3.6 %

Total

 

100.0 %

 

100.0 %

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

 

 

March 31, 2023

 

December 31, 2022

Aircraft type

 

Number of

Aircraft

 

% of Total

 

Number of

Aircraft

 

% of Total

Airbus A220-300

 

4

 

0.9 %

 

4

 

1.0 %

Airbus A319-100

 

1

 

0.2 %

 

1

 

0.2 %

Airbus A320-200

 

28

 

6.4 %

 

28

 

6.7 %

Airbus A320-200neo

 

23

 

5.3 %

 

23

 

5.5 %

Airbus A321-200

 

23

 

5.3 %

 

23

 

5.5 %

Airbus A321-200neo

 

84

 

19.2 %

 

78

 

18.7 %

Airbus A330-200

 

13

 

3.0 %

 

13

 

3.1 %

Airbus A330-300

 

5

 

1.1 %

 

5

 

1.2 %

Airbus A330-900neo

 

18

 

4.1 %

 

16

 

3.8 %

Airbus A350-900

 

14

 

3.2 %

 

13

 

3.1 %

Airbus A350-1000

 

6

 

1.4 %

 

6

 

1.4 %

Boeing 737-700

 

3

 

0.7 %

 

4

 

1.0 %

Boeing 737-800

 

81

 

18.5 %

 

82

 

19.7 %

Boeing 737-8 MAX

 

52

 

11.9 %

 

47

 

11.3 %

Boeing 737-9 MAX

 

23

 

5.3 %

 

15

 

3.7 %

Boeing 777-200ER

 

1

 

0.2 %

 

1

 

0.2 %

Boeing 777-300ER

 

24

 

5.5 %

 

24

 

5.8 %

Boeing 787-9

 

27

 

6.2 %

 

27

 

6.5 %

Boeing 787-10

 

6

 

1.4 %

 

6

 

1.4 %

Embraer E190

 

1

 

0.2 %

 

1

 

0.2 %

Total (1)

 

437

 

100.0 %

 

417

 

100.0 %

 

 

 

 

 

 

 

 

 

(1) As of March 31, 2023 and December 31, 2022, we had six and four aircraft, respectively, classified as flight equipment held for sale.

Debt Financing Activities

We ended the first quarter of 2023 with total debt financing, net of discounts and issuance costs, of $19.4 billion. As of March 31, 2023, 88.0% of our total debt financing was at a fixed rate and 99.4% was unsecured. As of March 31, 2023, our composite cost of funds was 3.42%. We ended the first quarter with total liquidity of $6.5 billion.

As of the end of the periods presented, our debt portfolio was comprised of the following components (dollars in millions):

 

March 31,

2023

 

December 31,

2022

Unsecured

 

 

 

Senior unsecured securities

$

17,196

 

 

$

17,095

 

Revolving credit facilities

 

1,673

 

 

 

1,020

 

Term financings

 

653

 

 

 

583

 

Total unsecured debt financing

 

19,522

 

 

 

18,698

 

Secured

 

 

 

Term financings

 

111

 

 

 

114

 

Export credit financing

 

10

 

 

 

11

 

Total secured debt financing

 

121

 

 

 

125

 

 

 

 

 

Total debt financing

 

19,643

 

 

 

18,823

 

Less: Debt discounts and issuance costs

 

(195

)

 

 

(182

)

Debt financing, net of discounts and issuance costs

$

19,448

 

 

$

18,641

 

Selected interest rates and ratios:

 

 

 

Composite interest rate(1)

 

3.42

%

 

 

3.07

%

Composite interest rate on fixed-rate debt(1)

 

3.20

%

 

 

2.98

%

Percentage of total debt at a fixed-rate

 

88.0

%

 

 

91.3

%

 

 

 

 

(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 May 1, 2023 at 4:30 PM Eastern Time to discuss the Company's financial results for the first quarter of 2023.

Investors can participate in the conference call by dialing 1 (888) 660-6652 domestic or 1 (646) 960-0554 international. The passcode for the call is 5952437.

The conference call will also be broadcast live through a link on the Investors 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 Investors page of the Air Lease Corporation website.

For your convenience, the conference call can be replayed in its entirety beginning on May 1, 2023 until 11:59 PM ET on May 8, 2023. If you wish to listen to the replay of this conference call, please dial 1 (800) 770-2030 domestic or 1 (647) 362-9199 international and enter passcode 5952437.

About Air Lease Corporation (NYSE: AL)

Air Lease Corporation is a leading global aircraft leasing company based in Los Angeles, California that has airline customers throughout the world. Air Lease Corporation and its team of dedicated and experienced professionals are principally engaged in purchasing new commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions. Air Lease Corporation routinely posts information that may be important to investors in the “Investors” section of its website at www.airleasecorp.com. Investors and potential investors are encouraged to consult Air Lease Corporation’s website regularly for important information. The information contained on, or that may be accessed through, Air Lease Corporation's website is not incorporated by reference into, and is not a part of, this press release.

Forward-Looking Statements

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this press release and include statements regarding, among other matters, the state of the airline industry, our access to the capital markets, the impact of Russia’s invasion of Ukraine and the impact of sanctions imposed on Russia, the impact of lease deferrals and other accommodations, aircraft delivery delays, the impact of inflation, rising interest rates and other macroeconomic conditions and other factors affecting our financial condition or results of operations. Words such as “can,” “could,” “may,” “predicts,” “potential,” “will,” “projects,” “continuing,” “ongoing,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and “should,” and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements, or industry results to vary materially from our future results, performance or achievements, or those of our industry, expressed or implied in such forward-looking statements. Such factors include, among others:

  • our inability to obtain additional capital on favorable terms, or at all, to acquire aircraft, service our debt obligations and refinance maturing debt obligations;
  • increases in our cost of borrowing or changes in interest rates;
  • our inability to generate sufficient returns on our aircraft investments through strategic acquisition and profitable leasing;
  • the failure of an aircraft or engine manufacturer to meet its delivery obligations to us, including or as a result of technical or other difficulties with aircraft before or after delivery;
  • our ability to pursue insurance claims to recover losses related to aircraft detained in Russia;
  • obsolescence of, or changes in overall demand for, our aircraft;
  • changes in the value of, and lease rates for, our aircraft, including as a result of aircraft oversupply, manufacturer production levels, our lessees’ failure to maintain our aircraft, rising inflation, appreciation of the U.S. Dollar, and other factors outside of our control;
  • impaired financial condition and liquidity of our lessees, including due to lessee defaults and reorganizations, bankruptcies or similar proceedings;
  • increased competition from other aircraft lessors;
  • the failure by our lessees to adequately insure our aircraft or fulfill their contractual indemnity obligations to us;
  • increased tariffs and other restrictions on trade;
  • changes in the regulatory environment, including changes in tax laws and environmental regulations;
  • other events affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, such as the threat or realization of epidemic diseases, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors; and
  • any additional factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2022 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 do not intend and undertake no obligation to update any forward-looking information to reflect actual results or 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)

 

 

March 31, 2023

 

December 31, 2022

Assets

 

Cash and cash equivalents

$

690,408

 

 

$

766,418

 

Restricted cash

 

11,129

 

 

 

13,599

 

Flight equipment subject to operating leases

 

30,924,948

 

 

 

29,466,888

 

Less accumulated depreciation

 

(5,175,430

)

 

 

(4,928,503

)

 

 

25,749,518

 

 

 

24,538,385

 

Deposits on flight equipment purchases

 

1,220,332

 

 

 

1,344,973

 

Other assets

 

1,691,754

 

 

 

1,733,330

 

Total assets

$

29,363,141

 

 

$

28,396,705

 

Liabilities and Shareholders’ Equity

 

 

 

Accrued interest and other payables

$

681,096

 

 

$

696,899

 

Debt financing, net of discounts and issuance costs

 

19,447,601

 

 

 

18,641,063

 

Security deposits and maintenance reserves on flight equipment leases

 

1,336,891

 

 

 

1,293,929

 

Rentals received in advance

 

153,588

 

 

 

147,654

 

Deferred tax liability

 

999,379

 

 

 

970,797

 

Total liabilities

$

22,618,555

 

 

$

21,750,342

 

Shareholders’ Equity

 

 

 

Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,600,000 (aggregate liquidation preference of $850,000) shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

$

106

 

 

$

106

 

Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,015,418 and 110,892,097 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

 

1,110

 

 

 

1,109

 

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

 

 

 

 

 

Paid-in capital

 

3,258,639

 

 

 

3,255,973

 

Retained earnings

 

3,482,912

 

 

 

3,386,820

 

Accumulated other comprehensive income

 

1,819

 

 

 

2,355

 

Total shareholders’ equity

$

6,744,586

 

 

$

6,646,363

 

Total liabilities and shareholders’ equity

$

29,363,141

 

 

$

28,396,705

 

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

 

Three Months Ended

March 31,

 

 

2023

 

2022

 

 

(unaudited)

Revenues

 

 

 

 

Rental of flight equipment

 

$

617,773

 

 

$

566,554

 

Aircraft sales, trading and other

 

 

18,369

 

 

 

30,107

 

Total revenues

 

 

636,142

 

 

 

596,661

 

 

 

 

 

 

Expenses

 

 

 

 

Interest

 

 

151,613

 

 

 

117,277

 

Amortization of debt discounts and issuance costs

 

 

13,073

 

 

 

13,198

 

Interest expense

 

 

164,686

 

 

 

130,475

 

 

 

 

 

 

Depreciation of flight equipment

 

 

259,680

 

 

 

235,308

 

Write-off of Russian fleet

 

 

 

 

 

802,352

 

Selling, general and administrative

 

 

47,614

 

 

 

32,762

 

Stock-based compensation expense

 

 

5,896

 

 

 

(2,523

)

Total expenses

 

 

477,876

 

 

 

1,198,374

 

Income/(loss) before taxes

 

 

158,266

 

 

 

(601,713

)

Income tax (expense)/benefit

 

 

(29,546

)

 

 

132,720

 

Net income/(loss)

 

$

128,720

 

 

$

(468,993

)

Preferred stock dividends

 

 

(10,425

)

 

 

(10,425

)

Net income/(loss) attributable to common stockholders

 

$

118,295

 

 

$

(479,418

)

 

 

 

 

 

Earnings/(Loss) per share of common stock:

 

 

 

 

Basic

 

$

1.07

 

 

$

(4.21

)

Diluted

 

$

1.06

 

 

$

(4.21

)

Weighted-average shares of common stock outstanding

 

 

 

 

Basic

 

 

110,943,552

 

 

 

113,894,867

 

Diluted

 

 

111,199,996

 

 

 

113,894,867

 

 

 

 

 

 

Other financial data

 

 

 

 

Pre-tax margin

 

 

24.9

%

 

 

(100.8

)%

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

 

 

10.2

%

 

 

(3.5

)%

Adjusted net income before income taxes(1)

 

$

166,810

 

 

$

200,889

 

Adjusted diluted earnings per share before income taxes(1)

 

$

1.50

 

 

$

1.76

 

Adjusted pre-tax margin(1)

 

 

26.2

%

 

 

33.7

%

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

 

 

11.0

%

 

 

11.8

%

(1)

Adjusted net income before income taxes (defined as net income/(loss) attributable to common stockholders excluding the effects of certain non-cash items, one-time or non-recurring items, such as write-offs of our Russian fleet, that are not expected to continue in the future and certain other items), adjusted pre-tax 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 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/(loss) attributable to common stockholders, pre-tax margin, earnings/(loss) per share, diluted earnings/(loss) 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 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 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 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 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 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 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 table shows the reconciliation of the numerator for adjusted pre-tax margin (in thousands, except percentages):

 

Three Months Ended

March 31,

 

2023

 

2022

 

(unaudited)

Reconciliation of the numerator for adjusted pre-tax margin (net income/(loss) attributable to common stockholders to adjusted net income before income taxes):

 

 

 

Net income/(loss) attributable to common stockholders

$

118,295

 

 

$

(479,418

)

Amortization of debt discounts and issuance costs

 

13,073

 

 

 

13,198

 

Write-off of Russian fleet

 

 

 

 

802,352

 

Stock-based compensation expense

 

5,896

 

 

 

(2,523

)

Income tax expense/(benefit)

 

29,546

 

 

 

(132,720

)

Adjusted net income before income taxes

$

166,810

 

 

$

200,889

 

 

 

 

 

Denominator for adjusted pre-tax margin:

 

Total revenues

$

636,142

 

 

$

596,661

 

Adjusted pre-tax margin(a)

 

26.2

%

 

 

33.7

%

 

 

 

 

 

 

 

 

(a) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues

The following table shows the reconciliation of the numerator for adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts):

 

 

 

Three Months Ended

March 31,

 

2023

 

2022

 

(unaudited)

Reconciliation of the numerator for adjusted diluted earnings per share (net income/(loss) attributable to common stockholders to adjusted net income before income taxes):

 

 

 

Net income/(loss) attributable to common stockholders

$

118,295

 

$

(479,418

)

Amortization of debt discounts and issuance costs

 

13,073

 

 

13,198

 

Write-off of Russian fleet

 

 

 

802,352

 

Stock-based compensation expense

 

5,896

 

 

(2,523

)

Income tax expense/(benefit)

 

29,546

 

 

(132,720

)

Adjusted net income before income taxes

$

166,810

 

$

200,889

 

 

 

 

 

Denominator for adjusted diluted earnings per share:

 

 

 

Weighted-average diluted common shares outstanding

 

111,199,996

 

 

113,894,867

 

Potentially dilutive securities, whose effect would have been anti-dilutive

 

 

 

249,781

 

Adjusted weighted-average diluted common shares outstanding

 

111,199,996

 

 

114,144,648

 

Adjusted diluted earnings per share before income taxes(b)

$

1.50

 

$

1.76

 

 

 

 

 

 

 

 

 

(b) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by adjusted weighted-average diluted common shares outstanding

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

 

Trailing Twelve Months Ended

March 31,

 

2023

 

2022

 

(unaudited)

Reconciliation of the numerator for adjusted pre-tax return on common equity (net income/(loss) attributable to common stockholders to adjusted net income before income taxes):

 

 

 

Net income/(loss) attributable to common stockholders

$

458,989

 

 

$

(151,507

)

Amortization of debt discounts and issuance costs

 

53,130

 

 

 

51,793

 

(Recovery)/write-off of Russian fleet

 

(30,877

)

 

 

802,352

 

Stock-based compensation expense

 

24,022

 

 

 

18,585

 

Income tax expense/(benefit)

 

120,524

 

 

 

(47,773

)

Adjusted net income before income taxes

$

625,788

 

 

$

673,450

 

 

 

 

 

Reconciliation of denominator for pre-tax return on common equity to adjusted pre-tax return on common equity:

 

 

 

Common shareholders' equity as of beginning of the period

$

5,519,585

 

 

$

5,878,212

 

Common shareholders' equity as of end of the period

$

5,894,586

 

 

$

5,519,585

 

Average common shareholders' equity

$

5,707,086

 

 

$

5,698,899

 

 

 

 

 

Adjusted pre-tax return on common equity(c)

 

11.0

%

 

 

11.8

%

 

 

 

 

 

 

 

 

(c) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

Three Months Ended

March 31,

 

2023

 

2022

 

(in thousands)

Operating Activities

 

 

 

Net income/(loss)

$

128,720

 

 

$

(468,993

)

Adjustments to reconcile net income/(loss) to net cash provided by operating activities:

 

 

 

Depreciation of flight equipment

 

259,680

 

 

 

235,308

 

Write-off of Russian fleet

 

 

 

 

802,352

 

Stock-based compensation expense

 

5,896

 

 

 

(2,523

)

Deferred taxes

 

28,726

 

 

 

(133,360

)

Amortization of prepaid lease costs

 

18,323

 

 

 

13,193

 

Amortization of discounts and debt issuance costs

 

13,073

 

 

 

13,198

 

Gain on aircraft sales, trading and other activity

 

(41,650

)

 

 

(66,791

)

Changes in operating assets and liabilities:

 

 

 

Other assets

 

(26,907

)

 

 

(74,560

)

Accrued interest and other payables

 

(45,493

)

 

 

(64,068

)

Rentals received in advance

 

8,122

 

 

 

938

 

Net cash provided by operating activities

 

348,490

 

 

 

254,694

 

Investing Activities

 

 

 

Acquisition of flight equipment under operating lease

 

(1,236,828

)

 

 

(395,402

)

Payments for deposits on flight equipment purchases

 

(4,000

)

 

 

(172,943

)

Proceeds from aircraft sales, trading and other activity

 

21,391

 

 

 

750

 

Acquisition of aircraft furnishings, equipment and other assets

 

(53,939

)

 

 

(52,974

)

Net cash used in investing activities

 

(1,273,376

)

 

 

(620,569

)

Financing Activities

 

 

 

Cash dividends paid on Class A common stock

 

(22,178

)

 

 

(21,088

)

Common shares repurchased

 

 

 

 

(97,644

)

Cash dividends paid on preferred stock

 

(10,425

)

 

 

(10,425

)

Tax withholdings on stock-based compensation

 

(3,229

)

 

 

(8,095

)

Net change in unsecured revolving facilities

 

653,000

 

 

 

 

Proceeds from debt financings

 

1,352,766

 

 

 

1,497,615

 

Payments in reduction of debt financings

 

(1,209,971

)

 

 

(708,847

)

Debt issuance costs

 

(3,159

)

 

 

(2,740

)

Security deposits and maintenance reserve receipts

 

93,377

 

 

 

125,727

 

Security deposits and maintenance reserve disbursements

 

(3,775

)

 

 

(4,864

)

Net cash provided by financing activities

 

846,406

 

 

 

769,639

 

Net decrease in cash

 

(78,480

)

 

 

403,764

 

Cash, cash equivalents and restricted cash at beginning of period

 

780,017

 

 

 

1,108,292

 

Cash, cash equivalents and restricted cash at end of period

$

701,537

 

 

$

1,512,056

 

Supplemental Disclosure of Cash Flow Information

 

 

 

Cash paid during the period for interest, including capitalized interest of $10,658 and $9,365 at March 31, 2023 and 2022, respectively

$

197,935

 

 

$

179,026

 

Cash paid for income taxes

$

3,571

 

 

$

3,446

 

Supplemental Disclosure of Noncash Activities

 

 

 

Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment

$

227,738

 

 

$

85,791

 

Cash dividends declared on common stock, not yet paid

$

22,203

 

 

$

21,136

 

 

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