Los Angeles, California, November 9, 2017 — Air Lease Corporation (ALC) (NYSE: AL) announces financial results for the three and nine months ended September 30, 2017.
- $377 million for the three months ended September 30, 2017, an increase of 6.1% - $1.1 billion for the nine months ended September 30, 2017, an increase of 6.6%
- Diluted earnings per share:
- $0.90 for the three months ended September 30, 2017, an increase of 4.7% o $2.59 for the nine months ended September 30, 2017, an increase of 1.6%
- Adjusted diluted earnings per share before income taxes:
- $1.50 for the three months ended September 30, 2017, an increase of 4.9% o $4.34 for the nine months ended September 30, 2017, an increase of 3.3%
- Pre-tax margin of 40.9% for the three months ended September 30, 2017
- Adjusted pre-tax margin of 44.2% for the three months ended September 30, 2017
- Return on equity:
- Pre-tax return on equity of 17.1% for the trailing twelve months ended September 30, 2017
- Adjusted pre-tax return on equity of 18.5% for the trailing twelve months ended September 30, 2017
Increased our quarterly cash dividend by 33%, from $0.075 per share to $0.10 per share. The next quarterly dividend of $0.10 per share will be paid on January 4, 2018 to holders of record of our common stock as of December 14, 2017.
Added three new aircraft with a cost of $245 million ending the quarter with $12.7 billion in aircraft with a weighted average age of 3.7 years and a weighted average lease term remaining of 6.8 years.
Sold seven aircraft, including three aircraft sold to Thunderbolt Aircraft Lease Limited, one aircraft sold to Blackbird Capital II, LLC and three aircraft sold to other third parties, for total sales proceeds of $185 million.
Placed 91% of our order book on long-term leases for aircraft delivering through 2019 and 72% through 2020.
“We had a solid quarter, delivering strong, consistent margins, a 6.1% increase in revenues and a 6.6% increase in pre- tax income compared to the third quarter of 2016. Global passenger traffic growth and the need to replace aging aircraft continue to drive healthy demand for new aircraft. Looking ahead, we remain focused on our core leasing business, harvesting leasing placements in 2020 and beyond, and further developing our management and side car platforms,” said John L. Plueger, Chief Executive Officer and President.
“Since ALC’s inception, we have strived to build an industry leading aircraft lessor with strong and predictable growth, and to reward our shareholders in line with ALC’s achievements. With this in mind, we are pleased to announce that the Board of Directors has authorized a 33% increase in ALC’s quarterly dividend to $0.10 per share from $0.075 per share. This dividend increase is in recognition of ALC’s performance as well as the confidence we have in the business going forward,” said Steven F. Udvar-Házy, Executive Chairman of the Board.
The following table summarizes the results for the three and nine months ended September 30, 2017 and 2016 (in thousands, except share amounts):
Flight Equipment Portfolio
Our fleet grew by 5.2% based on net book value of $12.7 billion as of September 30, 2017 compared to $12.0 billion as of December 31, 2016. As of September 30, 2017, our fleet was comprised of 236 owned aircraft, with a weighted-average age and remaining lease term of 3.7 years and 6.8 years, respectively, and 51 managed aircraft. We have a globally diversified customer base of 90 airlines in 55 countries. For the fourth quarter of 2017, we have contracted to deliver eight aircraft from our new order pipeline and five aircraft from the secondary market, all subject to lease, representing capital expenditures of approximately $913 million.
During the quarter ended September 30, 2017, we took delivery of three new aircraft and sold seven aircraft from our operating lease portfolio.
Below are the key portfolio metrics of our fleet:
Debt Financing Activities
We ended the third quarter of 2017 with total debt financing, net of discounts and issuance costs, of $9.2 billion, resulting in a debt to equity ratio of 2.53:1.
Our debt financing was comprised of unsecured debt of $8.8 billion and such unsecured debt represented 94.0% of our debt portfolio as of September 30, 2017 as compared to 92.4% as of December 31, 2016. Our fixed rate debt represented 78.1% of our debt portfolio as of September 30, 2017 as compared to 83.5% as of December 31, 2016. Our composite cost of funds decreased to 3.11% as of September 30, 2017 as compared to 3.42% as of December 31, 2016.
Our debt financing was comprised of the following at September 30, 2017 and December 31, 2016 (dollars in thousands):