Market Overview

Air Lease Corporation Announces Second Quarter 2018 Results

Share:

LOS ANGELES, Aug. 09, 2018 (GLOBE NEWSWIRE) -- Air Lease Corporation (ALC) (NYSE:AL) announces financial results for the three and six months ended June 30, 2018.

  • Revenues:
    • $398 million for the three months ended June 30, 2018, an increase of 4.4%
    • $779 million for the six months ended June 30, 2018, an increase of 5.1%

  • Diluted earnings per share:
    • $1.04 for the three months ended June 30, 2018, an increase of 13.0%
    • $2.04 for the six months ended June 30, 2018, an increase of 20.7%

  • Adjusted diluted earnings per share before income taxes:
    • $1.44 for the three months ended June 30, 2018, a decrease of 4.6%
    • $2.82 for the six months ended June 30, 2018, a decrease of 0.7%

  • Margin:
    • Pre-tax margin of 37.1% for the three months ended June 30, 2018
    • Adjusted pre-tax margin of 40.3% for the three months ended June 30, 2018

  • Return on equity:
    • Pre-tax return on equity of 15.4% for the trailing twelve months ended June 30, 2018
    • Adjusted pre-tax return on equity of 16.7% for the trailing twelve months ended June 30, 2018

Highlights

  • Took delivery of 14 aircraft from our order book and four young incremental aircraft from the secondary market, representing $1.4 billion in capital expenditures, ending the quarter with $14.9 billion in aircraft with a weighted average age of 3.8 years and a weighted average lease term remaining of 6.8 years.

  • Our aircraft on order are 100% placed through 2019, 87% placed through 2020 and 66% placed through 2021 on long term leases.

  • In August 2018, signed an agreement to purchase up to 78 Boeing airplanes, including 75 737-8 MAX aircraft and three 787-9 aircraft at the 2018 Farnborough International Airshow.

  • In August 2018, entered into an agreement to sell and continue to manage a fleet of 18 aircraft to Thunderbolt Aircraft Lease Limited II ("Thunderbolt II").  We expect a majority of the aircraft sales to be completed by the end of Q4 2018.

  • Ended the quarter with $25.0 billion in committed minimum future rental payments consisting of $11.3 billion in contracted minimum rental payments on the aircraft in our existing fleet and $13.7 billion in minimum future rental payments related to aircraft delivering in the future.

  • Completed a senior unsecured notes offering in June 2018, issuing $500 million at 3.875%, maturing in 2023.

  • Declared a quarterly cash dividend of $0.10 per share on our outstanding common stock for the second quarter of 2018.  The dividend will be paid on October 5, 2018 to holders of record of our common stock as of September 14, 2018.

"We enjoyed another great quarter with revenues and earnings right on track, and we continue to execute our plan to increase capital deployment by adding young aircraft incremental to our orderbook deliveries.  And, with our orderbook 87% placed through 2020 and 66% placed through 2021, we finalized a major order with Boeing for 75 MAX8 plus three B787-9 aircraft.  We also launched Thunderbolt II, a uniquely structured and highly successful portfolio sale of 18 aircraft, which priced and closed subsequent to quarter end," said John L. Plueger, Chief Executive Officer and President.

"With now over $17 billion in total assets, ALC remains committed to its strategy of investing in the youngest, most fuel efficient, and technologically advanced commercial aircraft. We are seeing solid lease demand driven by passenger traffic growth globally and the continued need to replace aging aircraft. The order we placed at the Farnborough Air Show provides us with access to valuable delivery positions through 2024, allowing us to deliver continued growth for our shareholders," said Steven F. Udvar-Házy, Executive Chairman of the Board.

The following table summarizes the results for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share amounts and percentages):

    Three Months Ended
June 30,
  Six Months Ended
June 30,
    2018   2017   $ change   % change   2018   2017   $ change   % change
Revenues   $ 397,814     $ 380,957     $ 16,857     4.4  %   $ 779,023     $ 741,144     $ 37,879     5.1  %
Income before taxes   $ 147,409     $ 155,869     $ (8,460 )   (5.4 )%   $ 288,728     $ 289,747     $ (1,019 )   (0.4 )%
Net income   $ 115,211     $ 100,925     $ 14,286     14.2  %   $ 225,862     $ 185,862     $ 40,000     21.5  %
Adjusted net income before income taxes(1)   $ 160,304     $ 166,660     $ (6,356 )   (3.8 )%   $ 313,077     $ 313,303     $ (226 )   (0.1 )%
Diluted EPS   $ 1.04     $ 0.92     $ 0.12     13.0  %   $ 2.04     $ 1.69     $ 0.35     20.7  %
Adjusted diluted EPS before income taxes(1)   $ 1.44     $ 1.51     $ (0.07 )   (4.6 )%   $ 2.82     $ 2.84     $ (0.02 )   (0.7 )%
                                                             

(1) Adjusted net income before income taxes and adjusted diluted earnings per share before income taxes have been adjusted to exclude 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. See note 1 under the Consolidated Statements of Income included in this earnings release for a discussion of the non-GAAP measures adjusted net income before income taxes and adjusted diluted EPS before income taxes and a reconciliation to their most comparable GAAP financial measures.

Revenues increased $17 million or 4.4% to $398 million for the three months ended June 30, 2018 from $381 million for the three months ended June 30, 2017. This increase was principally driven by the increase in the net book value of our fleet, partially offset by a reduction of our sales and trading activity. For the three months ended June 30, 2017, we sold 17 aircraft, generating $18 million in gains, and for the three months ended June 30, 2018, we chose not to sell any aircraft.

Income before taxes for the quarter ended June 30, 2018 was $147 million compared to $156 million for the quarter ended June 30, 2017.  As we did not sell any aircraft in the second quarter of 2018, our income before taxes decreased compared to the second quarter of 2017.

Net income for the quarter ended June 30, 2018 increased to $115 million or $1.04 per diluted share, compared to $101 million or $0.92 per diluted share for the quarter ended June 30, 2017. The increase in net income in the second quarter of 2018 as compared to 2017 was primarily due to a lower income tax expense as a result of the U.S. Tax Cuts and Jobs Act (the "Tax Reform Act"), which, among other things, lowered the corporate tax rate from 35% to 21% effective January 1, 2018.

Adjusted net income before income taxes for the three months ended June 30, 2018 was $160 million or $1.44 per diluted share, compared to $167 million or $1.51 per diluted share for the three months ended June 30, 2017. The change in our adjusted net income before income taxes was due to the decrease in the number of aircraft sold from 17 aircraft for the three months ended June 30, 2017 to zero aircraft for the three months ended June 30, 2018.

Flight Equipment Portfolio

Our fleet grew by 11.9% to a net book value of $14.9 billion as of June 30, 2018 compared to $13.3 billion as of December 31, 2017.  As of June 30, 2018, our fleet was comprised of 271 owned aircraft, with a weighted-average age and remaining lease term of 3.8 years and 6.8 years, respectively, and 49 managed aircraft.  We have a globally diversified customer base of 93 airlines in 56 countries.

During the quarter ended June 30, 2018, we took delivery of 14 aircraft from our order book and four incremental aircraft from the secondary market ending the quarter with 271 aircraft in our operating lease portfolio.

In August 2018, we entered into an agreement to purchase up to 78 Boeing aircraft, including 75 737-8 MAX aircraft and three 787-9 aircraft.  The three 787-9 aircraft and 30 737-8 MAX aircraft are firm orders and are included in the order book total in the table below.

Below are the key portfolio metrics of our fleet:

             
    June 30, 2018   December 31, 2017
Aggregate fleet net book value   $ 14.9 billion   $ 13.3 billion
Weighted-average fleet age(1)     3.8 years     3.8 years
Weighted-average remaining lease term(1)     6.8 years     6.8 years
             
Fleet size     271     244
Managed fleet     49     50
Order book     391     368
Total     711     662
             
Current fleet contracted rentals   $ 11.3 billion   $ 10.1 billion
Committed fleet rentals   $ 13.7 billion   $ 13.3 billion
Total committed rentals   $ 25.0 billion   $ 23.4 billion
             

(1) Weighted-average fleet age and remaining lease term calculated based on net book value.

                         

The following table details the region concentration of our fleet:

           
    June 30, 2018   December 31, 2017  
Region   % of Net Book Value   % of Net Book Value  
Europe   31.0 % 31.7 %
Asia (excluding China)   23.2 % 22.4 %
China   18.3 % 20.5 %
The Middle East and Africa   13.3 % 11.2 %
Central America, South America and Mexico   7.2 % 7.0 %
U.S. and Canada   4.6 % 4.5 %
Pacific, Australia and New Zealand   2.4 % 2.7 %
Total   100.0 % 100.0 %


The following table details the composition of our fleet by aircraft type:

                   
    June 30, 2018   December 31, 2017  
    Number of       Number of      
Aircraft type   Aircraft   % of Total   Aircraft   % of Total  
Airbus A319-100   1   0.4 % 1   0.4 %
Airbus A320-200   42   15.4 % 40   16.4 %
Airbus A320-200neo   5   1.9 % 5   2.1 %
Airbus A321-200   33   12.1 % 29   11.9 %
Airbus A321-200neo   9   3.3 % 5   2.1 %
Airbus A330-200   15   5.5 % 15   6.2 %
Airbus A330-300   5   1.9 % 5   2.0 %
Airbus A350-900   5   1.9 % 2   0.9 %
Boeing 737-700   5   1.9 % 3   1.2 %
Boeing 737-800   103   37.9 % 102   41.8 %
Boeing 737-8 MAX   10   3.7 % 2   0.8 %
Boeing 767-300ER   1   0.4 % 1   0.4 %
Boeing 777-200ER   1   0.4 % 1   0.4 %
Boeing 777-300ER   24   8.8 % 24   9.7 %
Boeing 787-9   11   4.1 % 8   3.3 %
Embraer E190   1   0.4 % 1   0.4 %
Total   271   100.0 % 244   100.0 %

Debt Financing Activities

We ended the second quarter of 2018 with total debt financing, net of discounts and issuance costs, of $11.0 billion, resulting in a debt to equity ratio of 2.53:1.

Our debt financing was comprised of unsecured debt of $10.6 billion representing 95.8% of our debt portfolio as of June 30, 2018 as compared to 94.6% as of December 31, 2017.  Our fixed rate debt represented 86.6% of our debt portfolio as of June 30, 2018 as compared to 85.4% as of December 31, 2017.  Our composite cost of funds increased to 3.32% as of June 30, 2018 as compared to 3.20% as of December 31, 2017.

Our debt financing was comprised of the following at June 30, 2018 and December 31, 2017 (dollars in thousands):

               
    June 30,
 2018
  December 31,
2017
 
Unsecured              
Senior notes   $ 9,268,445     $ 8,019,871    
Revolving credit facility     956,000       847,000    
Convertible senior notes     199,951       199,983    
Term financings     183,838       203,704    
Total unsecured debt financing     10,608,234       9,270,558    
Secured              
Term financings     428,951       484,036    
Export credit financing     41,593       44,920    
Total secured debt financing     470,544       528,956    
               
Total debt financing     11,078,778       9,799,514    
Less: Debt discounts and issuance costs     (116,332 )     (100,729 )  
Debt financing, net of discounts and issuance costs   $ 10,962,446     $ 9,698,785    
Selected interest rates and ratios:              
Composite interest rate(1)     3.32   %   3.20   %
Composite interest rate on fixed-rate debt(1)     3.32   %   3.27   %
Percentage of total debt at fixed-rate     86.61   %   85.42   %
                   

(1) This rate does not include the effect of upfront 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 August 9, 2018 at 4:30 PM Eastern Time to discuss the Company's financial results for the second quarter of 2018.

Investors can participate in the conference call by dialing (855) 308-8321 domestic or (330) 863-3465 international. The passcode for the call is 1497237.

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

For your convenience, the conference call can be replayed in its entirety beginning at 7:30 PM ET on August 9, 2018 until 7:30 PM ET on August 16, 2018. If you wish to listen to the replay of this conference call, please dial (855) 859-2056 domestic or (404) 537-3406 international and enter passcode 1497237.

About Air Lease Corporation (NYSE:AL)

Air Lease Corporation is a leading aircraft leasing company based in Los Angeles, California that has airline customers throughout the world. ALC and its team of dedicated and experienced professionals are principally engaged in purchasing commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions. For more information, visit ALC's website at www.airleasecorp.com.

Contact  
   
Investors:  
Mary Liz DePalma  
Assistant Vice President, Investor Relations  
Email: mdepalma@airleasecorp.com  
   
Media:  
Laura Woeste  
Manager, Media and Investor Relations  
Email: lwoeste@airleasecorp.com  

Forward-Looking Statements

Statements in this press release that are not historical facts are hereby identified as "forward-looking statements," including any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. These statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in such statements, including as a result of the following factors, among others:

  • our inability to make acquisitions of, or lease, aircraft on favorable terms;
                       
  • our inability to sell aircraft on favorable terms or to predict the timing of such sales;
                       
  • our inability to obtain additional financing on favorable terms, if required, to complete the acquisition of sufficient aircraft as currently contemplated or to fund the operations and growth of our business;
                       
  • our inability to effectively oversee our managed fleet;
                       
  • our inability to obtain refinancing prior to the time our debt matures;
                       
  • impaired financial condition and liquidity of our lessees;
                       
  • deterioration of economic conditions in the commercial aviation industry generally;
                       
  • increased maintenance, operating or other expenses or changes in the timing thereof;
                       
  • changes in the regulatory environment, including tariffs and other restrictions on trade;
                       
  • unanticipated impacts of the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act"), including as a result of changes in assumptions we make in our interpretation of the Tax Reform Act, guidance related to application of the Tax Reform Act that may be issued in the future, and actions that we may take as a result of our expected impact of the Tax Reform Act;
                       
  • potential natural disasters and terrorist attacks and the amount of our insurance coverage, if any, relating thereto; and
                       
  • the factors discussed under "Part I – Item 1A. Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2017, 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 undertake no obligation to update any forward-looking statement to reflect 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)

             
    June 30, 2018   December 31, 2017
    (unaudited)
Assets            
Cash and cash equivalents   $ 259,530     $ 292,204  
Restricted cash     21,528       16,078  
Flight equipment subject to operating leases     16,962,768       15,100,040  
Less accumulated depreciation     (2,098,524 )     (1,819,790 )
      14,864,244       13,280,250  
Deposits on flight equipment purchases     1,555,407       1,562,776  
Other assets     554,738       462,856  
Total assets   $ 17,255,447     $ 15,614,164  
Liabilities and Shareholders' Equity            
Accrued interest and other payables   $ 329,426     $ 309,182  
Debt financing, net of discounts and issuance costs     10,962,446       9,698,785  
Security deposits and maintenance reserves on flight equipment leases     933,309       856,140  
Rentals received in advance     112,151       104,820  
Deferred tax liability     580,273       517,795  
Total liabilities   $ 12,917,605     $ 11,486,722  
Shareholders' Equity            
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding            
Class A common stock, $0.01 par value; authorized 500,000,000 shares; issued and outstanding 104,065,045 and 103,621,629 shares at June 30, 2018 and December 31, 2017, respectively     1,041       1,036  
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding            
Paid-in capital     2,265,393       2,260,064  
Retained earnings     2,071,408       1,866,342  
Total shareholders' equity   $ 4,337,842     $ 4,127,442  
Total liabilities and shareholders' equity   $ 17,255,447     $ 15,614,164  

Air Lease Corporation and Subsidiaries 
CONSOLIDATED STATEMENTS OF INCOME 
(In thousands, except share, per share amounts and percentages)

   
    Three Months Ended
 June 30,
  Six Months Ended
 June 30,
 
    2018     2017     2018     2017    
    (unaudited)  
Revenues                          
Rental of flight equipment   $ 393,479     $ 358,114     $ 771,341     $ 712,767    
Aircraft sales, trading and other     4,335       22,843       7,682       28,377    
Total revenues     397,814       380,957       779,023       741,144    
                           
Expenses                          
Interest     73,452       63,014       142,395       130,077    
Amortization of debt discounts and issuance costs     8,010       6,437       16,032       15,429    
Interest expense     81,462       69,451       158,427       145,506    
                           
Depreciation of flight equipment     142,600       126,490       278,734       250,399    
Selling, general and administrative     21,458       23,843       44,817       46,415    
Stock-based compensation     4,885       5,304       8,317       9,077    
Total expenses     250,405       225,088       490,295       451,397    
                           
Income before taxes     147,409       155,869       288,728       289,747    
Income tax expense     (32,198 )     (54,944 )     (62,866 )     (103,885 )  
Net income   $ 115,211     $ 100,925     $ 225,862     $ 185,862    
                           
Net income per share of Class A and B common stock                          
Basic   $ 1.11     $ 0.98     $ 2.17     $ 1.80    
Diluted   $ 1.04     $ 0.92     $ 2.04     $ 1.69    
Weighted-average shares outstanding                          
Basic     104,003,960       103,180,769       103,876,647       103,064,834    
Diluted     112,424,582       111,564,483       112,326,506       111,490,683    
                           
Other financial data                          
Pre-tax profit margin     37.1   %   40.9   %   37.1   %   39.1   %
Adjusted net income before income taxes(1)   $ 160,304     $ 166,660     $ 313,077     $ 313,303    
Adjusted margin before income taxes(1)     40.3   %   43.9   %   40.2   %   42.3   %
Adjusted diluted earnings per share before income taxes(1)   $ 1.44     $ 1.51     $ 2.82     $ 2.84    
Pre-tax return on equity (TTM)     15.4   %   17.3   %   15.4   %   17.3   %
Adjusted pre-tax return on equity (TTM)(1)     16.7   %   18.7   %   16.7   %   18.7   %
                                   

(1) Adjusted net income before income taxes (defined as net income excluding 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), adjusted margin before income taxes (defined as adjusted net income before income taxes divided by total revenues, excluding insurance recovery on settlement), adjusted pre-tax return on equity (defined as adjusted net income before income taxes divided by average shareholders' equity) and 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) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income, pre-tax profit margin, earnings per share, pre-tax return on equity, and diluted earnings per share, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted margin before income taxes, adjusted pre-tax return on equity and adjusted diluted earnings per share before income taxes, 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 margin before income taxes, adjusted pre-tax return on equity and adjusted diluted earnings per share before income taxes 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 margin before income taxes, adjusted pre-tax return on equity and adjusted diluted earnings per share before income taxes, 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 margin before income taxes, adjusted pre-tax return on equity and adjusted diluted earnings per share before income taxes 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 margin before income taxes, adjusted pre-tax return on equity and adjusted diluted earnings per share before income taxes may differ from the adjusted net income before income taxes, adjusted margin before income taxes, adjusted pre-tax return on equity and adjusted diluted earnings per share before income taxes or analogous calculations of other companies in our industry, limiting their usefulness as a comparative measure.

The following tables show the reconciliation of net income to adjusted net income before income taxes and adjusted margin before income taxes (in thousands, except percentages):

                           
    Three Months Ended
 June 30,
  Six Months Ended
 June 30,
 
    2018   2017     2018   2017    
    (unaudited)  
Reconciliation of net income to adjusted net income before income taxes:                          
Net income   $ 115,211   $ 100,925     $ 225,862   $ 185,862    
Amortization of debt discounts and issuance costs     8,010     6,437       16,032     15,429    
Stock-based compensation     4,885     5,304       8,317     9,077    
Insurance recovery on settlement         (950 )         (950 )  
Provision for income taxes     32,198     54,944       62,866     103,885    
Adjusted net income before income taxes   $ 160,304   $ 166,660     $ 313,077   $ 313,303    
Adjusted margin before income taxes(1)     40.3 %   43.9   %   40.2 %   42.3   %
                               

(1) Adjusted margin before income taxes is adjusted net income before income taxes divided by total revenues excluding insurance recovery on settlement.

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

                         
    Three Months Ended
 June 30,
  Six Months Ended
 June 30,
    2018   2017     2018   2017  
      (unaudited)
Reconciliation of net income to adjusted diluted earnings per share before income taxes                        
Net income   $ 115,211   $ 100,925     $ 225,862   $ 185,862  
Amortization of debt discounts and issuance costs     8,010     6,437       16,032     15,429  
Stock-based compensation     4,885     5,304       8,317     9,077  
Insurance recovery on settlement         (950 )         (950 )
Provision for income taxes     32,198     54,944       62,866     103,885  
Adjusted net income before income taxes   $ 160,304   $ 166,660     $ 313,077   $ 313,303  
Assumed conversion of convertible senior notes     1,735     1,431       3,474     2,847  
Adjusted net income before income taxes plus assumed conversions   $ 162,039   $ 168,091     $ 316,551   $ 316,150  
Weighted-average diluted shares outstanding     112,424,582     111,564,483       112,326,506     111,490,683  
Adjusted diluted earnings per share before income taxes   $ 1.44   $ 1.51     $ 2.82   $ 2.84  

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

               
    Trailing Twelve Months
June 30,
 
    2018     2017    
    (unaudited)  
Reconciliation of net income to adjusted pre-tax return on equity:      
Net income   $ 796,152     $ 376,126    
Amortization of debt discounts and issuance costs     30,057       31,822    
Stock-based compensation     19,044       18,278    
Insurance recovery on settlement           (950 )  
Provision for income taxes     (187,641 )     207,597    
Adjusted net income before income taxes   $ 657,612     $ 632,873    
               
Shareholders' equity as of June 30, 2017 and 2016, respectively   $ 3,558,204     $ 3,195,529    
Shareholders' equity as of June 30, 2018 and 2017, respectively   $ 4,337,842     $ 3,558,204    
Average shareholders' equity   $ 3,948,023     $ 3,376,867    
               
Adjusted pre-tax return on equity (TTM)     16.7   %   18.7   %

Air Lease Corporation and Subsidiaries 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands)

             
    Six Months Ended
 June 30,
    2018     2017  
    (unaudited)
Operating Activities            
Net income   $ 225,862     $ 185,862  
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation of flight equipment     278,734       250,399  
Stock-based compensation     8,317       9,077  
Deferred taxes     62,866       103,885  
Amortization of debt discounts and issuance costs     16,032       15,429  
Amortization of prepaid lease costs     14,610       11,473  
Gain on aircraft sales, trading and other activity     (2,185 )     (25,048 )
Changes in operating assets and liabilities:            
Other assets     (47,313 )     (90,297 )
Accrued interest and other payables     23,737       31,240  
Rentals received in advance     7,331       5,943  
Net cash provided by operating activities     587,991       497,963  
Investing Activities            
Acquisition of flight equipment under operating lease     (1,402,374 )     (1,142,367 )
Payments for deposits on flight equipment purchases     (360,440 )     (385,628 )
Proceeds from aircraft sales, trading and other activity     250       433,284  
Acquisition of aircraft furnishings, equipment and other assets     (141,125 )     (84,874 )
Net cash used in investing activities     (1,903,689 )     (1,179,585 )
Financing Activities            
Issuance of common stock upon exercise of options and warrants     4,128       1,664  
Cash dividends paid     (20,757 )     (15,450 )
Tax withholdings on stock-based compensation     (7,141 )     (5,600 )
Net change in unsecured revolving facility     109,000       711,000  
Proceeds from debt financings     1,738,665       1,096,673  
Payments in reduction of debt financings     (594,706 )     (1,229,690 )
Debt issuance costs     (5,301 )     (3,964 )
Security deposits and maintenance reserve receipts     109,007       110,766  
Security deposits and maintenance reserve disbursements     (44,421 )     (12,630 )
Net cash provided by financing activities     1,288,474       652,769  
Net decrease in cash     (27,224 )     (28,853 )
Cash, cash equivalents and restricted cash at beginning of period     308,282       290,802  
Cash, cash equivalents and restricted cash at end of period   $ 281,058     $ 261,949  
Supplemental Disclosure of Cash Flow Information            
Cash paid during the period for interest, including capitalized interest of $25,692 and $21,931 at June 30, 2018 and 2017, respectively   $ 149,077     $ 159,269  
Supplemental Disclosure of Noncash Activities            
Buyer furnished equipment, capitalized interest, deposits on flight equipment purchases and seller financing applied to acquisition of flight equipment and other assets applied to payments for deposits on flight equipment purchases   $ 451,048     $ 312,837  
Cash dividends declared, not yet paid   $ 10,399     $ 7,741  

Primary Logo

View Comments and Join the Discussion!