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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Air Lease Corporation | NYSE:AL | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.5775 | -1.11% | 51.4425 | 51.78 | 51.33 | 51.57 | 27,756 | 15:01:43 |
From Apr 2019 to Apr 2024
Air Lease Corporation (NYSE: AL):
Third Quarter 2011 Highlights
Air Lease Corporation (ALC) (NYSE: AL) announced today the results of its operations for the third quarter ended September 30, 2011. ALC recorded its third quarterly positive pre-tax income of $28.3 million and net income of $18.3 million and recorded cash flow from operations of $83.1 million.
"Passenger airline growth in many regions of the world continues at a strong rate, and this, coupled with the requirement on the part of all carriers to constantly push towards newer, and more efficient fleets,” said Steven F. Udvar-Hazy, Chairman and CEO of Air Lease Corporation.
“We are pleased with ALC’s Q3 results, which we believe demonstrate that ALC has moved beyond its startup phase with three successive quarters of increasing profitability,” said John L. Plueger, President and Chief Operating Officer of Air Lease Corporation. “Our growth trajectory is on track as we closed Q3 with a fleet of 79 aircraft, en route to our 2011 goal of 100 aircraft.”
“The financing community has continued to show support for ALC amidst the international events affecting the global supply of credit,” said James C. Clarke, Senior Vice President and Chief Financial Officer of Air Lease Corporation. “ALC formed relationships with 4 new banks during the quarter, expanding our banking group to 20 financial institutions. We continue to build a strong balance sheet with conservative leverage targets and significant unsecured borrowing.”
The following table summarizes the results for the quarters ended September 30, 2011 and June 30, 2011:
(dollars in thousands) Q3 2011 Q2 2011 % change Revenues $ 92,125 $ 74,344 24% Pretax income $ 28,341 $ 10,888 160% Net income $ 18,271 $ 7,023 160% Cash provided by operating activities $ 83,076 $ 48,483 71% Adjusted net income(1) $ 25,122 $ 19,459 29% Adjusted EBITDA(1) $ 79,954 $ 62,780 27% Diluted EPS $ 0.18 $ 0.08 125%
1
See notes 1 and 2 to the Consolidated Statement of Operations included in this press release for a discussion of the non-GAAP measures adjusted net income and adjusted EBITDA.Fleet Growth
Building on our base of 65 aircraft at June 30, 2011, we added 14 aircraft during the third quarter of 2011 and ended the quarter with 79 aircraft spread across a diverse and balanced customer base of 49 airlines in 30 countries. We continue to evaluate opportunities on an ongoing basis to acquire attractive aircraft from other leasing companies and our airline customers, as well as opportunistic transactions with the airframe manufacturers such that we project we will grow our fleet to approximately 100 aircraft by the end of 2011.
Below are portfolio metrics as of September 30, 2011 and December 31, 2010:
(dollars in thousands) September 30, 2011 December 31, 2010 Fleet size 79 40 Weighted average fleet age 3.6 years 3.8 years Weighted average remaining lease term 6.3 years 5.6 years Aggregate fleet cost $ 3,433,308 $ 1,649,071The following table sets forth the number of aircraft we leased in the indicated regions as of September 30, 2011 and December 31, 2010:
September 30, 2011 December 31, 2010Number of
aircraft
% of total
Number of
aircraft
% of total Europe 28 35.4 % 16 40.0 % Asia/Pacific 24 30.4 11 27.5 Central America, South America and Mexico 12 15.2 5 12.5 U.S. and Canada 8 10.1 5 12.5 The Middle East and Africa 7 8.9 3 7.5 Total 79 100.0 % 40 100.0 %The following table sets forth the number of aircraft we leased by aircraft type as of September 30, 2011 and December 31, 2010:
September 30, 2011 December 31, 2010 Number ofaircraft
% of total Number ofaircraft
% of total Airbus A319-100 7 8.9 % 7 17.5 % Airbus A320-200 17 21.5 8 20.0 Airbus A321-200 3 3.8 2 5.0 Airbus A330-200 8 10.1 2 5.0 Boeing 737-700 7 8.9 5 12.5 Boeing 737-800 26 32.9 14 35.0 Boeing 767-300ER 2 2.5 - - Boeing 777-300ER 4 5.1 2 5.0 Embraer E190 5 6.3 Total 79 100.0 % 40 100.0 %We have made further progress in placing our aircraft. As of September 30, 2011, we have entered into contracts for the leaseof new and used aircraft scheduled to be delivered through 2020 as follows:
Delivery year Number ofaircraft
Numberleased
% Leased 2011 22 22 100.0 % 2012 45 45 100.0 2013 31 15 48.4 2014 26 6 23.1 2015 24 - - Thereafter 91 - - Total 239 88 36.8 %Financing Activities
As of September 30, 2011, we had established a diverse lending group consisting of 20 banks across four general types of lending facilities with a composite interest rate of 3.09%. This rate does not include the effect of upfront fees, undrawn fees or issuance cost amortization.
During the third quarter of 2011, the Company entered into four additional fixed-rate amortizing unsecured facilities aggregating$62.9 million and a revolving $45.0 million unsecured credit facility as follows:
Facility Type Term Interest Rate Amount Unsecured term loan 3 year(1) 3.25% $ 35.0 million Unsecured term loan 5 year(1) 3.99% 20.0 million Unsecured term loan 5 year(1) 3.85% 5.0 million Unsecured term loan 1 year(1) 3.00% 2.9 million Subtotal $ 62.9 million Unsecured revolving facility(2) 3 year LIBOR + 2.00% $ 45.0 million(1)
Amortizing loan.
(2)
As of September 30, 2011, the Company maintained a $2.5 million compensating balance with respect to this credit facility.
We ended the third quarter of 2011 with a total of 13 unsecured term facilities. The total amount outstanding under our unsecured term facilities was $229.3 million and $13.1 million as of September 30, 2011 and December 31, 2010, respectively.
The Company ended the third quarter of 2011 with a total of 13 revolving unsecured credit facilities aggregating $358.0 million, each with a borrowing rate of LIBOR plus 2.00%. The total amount outstanding under our bilateral revolving credit facilities was $273.0 million and $120.0 million as of September 30, 2011 and December 31, 2010, respectively.
In addition, one of our wholly-owned subsidiaries entered into a recourse 11.75 year $70.9 million secured term facility at a rate of LIBOR plus 1.50%. In connection with this facility, the Company pledged $94.5 million in aircraft collateral. The outstanding balance on our secured term facilities was $559.8 million and $224.0 million at September 30, 2011 and December 31, 2010, respectively.
During the third quarter of 2011, the Company drew $31.3 million under the Warehouse Facility and incrementally pledged $36.8 million in aircraft collateral. As of September 30, 2011, the Company had borrowed $740.5 million under the Warehouse Facility and pledged 29 aircraft as collateral with a net book value of $1.2 billion.
The Company’s consolidated debt as of September 30, 2011 and December 31, 2010 is summarized below:
(dollars in thousands) September 30, 2011 December 31, 2010 Warehouse credit facility $ 740,533 $ 554,915 Secured term debt financing 559,798 223,981 Unsecured financing 502,317 133,085 Total $ 1,802,648 $ 911,981Composite interest rate(1)
3.09 % 3.32 % Percentage of total debt at fixed rate 23.30 % 1.40 %Composite interest rate on fixed debt(1)
4.51 % 3.83 %(1)
This rate does not include the effect of upfront fees, undrawn fees or issuance cost amortization.
Financial Results for the Third Quarter of 2011
For the three months ended September 30, 2011, the Company reported consolidated net income of $18.3 million, or $0.18 per diluted share, compared to a consolidated net loss of $7.7 million, or $0.12 per diluted share, for the three months ended September 30, 2010. The increase in net income for 2011, compared to 2010, was primarily attributable to the acquisition and lease of additional aircraft.
For the quarter ended September 30, 2011, we recorded $90.5 million in rental revenue, which includes overhaul revenue of $3.3 million. For the quarter ended September 30, 2010, we recorded $19.1 million in rental revenue, which includes overhaul revenue of $1.6 million. The increase in rental revenue for the three months ended September 30, 2011, compared to 2010, was attributable to the acquisition and lease of additional aircraft. The full impact on rental revenue for aircraft acquired during the quarter will be reflected in subsequent periods.
Interest and other income totaled $1.6 million and $0.6 million for the three months ended September 30, 2011 and 2010, respectively. During the quarter ended September 30, 2011, the Company provided short-term bridge financing for the acquisition of an aircraft for which we earned $1.1 million in fee and interest income.
Interest expense totaled $13.3 million and $5.8 million for the three months ended September 30, 2011 and 2010, respectively. The change was primarily due to an increase in our outstanding debt balances resulting in a $7.1 million increase in interest and an increase of $0.4 million in amortization of our deferred debt issue costs.
We recorded selling, general and administrative expenses of $11.5 million and $7.9 million for the three months ended September 30, 2011 and 2010, respectively. Selling, general and administrative expense represents a disproportionately higher percentage of revenues during our initial years of operation. As we continue to add new aircraft to our portfolio, we expect selling, general and administrative expense to continue decreasing as a percentage of our revenue.
During the three months ended September 30, 2011, the Company recorded $83.1 million of cash from operations compared to $14.7 million for the three months ended September 30, 2010. The increase in cash from operating activities for 2011, compared to 2010, was primarily attributable to the acquisition and lease of additional aircraft.
Financial Results for the First Nine Months of 2011
For the nine months ended September 30, 2011, the Company reported consolidated net income of $28.5 million, or $0.33 per diluted share, compared to a consolidated net loss of $49.4 million, or $1.64 per diluted share, for the period from inception to September 30, 2010. The increase in net income for 2011, compared to 2010, was primarily attributable to the acquisition and lease of additional aircraft and the effect of a one-time $35.8 million charge for the amortization of convertible debt discounts recorded during the second quarter of 2010.
For the nine months ended September 30, 2011, we recorded $219.1 million in rental revenue, which includes overhaul revenue of $7.6 million. For the period from inception to September 30, 2010, we recorded $20.3 million in rental revenue, which includes overhaul revenue of $1.8 million. The increase in rental revenue for 2011, compared to 2010, was attributable to the acquisition and lease of additional aircraft. The full impact on rental revenue for aircraft acquired during the quarter will be reflected in subsequent periods.
Interest and other income totaled $2.6 million and $1.1 million for the nine months ended September 30, 2011 and the period from inception to September 30, 2010, respectively. During the nine months ended September 30, 2011, the Company provided short-term bridge financing for the acquisition of an aircraft for which we earned $1.1 million in fee and interest income. In addition, we recorded $0.5 million in servicing fee revenue.
Interest expense totaled $40.5 million and $44.3 million for the nine months ended September 30, 2011 and the period from inception to September 30, 2010, respectively. The change was primarily due to an increase in our outstanding debt balances resulting in a $24.4 million increase in interest, an increase of $4.2 million in amortization of our deferred debt issue costs and a $3.3 million extinguishment of debt charge resulting from replacing two banks in our Warehouse Facility in connection with its modification in April 2011, offset by a one-time $35.8 million charge for the amortization of convertible debt discounts recorded during the second quarter of 2010.
We recorded selling, general and administrative expenses of $32.7 million and $14.2 million for the nine months ended September 30, 2011 and the period from inception to September 30, 2010, respectively. Selling, general and administrative expense represents a disproportionately higher percentage of revenues during our initial years of operation. As we continue to add new aircraft to our portfolio, we expect selling, general and administrative expense to continue decreasing as a percentage of our revenue.
During the nine months ended September 30, 2011, the Company recorded $166.2 million of cash from operations compared to $11.6 million for the period from inception to September 30, 2010. The increase in cash from operating activities for 2011, compared to 2010, was primarily attributable to the acquisition and lease of additional aircraft.
Conference Call
In connection with the earnings release, Air Lease Corporation will host a conference call on November 10, 2011 at 4:30 PM Eastern Time to discuss the Company's financial results for the third quarter of 2011.
Investors can participate in the conference call by dialing (866) 383-8003 domestic or (617) 597-5330 international. The passcode for the call is 39948334.
For your convenience, the conference call can be replayed in its entirety beginning at 7:30 PM ET on November 10, 2011 until 11:59 PM ET November 17, 2011. If you wish to listen to the replay of this conference call, please dial (888) 286-8010 domestic or (617) 801-6888 international and enter passcode 38410209.
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.
About Air Lease Corporation
Launched in 2010, Air Lease Corporation is an 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 partners worldwide through customized aircraft leasing and financing solutions. For more information, visit ALC's website at www.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 that are not historical facts and may be forward-looking. 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:
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 (Unaudited) (in thousands, except share data) September 30, 2011 December 31, 2010 Assets Cash and cash equivalents $ 279,647 $ 328,821 Restricted cash 74,819 48,676 Flight equipment subject to operating leases 3,433,308 1,649,071 Less accumulated depreciation (92,693 ) (19,262 ) 3,340,615 1,629,809 Deposits on flight equipment purchases 406,487 183,367Deferred debt issue costs - less accumulated amortization of $11,726 and $4,754 as
of September 30, 2011 and December 31, 2010, respectively 46,439 46,422 Notes receivable 28,066 - Deferred tax asset - 8,875 Other assets 70,944 30,312 Total assets $ 4,247,017 $ 2,276,282 Liabilities and Shareholders' Equity Accrued interest and other payables $ 44,139 $ 22,054 Debt financing 1,802,648 911,981 Security deposits and maintenance reserves on flight equipment leases 232,816 109,274 Rentals received in advance 17,317 8,038 Deferred tax liability 6,809 - Total liabilities 2,103,729 1,051,347 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 98,885,131 and 63,563,810 shares at September 30, 2011 and December 31, 2010, respectively
984 636 Class B Non-Voting Common Stock, $0.01 par value; authorized 10,000,000 shares; issued and outstanding 1,829,339 shares 18 18 Paid-in capital 2,165,856 1,276,321 Accumulated deficit (23,570 ) (52,040 ) Total shareholders' equity 2,143,288 1,224,935 Total liabilities and shareholders' equity $ 4,247,017 $ 2,276,282 AIR LEASE CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited)For the three months ended
September 30,
For the nine
months ended
September 30,
For the period
from Inception to
September 30,
(in thousands, except share data) 2011 2010 2011 2010 Revenues Rental of flight equipment $ 90,476 $ 19,110 $ 219,092 $ 20,345 Interest and other 1,649 642 2,592 1,116 Total revenues 92,125 19,752 221,684 21,461 - - - - Expenses - - - - Interest 10,993 3,871 30,143 5,709 Amortization of deferred debt issue costs 2,308 1,935 6,972 2,810 Extinguishment of debt - - 3,349 - Amortization of convertible debt discounts - - - 35,798 Interest expense 13,301 5,806 40,464 44,317 - - - - Depreciation of flight equipment 30,657 6,301 73,431 6,628 Selling, general and administrative 11,512 7,941 32,661 14,177 Stock-based compensation 8,314 10,941 30,974 13,196 Total expenses 63,784 30,989 177,530 78,318 - - - - Income (loss) before taxes 28,341 (11,237 ) 44,154 (56,857 ) Income tax (expense) benefit (10,070 ) 3,490 (15,684 ) 7,492 Net income (loss) $ 18,271 $ (7,747 ) $ 28,470 $ (49,365 ) Net income (loss) attributable to common shareholders per share Net income (loss) Basic $ 0.18 $ (0.12 ) $ 0.33 $ (1.64 ) Diluted $ 0.18 $ (0.12 ) $ 0.33 $ (1.64 ) Weighted-average shares outstanding Basic 100,714,470 64,984,887 85,845,031 30,062,023 Diluted 100,767,839 64,984,887 85,946,120 30,062,023 Other Financial Data Adjusted net income (loss) (1) $ 25,122 $ 595 $ 56,294 $ (3,197 ) Adjusted EBITDA (2) $ 79,954 $ 11,174 $ 188,001 $ 6,243 (1) Adjusted net income (loss) (defined as net income before stock-based compensation expense and non-cash interest expense, which includes the amortization of debt issuance costs and extinguishment of debt) is a measure of both operating performance and liquidity that is not defined by United States generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income (loss), income from operations or any other performance measures derived in accordance with GAAP. Adjusted net income (loss) is presented as a supplemental disclosure because management believes that it may be a useful performance measure that is used within our industry. We believe adjusted net income (loss) provides useful information on our earnings from ongoing operations, our ability to service our long-term debt and other fixed obligations, and our ability to fund our expected growth with internally generated funds. Set forth below is additional detail as to how we use adjusted net income (loss) as a measure of both operating performance and liquidity, as well as a discussion of the limitations of adjusted net income (loss) as an analytical tool and a reconciliation of adjusted net income (loss) to our GAAP net income (loss) and cash flow from operating activities. Operating Performance: Management and our board of directors use adjusted net income (loss) in a number of ways to assess our consolidated financial and operating performance, and we believe this measure is helpful in identifying trends in our performance. We use adjusted net income (loss) as a measure of our consolidated operating performance exclusive of income and expenses that relate to the financing, income taxes, and capitalization of the business. Also, adjusted net income (loss) assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily one-time amortization of convertible debt discounts) and stock-based compensation expense from our operating results. In addition, adjusted net income (loss) helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance. Accordingly, we believe this metric measures our financial performance based on operational factors that we can influence in the short term, namely the cost structure and expenses of the organization. Liquidity: In addition to the uses described above, management and our board of directors use adjusted net income as an indicator of the amount of cash flow we have available to service our debt obligations, and we believe this measure can serve the same purpose for our investors. Limitations: Adjusted net income (loss) has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Some of these limitations are as follows:•
adjusted net income (loss) does not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, or (ii) changes in or cash requirements for our working capital needs; and•
our calculation of adjusted net income (loss) may differ from the adjusted net income (loss) or analogous calculations of other companies in our industry, limiting its usefulness as a comparative measure. The following tables show the reconciliation of net income (loss) and cash flows from operating activities, the most directly comparable GAAP measures of performance and liquidity, to adjusted net income (loss) for three months ended September 30, 2011 and 2010, the nine months ended September 30, 2011 and the period from inception to September 30, 2010. Cash flows from operating activities for the three months ended September 30, 2011 is calculated as the difference between the cash flows from operating activities for the nine months then ended and the six months ended June 30, 2011. Cash flows from operating activities for the three months ended September 30, 2010 is calculated as the difference between cash flows from operating activities for the three months then ended and the period from inception to June 30, 2010.For the three months ended
September 30,
For the ninemonths ended
September 30,
For the periodfrom Inception to
September 30,
(in thousands) 2011 2010 2011 2010Reconciliation of cash flows from operating activities to adjusted net income (loss):
Net cash provided by operating activities $ 83,076 $ 14,716 $ 166,197 $ 11,612 Depreciation of flight equipment (30,657 ) (6,301 ) (73,431 ) (6,628 ) Stock-based compensation (8,314 ) (10,941 ) (30,974 ) (13,196 ) Deferred taxes (10,070 ) 3,490 (15,684 ) 7,492 Amortization of deferred debt issue costs (2,308 ) (1,935 ) (6,972 ) (2,810 ) Extinguishment of debt - - (3,349 ) - Amortization of convertible debt discounts - - - (35,798 ) Changes in operating assets and liabilities: Other assets (900 ) 2,140 15,427 3,339 Accrued interest and other payables (10,444 ) (5,974 ) (13,465 ) (8,275 ) Rentals received in advance (2,112 ) (2,942 ) (9,279 ) (5,101 ) Net income (loss) 18,271 (7,747 ) 28,470 (49,365 ) Amortization of debt issue costs 2,308 1,935 6,972 2,810 Extinguishment of debt - - 3,349 - Amortization of convertible debt discounts - - - 35,798 Stock-based compensation 8,314 10,941 30,974 13,196 Tax effect (3,771 ) (4,534 ) (13,471 ) (5,636 ) Adjusted net income (loss) $ 25,122 $ 595 $ 56,294 $ (3,197 ) For the three months endedSeptember 30,
For the ninemonths ended
September 30,
For the periodfrom Inception to
September 30,
(in thousands) 2011 2010 2011 2010 Reconciliation of net income (loss) to adjusted net income (loss): Net income (loss) $ 18,271 $ (7,747 ) $ 28,470 $ (49,365 ) Amortization of debt issue costs 2,308 1,935 6,972 2,810 Extinguishment of debt - - 3,349 - Amortization of convertible debt discounts - - - 35,798 Stock-based compensation 8,314 10,941 30,974 13,196 Tax effect (3,771 ) (4,534 ) (13,471 ) (5,636 ) Adjusted net income (loss) $ 25,122 $ 595 $ 56,294 $ (3,197 ) (2) Adjusted EBITDA (defined as net income (loss) before net interest expense, extinguishment of debt, stock-based compensation expense, income tax (expense) benefit, and depreciation and amortization expense) is a measure of both operating performance and liquidity that is not defined by GAAP and should not be considered as an alternative to net income (loss), income from operations or any other performance measures derived in accordance with GAAP. Adjusted EBITDA is presented as a supplemental disclosure because management believes that it may be a useful performance measure that is used within our industry. We believe adjusted EBITDA provides useful information on our earnings from ongoing operations, our ability to service our long-term debt and other fixed obligations, and our ability to fund our expected growth with internally generated funds. Set forth below is additional detail as to how we use adjusted EBITDA as a measure of both operating performance and liquidity, as well as a discussion of the limitations of adjusted EBITDA as an analytical tool and a reconciliation of adjusted EBITDA to our GAAP net loss and cash flow from operating activities. Operating Performance: Management and our board of directors use adjusted EBITDA in a number of ways to assess our consolidated financial and operating performance, and we believe this measure is helpful in identifying trends in our performance. We use adjusted EBITDA as a measure of our consolidated operating performance exclusive of income and expenses that relate to the financing, income taxes, and capitalization of the business. Also, adjusted EBITDA assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure and stock-based compensation expense from our operating results. In addition, adjusted EBITDA helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance. Accordingly, we believe this metric measures our financial performance based on operational factors that we can influence in the short term, namely the cost structure and expenses of the organization. Liquidity: In addition to the uses described above, management and our board of directors use adjusted EBITDA as an indicator of the amount of cash flow we have available to service our debt obligations, and we believe this measure can serve the same purpose for our investors. Limitations: Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Some of these limitations are as follows:•
adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;•
adjusted EBITDA does not reflect changes in or cash requirements for our working capital needs;•
adjusted EBITDA does not reflect interest expense or cash requirements necessary to service interest or principal payments on our debt; and•
other companies in our industry may calculate these measures differently from how we calculate these measures, limiting their usefulness as comparative measures. The following tables show the reconciliation of net income (loss) and cash flows from operating activities, the most directly comparable GAAP measures of performance and liquidity, to adjusted EBITDA for the three months ended September 30, 2011 and 2010, the nine months ended September 30, 2011 and the period from inception to September 30, 2010. Cash flows from operating activities for the three months ended September 30, 2011 is calculated as the difference between the cash flows from operating activities for the nine months then ended and the six months ended June 30, 2011. Cash flows from operating activities for the three months ended September 30, 2010 is calculated as the difference between cash flows from operating activities for the three months then ended and the period from inception to June 30, 2010. For the three months endedSeptember 30,
For the ninemonths ended
September 30,
For the period
from Inception to
September 30,
(in thousands) 2011 2010 2011 2010Reconciliation of cash flows from operating activities to adjusted EBITDA:
Net cash provided by operating activities $ 83,076 $ 14,716 $ 166,197 $ 11,612 Depreciation of flight equipment (30,657 ) (6,301 ) (73,431 ) (6,628 ) Stock-based compensation (8,314 ) (10,941 ) (30,974 ) (13,196 ) Deferred taxes (10,070 ) 3,490 (15,684 ) 7,492 Amortization of deferred debt issue costs (2,308 ) (1,935 ) (6,972 ) (2,810 ) Extinguishment of debt - - (3,349 ) - Amortization of convertible debt discounts - - - (35,798 ) Changes in operating assets and liabilities: Other assets (900 ) 2,140 15,427 3,339 Accrued interest and other payables (10,444 ) (5,974 ) (13,465 ) (8,275 ) Rentals received in advance (2,112 ) (2,942 ) (9,279 ) (5,101 ) Net income (loss) 18,271 (7,747 ) 28,470 (49,365 ) Net interest expense 12,642 5,169 39,442 43,276 Income taxes 10,070 (3,490 ) 15,684 (7,492 ) Depreciation 30,657 6,301 73,431 6,628 Stock-based compensation 8,314 10,941 30,974 13,196 Adjusted EBITDA $ 79,954 $ 11,174 $ 188,001 $ 6,243 For the three months endedSeptember 30,
For the ninemonths ended
September 30,
For the periodfrom Inception to
September 30,
(in thousands) 2011 2010 2011 2010 Reconciliation of net income (loss) to adjusted EBITDA: Net income (loss) $ 18,271 $ (7,747 ) $ 28,470 $ (49,365 ) Net interest expense 12,642 5,169 39,442 43,276 Income taxes 10,070 (3,490 ) 15,684 (7,492 ) Depreciation 30,657 6,301 73,431 6,628 Stock-based compensation 8,314 10,941 30,974 13,196 Adjusted EBITDA $ 79,954 $ 11,174 $ 188,001 $ 6,243 AIR LEASE CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) For the ninemonths ended
For the periodfrom Inception to
(dollars in thousands) September 30, 2011 September 30, 2010 Operating Activities Net income (loss) $ 28,470 $ (49,365 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation of flight equipment 73,431 6,628 Stock-based compensation 30,974 13,196 Deferred taxes 15,684 (7,492 ) Amortization of deferred debt issue costs 6,972 2,810 Extinguishment of debt 3,349 - Amortization of convertible debt discounts - 35,798 Changes in operating assets and liabilities: Other assets (15,427 ) (3,339 ) Accrued interest and other payables 13,465 8,275 Rentals received in advance 9,279 5,101 Net cash provided by operating activities 166,197 11,612 Investing Activities Acquisition of flight equipment under operating lease (1,706,278 ) (980,110 ) Payments for deposits on flight equipment purchases (278,820 ) (75,386 ) Acquisition of furnishings, equipment and other assets (38,844 ) (11,150 ) Advances on notes receivable (30,000 ) - Collections on notes receivable 1,934 - Net cash used in investing activities (2,052,008 ) (1,066,646 ) Financing Activities Issuance of common stock and warrants 867,365 1,157,133 Tax withholdings on stock based compensation (8,456 ) - Issuance of convertible notes - 60,000 Net change in unsecured revolving facilities 153,000 - Proceeds from debt financings 800,043 203,631 Payments in reduction of debt financings (62,376 ) (4,940 ) Restricted cash (26,143 ) (43,921 ) Debt issue costs (10,338 ) (47,960 ) Security deposits and maintenance reserve receipts 127,262 67,964 Security deposits and maintenance reserve disbursements (3,720 ) (5,049 ) Net cash provided by financing activities 1,836,637 1,386,858 Net increase in cash (49,174 ) 331,824 Cash at beginning of period 328,821 - Cash at end of period $ 279,647 $ 331,824 Supplemental Disclosure of Cash Flow Information Cash paid during the period for interest, including capitalized interest of $7,297 at September 30, 2011 and capitalized interest of $363 at September 30, 2010 $ 34,849 $ 4,696 Supplemental Disclosure of Noncash Activities Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment under operating leases $ 77,959 $ - Conversion of convertible notes to Class A Common Stock $ - $ 60,000
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