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Name | Symbol | Market | Type |
---|---|---|---|
Tal Education Group | NYSE:TAL | NYSE | Depository Receipt |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.25 | 1.95% | 13.05 | 13.25 | 12.4438 | 12.75 | 7,892,805 | 01:00:00 |
TAL International Group, Inc. (NYSE:TAL), one of the world’s largest lessors of intermodal freight containers and chassis, today reported results for the fourth quarter and full year ended December 31, 2015.
Highlights:
Financial Results
The following table depicts TAL’s selected key financial information for the fourth quarter and full year ended December 31, 2015 and 2014 (dollars in millions, except per share data):
Three Months Ended December 31, Twelve Months Ended December 31,2015
2014
% Change
2015
2014
% Change
Adjusted pre-tax income(1) $ 25.9 $ 49.5 (47.7 %) $ 145.0 $ 195.5 (25.8 %) Adjusted pre-tax income per share(1) $ 0.79 $ 1.48 (46.6 %) $ 4.40 $ 5.81 (24.3 %) Leasing revenues $ 153.8 $ 154.0 (0.1 %) $ 608.0 $ 594.0 2.4 % Adjusted EBITDA(1) $128.1
$ 148.4(13.7
%) $548.7
$577.1
(4.9
%) Adjusted net income(1) $ 16.7 $ 32.4 (48.5 %) $ 93.8 $ 128.0 (26.7 %) Adjusted net income per share(1) $ 0.51 $ 0.97 (47.4 %) $ 2.84 $ 3.80 (25.3 %) Net income $ 13.3 $ 32.1 (58.6 %) $ 88.2 $ 124.0 (28.9 %) Net income per share $ 0.40 $ 0.96 (58.3 %) $ 2.67 $ 3.68 (27.4 %) Note: All per share data is per fully diluted common share.TAL considers Adjusted pre-tax results as the best measure of its operating performance since it considers gains and losses on interest rate swaps, the write-off of deferred financing costs, and transaction costs related to the pending merger with Triton Container International Limited ("Triton") to be unrelated to operating performance and since it does not expect to pay any significant income taxes for a number of years due to the availability of accelerated tax depreciation on its existing container fleet and anticipated future equipment purchases.
Operating Performance
“TAL achieved solid results in 2015, while facing very difficult market conditions,” commented Brian M. Sondey, President and CEO of TAL International. “We generated Adjusted pre-tax income of $145.0 million in 2015, representing $4.40 per share. TAL also grew leasing revenue 2.4% from 2014, and continued to achieve a high level of returns. In 2015, we generated an Adjusted pre-tax return on tangible equity(1) of 14.0%.”
“While our results for the full year of 2015 were solid, pressure on our earnings increased throughout the year as the operating impacts of the difficult market conditions accumulated. In the fourth quarter of 2015, TAL generated $25.9 million of Adjusted pre-tax income, which represents a decrease of 48% from the fourth quarter of 2014 and a decrease of 29% from the third quarter of 2015.”
“Market conditions in 2015 were extremely challenging. Market lease rates reached all-time low levels due to a large drop in steel and new container prices, and lease re-pricing pressures accelerated. We also faced unusually low leasing demand in 2015 as containerized trade growth fell well below expectations. The gap between expected and actual growth led to an over-supply of containers in 2015 since leasing companies and shipping lines placed large orders for new containers at the beginning of the year in anticipation of solid growth. The combination of low demand and excess supply led to reduced pick-up volumes, increased drop-off volumes and a substantial decrease in TAL's utilization. Lower new container prices and reduced leasing demand has also led to an increase in disposal volumes and a roughly 20% decrease in sale prices for used containers.”
“The large decrease in used container sale prices in 2015 turned our historical gains on container disposals into disposal losses, and TAL recognized an $8.7 million loss on disposals in the fourth quarter of 2015. Roughly half of TAL’s disposal losses in the fourth quarter were caused by marking-to-market TAL’s inventory of containers waiting for sale. The negative mark-to-market will shrink when used container sale prices stabilize.”
“While down, our utilization remains at a high level and continues to support our profitability. Our utilization averaged 93.7% in the fourth quarter of 2015, and finished the quarter at 93.0%. Our utilization currently stands at 92.1%. The resiliency of our utilization during these extreme market conditions reflects the underlying strength of our lease portfolio. As of December 31, 2015, 76.4% of our containers on-hire were covered by long-term or finance leases, and these leases have an average remaining duration of 42 months assuming no leases are renewed. Our containers are also supported by our lease structuring discipline, especially in ensuring the vast majority of our containers on lease must be returned to traditionally strong export locations. Over 95% of our dry container leasing inventory is located in Asia, which should allow us to push the containers back on-hire when leasing demand improves.”
“We purchased approximately $625 million of new and sale-leaseback containers for delivery in 2015. Most of our new container investment in 2015 was placed early in the year, while we invested in sale leaseback transactions throughout the year. This solid level of investment in a challenging year reflects TAL’s strong supply capability and close customer relationships.”
Outlook
Mr. Sondey continued, “The first quarter is typically our weakest quarter of the year since it represents the slow season for dry containers, and market conditions are unlikely to improve during this seasonally weak period. We expect our utilization and other key operating metrics will continue to deteriorate, and expect our negative earnings trend will continue through the first quarter of 2016.”
“We expect that the supply / demand balance for containers will improve after the first quarter if trade growth is at least moderately positive. New container production has been limited since the middle of 2015, and leasing companies and shipping lines are generally accelerating their disposals of older containers. As a result, positive trade growth should create demand for our existing containers and allow us to recapture some of our lost utilization. On the other hand, lease pricing pressure will continue as long as steel and new container prices remain low. We expect our Adjusted pre-tax income will decrease from 2015 to 2016, though our quarterly earnings in 2016 may improve sequentially after the first quarter if TAL is successful in pushing utilization back up.”
Dividend
TAL’s Board of Directors has approved and declared a $0.45 per share quarterly cash dividend on its issued and outstanding common stock, payable on March 24, 2016 to shareholders of record at the close of business on March 10, 2016. Based on the information available today, we believe this distribution will qualify as a return of capital rather than a taxable dividend for U.S. tax purposes. Investors should consult with a tax adviser to determine the proper tax treatment of this distribution.
Announced Merger with Triton Container International Limited
Mr. Sondey concluded, “We are making good progress on our announced merger with Triton Container International to create the world's largest, most efficient and most capable container leasing company. We have received all required anti-trust approvals and the SEC review process of the S-4 registration statement filed by Triton International Limited is progressing. We are also making good progress with integration planning. Much of the commercial leadership for the combined company has been identified, and we expect our systems integration plan will be developed well ahead of the merger closing. We believe we will be able to achieve roughly $40 million of administrative cost reductions which should be fully implemented by the end of 2016. We continue to expect the transaction will generate more than 30% earnings per share accretion for TAL’s shareholders once the anticipated merger benefits are fully realized.”
Investors’ Webcast
TAL will hold a Webcast at 9 a.m. (New York time) on Thursday, February 25, 2016 to discuss its fourth quarter and full year results. An archive of the Webcast will be available one hour after the live call through Friday, April 8, 2016. To access the live Webcast or archive, please visit TAL’s website at http://www.talinternational.com.
About TAL International Group, Inc.
TAL is one of the world’s largest lessors of intermodal freight containers and chassis with 17 offices in 11 countries and approximately 230 third-party container depot facilities in 40 countries. TAL’s global operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. TAL’s fleet consists of approximately 1,531,000 containers and related equipment representing approximately 2,513,000 twenty-foot equivalent units (TEUs). This places TAL among the world’s largest independent lessors of intermodal containers and chassis as measured by fleet size.
Important Cautionary Information Regarding Forward-Looking Statements
Certain statements included in this communication are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may”, “should”, “would”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “seem”, “seek”, “continue”, “future”, “will”, “expect”, “outlook” or other similar words, phrases or expressions. These forward-looking statements include statements regarding our views, estimates, plans and outlook, industry, future events, the proposed transaction between Triton Container International Limited (“Triton”) and TAL International Group, Inc. (“TAL International”) , the estimated or anticipated future results and benefits of Triton and TAL International following the transaction, including estimated synergies, the likelihood and ability of the parties to successfully close the proposed transaction, future opportunities for the combined company, and other statements that are not historical facts. These statements are based on the current expectations of Triton and TAL International management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties regarding Triton’s and TAL International’s respective businesses and the transaction, and actual results may differ materially. These risks and uncertainties include, but are not limited to, changes in the business environment in which Triton and TAL International operate, including inflation and interest rates, and general financial, economic, regulatory and political conditions affecting the industry in which Triton and TAL International operate; changes in taxes, governmental laws, and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the loss of one or more members of Triton’s or TAL International’s management team; the ability of the parties to successfully close the proposed transaction; failure to realize the anticipated benefits of the transaction, including as a result of a delay in completing the transaction or a delay or difficulty in integrating the businesses of Triton and TAL International; uncertainty as to the long-term value of Triton International Limited (“Holdco”) common shares; the expected amount and timing of cost savings and operating synergies; failure to receive the approval of the stockholders of TAL International for the transaction, and those discussed in TAL International’s Annual Report on Form 10-K for the year ended December 31, 2014 under the heading “Risk Factors,” as updated from time to time by TAL International’s Quarterly Reports on Form 10-Q and other documents of TAL International on file with the Securities and Exchange Commission ("SEC") and in the registration statement on Form S-4 that was filed with the SEC by Holdco. There may be additional risks that neither Triton nor TAL International presently know or that Triton and TAL International currently believe are immaterial which could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements provide Triton’s and TAL International’s expectations, plans or forecasts of future events and views as of the date of this communication. Triton and TAL International anticipate that subsequent events and developments will cause Triton’s and TAL International’s assessments to change. However, while Triton and TAL International may elect to update these forward-looking statements at some point in the future, Triton and TAL International specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing Triton’s and TAL International’s assessments as of any date subsequent to the date of this communication.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information
This communication is not a solicitation of a proxy from any stockholder of TAL International. In connection with the proposed transaction, Holdco has filed with the SEC a registration statement on Form S-4 that includes a preliminary prospectus of Holdco and also includes a preliminary proxy statement of TAL International. The SEC has not yet declared the registration statement effective. After it is declared effective, TAL International will mail the proxy statement/prospectus to its stockholders. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) BECAUSE IT CONTAINS IMPORTANT INFORMATION. You are able to obtain the proxy statement/prospectus, as well as other filings containing information about TAL free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the proxy statement/prospectus and the filings with the SEC that are incorporated by reference in the proxy statement/prospectus can also be obtained, free of charge, by directing a request to TAL International Group, Inc., 100 Manhattanville Road, Purchase, New York 10577, Attention: Secretary.
The respective directors and executive officers of Triton, TAL International and Triton International Limited (“Holdco”) and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding TAL International’s directors and executive officers is available in its proxy statement filed with the SEC on March 19, 2015. Other information regarding the participants in the proxy solicitation and their respective interests are included in the proxy statement/prospectus and will be contained in other relevant materials to be filed with the SEC when they become available. These documents can be obtained free of charge from the sources indicated above.
(1) Adjusted pre-tax income, Adjusted EBITDA, Adjusted net income, and Adjusted pre-tax return on tangible equity are non-GAAP measurements we believe are useful in evaluating our operating performance. TAL’s definition and calculation of Adjusted pre-tax income, Adjusted EBITDA, Adjusted net income, and Adjusted pre-tax return on tangible equity are outlined in the attached schedules.
Please see Financial Tables below for a detailed reconciliation of these financial measurements.
-Financial Tables Follow-
TAL INTERNATIONAL GROUP, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share data)
December 31, 2015 December 31, 2014 ASSETS:Leasing equipment, net of accumulated depreciation and allowances of $1,218,826 and$1,055,864
$ 3,908,292 $ 3,674,031 Net investment in finance leases, net of allowances of $805 and $1,056 177,737 219,872 Equipment held for sale 74,899 59,861Revenue earning assets
4,160,928
3,953,764
Unrestricted cash and cash equivalents 58,907 79,132 Restricted cash 30,302 35,649 Accounts receivable, net of allowances of $1,314 and $978 95,709 85,681 Goodwill 74,523 74,523 Other assets 13,620 11,400 Fair value of derivative instruments 87 1,898 Total assets $ 4,434,076 $ 4,242,047 LIABILITIES AND STOCKHOLDERS' EQUITY: Equipment purchases payable $ 20,009 $ 88,336 Fair value of derivative instruments 20,348 10,394 Accounts payable and other accrued expenses 56,096 57,877 Net deferred income tax liability 456,123 411,007 Debt, net of unamortized deferred financing costs of $25,245 and $32,937 3,216,488 3,007,905Total liabilities
3,769,064
3,575,519
Stockholders' equity: Preferred stock, $0.001 par value, 500,000 shares authorized, none issued — —Common stock, $0.001 par value, 100,000,000 shares authorized, 37,167,134 and 37,006,283shares issued respectively
37 37 Treasury stock, at cost, 3,911,843 and 3,829,928 shares (75,310 ) (71,917 ) Additional paid-in capital 511,297 504,891 Accumulated earnings 248,183 246,766 Accumulated other comprehensive (loss) (19,195 ) (13,249 ) Total stockholders' equity 665,012 666,528 Total liabilities and stockholders' equity $ 4,434,076 $ 4,242,047TAL INTERNATIONAL GROUP, INC.
Consolidated Statements of Income
(Dollars and shares in thousands, except earnings per share)
Three Months Ended December 31, Twelve Months Ended December 31, 2015 2014 2015 2014 Leasing revenues: Operating leases $ 150,057 $ 149,346 $ 591,665 $ 573,778 Finance leases 3,474 4,237 15,192 18,355 Other revenues 234 409 1,147 1,873 Total leasing revenues 153,765 153,992 608,004 594,006 Equipment trading revenues 13,512 11,410 62,195 56,436 Equipment trading expenses (13,444 ) (9,796 ) (58,001 ) (49,246 ) Trading margin 68 1,614 4,194 7,190 Net (loss) gain on sale of leasing equipment (8,683 ) 560 (13,646 ) 6,987 Operating expenses: Depreciation and amortization 62,422 59,515 242,538 224,753 Direct operating expenses 17,067 7,840 48,902 33,076 Administrative expenses 16,843 11,122 51,154 45,399 Provision for doubtful accounts 65 154 133 212 Total operating expenses 96,397 78,631 342,727 303,440 Operating income 48,753 77,535 255,825 304,743 Other expenses: Interest and debt expense 28,958 28,063 118,280 109,265 Write-off of deferred financing costs — 120 895 5,192 Net (gain) loss on interest rate swaps (809 ) 370 205 780 Total other expenses 28,149 28,553 119,380 115,237 Income before income taxes 20,604 48,982 136,445 189,506 Income tax expense 7,330 16,927 48,233 65,461 Net income $ 13,274 $ 32,055 $ 88,212 $ 124,045 Net income per common share—Basic $ 0.40 $ 0.97 $ 2.68 $ 3.70 Net income per common share—Diluted $ 0.40 $ 0.96 $ 2.67 $ 3.68 Cash dividends paid per common share $ 0.45 $ 0.72 $ 2.61 $ 2.88 Weighted average number of common shares outstanding—Basic 32,865 33,110 32,861 33,482 Dilutive stock options and restricted stock 109 228 118 182 Weighted average number of common shares outstanding—Diluted 32,974 33,338 32,979 33,664TAL INTERNATIONAL GROUP, INC.
Consolidated Statements of Cash Flows
(Dollars in thousands)
Year Ended December 31, 2015 2014 2013 Cash flows from operating activities: Net income $ 88,212 $ 124,045 $ 143,166
Adjustments to reconcile net income to net cash provided by operatingactivities:
Depreciation and amortization 242,538 224,753 205,073 Amortization of deferred financing costs 7,602 7,729 7,260Amortization of net loss on terminated derivative instruments designated ascash flow hedges
2,618 2,479 3,020 Amortization of lease intangibles 3,713 130 — Net loss (gain) on sale of leasing equipment 13,646 (6,987 ) (26,751 ) Net loss (gain) on interest rate swaps 205 780 (8,947 ) Write-off of deferred financing costs 895 5,192 4,000 Deferred income taxes 48,233 65,461 77,699 Stock compensation charge 6,452 5,984 5,216 Changes in operating assets and liabilities: Net equipment (purchased) sold for resale activity (4,878 ) (6,671 ) (11,186 )Net realized loss on interest rate swaps terminated prior to their contractualmaturities
— (4,953 ) (24,235 ) Accounts receivable (10,028 ) (11,507 ) (2,811 ) Net (deferred revenue) (7,098 ) (5,696 ) (1,572 ) Accounts payable and other accrued expenses 8,123 (720 ) (3,982 ) Income taxes payable — 67 (220 ) Other assets 245 (1,279 ) 958 Net cash provided by operating activities 400,478 398,807 366,688 Cash flows from investing activities: Purchases of leasing equipment and investments in finance leases (704,178 ) (670,529 ) (660,492 ) Proceeds from sale of equipment, net of selling costs 125,525 165,990 140,724 Cash collections on finance lease receivables, net of income earned 42,860 47,607 39,470 Other (101 ) (253 ) 84 Net cash (used in) investing activities (535,894 ) (457,185 ) (480,214 ) Cash flows from financing activities: Purchases of treasury stock (4,446 ) (34,382 ) —Stock options exercised, related activity, and excess tax benefits from stockcompensation
38 (234 ) (235 ) Financing fees paid under debt facilities (805 ) (16,702 ) (13,897 ) Borrowings under debt facilities and proceeds under capital lease obligations 665,000 1,828,545 1,206,735 Payments under debt facilities and capital lease obligations (464,183 ) (1,605,666 ) (993,011 ) Decrease (increase) in restricted cash 5,347 (6,523 ) 6,711 Common stock dividends paid (85,760 ) (96,403 ) (89,745 ) Net cash provided by financing activities 115,191 68,635 116,558 Net (decrease) increase in unrestricted cash and cash equivalents $ (20,225 ) $ 10,257 $ 3,032 Unrestricted cash and cash equivalents, beginning of period 79,132 68,875 65,843 Unrestricted cash and cash equivalents, end of period $ 58,907 $ 79,132 $ 68,875 Supplemental disclosures: Interest paid $ 108,488 $ 99,895 $ 101,535 Income taxes (refunded) paid $ — $ (67 ) $ 225 Supplemental non-cash investing activities: Accrued and unpaid purchases of equipment $ 20,009 $ 88,336 $ 112,268The following table sets forth TAL’s equipment fleet utilization(2) as of and for the quarter and year ended December 31, 2015:
Average and Ending Utilization for theQuarter Ended December 31, 2015
Average Utilization Ending Utilization 93.7 % 93.0 %(2) Utilization is computed by dividing TAL’s total units on lease (in CEUs) by the total units in TAL’s fleet (in CEUs) excluding new units not yet leased and off-hire units designated for sale.
The following table provides the composition of TAL’s equipment fleet as of December 31, 2015 (in units, TEUs and cost equivalent units, or “CEUs”):
December 31, 2015 Equipment Fleet in Units Equipment Fleet in TEUs Dry 1,351,170 2,190,940 Refrigerated 70,505 134,204 Special 56,118 102,081 Tank 11,243 11,243 Chassis 21,216 38,210 Equipment leasing fleet 1,510,252 2,476,678 Equipment trading fleet 21,135 35,989 Total 1,531,387 2,512,667 December 31, 2015 Equipment Fleet in CEUs Operating leases 2,801,607 Finance leases 197,225 Equipment trading fleet 107,079 Total 3,105,911Non-GAAP Financial Measures
We use the terms "EBITDA", “Adjusted EBITDA”, "Adjusted pre-tax income", "Adjusted net income", and "Adjusted pre-tax return on tangible equity" throughout this press release.
EBITDA is defined as net income before interest and debt expense, income tax expense, depreciation and amortization, and the write-off of deferred financing costs. Adjusted EBITDA is defined as EBITDA excluding gains and losses on interest rate swaps, plus principal payments on finance leases, plus non-recurring transaction costs related to the pending merger with Triton.
Adjusted pre-tax income is defined as income before income taxes as further adjusted for certain items which are described in more detail below, which management believes are not representative of our operating performance. Adjusted pre-tax income excludes gains and losses on interest rate swaps, the write-off of deferred financing costs, and transaction costs related to the pending merger with Triton. Adjusted net income is defined as net income further adjusted for the items discussed above, net of income tax.
Adjusted pre-tax return on tangible equity is defined as the annual Adjusted pre-tax income divided by the Average adjusted tangible equity. Adjusted tangible equity is defined as total stockholders' equity plus net deferred income tax liability and the net fair value of derivative instruments less goodwill.
EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net income, and Adjusted pre-tax return on tangible equity are not presentations made in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net income, and Adjusted pre-tax return on tangible equity should not be considered as alternatives to, or more meaningful than, amounts determined in accordance with U.S. GAAP, including net income, or net cash from operating activities.
We believe that EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net income, and Adjusted pre-tax return on tangible equity are useful to an investor in evaluating our operating performance because:
-- these measures are widely used by securities analysts and investors to measure a company’s operating performance and available liquidity to service debt and fund investments without regard to debt or capital structure, income tax rates and depreciation policy estimates, which can vary substantially from company to company;
-- these measures help investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure, our asset base and certain non-routine events which we do not expect to occur in the future; and
-- these measures are used by our management for various purposes, including as measures of operating performance and liquidity, to assist in comparing performance from period to period on a consistent basis, in presentations to our board of directors concerning our financial performance and as a basis for strategic planning and forecasting.
We have provided a reconciliation of net income, the most directly comparable U.S. GAAP measure, to EBITDA in the tables below for the three and twelve months ended December 31, 2015 and 2014. We have also provided reconciliations of income before income taxes and net income, the most directly comparable U.S. GAAP measures, to Adjusted pre-tax income and Adjusted net income in the tables below for the three and twelve months ended December 31, 2015 and 2014.
We have also provided reconciliations of Operating cash flows to Adjusted EBITDA and Adjusted pre-tax return on tangible equity in the tables below for the current quarter.
TAL INTERNATIONAL GROUP, INC.Non-GAAP Reconciliations of Adjusted Pre-tax Income and Adjusted Net Income (Dollars and Shares in Thousands, Except Per Share Data)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
2015 2014 2015 2014 Income before income taxes $ 20,604 $ 48,982 $ 136,445 $ 189,506 Add: Write-off of deferred financing costs — 120 895 5,192 Net (gain) loss on interest rate swaps (809 ) 370 205 780 Transaction costs related to pending merger 6,100 — 7,500 — Adjusted pre-tax income $ 25,895 $ 49,472 $ 145,045 $ 195,478 Adjusted pre-tax income per fully diluted common share $0.79 $1.48 $4.40 $5.81 Weighted average number of common shares outstanding—Diluted 32,974 33,338 32,979 33,664Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
2015 2014 2015 2014 Net income $ 13,274 $ 32,055 $ 88,212 $ 124,045 Add:Write-off of deferred financing costs, net of tax
— 78 579 3,398Net (gain) loss on interest rate swaps, net of tax
(521 ) 242 133 511Transaction costs related to pending merger, net of tax
3,929 — 4,849 —Adjusted net income
$ 16,682 $ 32,375 $ 93,773 $ 127,954 Adjusted net income per fully diluted common share $0.51 $0.97 $2.84 $3.80 Weighted average number of common shares outstanding—Diluted 32,974 33,338 32,979 33,664 TAL INTERNATIONAL GROUP, INC. Non-GAAP Reconciliations of EBITDA(Dollars in Thousands)Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
2015 2014 2015 2014 Net income $ 13,274 $ 32,055 $ 88,212 $ 124,045 Add: Depreciation and amortization 62,422 59,515 242,538 224,753 Interest and debt expense 28,958 28,063 118,280 109,265 Write-off of deferred financing costs — 120 895 5,192 Income tax expense 7,330 16,927 48,233 65,461 EBITDA $ 111,984 $ 136,680 $ 498,158 $ 528,716 TAL INTERNATIONAL GROUP, INC.Non-GAAP Reconciliations of Operating Cash Flows to Adjusted EBITDA (Dollars in Thousands)Twelve Months Ended December 31,
2015 2014 Net cash provided by operating activities $ 400,478 $ 398,807 Non-cash expenses (20,385 ) (16,322 ) (Loss) gain on sale of equipment (13,646 ) 6,987 Changes in operating assets & liabilities 13,636 30,759 Interest expense 118,280 109,265 Principal payments on finance leases 42,860 47,607Transaction costs related to pending merger
7,500
—
Adjusted EBITDA $548,723
$ 577,103 TAL INTERNATIONAL GROUP, INC.Non-GAAP Reconciliations of Adjusted Pre-tax Return on Tangible Equity
(Dollars in Thousands)
Balance as ofDecember 31, 2015
Balance as ofDecember 31, 2014
Total stockholders' equity $ 665,012 $ 666,528 Net deferred income tax liability 456,123 411,007 Net fair value of derivative instruments liability 20,261 8,496 Goodwill (74,523 ) (74,523 ) Total adjusted tangible equity $ 1,066,873 $ 1,011,508 Average adjusted tangible equity(a) $ 1,039,191 Adjusted pre-tax income $ 145,045 Adjusted pre-tax return on tangible equity 14.0%(a) Calculated by taking the average of the current year's and the prior year's ending total Adjusted tangible equity.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160224006648/en/
TAL International Group, Inc.Investor RelationsJohn Burns, 914-697-2900Senior Vice President and Chief Financial Officer
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