Air Lease Corporation Announces First Quarter 2013 Results

Air Lease Corporation Announces First Quarter 2013 Results

LOS ANGELES--(BUSINESS WIRE)-- Air Lease Corporation (ALC) (NYS: AL) announced today the results of its operations for the three months ended March 31, 2013.

Highlights

Air Lease Corporation reports another consecutive quarter of fleet, revenue, profitability and financing growth:

• Diluted EPS increased by 46% to $0.38 per share for the three months ended March 31, 2013 from $0.26 per share for the three months ended March 31, 2012

• Revenues increased 45% to $192 million for the three months ended March 31, 2013 compared to $133 million for the three months ended March 31, 2012

• Income before taxes increased 48% to $62 million with a pretax margin of 32% for the three months ended March 31, 2013 compared to income before taxes of $42 million with a pretax margin of 31% for the three months ended March 31, 2012

• Received a corporate credit rating of A- from Kroll Bond Rating Agency

• Acquired seven aircraft (including five aircraft from our order book and two incremental aircraft), growing our fleet to 162 aircraft spread across a diverse and balanced customer base of 71 airlines in 41 countries

• Asia/Pacific carriers now represent the largest regional concentration of our fleet at 39.2% based on net book value as of March 31, 2013

• On May 7, 2013, we amended our Syndicated Unsecured Revolving Credit Facility increasing the aggregate principal amount by $607 million to $1.7 billion, reducing the interest rate to LIBOR plus a margin of 1.45% from LIBOR plus 1.75% and extending the term from three to four years

• Increased our bank group to 40 financial institutions

• Issued our first bond guaranteed by the Export-Import Bank of the United States for $77 million at a fixed rate of 1.6% for 12 years

• Issued a $400 million senior unsecured notes offering due in 2020 at a rate of 4.75%

• Our Board of Directors declared ALC's second quarterly cash dividend of $0.025 per share on our outstanding common stock

The following table summarizes the results for Q1 2013 and Q1 2012 (in thousands, except share amounts):

"During the first quarter we continued to execute our strategic plan for future growth, increasing our fully diluted EPS by 46% compared to Q1 of 2012. Although macro-economic indicators remain mixed, we continue to see strong global growth of passenger traffic led by the emerging markets, which drives demand for new aircraft. We see that strength continuing for the foreseeable future. Accordingly, we increased our order positions to meet that demand. Financing markets remain open and investors and institutions have been very receptive to ALC's strong credit metrics. Our recent corporate credit rating of A- from Kroll further broadens our access to attractively priced capital," said Steven F. Udvar-Házy, Chairman and Chief Executive Officer of Air Lease Corporation.

"The results of our first quarter reflect ALC's strong core leasing business that continues to yield attractive lease and operating margins. Asia/Pacific has now surpassed Europe as ALC's largest region as measured by percentage of net book value of our fleet. We see this trend continuing. We see further pockets of opportunity emerging with quality airlines in the Middle East, Africa and Latin America. Our overall lease placements are tracking as expected, including placement of our recently announced orders, and we have no significant customer credit concerns," said John L. Plueger, President and Chief Operating Officer of Air Lease Corporation.

Fleet Growth

Building on our base of 155 aircraft at December 31, 2012, we increased our fleet by seven aircraft during the first quarter of 2013 and ended the first quarter with 162 aircraft spread across a broad customer base of 71 airlines across 41 countries.

Below are portfolio metrics of our fleet as of March 31, 2013 and December 31, 2012:

Over 90% of our aircraft are operated internationally. The following table sets forth the percentage of net book value of our aircraft portfolio in the indicated regions as of March 31, 2013 and December 31, 2012:

The following table sets forth the number of aircraft we leased by aircraft type as of March 31, 2013 and December 31, 2012:

Debt Financing Activities

During the first quarter of 2013 and through May 9, 2013, the Company entered into additional debt facilities aggregating $1.2 billion, which included a $607.0 million addition to our Syndicated Unsecured Revolving Credit Facility, $400.0 million in senior unsecured notes due 2020 bearing interest at a rate of 4.75% per annum, $76.5 million of secured notes due 2024 bearing interest at a rate of 1.6% and are guaranteed by the Export-Import Bank of the United States ("Ex-Im Bank") and additional facilities aggregating $75.0 million. We ended the first quarter of 2013 with total unsecured debt outstanding of $3.0 billion. The Company's unsecured debt as a percentage of total debt increased to 61.8% as of March 31, 2013 from 60.2% as of December 31, 2012. The Company's fixed-rate debt as a percentage of total debt increased to 58.0% as of March 31, 2013 from 53.9% as of December 31, 2012. We ended the first quarter of 2013 with a conservative balance sheet with a low residual value risk profile and ample liquidity of $1.3 billion.

Our financing plan remains focused on raising unsecured debt in the global bank and capital markets, reinvesting cash flow from operations, and limited utilization of export credit financing. In May 2013, the Company received a corporate credit rating of A- from Kroll Bond Ratings which further broadens our access to attractively priced capital.

We have established a globally diverse lending group consisting of 40 banks. The Company's debt financing was comprised of the following at March 31, 2013 and December 31, 2012:

Conference Call

In connection with the earnings release, Air Lease Corporation will host a conference call on May 9, 2013 at 4:30 PM Eastern Time to discuss the Company's first quarter 2013 financial results.

Investors can participate in the conference call by dialing (866) 271-6130 domestic or (617) 213-8894 international. The passcode for the call is 98586894.

For your convenience, the conference call can be replayed in its entirety beginning at 6:30 PM ET on May 9, 2013 until 11:59 PM ET on May 16, 2013. 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 24099055.

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

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. 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 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 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;

• our inability to effectively deploy the net proceeds from our capital raising activities;

• 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, 2012 and other 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.