Air Lease Corporation Announces Fourth Quarter 2012 Results and Declares Its First Quarterly Cash Dividend on Its Common Stock

Thu Feb 28, 2013 4:03pm EST

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LOS ANGELES--(Business Wire)--
Air Lease Corporation (ALC) (NYSE: AL) announced today the results of its
operations for the three months ended and year ended December 31, 2012. 

Highlights

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

* Diluted EPS increased 117% to $1.28 per share for the year ended December 31,
2012 compared to $0.59 per share for the year ended December 31, 2011. Diluted
EPS increased 58% to $0.38 per share in the fourth quarter of 2012 compared to
$0.24 in the fourth quarter of 2011. 
* Revenues increased 95% to $656 million for the year ended December 31, 2012
compared to $337 million for the year ended December 31, 2011. Revenues
increased 65% to $190 million in the fourth quarter of 2012 compared to $115
million in the fourth quarter of 2011. 
* Income before taxes increased 146% to $204 million for the year ended December
31, 2012 compared to $83 million for the year ended December 31, 2011. Income
before taxes increased 58% to $61 million in the fourth quarter of 2012 compared
to $39 million in the fourth quarter of 2011. 
* Added 14 aircraft (including 11 aircraft from our order book and three
opportunistic/incremental aircraft) and sold one aircraft from our fleet,
growing our fleet to 155 aircraft spread across a diverse and balanced customer
base of 69 airlines in 40 countries. 
* Ended the fourth quarter with a composite interest rate of 3.94%, adding debt
facilities aggregating $611 million during the fourth quarter and through
February 28, 2013 and increased the Company`s unsecured debt as a percentage of
total debt to 60.2% as of December 31, 2012 compared to 31.7% as of December 31,
2011. 
* Based on strong Company performance to date, our board of directors declared
ALC`s first quarterly cash dividend of $0.025 per share on our outstanding
common stock.

The following table summarizes the results for the three months and years ended
December 31, 2012 and 2011 (in thousands, except share amounts):

                                            Three Months Ended                                            Year Ended                                                
                                            December 31,                                                  December 31,                                              
                                            2012                  2011                  % change          2012                  2011                  % change      
 Revenues                                   $    190,095          $    115,057          65     %          $    655,746          $    336,741          95     %      
 Income before taxes                        $    61,286           $    38,687           58     %          $    203,973          $    82,841           146    %      
 Net income                                 $    39,809           $    24,762           61     %          $    131,919          $    53,232           148    %      
 Cash provided by operating activities      $    115,683          $    100,969          15     %          $    491,029          $    267,166          84     %      
 Diluted EPS                                $    0.38             $    0.24             58     %          $    1.28             $    0.59             117    %      
 Adjusted net income(1)                     $    47,989           $    31,660           52     %          $    163,404          $    87,954           86     %      
 Adjusted EBITDA(1)                         $    173,768          $    102,167          70     %          $    596,451          $    290,168          106    %      


 (1)    See notes 1 and 2 to the Consolidated Statements of Income included in this earnings release for a discussion of the non-GAAP measures adjusted net income and adjusted EBITDA.  
                                                                                                                                                                                         


"We more than doubled our year over year profits in all metrics-Income before
taxes, Net income and Diluted EPS. The young age of the highly desirable
aircraft types in our globally diversified fleet continue to deliver strong
results for our shareholders. Owing to the financial success of the company
since inception three years ago, our board has declared the first quarterly cash
dividend on our common stock as part of a new dividend policy," said Steven F.
Udvar-Házy, Chairman and Chief Executive Officer of Air Lease Corporation. 

"To further enhance ALC`s growth during Q4 we took advantage of opportunistic
transactions and acquired 3 incremental aircraft over and above our new order
pipeline. We concluded the first sale of an aircraft from our fleet and
profitably redeployed a 737-800 from a troubled carrier. In addition to the
strong execution of our business plan during the quarter, we worked equally hard
to grow our future performance by increasing our orders in the last few months
for additional aircraft from Airbus, Boeing and ATR. We continue to place these
aircraft with high quality airline customers many years into the future," said
John L. Plueger, President and Chief Operating Officer of Air Lease Corporation.


Fleet Growth

Building on our base of 142 aircraft at September 30, 2012, we increased our
fleet by 13 aircraft during the fourth quarter of 2012 and ended the quarter
with 155 aircraft spread across a diverse and balanced customer base of 69
airlines based in 40 countries. 

Below are portfolio metrics of our fleet as of December 31, 2012 and 2011:

                                                       December 31, 2012          December 31, 2011  
 Fleet size                                            155                        102                
 Weighted-average fleet age(1)                         3.5 years                  3.6 years          
 Weighted-average remaining lease term(1)              6.8 years                  6.6 years          
 Aggregate fleet cost                                  $ 6.60 Billion             $ 4.37 Billion     


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


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 December 31, 2012 and 2011:

                                                    December 31, 2012               December 31, 2011       
 Region                                             % of net book value             % of net book value     
 Europe                                             38.4        %                   42.1        %           
 Asia/Pacific                                       35.9                            32.0                    
 Central America, South America and Mexico          12.6                            12.2                    
 U.S. and Canada                                    7.3                             9.1                     
 The Middle East and Africa                         5.8                             4.6                     
 Total                                              100.0       %                   100.0       %           
                                                                                                            


The following table sets forth the number of aircraft we leased by aircraft type
as of December 31, 2012 and 2011:

                               December 31, 2012                       December 31, 2011                   
 Aircraft type                 Number of              % of             Number of              % of         
                               aircraft               Total            aircraft               total        
 Airbus A319/320/321           41                     26.4   %         31                     30.4   %     
 Airbus A330-200/300           17                     11.0             11                     10.8         
 Boeing 737-700/800            46                     29.7             38                     37.2         
 Boeing 767-300ER              3                      1.9              3                      2.9          
 Boeing 777-200/300ER          7                      4.5              5                      4.9          
 Embraer E175/190              31                     20.0             12                     11.8         
 ATR 72-600                    10                     6.5              2                      2.0          
 Total                         155                    100.0  %         102                    100.0  %     
                                                                                                           


Debt Financing Activities

During the fourth quarter of 2012 and through February 28, 2013, the Company
entered into additional debt facilities aggregating $610.5 million, which
included a $450.0 million in senior unsecured notes and additional debt
facilities aggregating $160.5 million. We ended the fourth quarter of 2012 with
total unsecured debt outstanding of $2.6 billion. The Company`s unsecured debt
as a percentage of total debt increased to 60.2% as of December 31, 2012 from
31.7% as of December 31, 2011. We ended the fourth quarter of 2012 with a
conservative balance sheet with low leverage and ample available liquidity of
$1.29 billion. As part of our financing strategy we will continue to focus on
financing the Company on an unsecured basis. 

Our financing plan remains focused on continuing to raise unsecured debt in the
global bank market and through international and domestic capital markets
transactions, reinvesting cash flow from operations, and to a limited extent
through government guaranteed loan programs from Ex-Im Bank in support of our
new Boeing aircraft deliveries. 

As of December 31, 2012 and through February 28, 2013, we had established a
diverse lending group consisting of 36 banks across four general types of
lending facilities. The Company`s debt financing was comprised of the following
at December 31, 2012 and 2011:

                                                December 31, 2012            December 31, 2011  
                                                (dollars in thousands)                          
 Unsecured                                                                                      
 Senior notes                                   $ 1,775,000                  $ 120,000          
 Revolving credit facilities                    420,000                      358,000            
 Term financings                                248,916                      148,209            
 Convertible senior notes                       200,000                      200,000            
 Total unsecured debt financing                 2,643,916                    826,209            
                                                                                                
 Secured                                                                                        
 Warehouse facilities                           1,061,838                    1,048,222          
 Term financings                                688,601                      735,285            
 Total secured debt financing                   1,750,439                    1,783,507          
                                                                                                
 Total secured and unsecured debt financing     4,394,355                    2,609,716          
 Less: Debt discount                            (9,623)                      (6,917)            
 Total debt                                     $ 4,384,732                  $ 2,602,799        
                                                                                                
 Selected interest rates and ratios:                                                            
 Composite interest rate(1)                     3.94%                        3.14%              
 Composite interest rate on fixed rate debt(1)  5.06%                        4.28%              
 Percentage of total debt at fixed rate         53.88%                       24.26%             


 (1)    This rate does not include the effect of upfront fees, undrawn fees or issuance cost amortization.  
                                                                                                            


Conference Call

In connection with the earnings release, Air Lease Corporation will host a
conference call on February 28, 2013 at 4:30 PM Eastern Time to discuss the
Company's fourth quarter 2012 financial results. 

Investors can participate in the conference call by dialing (800) 299-8538
domestic or (617) 786-2902 international. The passcode for the call is 19927931.


For your convenience, the conference call can be replayed in its entirety
beginning at 6:30 PM ET on February 28, 2013 until 11:59 PM ET on March 7, 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 85948357. 

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; and 
* potential natural disasters and terrorist attacks and the amount of our
insurance coverage, if any, relating thereto.

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)                                                                                                                                                                                                
                                                                                                                                                                                                                                                   
                                                                                                                                                                                             December 31,                 December 31,             
                                                                                                                                                                                             2012                         2011                     
                                                                                                                                                                                                                                                   
 Assets                                                                                                                                                                                                                                            
 Cash and cash equivalents                                                                                                                                                                   $      230,089               $      281,805           
 Restricted cash                                                                                                                                                                             106,307                      96,157                   
 Flight equipment subject to operating leases                                                                                                                                                6,598,898                    4,368,985                
 Less accumulated depreciation                                                                                                                                                               (347,035          )          (131,569          )      
                                                                                                                                                                                             6,251,863                    4,237,416                
 Deposits on flight equipment purchases                                                                                                                                                      564,718                      405,549                  
 Deferred debt issue costs-less accumulated amortization of $32,288 and $17,500 as of December 31, 2012 and December 31, 2011, respectively                                                  74,219                       47,609                   
 Other assets                                                                                                                                                                                126,428                      96,057                   
 Total assets                                                                                                                                                                                $      7,353,624             $      5,164,593         
 Liabilities and Shareholders` Equity                                                                                                                                                                                                              
 Accrued interest and other payables                                                                                                                                                         $      90,169                $      54,648            
 Debt financing                                                                                                                                                                              4,384,732                    2,602,799                
 Security deposits and maintenance reserves on flight equipment leases                                                                                                                       412,223                      284,154                  
 Rentals received in advance                                                                                                                                                                 41,137                       26,017                   
 Deferred tax liability                                                                                                                                                                      92,742                       20,692                   
 Total liabilities                                                                                                                                                                           $      5,021,003             $      2,988,310         
 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 99,417,998 and 98,885,131 shares at December 31, 2012 and December 31, 2011, respectively      991                          984                      
 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                                                                                                                                                                             2,198,501                    2,174,089                
 Retained earnings                                                                                                                                                                           133,111                      1,192                    
 Total shareholders` equity                                                                                                                                                                  2,332,621                    2,176,283                
 Total liabilities and shareholders` equity                                                                                                                                                  $      7,353,624             $      5,164,593         
                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                   


 Air Lease Corporation and Subsidiaries                                                                                                                                     
 CONSOLIDATED STATEMENTS OF INCOME                                                                                                                                          
 (In thousands, except share amounts)                                                                                                                                       
                                                                                                                                                                            
                                                                Three Months Ended                                        Year Ended                                        
                                                                December 31,                                              December, 31                                      
                                                                2012                            2011                      2012                         2011                 
                                                                                                                                                                            
 Revenues                                                                                                                                                                   
 Rental of flight equipment                                     $       186,210                 $       113,627           $       645,853              $       332,719      
 Interest and other                                             3,885                           1,430                     9,893                        4,022                
 Total revenues                                                 190,095                         115,057                   655,746                      336,741              
                                                                                                                                                                            
 Expenses                                                                                                                                                                   
 Interest                                                       39,111                          14,719                    130,419                      44,862               
 Amortization of discounts and deferred debt issue costs        5,441                           2,509                     16,994                       9,481                
 Extinguishment of debt                                         -                               -                         -                            3,349                
 Interest expense                                               44,552                          17,228                    147,413                      57,692               
                                                                                                                                                                            
 Depreciation of flight equipment                               61,414                          38,876                    216,219                      112,307              
 Selling, general and administrative                            15,703                          11,898                    56,453                       44,559               
 Stock-based compensation                                       7,140                           8,368                     31,688                       39,342               
 Total expenses                                                 128,809                         76,370                    451,773                      253,900              
                                                                                                                                                                            
 Income before taxes                                            61,286                          38,687                    203,973                      82,841               
 Income tax expense                                             (21,477          )              (13,925          )        (72,054          )           (29,609          )   
 Net income                                                     $       39,809                  $       24,762            $       131,919              $       53,232       
                                                                                                                                                                            
 Net income per share of Class A and Class B Common Stock:                                                                                                                  
 Basic                                                          $       0.39                    $       0.25              $       1.31                 $       0.59         
 Diluted                                                        $       0.38                    $       0.24              $       1.28                 $       0.59         
 Weighted-average shares outstanding:                                                                                                                                       
 Basic                                                          101,247,337                     100,714,470               100,991,871                  89,592,945           
 Diluted                                                        107,899,560                     103,634,555               107,656,463                  90,416,346           
                                                                                                                                                                            
 Other financial data:                                                                                                                                                      
 Adjusted net income(1)                                         $       47,989                  $       31,660            $       163,404              $       87,954       
 Adjusted EBITDA(2)                                             $       173,768                 $       102,167           $       596,451              $       290,168      
                                                                                                                                                                            


 (1)    Adjusted net income (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, income from operations or any other performance measures derived in accordance with GAAP. Adjusted 
        net income 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 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 as a measure of both       
        operating performance and liquidity, as well as a discussion of the limitations of adjusted net income as an analytical tool and a reconciliation of adjusted net income  
        to our GAAP net loss and cash flow from operating activities.                                                                                                             
                                                                                                                                                                                  
        Operating Performance: Management and our board of directors use adjusted net income 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 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 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 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 has limitations as an analytical tool, and should not be considered 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 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 may differ from the adjusted net income 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 and cash flows from
operating activities, the most directly comparable GAAP measures of performance
and liquidity, to adjusted net income (in thousands):

                                                                                     Three Months Ended                                      Year Ended                                      
                                                                                     December 31,                                            December 31,                                    
                                                                                     2012                          2011                      2012                        2011                
                                                                                     (unaudited)                                             (unaudited)                                     
 Reconciliation of cash flows from operating activities to adjusted net income:                                                                                                              
 Net cash provided by operating activities                                           $     118,533                 $     100,969             $      491,029              $      267,166      
 Depreciation of flight equipment                                                    (61,414        )              (38,876        )          (216,219        )           (112,307        )   
 Stock-based compensation                                                            (7,140         )              (8,368         )          (31,688         )           (39,342         )   
 Deferred taxes                                                                      (21,477        )              (13,883        )          (72,050         )           (29,567         )   
 Amortization of discounts and deferred debt issue costs                             (5,441         )              (2,509         )          (16,994         )           (9,481          )   
 Extinguishment of debt                                                              -                             -                         -                           (3,349          )   
 Changes in operating assets and liabilities:                                                                                                                                                
 Other assets                                                                        (1,356         )              2,011                     18,758                      17,438              
 Accrued interest and other payables                                                 22,288                        (5,882         )          (25,797         )           (19,347         )   
 Rentals received in advance                                                         (4,184         )              (8,700         )          (15,120         )           (17,979         )   
 Net income                                                                          39,809                        24,762                    131,919                     53,232              
 Amortization of discounts and deferred debt issue costs                             5,441                         2,509                     16,994                      9,481               
 Extinguishment of debt                                                              -                             -                         -                           3,349               
 Stock-based compensation                                                            7,140                         8,368                     31,688                      39,342              
 Tax effect                                                                          (4,401         )              (3,979         )          (17,197         )           (17,450         )   
 Adjusted net income                                                                 $     47,989                  $     31,660              $      163,404              $      87,954       
                                                                                                                                                                                             
                                                                                     Three Months Ended                                      Year Ended                                      
                                                                                     December 31,                                            December 31,                                    
                                                                                     2012                          2011                      2012                        2011                
                                                                                     (unaudited)                                             (unaudited)                                     
 Reconciliation of net income to adjusted net income:                                                                                                                                        
 Net income                                                                          $     39,809                  $     24,762              $      131,919              $      53,232       
 Amortization of discounts and deferred debt issue costs                             5,441                         2,509                     16,994                      9,481               
 Extinguishment of debt                                                              -                             -                         -                           3,349               
 Stock-based compensation                                                            7,140                         8,368                     31,688                      39,342              
 Tax effect                                                                          (4,401         )              (3,979         )          (17,197         )           (17,450         )   
 Adjusted net income                                                                 $     47,989                  $     31,660              $      163,404              $      87,954       
                                                                                                                                                                                             


 (2)    Adjusted EBITDA (defined as net income before net interest expense, stock-based compensation expense, income tax expense, 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, 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 (primarily one-time amortization of convertible debt discounts) 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 should not be considered 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 and cash flows from
operating activities, the most directly comparable GAAP measures of performance
and liquidity, to adjusted EBITDA (in thousands):

                                                                                 Three Months Ended                                  Year Ended                                    
                                                                                 December 31,                                        December 31,                                  
                                                                                 2012                         2011                   2012                        2011              
                                                                                 (unaudited)                                         (unaudited)                                   
 Reconciliation of cash flows from operating activities to adjusted EBITDA:                                                                                                        
 Net cash provided by operating activities                                       $    118,533                 $    100,969           $      491,029              $   267,166       
 Depreciation of flight equipment                                                     (61,414  )                   (38,876  )        (216,219        )               (112,307  )   
 Stock-based compensation                                                             (7,140   )                   (8,368   )        (31,688         )               (39,342   )   
 Deferred taxes                                                                       (21,477  )                   (13,883  )        (72,050         )               (29,567   )   
 Amortization of discounts and deferred debt issue costs                              (5,441   )                   (2,509   )        (16,994         )               (9,481    )   
 Extinguishment of debt                                                               -                            -                 -                               (3,349    )   
 Changes in operating assets and liabilities:                                                                                                                                      
 Other assets                                                                         (1,356   )                   2,011             18,758                          17,438        
 Accrued interest and other payables                                                  22,288                       (5,882   )        (25,797         )               (19,347   )   
 Rentals received in advance                                                          (4,184   )                   (8,700   )        (15,120         )               (17,979   )   
 Net income                                                                           39,809                       24,762            131,919                         53,232        
 Net interest expense                                                                 43,928                       16,236            144,571                         55,678        
 Income taxes                                                                         21,477                       13,925            72,054                          29,609        
 Depreciation                                                                         61,414                       38,876            216,219                         112,307       
 Stock-based compensation                                                             7,140                        8,368             31,688                          39,342        
 Adjusted EBITDA                                                                 $    173,768                 $    102,167           $      596,451              $   290,168       
                                                                                                                                                                                   
                                                                                 Three Months Ended                                  Year Ended                                    
                                                                                 December 31,                                        December 31,                                  
                                                                                 2012                         2011                   2012                        2011              
                                                                                 (unaudited)                                         (unaudited)                                   
 Reconciliation of net income to adjusted EBITDA:                                                                                                                                  
 Net income                                                                      $    39,809                  $    24,762            $      131,919              $   53,232        
 Net interest expense                                                                 43,928                       16,236            144,571                         55,678        
 Income taxes                                                                         21,477                       13,925            72,054                          29,609        
 Depreciation                                                                         61,414                       38,876            216,219                         112,307       
 Stock-based compensation                                                             7,140                        8,368             31,688                          39,342        
 Adjusted EBITDA                                                                 $    173,768                 $    102,167           $      596,451              $   290,168       
                                                                                                                                                                                   
                                                                                                                                                                                   


 Air Lease Corporation and Subsidiaries                                                                                                                                                                                                
 CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                                                                                                 
 (In thousands)                                                                                                                                                                                                                        
                                                                                                                                                                                                                                       
                                                                                                                                                                                     Year Ended                                        
                                                                                                                                                                                     December 31,                                      
                                                                                                                                                                                     2012                         2011                 
                                                                                                                                                                                     (unaudited)                                       
 Operating Activities                                                                                                                                                                                                                  
 Net income                                                                                                                                                                          $       131,919              $       53,232       
 Adjustments to reconcile net income to net cash provided by operating activities:                                                                                                                                                     
 Depreciation of flight equipment                                                                                                                                                    216,219                      112,307              
 Stock-based compensation                                                                                                                                                            31,688                       39,342               
 Deferred taxes                                                                                                                                                                      72,050                       29,567               
 Amortization of discounts and deferred debt issue costs                                                                                                                             16,994                       9,481                
 Extinguishment of debt                                                                                                                                                              -                            3,349                
 Changes in operating assets and liabilities:                                                                                                                                                                                          
 Other assets                                                                                                                                                                        (18,758          )           (17,438          )   
 Accrued interest and other payables                                                                                                                                                 25,797                       19,347               
 Rentals received in advance                                                                                                                                                         15,120                       17,979               
 Net cash provided by operating activities                                                                                                                                           491,029                      267,166              
 Investing Activities                                                                                                                                                                                                                  
 Acquisition of flight equipment under operating lease                                                                                                                               (1,899,231       )           (2,529,901       )   
 Payments for deposits on flight equipment purchases                                                                                                                                 (418,278         )           (360,587         )   
 Proceeds from disposal of flight equipment                                                                                                                                          47,490                       -                    
 Acquisition of furnishings, equipment and other assets                                                                                                                              (74,905          )           (86,668          )   
 Net cash used in investing activities                                                                                                                                               (2,344,924       )           (2,977,156       )   
 Financing Activities                                                                                                                                                                                                                  
 Issuance of common stock                                                                                                                                                            43                           858,774              
 Tax withholdings on stock-based compensation                                                                                                                                        (7,312           )           -                    
 Issuance of convertible notes                                                                                                                                                       -                            193,000              
 Net change in unsecured revolving facilities                                                                                                                                        62,000                       238,000              
 Proceeds from debt financings                                                                                                                                                       2,115,607                    1,344,530            
 Payments in reduction of debt financings                                                                                                                                            (432,129         )           (84,796          )   
 Restricted cash                                                                                                                                                                     (10,150          )           (47,481          )   
 Debt issue costs                                                                                                                                                                    (42,149          )           (13,933          )   
 Security deposits and maintenance reserve receipts                                                                                                                                  142,541                      180,862              
 Security deposits and maintenance reserve disbursements                                                                                                                             (26,272          )           (5,982           )   
 Net cash provided by financing activities                                                                                                                                           1,802,179                    2,662,974            
 Net increase (decrease) in cash                                                                                                                                                     (51,716          )           (47,016          )   
 Cash and cash equivalents at beginning of period                                                                                                                                    281,805                      328,821              
 Cash and cash equivalents at end of period                                                                                                                                          $       230,089              $       281,805      
 Supplemental Disclosure of Cash Flow Information                                                                                                                                                                                      
 Cash paid during the period for interest, including capitalized interest of $19,388 at December 31, 2012 and capitalized interest of $10,390 at December 31, 2011                   $       124,731              $       51,986       
 Supplemental Disclosure of Noncash Activities                                                                                                                                                                                         
 Buyer furnished equipment, capitalized interest, deposits on flight equipment purchases and seller financing applied to acquisition of flight equipment under operating leases      $       377,892              $       190,013      


Air Lease Corporation
Investors:
Ryan McKenna, 310-553-0555
Assistant Vice President, Strategic Planning & Investor Relations
rmckenna@airleasecorp.com
or
Media:
Laura St. John, 310-553-0555
Media and Investor Relations Coordinator
lstjohn@airleasecorp.com

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