“We had a solid fourth quarter, concluding another successful year for ALC generating pre-tax return on equity of 14.3% and $1.25 billion of operating cash flow for the full year 2018. We are now in our tenth year of operation and expect to reach $20 billion in assets in 2019 with a strong balance sheet. We have good momentum on lease placements and a strong outlook on aircraft sales and financing, already issuing $700 million of senior unsecured notes in January. We remain confident and optimistic looking forward,” said John L. Plueger, Air Lease president and CEO.
Revenues increased 12.9% for the three months ended December 31, 2018, as compared to the three months ended December 31, 2017. The increase was principally driven by the continued fleet growth, partially offset by a decrease in sales and trading activity.
Income before taxes increased $6 million or 3.8% to $172 million for the Q4/2018, as compared to Q4/2017, also driven by fleet growth.
Net income decreased $333 million or 70.6% to $138 million representing $1.24 per diluted share for Q4/2018, as compared to Q4/2017. The decrease primarily resulted from the enactment of the Tax Reform Act, which resulted in a tax benefit of $354.1 million, or $3.16 per diluted share in 2017. This decrease was partially offset by the growth in revenues highlighted above.
The Air Lease fleet grew by 18.3% based on net book value of $15.7 billion as of December 31, 2018 and was comprised of 275 aircraft, with a weighted-average age and remaining lease term of 3.8 years and 6.8 years, respectively, and 61 managed aircraft.
The company ended the fourth quarter of 2018 with total debt financing, net of discounts and issuance costs, of $11.5 billion, resulting in a debt to equity ratio of 2.40:1.
Other highlights from 2018 included:
Took delivery of 12 aircraft from the company’s order book during the fourth quarter, representing $881 million in aircraft investments
Sold five aircraft during Q4 for sales proceeds of $164 million
Ended the year with $25.7 billion in committed minimum future rental payments consisting of $11.8 billion in contracted minimum rental payments on the aircraft in the existing fleet and $13.9 billion in minimum future rental payments related to aircraft on order
Issued a total of $3.03 billion of senior unsecured notes in 2018 and ended the year with liquidity of $4.3 billion
Declared a quarterly cash dividend of $0.13 per share on outstanding common stock for the fourth quarter of 2018
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