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Air Lease Corporation Announces Second Quarter 2013 Results

  Air Lease Corporation Announces Second Quarter 2013 Results

Business Wire

LOS ANGELES -- August 8, 2013

Air Lease Corporation (ALC) (NYSE: AL) announced today the results of its
operations for the three and six months ended June 30, 2013.

Highlights

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

  *Diluted EPS increased by 46.4% to $0.41 per share for the three months
    ended June 30, 2013 from $0.28 per share for the three months ended June
    30, 2012
  *Revenues increased 31.4% to $207.9 million for the three months ended June
    30, 2013 compared to $158.2 million for the three months ended June 30,
    2012
  *Income before taxes increased 51.1% to $66.3 million with a pretax margin
    of 31.9% for the three months ended June 30, 2013 compared to income
    before taxes of $43.9 million with a pretax margin of 27.7% for the three
    months ended June 30, 2012
  *ALC became a launch customer for Boeing’s 787-10 Dreamliner at the Le
    Bourget airshow in June 2013, signing a non-binding memorandum of
    understanding for 30 787-10 aircraft and three additional 787-9 aircraft
  *Acquired twelve aircraft (including ten aircraft from our order book and
    two incremental aircraft), growing our fleet to 174 aircraft spread across
    a broad customer base of 78 airlines in 44 countries
  *We amended our 2010 Warehouse Facility, reducing the facility size by
    $250.0 million to $1.0 billion, reducing the interest rate to LIBOR plus
    2.25% per annum from LIBOR plus 2.50% per annum on drawn balances,
    reducing the interest rate to 0.50% per annum from 0.75% per annum on
    undrawn balances and extending the availability period to June 2015 from
    June 2013 with a subsequent four year term out option
  *Our Board of Directors declared ALC’s third quarterly cash dividend of
    $0.025 per share on our outstanding common stock

The following table summarizes the results for the three and six months ended
June 30, 2013 and 2012 (in thousands, except share amounts):

                 Three Months Ended                           Six Months Ended
                                                       
                 June 30,                                     June 30,
                 2013         2012         %            2013         2012         %
                                                 change                                       change
Revenues         $ 207,872       $ 158,173       31.4%        $ 399,869       $ 290,726       37.5%
Income
before           $ 66,311        $ 43,884        51.1%        $ 127,983       $ 85,494        49.7%
taxes
Net income       $ 42,990        $ 28,172        52.6%        $ 82,986        $ 55,099        50.6%
Cash
provided
by               $ 146,739       $ 138,698       5.8%         $ 307,880       $ 240,220       28.2%
operating
activities
Diluted          $ 0.41          $ 0.28          46.4%        $ 0.79          $ 0.54          46.3%
EPS
Adjusted
net              $ 51,199        $ 36,713        39.5%        $ 98,967        $ 70,813        39.8%
income^(1)
Adjusted         $ 190,748       $ 142,899       33.5%        $ 368,006       $ 261,216       40.9%
EBITDA^(1)

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

“Our strong results continued during the second quarter as we increased our
fully diluted EPS by 46% compared to Q2 of 2012. With an eye towards our
customers’ future requirements, and ALC’s long term growth, we placed a launch
order for the Boeing 787-10 at the Le Bourget Airshow, which will begin
delivering in 2019. The growth in overall global passenger traffic remains at
or above our expectations and we continue to see steady demand for our
aircraft,” said Steven F. Udvar-Házy, Chairman and Chief Executive Officer of
Air Lease Corporation.

“ALC’s fleet continues to perform well with no significant change in overall
portfolio lease rate factor. Our performance remains consistent and forward
placements overall are tracking with our expectations. Having closed a large
upsizing of our bank facility, we were able to drive our composite cost of
funds below 4% for the quarter,” said John L. Plueger, President and Chief
Operating Officer of Air Lease Corporation.

Fleet Growth

Building on our base of 162 aircraft at March 31, 2013, we increased our fleet
by twelve aircraft during the second quarter of 2013 and ended the second
quarter with 174 aircraft spread across a broad customer base of 78 airlines
across 44 countries.

Below are portfolio metrics of our fleet as of June 30, 2013 and December 31,
2012:

                                    June 30, 2013    December 31,
                                                                2012
Fleet size                                  174                 155
Weighted-average fleet                      3.5 years           3.5 years
age^(1)
Weighted-average remaining                  7.1 years           6.8 years
lease term^(1)
Aggregate fleet net book            $ 7.0 billion    $ 6.3 billion
value

^(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 June 30, 2013 and December 31, 2012:

                                    June 30, 2013     December 31,
                                                                 2012
Region                                      % of net book        % of net book
                                            value                value
Asia/Pacific                            39.3%             35.9%
Europe                                      37.2%                38.4%
Central America, South                      11.7%                12.6%
America and Mexico
U.S. and Canada                             6.4%                 7.3%
The Middle East and Africa                  5.4%                 5.8%
Total                                       100.0%               100.0%
                                                                 

The following table sets forth the number of aircraft we leased by aircraft
type as of June 30, 2013 and December 31, 2012:

                      June 30, 2013            December 31, 2012
                              Number         % of         Number         % of
Aircraft type                 of                       of         
                                             Total                       Total
                              aircraft                    aircraft
Airbus                        51             29.3%        41             26.4%
A319/320/321
Airbus                        20             11.5%        17             11.0%
A330-200/300
Boeing                        49             28.2%        46             29.7%
737-700/800
Boeing                        3              1.7%         3              1.9%
767-300ER
Boeing                        7              4.0%         7              4.5%
777-200/300ER
Embraer                       32             18.4%        31             20.0%
E175/190
ATR 72-600                    12             6.9%         10             6.5%
Total                         174            100.0%       155            100.0%
                                                                         

Debt Financing Activities

During the second quarter of 2013 and through August 8, 2013, the Company
expanded our banking group to 41 institutions and entered into additional debt
facilities aggregating $747.7 million, which included a $607.0 million
addition to our Syndicated Unsecured Revolving Credit Facility and additional
facilities aggregating $140.7 million. We ended the second quarter of 2013
with total unsecured debt outstanding of $3.6 billion. The Company’s unsecured
debt as a percentage of total debt increased to 68.8% as of June 30, 2013 from
60.2% as of December 31, 2012, while maintaining a composite cost of funds of
3.74%. We ended the third 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 to a
limited extent 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.

The Company’s debt financing was comprised of the following at June 30, 2013
and December 31, 2012:

                                  June 30, 2013      December 31, 2012
                                     (dollars in thousands)
Unsecured
Senior notes                         $ 2,170,620             $   1,775,000
Revolving credit facilities            950,000                   420,000
Term financings                        285,429                   248,916
Convertible senior notes              200,000                 200,000    
Total unsecured debt financing         3,606,049                 2,643,916
                                                             
Secured
Warehouse facilities                   842,133                   1,061,838
Term financings                        715,973                   688,601
Export credit financing               74,866                  —          
Total secured debt financing           1,632,972                 1,750,439
                                                             
Total secured and unsecured            5,239,021                 4,394,355
debt financing
Less: Debt discount                   (12,679   )              (9,623     )
Total debt                           $ 5,226,342            $   4,384,732  
                                                             
Selected interest rates and
ratios:
Composite interest rate^(1)            3.74      %               3.94       %
Composite interest rate on             5.06      %               5.06       %
fixed rate debt^(1)
Percentage of total debt at            53.57     %               53.88      %
fixed rate

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

Dividend

On August 8, 2013, our board of directors approved our third consecutive
quarterly cash dividend of $0.025 per share on our outstanding common stock.
The dividend will be paid on October 7, 2013 to holders of record of our
common stock as of September 17, 2013.

Conference Call

In connection with the earnings release, Air Lease Corporation will host a
conference call on August 8, 2013 at 4:30 PM Eastern Time to discuss the
Company's second quarter 2013 financial results.

Investors can participate in the conference call by dialing (866) 788-0542
domestic or (857) 350-1680 international. The passcode for the call is
60047305.

For your convenience, the conference call can be replayed in its entirety
beginning at 6:30 PM ET on August 8, 2013 until 11:59 PM ET on August 15,
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
57699038.

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,
Californiathat has airline customers throughout the world. ALC and its team
of dedicated and experienced professionalsare principally engaged in
purchasing commercial aircraft and leasing them toits airline partners
worldwide through customized aircraft leasing and financing solutions. For
more information, visitALC'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.

                                                        
Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)
                                                                             
                                          June 30,              December 31,

                                          2013                  2012
                                          (unaudited)
Assets
Cash and cash equivalents                 $ 234,299             $  230,089
Restricted cash                           77,975                106,307
Flight equipment subject to               7,462,993             6,598,898
operating leases
Less accumulated depreciation             (479,681    )         (347,035     )
                                          6,983,312             6,251,863
Deposits on flight equipment              861,403               564,718
purchases
Deferred debt issue costs—less
accumulated amortization of $41,357       90,720                74,219
and $32,288 as of June 30, 2013 and
December 31, 2012, respectively
Other assets                              191,962               126,428
Total assets                              $ 8,439,671           $  7,353,624
Liabilities and Shareholders’
Equity
Accrued interest and other payables       $ 112,675             $  90,169
Debt financing                            5,226,342             4,384,732
Security deposits and maintenance         502,164               412,223
reserves on flight equipment leases
Rentals received in advance               49,724                41,137
Deferred tax liability                    137,739               92,742
Total liabilities                         $ 6,028,644           $  5,021,003
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            991                   991
99,924,388 and 99,417,998 shares at
June 30, 2013 and December 31,
2012, respectively
Class B Non-Voting Common Stock,
$0.01 par value; authorized               18                    18
10,000,000 shares; issued and
outstanding 1,829,339 shares
Paid-in capital                           2,198,986             2,198,501
Retained earnings                         211,032               133,111
Total shareholders’ equity                $ 2,411,027           $  2,332,621
Total liabilities and shareholders’       $ 8,439,671           $  7,353,624
equity
                                                                             
                                                                             

                                                     
Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share amounts)
                                                                                         
                       Three Months Ended                  Six Months Ended
                       June 30,                            June 30,
                       2013            2012              2013            2012
                       (unaudited)
Revenues
Rental of flight       $  206,299        $  155,050        $  396,402        $  286,787
equipment
Interest and           1,573             3,123             3,467             3,939
other
Total revenues         207,872           158,173           399,869           290,726
                                                                                         
Expenses
Interest               43,468            34,146            83,698            56,060
Amortization of
discounts and          5,349             4,091             10,559            6,958
deferred debt
issue costs
Interest expense       48,817            38,237            94,257            63,018
                                                                                         
Depreciation of        68,783            52,537            132,646           96,873
flight equipment
Selling, general
and                    16,648            14,308            30,895            27,917
administrative
Stock-based            7,313             9,207             14,088            17,424
compensation
Total expenses         141,561           114,289           271,886           205,232
                                                                                         
Income before          66,311            43,884            127,983           85,494
taxes
Income tax             (23,321     )     (15,712     )     (44,997     )     (30,395     )
expense
Net income             $  42,990         $  28,172         $  82,986         $  55,099
                                                                                         
Net income per
share of Class A
and Class B
Common Stock:
Basic                  $  0.42           $  0.28           $  0.82           $  0.55
Diluted                $  0.41           $  0.28           $  0.79           $  0.54
Weighted-average
shares
outstanding:
Basic                  101,301,263       100,749,892       101,270,323       100,733,597
Diluted                108,815,938       107,410,967       108,665,884       107,420,100
                                                                                         
Other financial
data:
Adjusted net           51,199            36,713            98,967            70,813
income^(1)
Adjusted               190,748           142,899           368,006           261,216
EBITDA^(2)
                                                                                         

         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
^(1)   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
         income 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 you should not 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                  Six Months Ended
                                                  
                     June 30,                            June 30,
                     2013           2012              2013            2012
                     (unaudited)                         (unaudited)
Reconciliation
of cash flows
from operating
activities to

adjusted net
income:
Net cash
provided by          $ 146,739         $ 138,698         $ 307,880          $ 240,220
operating
activities
Depreciation
of flight              (68,783 )         (52,537 )         (132,646 )         (96,873 )
equipment
Stock-based            (7,313  )         (9,207  )         (14,088  )         (17,424 )
compensation
Deferred taxes         (23,321 )         (15,712 )         (44,997  )         (30,391 )
Amortization
of discounts
and deferred           (5,349  )         (4,091  )         (10,559  )         (6,958  )
debt issue
costs
Changes in
operating
assets and
liabilities:
Other assets           (1,816  )         729               (8,555   )         8,387
Accrued
interest and           5,585             (23,632 )         (5,463   )         (31,161 )
other payables
Rentals
received in           (2,753  )        (6,076  )        (8,587   )        (10,701 )
advance
Net income             42,990            28,172            82,986             55,099
Amortization
of discounts
and deferred           5,349             4,091             10,559             6,958
debt issue
costs
Stock-based            7,313             9,207             14,088             17,424
compensation
Tax effect            (4,453  )        (4,757  )        (8,666   )        (8,668  )
Adjusted net         $ 51,199         $ 36,713         $ 98,967          $ 70,813  
income
                                                                            
                                                                            
                     Three Months Ended                  Six Months Ended

                     June 30,                            June 30,
                     2013              2012              2013               2012
                    (unaudited)                         (unaudited)
Reconciliation
of net income
to adjusted
net income:
Net income           $ 42,990          $ 28,172          $ 82,986           $ 55,099
Amortization
of discounts
and deferred           5,349             4,091             10,559             6,958
debt issue
costs
Stock-based            7,313             9,207             14,088             17,424
compensation
Tax effect            (4,453  )        (4,757  )        (8,666   )        (8,668  )
Adjusted net         $ 51,199         $ 36,713         $ 98,967          $ 70,813  
income
                                                                            

         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
^(2)   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 income 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            Six Months Ended
                     June 30,                        June 30,
                     2013          2012            2013          2012
                     (unaudited)                     (unaudited)
Reconciliation
of cash flows
from operating
activities to
adjusted
EBITDA:
Net cash
provided by          $ 146,739       $ 138,698       $ 307,880       $ 240,220
operating
activities
Depreciation
of flight            (68,783   )     (52,537   )     (132,646  )     (96,873   )
equipment
Stock-based          (7,313    )     (9,207    )     (14,088   )     (17,424   )
compensation
Deferred taxes       (23,321   )     (15,712   )     (44,997   )     (30,391   )
Amortization
of discounts
and deferred         (5,349    )     (4,091    )     (10,559   )     (6,958    )
debt issue
costs
Changes in
operating
assets and
liabilities:
Other assets         (1,815    )     729             (8,555    )     8,387
Accrued
interest and         5,585           (23,632   )     (5,462    )     (31,161   )
other payables
Rentals
received in          (2,753    )     (6,076    )     (8,587    )     (10,701   )
advance
Net income           42,990          28,172          82,986          55,099
Net interest         48,341          37,271          93,289          61,425
expense
Income taxes         23,321          15,712          44,997          30,395
Depreciation         68,783          52,537          132,646         96,873
Stock-based          7,313           9,207           14,088          17,424
compensation
Adjusted             $ 190,748       $ 142,899       $ 368,006       $ 261,216
EBITDA
                                                       

                     Three Months Ended              Six Months Ended
                     June 30,                        June 30,
                     2013            2012            2013            2012
                     (unaudited)                     (unaudited)
Reconciliation
of net income
to adjusted
EBITDA:
Net income           $ 42,990        $ 28,172        $ 82,986        $ 55,099
Net interest         48,341          37,271          93,289          61,425
expense
Income taxes         23,321          15,712          44,997          30,395
Depreciation         68,783          52,537          132,646         96,873
Stock-based          7,313           9,207           14,088          17,424
compensation
Adjusted             $ 190,748       $ 142,899       $ 368,006       $ 261,216
EBITDA
                                                                               
                                                                               

                                   
Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
                                                                             
                                      Six Months Ended
                                       June 30,
                                       2013                2012
                                       (unaudited)
Operating Activities
Net income                             $  82,986                  $  55,099
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation of flight equipment       132,646                    96,873
Stock-based compensation               14,088                     17,424
Deferred taxes                         44,997                     30,391
Amortization of discounts and          10,559                     6,958
deferred debt issue costs
Changes in operating assets and
liabilities:
Other assets                           8,555                      (8,387     )
Accrued interest and other             5,462                      31,161
payables
Rentals received in advance            8,587                      10,701
Net cash provided by operating         307,880                    240,220
activities
Investing Activities
Acquisition of flight equipment        (705,774   )               (1,256,809 )
under operating lease
Payments for deposits on flight        (464,636   )               (250,836   )
equipment purchases
Acquisition of furnishings,            (47,327    )               (55,243    )
equipment and other assets
Net cash used in investing             (1,217,737 )               (1,562,888 )
activities
Financing Activities
Issuance of common stock               —                          70
Cash dividends paid                    (2,532     )               —
Tax withholdings related to
vesting of restricted stock            (1,742     )               —
units
Net change in unsecured                530,000                    122,000
revolving facilities
Proceeds from debt financings          653,849                    1,586,188
Payments in reduction of debt          (343,518   )               (287,369   )
financings
Restricted cash                        28,332                     (16,852    )
Debt issue costs                       (26,261    )               (32,661    )
Security deposits and                  90,092                     78,247
maintenance reserve receipts
Security deposits and
maintenance reserve                    (14,153    )               (20,173    )
disbursements
Net cash provided by financing         914,067                    1,429,450
activities
Net increase in cash                   4,210                      106,782
Cash and cash equivalents at           230,089                    281,805
beginning of period
Cash and cash equivalents at end       $  234,299                 $  388,587
of period
Supplemental Disclosure of Cash
Flow Information
Cash paid during the period for
interest, including capitalized        $  87,511                  $  43,010
interest of $14,887 and $8,631
at June 30, 2013 and 2012
                                                                             
Supplemental Disclosure of
Noncash Activities
Buyer furnished equipment,
capitalized interest, deposits
on flight equipment purchases          $  163,464                 $  255,900
and seller financing applied to
acquisition of flight equipment
Cash dividends declared, not yet       $  2,533                   $  —
paid

Contact:

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