AIR LEASE CORPORATION (NYSE:AL) Files An 8-K Regulation FD DisclosureItem 7.01.
Air Lease Corporation (the “Company”) is providing estimated impacts related to the Tax Cuts and Jobs Act (the “Act”) signed into law on December22, 2017. The Company expects the overall net impact of the Act to be favorable to it with significant upfront and ongoing benefits to shareholders due to the reduction in the federal corporate tax rate as described below. The Company is proud to be a U.S.-based company and continues to believe that its corporate structure provides significant value to its shareholders.
| • | Effective January1, 2018, the U.S. corporate tax rate will be reduced permanently from 35% to 21%. As such, the Company will revalue its deferred tax liability in its December31, 2017 financial statements to reflect this change in statutory rate. |
| • | The Company expects the revaluation to result in a 40% reduction in its deferred tax liability, and such revaluation will be recorded as a discrete item in the Company’s fourth quarter 2017 tax provision. |
| • | To provide further context, had the Act been signed into law in the third quarter, the Company estimates that it would have recorded an increase to shareholders’ equity of $329million or $2.95 per share. This estimation is based on balances as of September30, 2017 and the actual amount at the end of the fourth quarter of 2017 may differ, as it is dependent on, among other things, the final net deferred tax liability balance as of December31, 2017. |
| • | The Company reiterates its intention to target a debt-to-equity ratio of 2.5-to-1.0x and will remain asset focused and opportunistic as it relates to potential aircraft acquisitions and dispositions. |
| • | Looking forward, the Company expects to benefit from a lower U.S. corporate tax rate, which will serve to increase net income and further accelerate the Company’s earnings growth. |
The impact of the Act on the Company may differ from estimates above due to, among other things, changes in assumptions the Company has made in its interpretation of the Act, guidance related to application of the Act that may be issued in the future, and actions that the Company may take as a result of the Company’s expected impact of the Act.
The information furnished under this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-Looking Statements
Statements in this Current Report on Form 8-K that are not historical facts are hereby identified as “forward-looking statements,” including statements about the Company’s expectations of the impact of the Act to the Company, including the Company’s estimated reduction in its deferred tax liability, and the Company’s intention to target a debt-to-equity ratio of 2.5-to-1.0x. 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:
| • | the Company’s inability to make acquisitions of, or lease, aircraft on favorable terms; |
| • | the Company’s inability to sell aircraft on favorable terms; |
| • | the Company’s 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; |
| • | the Company’s inability to effectively oversee our managed fleet; |
| • | the Company’s inability to obtain refinancing prior to the time our debt matures; |
| • | impaired financial condition and liquidity of the Company’s 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; |
| • | potential natural disasters and terrorist attacks and the amount of the Company’s 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 December31, 2016, 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.
About AIR LEASE CORPORATION (NYSE:AL)
Air Lease Corporation is an aircraft leasing company. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company (Boeing) and Airbus S.A.S. (Airbus), and leasing those aircraft to airlines across the world. Along with its leasing activities, the Company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies and airlines. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee. The Company provides aircraft to airline customers in various markets, such as Asia, the Pacific Rim, Latin America, the Middle East, Europe, Africa and North America. The Company owns approximately 240 aircraft, including over 180 single-aisle narrowbody jet aircraft, approximately 40 twin-aisle widebody jet aircraft and over 20 turboprop aircraft.
