Air Lease Corporation (AL)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,327,685 | 1,458,157 | 1,450,944 | 1,469,678 | 1,462,598 | 1,341,165 | 1,274,032 | 1,201,603 | 407,413 | 397,496 | 385,922 | 349,253 | 1,054,031 | 999,154 | 1,009,052 | 1,065,235 | 1,121,436 | 1,181,688 | 1,217,517 | 1,186,733 |
| Interest expense (ttm) | US$ in thousands | 794,428 | 798,456 | 756,457 | 738,981 | 708,964 | 673,755 | 633,801 | 580,391 | 546,180 | 528,058 | 519,778 | 513,479 | 513,015 | 508,697 | 499,885 | 486,700 | 474,758 | 466,413 | 461,710 | 454,320 |
| Interest coverage | 1.67 | 1.83 | 1.92 | 1.99 | 2.06 | 1.99 | 2.01 | 2.07 | 0.75 | 0.75 | 0.74 | 0.68 | 2.05 | 1.96 | 2.02 | 2.19 | 2.36 | 2.53 | 2.64 | 2.61 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,327,685K ÷ $794,428K
= 1.67
The interest coverage ratio for Air Lease Corporation has fluctuated over the past few years, indicating the company's ability to meet its interest payments from its earnings. As of December 31, 2024, the interest coverage ratio was 1.67, which means the company generated 1.67 times the earnings necessary to cover its interest expenses for that period.
The declining trend in the interest coverage ratio since the beginning of 2022, reaching a low of 0.68 on March 31, 2022, could raise concerns about the company's ability to comfortably meet its interest obligations from its operating profits. However, it is worth noting that the ratio has shown some improvement in the following quarters but remains below the levels seen in the earlier periods.
Overall, a lower interest coverage ratio may indicate a higher risk of financial distress, as the company may struggle to cover its interest expenses with its current level of earnings. Investors and creditors may closely monitor this ratio to assess Air Lease Corporation's financial health and debt servicing capacity.
Peer comparison
Dec 31, 2024