Air Lease Corporation (AL)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 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 | 1,169,696 | 1,112,223 | 1,074,491 | 1,037,290 |
| Interest expense (ttm) | US$ in thousands | 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 | 434,011 | 410,928 | 387,601 | 363,527 |
| Interest coverage | 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 | 2.70 | 2.71 | 2.77 | 2.85 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,462,598K ÷ $708,964K
= 2.06
Air Lease Corporation's interest coverage ratio has shown some fluctuations over the past few quarters. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to cover interest payments.
As of December 31, 2023, the interest coverage ratio was 2.06, which improved from the previous quarter at 1.99. This indicates that the company's operating income is sufficient to cover its interest expenses. However, looking back to the same period in the prior year, the interest coverage ratio was significantly lower at 0.75, reflecting a potential improvement in the company's financial health.
Generally, an interest coverage ratio above 1 indicates that the company is generating enough earnings to cover its interest obligations. Air Lease Corporation's interest coverage ratio has been consistently above 1 over the analyzed periods, with the highest ratio seen in March 2020 at 2.85.
It is important to monitor the trend of the interest coverage ratio over time to assess the company's ability to meet its debt obligations. Any significant changes or persistent downward trend in the interest coverage ratio may indicate concerns about the company's financial health and ability to service its debt.
Peer comparison
Dec 31, 2023