TAL INTERNATIONAL GROUP, INC. REPORTS THIRD QUARTER 2015 RESULTS
Purchase, New York, October 28, 2015 – TAL International Group, Inc. (NYSE: TAL), one of the world’s largest lessors of intermodal freight containers and chassis, today reported results for the third quarter ended September 30, 2015.
Highlights:
| |
| • | TAL reported Adjusted pre-tax income per fully diluted common share of $1.10 for the third quarter of 2015, a decrease of 25.2% from the third quarter of 2014. |
| |
| • | TAL reported leasing revenues of $154.4 million for the third quarter of 2015, an increase of 2.6% from the third quarter of 2014. |
| |
| • | TAL continues to achieve solid operational performance. Utilization averaged 95.8% for the third quarter of 2015, and through October 28, 2015, TAL has invested approximately $510 million in new and sale-leaseback containers for delivery in 2015. |
| |
| • | TAL announced a quarterly dividend of $0.45 per share, a 37.5% reduction from the prior quarter. The dividend is payable on December 23, 2015 to shareholders of record as of December 2, 2015. |
| |
| • | TAL announced a share repurchase plan of up to $150 million. |
Financial Results
The following table depicts TAL’s selected key financial information for the three and nine months ended September 30, 2015 and 2014 (dollars in millions, except per share data):
|
| | | | | | |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2015 | 2014 | % Change | 2015 | 2014 | % Change |
| Adjusted pre-tax income(1) | $36.4 | $49.6 | (26.6%) | $117.8 | $146.0 | (19.3%) |
| Adjusted pre-tax income(1) per share | $1.10 | $1.47 | (25.2%) | $3.57 | $4.32 | (17.4%) |
| Leasing revenues | $154.4 | $150.5 | 2.6% | $454.2 | $440.0 | 3.2% |
| Adjusted EBITDA(1) | $139.3 | $145.7 | (4.4%) | $419.2 | $428.7 | (2.2%) |
| Adjusted net income(1) | $23.5 | $32.4 | (27.5%) | $76.2 | $95.6 | (20.3%) |
| Adjusted net income(1) per share | $0.71 | $0.96 | (26.0%) | $2.31 | $2.83 | (18.4%) |
| Net income | $22.5 | $32.6 | (31.0%) | $74.9 | $92.0 | (18.6%) |
| Net income per share | $0.68 | $0.97 | (29.9%) | $2.27 | $2.72 | (16.5%) |
| Note: All per share data is per fully diluted common share. |
The Company focuses on adjusted pre-tax results since it considers gains and losses on interest rate swaps and the write-off of deferred financing costs to be unrelated to operating performance and since it does not expect to pay any significant income taxes for a number of years due to the availability of accelerated tax depreciation on its existing container fleet and anticipated future equipment purchases.
Operating Performance
“TAL achieved solid results in the third quarter of 2015, though we continued to face a challenging market environment,” commented Brian M. Sondey, President and CEO of TAL International. “We generated $36.4 million of Adjusted pre-tax income, representing $1.10 of Adjusted pre-tax income per share. Included in these results is a $1.3 million one-time charge to interest expense associated with the cancellation of a capital lease obligation. We grew our leasing revenues 2.6% from the third quarter of 2014, and we continued to generate an attractive level of returns. In the third quarter of 2015, our annualized Adjusted pre-tax return on tangible equity(1) was 13.8%.”
“Market conditions in 2015 have been challenging. TAL has been experiencing lease pricing pressure and decreasing disposal gains for several years due to falling steel and new container prices, widely available low-cost financing and aggressive competition. In 2015, lease pricing pressure has accelerated due to a 40% drop in steel prices, and we are also facing unusually low demand this year. Trade growth in 2015 has been disappointing, particularly on the critical Asia to Europe trade lane, and the traditional summer peak demand season for dry containers failed to materialize. This lack of demand has led to reduced pick-up volumes, increased drop-off volumes and a decrease in utilization and investment opportunities. Lower new container prices and reduced leasing demand has also led to an increase in disposal volumes and lower sale prices for used containers.”
“While down slightly, our utilization remains at a high level and continues to drive our solid profitability. Our utilization averaged 95.8% in the third quarter of 2015, and finished the quarter at 94.7%. Our utilization currently stands at 94.0%. The resiliency of our utilization reflects the underlying strength of our lease portfolio. As of September 30, 2015, 73.7% of our containers on-hire were covered by long-term or finance leases, and these leases have an average remaining duration of 42 months assuming no leases are renewed. Our lease portfolio is also protected by our lease structuring discipline, especially in ensuring the vast majority of our containers on lease must be returned to strong export locations.”
“We have purchased approximately $510 million of new and sale-leaseback containers for delivery this year. Most of this investment was placed early in the year and is supported by customer lease commitments. This solid level of investment in a challenging year reflects TAL’s strong supply capability and close customer relationships. However, we expect further investments this year to be limited.”
Outlook
“We currently expect the difficult market conditions will continue through the end of the year, and we expect our utilization and other key operating metrics will continue to deteriorate. As a result, we expect our Adjusted pretax income will decrease from the third quarter to the fourth quarter of 2015.”
“Looking into next year, we are hopeful that the supply / demand balance for containers will improve and offset some of the impacts of ongoing lease rate pressure. New container production has been limited in the second half of 2015, and leasing companies and shipping lines are generally accelerating their disposals of older containers. We expect our utilization will rebound next year if trade growth meets expectations. On the other hand, lease pricing pressure will continue as long as steel and new container prices remain low. Overall, we expect our Adjusted pre-tax income will decrease from 2015 to 2016.”
Dividend
TAL’s Board of Directors has approved and declared a $0.45 per share quarterly cash dividend on its issued and outstanding common stock, payable on December 23, 2015 to shareholders of record at the close of business on December 2, 2015. Based on the information available today, we believe this distribution will qualify as a return of capital rather than a taxable dividend for U.S. tax purposes. Investors should consult with a tax adviser to determine the proper tax treatment of this distribution.
Mr. Sondey commented, “TAL has decided to reduce our dividend to $0.45 per share this quarter, or to $1.80 per share on an annual basis. This represents a reduction of 37.5% from our previous dividend level. We believe the new dividend level is better aligned to the difficult current conditions in our market, and we are confident that our revised dividend level will be sustainable beyond our long-term forecasting horizon.”
Share Repurchase Plan
TAL’s Board of Directors authorized a share repurchase plan of up to $150 million. Repurchases will be made from time to time at TAL's discretion. No time limit was set for the completion of the repurchase program. This repurchase program replaces all prior plans.
Mr. Sondey concluded, “We believe our shares today represent a compelling investment opportunity. Despite the challenges we face, we continue to generate a high level of equity cash flow which appears to be under-estimated by investors. Given our current low trading multiples, the share repurchase program will be significantly accretive to earnings per share if we are successful in accumulating a meaningful number of shares.”
Investors’ Webcast
TAL will hold a Webcast at 9 a.m. (New York time) on Thursday, October 29, 2015 to discuss its third quarter results. An archive of the Webcast will be available one hour after the live call through Friday, December 11, 2015. To access the live Webcast or archive, please visit the Company’s website at http://www.talinternational.com.
About TAL International Group, Inc.
TAL is one of the world’s largest lessors of intermodal freight containers and chassis with 17 offices in 11 countries and approximately 230 third-party container depot facilities in 40 countries. The Company’s global operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. TAL’s fleet consists of approximately 1,493,000 containers and related equipment representing approximately 2,450,000 twenty-foot equivalent units (TEUs). This places TAL among the world’s largest independent lessors of intermodal containers and chassis as measured by fleet size.
Contact
John Burns
Senior Vice President and Chief Financial Officer
Investor Relations
(914) 697-2900
Important Cautionary Information Regarding Forward-Looking Statements
Statements in this press release regarding TAL International Group, Inc.'s business that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these statements involve risks and uncertainties, are only predictions and may differ materially from actual future events or results. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2015.
The Company’s views, estimates, plans and outlook as described within this document may change subsequent to the release of this statement. The Company is under no obligation to modify or update any or all of the statements it has made herein despite any subsequent changes the Company may make in its views, estimates, plans or outlook for the future.
(1) Adjusted pre-tax income, Adjusted EBITDA, Adjusted net income, and Adjusted pre-tax return on tangible equity are non-GAAP measurements we believe are useful in evaluating our operating performance. The Company’s definition and calculation of Adjusted pre-tax income, Adjusted EBITDA, Adjusted net income, and Adjusted pre-tax return on tangible equity are outlined in the attached schedules.
Please see below for a detailed reconciliation of these financial measurements.
-Financial Tables Follow-
TAL INTERNATIONAL GROUP, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share data)
(Unaudited)
|
| | | | | | |
| | September 30,
2015 | December 31,
2014 |
| ASSETS: | |
| |
|
| Leasing equipment, net of accumulated depreciation and allowances of $1,178,845 and $1,055,864 | $ | 3,856,833 |
| $ | 3,674,031 |
|
| Net investment in finance leases, net of allowances of $844 and $1,056 | 202,078 |
| 219,872 |
|
| Equipment held for sale | 67,480 |
| 59,861 |
|
| Revenue earning assets | 4,126,391 |
| 3,953,764 |
|
| Unrestricted cash and cash equivalents | 66,817 |
| 79,132 |
|
| Restricted cash | 31,185 |
| 35,649 |
|
| Accounts receivable, net of allowances of $1,250 and $978 | 84,883 |
| 85,681 |
|
| Goodwill | 74,523 |
| 74,523 |
|
| Deferred financing costs | 27,015 |
| 32,937 |
|
| Other assets | 12,967 |
| 11,400 |
|
| Fair value of derivative instruments | 86 |
| 1,898 |
|
| Total assets | $ | 4,423,867 |
| $ | 4,274,984 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |
| |
|
| Equipment purchases payable | $ | 12,572 |
| $ | 88,336 |
|
| Fair value of derivative instruments | 34,019 |
| 10,394 |
|
| Accounts payable and other accrued expenses | 54,428 |
| 57,877 |
|
| Net deferred income tax liability | 443,962 |
| 411,007 |
|
| Debt | 3,222,149 |
| 3,040,842 |
|
| Total liabilities | 3,767,130 |
| 3,608,456 |
|
| Stockholders' equity: | |
| |
|
| Preferred stock, $0.001 par value, 500,000 shares authorized, none issued | — |
| — |
|
| Common stock, $0.001 par value, 100,000,000 shares authorized, 37,167,134 and 37,006,283 shares issued respectively | 37 |
| 37 |
|
| Treasury stock, at cost, 3,911,843 and 3,829,928 shares | (75,310 | ) | (71,917 | ) |
| Additional paid-in capital | 509,960 |
| 504,891 |
|
| Accumulated earnings | 249,874 |
| 246,766 |
|
| Accumulated other comprehensive (loss) | (27,824 | ) | (13,249 | ) |
| Total stockholders' equity | 656,737 |
| 666,528 |
|
| Total liabilities and stockholders' equity | $ | 4,423,867 |
| $ | 4,274,984 |
|
TAL INTERNATIONAL GROUP, INC.
Consolidated Statements of Income
(Dollars and shares in thousands, except earnings per share)
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | 2015 | | 2014 | | 2015 | | 2014 |
| Leasing revenues: | | | | | | | |
| Operating leases | $ | 150,471 |
| | $ | 145,613 |
| | $ | 441,608 |
| | $ | 424,432 |
|
| Finance leases | 3,807 |
| | 4,441 |
| | 11,718 |
| | 14,118 |
|
| Other revenues | 148 |
| | 470 |
| | 913 |
| | 1,464 |
|
| Total leasing revenues | 154,426 |
| | 150,524 |
| | 454,239 |
| | 440,014 |
|
| | | | | | | | |
| Equipment trading revenues | 15,360 |
| | 13,745 |
| | 48,683 |
| | 45,026 |
|
| Equipment trading expenses | (14,169 | ) | | (12,032 | ) | | (44,557 | ) | | (39,450 | ) |
| Trading margin | 1,191 |
| | 1,713 |
| | 4,126 |
| | 5,576 |
|
| | | | | | | | |
| Net (loss) gain on sale of leasing equipment | (2,854 | ) | | 870 |
| | (4,963 | ) | | 6,427 |
|
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Depreciation and amortization | 61,711 |
| | 57,198 |
| | 180,116 |
| | 165,238 |
|
| Direct operating expenses | 13,002 |
| | 8,287 |
| | 31,835 |
| | 25,236 |
|
| Administrative expenses | 10,962 |
| | 11,317 |
| | 34,311 |
| | 34,277 |
|
| Provision for doubtful accounts | 256 |
| | 22 |
| | 68 |
| | 58 |
|
| Total operating expenses | 85,931 |
| | 76,824 |
| | 246,330 |
| | 224,809 |
|
| Operating income | 66,832 |
| | 76,283 |
| | 207,072 |
| | 227,208 |
|
| Other expenses: | | | | | | | |
| Interest and debt expense | 30,477 |
| | 26,695 |
| | 89,322 |
| | 81,202 |
|
| Write-off of deferred financing costs | 895 |
| | 173 |
| | 895 |
| | 5,072 |
|
| Net loss (gain) on interest rate swaps | 662 |
| | (545 | ) | | 1,014 |
| | 410 |
|
| Total other expenses | 32,034 |
| | 26,323 |
| | 91,231 |
| | 86,684 |
|
| Income before income taxes | 34,798 |
| | 49,960 |
| | 115,841 |
| | 140,524 |
|
| Income tax expense | 12,287 |
| | 17,343 |
| | 40,903 |
| | 48,534 |
|
| Net income | $ | 22,511 |
| | $ | 32,617 |
| | $ | 74,938 |
| | $ | 91,990 |
|
| Net income per common share—Basic | $ | 0.69 |
| | $ | 0.97 |
| | $ | 2.28 |
| | $ | 2.74 |
|
| Net income per common share—Diluted | $ | 0.68 |
| | $ | 0.97 |
| | $ | 2.27 |
| | $ | 2.72 |
|
| Cash dividends paid per common share | $ | 0.72 |
| | $ | 0.72 |
| | $ | 2.16 |
| | $ | 2.16 |
|
| Weighted average number of common shares outstanding—Basic | 32,860 |
| | 33,594 |
| | 32,860 |
| | 33,607 |
|
| Dilutive stock options and restricted stock | 94 |
| | 201 |
| | 129 |
| | 168 |
|
| Weighted average number of common shares outstanding—Diluted | 32,954 |
| | 33,795 |
| | 32,989 |
| | 33,775 |
|
TAL INTERNATIONAL GROUP, INC.
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
|
| | | | | | | |
| | Nine Months Ended
September 30, |
| | 2015 | | 2014 |
| Cash flows from operating activities: | | | |
| Net income | $ | 74,938 |
| | $ | 91,990 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 180,116 |
| | 165,238 |
|
| Amortization of deferred financing costs | 5,788 |
| | 5,799 |
|
| Amortization of net loss on terminated derivative instruments designated as cash flow hedges | 2,001 |
| | 1,751 |
|
| Amortization of lease premiums | 2,250 |
| | — |
|
| Net loss (gain) on sale of leasing equipment | 4,963 |
| | (6,427 | ) |
| Net loss on interest rate swaps | 1,014 |
| | 410 |
|
| Write-off of deferred financing costs | 895 |
| | 5,072 |
|
| Deferred income taxes | 40,903 |
| | 48,533 |
|
| Stock compensation charge | 5,031 |
| | 4,700 |
|
| Changes in operating assets and liabilities: | | | |
| Net equipment purchased for resale activity | (7,000 | ) | | (6,335 | ) |
| Net realized gain (loss) on interest rate swaps terminated prior to their contractual maturities | — |
| | 7,408 |
|
| Other changes in operating assets and liabilities | 1,327 |
| | (16,485 | ) |
| Net cash provided by operating activities | 312,226 |
| | 301,654 |
|
| Cash flows from investing activities: | | | |
| Purchases of leasing equipment and investments in finance leases | (561,687 | ) | | (547,555 | ) |
| Proceeds from sale of equipment, net of selling costs | 95,556 |
| | 117,351 |
|
| Cash collections on finance lease receivables, net of income earned | 32,051 |
| | 36,269 |
|
| Other | (35 | ) | | (108 | ) |
| Net cash (used in) investing activities | (434,115 | ) | | (394,043 | ) |
| Cash flows from financing activities: | | | |
| Purchases of treasury stock | (4,446 | ) | | (7,690 | ) |
| Stock options exercised and stock related activity | 38 |
| | (234 | ) |
| Financing fees paid under debt facilities | (761 | ) | | (9,074 | ) |
| Borrowings under debt facilities | 555,000 |
| | 1,225,935 |
|
| Payments under debt facilities and capital lease obligations | (373,750 | ) | | (1,039,021 | ) |
| Decrease (increase) in restricted cash | 4,464 |
| | (352 | ) |
| Common stock dividends paid | (70,971 | ) | | (72,617 | ) |
| Net cash provided by financing activities | 109,574 |
| | 96,947 |
|
| Net (decrease) increase in unrestricted cash and cash equivalents | $ | (12,315 | ) | | $ | 4,558 |
|
| Unrestricted cash and cash equivalents, beginning of period | 79,132 |
| | 68,875 |
|
| Unrestricted cash and cash equivalents, end of period | $ | 66,817 |
| | $ | 73,433 |
|
| Supplemental non-cash investing activities: | | | |
| Equipment purchases payable | $ | 12,572 |
| | $ | 68,228 |
|
The following table sets forth TAL’s equipment fleet utilization(2) as of and for the quarter ended September 30, 2015:
|
| | | | |
| Average and Ending Utilization for the Quarter Ended September 30, 2015 |
| Average Utilization | | Ending Utilization |
| 95.8 | % | | 94.7 | % |
(2) Utilization is computed by dividing TAL’s total units on lease (in cost equivalent units, or "CEUs") by the total units in TAL’s fleet (in CEUs) excluding new units not yet leased and off-hire units designated for sale.
The following table provides the composition of TAL’s equipment fleet as of September 30, 2015 (in units, TEUs and CEUs):
|
| | | |
| | September 30, 2015 |
| | Equipment Fleet in Units | | Equipment Fleet in TEUs |
Dry | 1,313,912 | | 2,131,165 |
Refrigerated | 66,898 | | 127,142 |
Special | 56,179 | | 102,677 |
Tank | 11,249 | | 11,249 |
Chassis | 21,231 | | 38,236 |
Equipment leasing fleet | 1,469,469 | | 2,410,469 |
| Equipment trading fleet | 23,554 | | 39,296 |
Total | 1,493,023 | | 2,449,765 |
| | | | |
| | September 30, 2015 | | |
| | Equipment Fleet in CEUs | | |
| Operating leases | 2,702,373 | | |
| Finance leases | 208,038 | | |
| Equipment trading fleet | 105,284 | | |
Total | 3,015,695 | | |
| | | | |
Non-GAAP Financial Measures
We use the terms "EBITDA", “Adjusted EBITDA”, "Adjusted pre-tax income", "Adjusted net income", and "Adjusted pre-tax return on tangible equity" throughout this press release.
EBITDA is defined as net income before interest and debt expense, income tax expense, depreciation and amortization, and the write-off of deferred financing costs. Adjusted EBITDA is defined as EBITDA excluding gains and losses on interest rate swaps, plus principal payments on finance leases.
Adjusted pre-tax income is defined as income before income taxes as further adjusted for certain items which are described in more detail below, which management believes are not representative of our operating performance. Adjusted pre-tax income excludes gains and losses on interest rate swaps and the write-off of deferred financing costs. Adjusted net income is defined as net income further adjusted for the items discussed above, net of income tax.
Adjusted pre-tax return on tangible equity is defined as the current quarter's Annualized adjusted pre-tax income divided by the average adjusted tangible equity. Adjusted tangible equity is defined as total stockholders' equity plus net deferred income tax liability and the net fair value of derivative instruments less goodwill.
EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net income, and Adjusted pre-tax return on tangible equity are not presentations made in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net income, and Adjusted pre-tax return on tangible equity should not be considered as alternatives to, or more meaningful than, amounts determined in accordance with U.S. GAAP, including net income, or net cash from operating activities.
We believe that EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net income, and Adjusted pre-tax return on tangible equity are useful to an investor in evaluating our operating performance because:
-- these measures are widely used by securities analysts and investors to measure a company’s operating performance and ability to service debt and fund investments without regard to debt or capital structure, income tax rates and depreciation policy estimates, which can vary substantially from company to company;
-- these measures help investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure, our asset base and certain non-routine events which we do not expect to occur in the future; and
-- these measures are used by our management for various purposes, including as measures of operating performance and as indicators of cash flows available to service debt and fund investments, to assist in comparing performance from period to period on a consistent basis, in presentations to our board of directors concerning our financial performance and as a basis for strategic planning and forecasting.
We have provided reconciliations of net income, the most directly comparable U.S. GAAP measure, to EBITDA and Adjusted EBITDA in the tables below for the three and nine months ended September 30, 2015 and 2014. We have provided reconciliations of income before income taxes and net income, the most directly comparable U.S. GAAP measures, to Adjusted pre-tax income and Adjusted net income in the tables below for the three and nine months ended September 30, 2015 and 2014.
We have also provided reconciliations of Operating cash flows to Adjusted EBITDA and Adjusted pre-tax return on tangible equity in the tables below for the current quarter.
|
| | | | | | | | | | | | |
TAL INTERNATIONAL GROUP, INC. Non-GAAP Reconciliations of EBITDA and Adjusted EBITDA
(Dollars in Thousands) |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2015 | 2014 | 2015 | 2014 |
| Net income | $ | 22,511 |
| $ | 32,617 |
| $ | 74,938 |
| $ | 91,990 |
|
| Add: | | | | |
| Depreciation and amortization | 61,711 |
| 57,198 |
| 180,116 |
| 165,238 |
|
| Interest and debt expense | 30,477 |
| 26,695 |
| 89,322 |
| 81,202 |
|
| Write-off of deferred financing costs | 895 |
| 173 |
| 895 |
| 5,072 |
|
| Income tax expense | 12,287 |
| 17,343 |
| 40,903 |
| 48,534 |
|
| EBITDA | 127,881 |
| 134,026 |
| 386,174 |
| 392,036 |
|
| Add: | | | | |
| Net loss (gain) on interest rate swaps | 662 |
| (545 | ) | 1,014 |
| 410 |
|
| Principal payments on finance lease | 10,762 |
| 12,169 |
| 32,051 |
| 36,269 |
|
| Adjusted EBITDA | $ | 139,305 |
| $ | 145,650 |
| $ | 419,239 |
| $ | 428,715 |
|
| | | | | |
TAL INTERNATIONAL GROUP, INC. Non-GAAP Reconciliations of Adjusted Pre-tax Income and Adjusted Net Income
(Dollars and Shares in Thousands, Except Per Share Data) |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2015 | 2014 | 2015 | 2014 |
| Income before income taxes | $ | 34,798 |
| $ | 49,960 |
| $ | 115,841 |
| $ | 140,524 |
|
| Add: | | | | |
| Write-off of deferred financing costs | 895 |
| 173 |
| 895 |
| 5,072 |
|
| Net loss (gain) on interest rate swaps | 662 |
| (545 | ) | 1,014 |
| 410 |
|
| Adjusted pre-tax income | $ | 36,355 |
| $ | 49,588 |
| $ | 117,750 |
| $ | 146,006 |
|
| Adjusted pre-tax income per fully diluted common share |
| $1.10 |
|
| $1.47 |
|
| $3.57 |
|
| $4.32 |
|
| Weighted average number of common shares outstanding—Diluted | 32,954 |
| 33,795 |
| 32,989 |
| 33,775 |
|
| | | | | |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2015 | 2014 | 2015 | 2014 |
| Net income | $ | 22,511 |
| $ | 32,617 |
| $ | 74,938 |
| $ | 91,990 |
|
| Add: | | | | |
| Write-off of deferred financing costs, net of tax(a) | 579 |
| 107 |
| 579 |
| 3,320 |
|
| Net loss (gain) on interest rate swaps, net of tax(a) | 428 |
| (356 | ) | 656 |
| 269 |
|
| Adjusted net income(a) | $ | 23,518 |
| $ | 32,368 |
| $ | 76,173 |
| $ | 95,579 |
|
| Adjusted net income per fully diluted common share |
| $0.71 |
|
| $0.96 |
|
| $2.31 |
|
| $2.83 |
|
| Weighted average number of common shares outstanding—Diluted | 32,954 |
| 33,795 |
| 32,989 |
| 33,775 |
|
| | | | | |
| (a) The differences between Adjusted net income and reported net income in the three and nine months ended September 30, 2015 and 2014 were due to net losses and gains on interest rate swaps and the write-off of deferred financing costs. TAL uses interest rate swaps to synthetically fix the interest rates for most of its floating rate debt so that the duration of the fixed interest rates more closely matches the expected duration of TAL’s lease portfolio. |
|
| | | | | | |
TAL INTERNATIONAL GROUP, INC.
Non-GAAP Reconciliations of Operating Cash Flows to Adjusted EBITDA
(Dollars in Thousands)
|
| | Nine Months Ended
September 30, |
| | 2015 | 2014 |
| Net cash provided by operating activities | $ | 312,226 |
| $ | 301,654 |
|
| Non-cash expenses | (15,070 | ) | (12,249 | ) |
| (Loss) gain on sale of equipment | (4,963 | ) | 6,427 |
|
| Changes in operating assets & liabilities | 5,673 |
| 15,412 |
|
Interest expense
| 89,322 |
| 81,202 |
|
| Principal payments on finance leases | 32,051 |
| 36,269 |
|
| Adjusted EBITDA | $ | 419,239 |
| $ | 428,715 |
|
|
| | | | | | |
TAL INTERNATIONAL GROUP, INC.
Non-GAAP Reconciliations of Adjusted Pre-tax Return on Tangible Equity
(Dollars in Thousands)
|
| | Balance as of September 30, 2015 | Balance as of June 30, 2015 |
| Total stockholders' equity | $ | 656,737 |
| $ | 675,586 |
|
| Net deferred income tax liability | 443,962 |
| 441,898 |
|
| Net fair value of derivative instruments liability | 33,933 |
| 3,572 |
|
| Goodwill | (74,523 | ) | (74,523 | ) |
| Total adjusted tangible equity | $ | 1,060,109 |
| $ | 1,046,533 |
|
| Average adjusted tangible equity(a) | $ | 1,053,321 |
| |
| Adjusted pre-tax income (for the current three months ended) | $ | 36,355 |
| |
| Annualized adjusted pre-tax income (Adjusted pre-tax income * 4) | $ | 145,420 |
| |
| Adjusted pre-tax return on tangible equity | 13.8 | % | |
| | | |
| (a) Calculated by taking the average of the current quarter's and the prior quarter's ending total adjusted tangible equity. |
