TAL International Group, Inc. (NYSE:TAL), one of the
world’s largest lessors of intermodal freight containers and
chassis, today reported results for the fourth quarter and full
year ended December 31, 2014.
Highlights:
- TAL reported Adjusted pre-tax income of
$5.81 per fully diluted common share for the year ended
December 31, 2014, a decrease of 9.4% from 2013. TAL reported
leasing revenues of $594.0 million for the year ending
December 31, 2014, an increase of 4.2% from 2013.
- TAL reported Adjusted pre-tax income of
$1.48 per fully diluted common share for the fourth quarter of
2014, a decrease of 2.6% from the fourth quarter of 2013. TAL
reported leasing revenues of $154.0 million for the fourth quarter
of 2014, an increase of 4.5% from the fourth quarter of 2013.
- TAL continued to achieve outstanding
operational performance. Utilization averaged 98.1% for the fourth
quarter of 2014 and averaged 97.6% for the full year.
- TAL announced a quarterly dividend of
$0.72 per share payable on March 24, 2015 to shareholders of
record as of March 3, 2015.
- TAL completed the stock repurchase plan
that it implemented on September 1, 2014 under its stock repurchase
program. Since September 1, 2014, TAL repurchased 900,000 shares of
its stock at an average price of $41.95. As of February 10, 2015,
there were 88,157 shares authorized for purchase under TAL's stock
repurchase program.
- On February 11, 2015, TAL's Board of
Directors authorized a new share repurchase program of up to 3
million of its outstanding shares. These shares augment the
remaining 88,157 shares authorized for purchase under TAL's
existing stock repurchase program. Repurchases will be made from
time to time at TAL's discretion, based on ongoing assessments of
the capital needs of the business, the market price of TAL's common
stock and general market and other conditions. No time limit was
set for the completion of the repurchase program.
Financial Results
The following table depicts TAL’s selected key financial
information for the fourth quarter and full year ended
December 31, 2014 and 2013 (dollars in millions, except per
share data):
Three Months Ended
December 31, Twelve Months Ended December 31,
2014
2013
%
Change
2014
2013
%
Change
Adjusted pre-tax income(1) $49.5 $51.5 (3.9%) $195.5 $215.9
(9.4%)
Adjusted pre-tax income(1) per share $1.48 $1.52
(2.6%) $5.81 $6.41 (9.4%)
Leasing revenues $154.0 $147.4
4.5% $594.0 $569.9 4.2%
Adjusted EBITDA(1) $148.4 $142.9
3.8% $577.1 $572.2 0.9%
Adjusted net income(1) $32.4 $33.5
(3.3%) $128.0 $140.0 (8.6%)
Adjusted net income(1) per share
$0.97 $0.99 (2.0%) $3.80 $4.15 (8.4%)
Net income $32.1 $33.1
(3.0%) $124.0 $143.2 (13.4%)
Net income per share $0.96
$0.98 (2.0%) $3.68 $4.25 (13.4%) 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
“We are very pleased that 2014 was another solid year for TAL,"
commented Brian M. Sondey, President and CEO of TAL International.
"We generated Adjusted pre-tax income of $195.5 million in 2014,
representing $5.81 per share. TAL also grew leasing revenue over
4.2% from 2013, and continued to achieve a high level of returns.
In 2014, we generated an Adjusted pre-tax return on tangible
equity(1) of 19.9%.”
“Our solid profitability and excellent returns continued to be
driven by very high container utilization. Our utilization averaged
97.6% in 2014, and finished the year at 98.1%. Our utilization
currently stands at 98.0%. Demand for leased containers was strong
in 2014. Trade volumes generally outperformed our customers’
expectations, and the market share shift from owned to leased
containers continued. Our utilization was also supported by our
high quality lease portfolio. As of December 31, 2014, 76.9% of our
containers on-hire were under long-term or finance leases, with an
average remaining duration of 41 months assuming no leases are
renewed.”
“While we continued to achieve solid operating and financial
performance, our Adjusted pre-tax income per share decreased 9.4%
from 2013 to 2014. The decrease in our earnings in 2014 primarily
reflected a decrease in our disposal gains. Our average used
container selling prices in 2014 were down nearly 23% from 2013,
reflecting the ongoing moderation of used container sale prices
from the extreme peak levels reached in 2011. Our disposal gains
also continue to be impacted by the shift in the mix of our
disposals from original TAL containers to containers acquired from
our customers through sale-leaseback transactions. There are
relatively few original TAL containers currently reaching sale age
due to our low level of procurement in the late 1990’s and early
2000’s, and we have supplemented our older fleet with
sale-leaseback containers. These containers typically have been
acquired for prices higher than the net book values of
similarly-aged original TAL containers.”
“Our profitability in 2014 was also negatively impacted by very
low market lease rates. New container prices have decreased
significantly over the last few years, and long-term interest rates
remain exceptionally low. Low-cost financing for leasing companies
also remains widely available and continues to fuel aggressive
competition for every deal. The low market lease rates limited the
profitability of our new investments in 2014 and increased the rate
pressure we faced as we renegotiated expiring leases and remarketed
containers that had been returned to us. In 2014, our average lease
rates for dry containers decreased 5.8% from 2013, excluding the
impact of sale-leaseback transactions, and our average lease rates
for refrigerated containers decreased 4.2%. We were able to offset
some of this lease rate pressure by taking advantage of low
interest rates to refinance existing borrowing facilities and lower
the cost of our debt while at the same time extending the duration
of our fixed interest rates. We lowered our average effective
interest rate to 3.69% in 2014 from 4.01% in 2013, increased the
average duration of our fixed interest rates to 68 months, and
increased the portion of our debt with fixed interest rates to 90%
as of year-end.”
“We passed on an unusually large number of lease opportunities
in 2014 due to pricing and lease structuring concerns. But we also
continued to actively invest in our fleet to ensure we remain our
core customers’ supplier of choice and to take advantage of the
reasonable lease transactions that came to us due to our extensive
supply capability, strong reputation for reliability and deep
customer relationships. We purchased over $638 million of
containers for delivery in 2014.”
Outlook
Mr. Sondey continued, “As we begin 2015, we see a mix of
positive and negative market factors, and we expect our operating
performance to continue to reflect a combination of high
utilization and decreasing average lease rates.”
“The supply and demand balance for containers remains favorable.
Utilization for the leasing industry is high overall, and depot
inventories for leasing companies are low in key Asian export
locations. We also expect container leasing to continue to take
share from ownership as many customers remain cautious about
purchasing large volumes of new containers and continue to be
interested in concluding sale-leaseback transactions for older
containers in their fleets. Market forecasters also expect trade
volume to be solid in 2015. Alphaliners, for example, is projecting
container throughput to increase 5.4% in 2015.”
“On the other hand, we expect that we will continue to face very
low market lease rates. Steel prices in China have decreased
roughly 15% over the last few months, which will likely lead to
further decreases in new container prices. Long-term interest rates
remain exceptionally low, and we continue to see aggressive
competition for every leasing transaction. Used container sale
prices are also likely to drift lower if new container prices
decrease further.”
“In 2015, we will also start to face the expiration of high rate
leases that were originated from 2010 through 2012, and we expect
the decrease in our average portfolio lease rates to accelerate.
The bulk of expirations for leases covering our 2010-2012
containers stretch through 2019, and we will continue to face lease
rate and profitability pressure through this period if market lease
rates remain low. It will also be more difficult to offset the
profitability impact of decreasing lease rates by lowering our
average borrowing costs since our average effective interest rate
is now approaching the current market level.”
“The first quarter is typically our weakest quarter of the year
since it represents the slow season for our dry container product
line. In addition, the first quarter has the fewest number of days,
which reduces our per diem revenue, and we typically incur extra
expenses in the first quarter from share grants. As a result of
these factors, we expect our Adjusted pre-tax income to decrease
from the fourth quarter of 2014 to the first quarter of 2015. After
the first quarter, we expect improving seasonality and ongoing
fleet growth will offset much of the pressure caused by decreasing
average lease rates. For the full year, we expect our Adjusted
pre-tax income in 2015 will decrease from our 2014 level, but we
also expect our profitability will remain strong and expect to
continue to generate attractive returns that are at the upper end
of our industry.”
Dividend
TAL’s Board of Directors has approved and declared a $0.72 per
share quarterly cash dividend on its issued and outstanding common
stock, payable on March 24, 2015 to shareholders of record at
the close of business on March 3, 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.
Stock Buyback Program
On February 11, 2015, TAL's Board of Directors authorized a new
share repurchase program of up to 3 million of its outstanding
shares. These shares augment the remaining 88,157 shares authorized
for purchase under TAL's existing stock repurchase program.
Repurchases will be made in the future at TAL's discretion, based
on ongoing assessments of the capital needs of the business, the
market price of TAL's common stock and general market and other
conditions. No time limit was set for the completion of the
repurchase program.
Mr. Sondey concluded, “Investing in our container fleet to
support our customers and build our franchise remains our top cash
flow priority, and we continue to view our dividend as the primary
means by which we share our strong cash flow with our shareholders.
However, our fleet growth was constrained in 2014 due to the
difficult investment environment, and we viewed share repurchases
as an attractive use of excess cash flow. We repurchased 900,000
shares since September 1, 2014, and we will consider repurchasing
additional shares in the future if, among other things, investment
returns and our fleet growth remained constrained.”
Investors’ Webcast
TAL will hold a Webcast at 9 a.m. (New York time) on Thursday,
February 12, 2015 to discuss its fourth quarter and full year
results. An archive of the Webcast will be available one hour after
the live call through Friday, March 27, 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 1,372,000 containers and related equipment
representing approximately 2,250,000 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.
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 20,
2014.
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 Financial Tables 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) December
31, 2014 December 31, 2013
ASSETS: Leasing equipment, net of accumulated depreciation
and allowances of $1,055,864 and $910,713 $ 3,674,031 $ 3,414,904
Net investment in finance leases, net of allowances of $1,056 and
$1,057 219,872 257,176 Equipment held for sale 59,861
58,042
Revenue earning assets 3,953,764 3,730,122
Unrestricted cash and cash equivalents 79,132 68,875 Restricted
cash 35,649 29,126 Accounts receivable, net of allowances of $978
and $948 85,681 74,174 Goodwill 74,523 74,523 Deferred financing
costs 32,937 29,087 Other assets 11,400 11,898 Fair value of
derivative instruments 1,898 27,491
Total
assets $ 4,274,984 $ 4,045,296
LIABILITIES AND STOCKHOLDERS' EQUITY: Equipment purchases
payable $ 88,336 $ 112,268 Fair value of derivative instruments
10,394 1,900 Accounts payable and other accrued expenses 57,877
63,022 Net deferred income tax liability 411,007 358,255 Debt
3,040,842 2,817,933
Total liabilities
3,608,456 3,353,378
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, 37,006,283
and 36,858,778 shares issued respectively 37 37 Treasury stock, at
cost, 3,829,928 and 3,011,843 shares (71,917
)
(37,535 ) Additional paid-in capital 504,891 498,854 Accumulated
earnings 246,766 220,492 Accumulated other comprehensive (loss)
income (13,249 ) 10,070
Total stockholders'
equity 666,528 691,918
Total
liabilities and stockholders' equity $ 4,274,984
$ 4,045,296
TAL
INTERNATIONAL GROUP, INC. Consolidated Statements of
Income (Dollars and shares in thousands, except earnings per
share) Three Months Ended December 31,
Twelve Months Ended December 31, 2014
2013 2014 2013 Leasing
revenues: Operating leases $ 149,346 $ 142,288 $
573,778 $ 552,640 Finance leases 4,237 4,610 18,355 14,728 Other
revenues 409 541 1,873
2,485
Total leasing revenues 153,992
147,439 594,006 569,853
Equipment trading revenues 11,410 8,953 56,436 73,004 Equipment
trading expenses (9,796 ) (7,644 ) (49,246 )
(62,726 )
Trading margin 1,614 1,309
7,190 10,278
Net gain on sale
of leasing equipment 560 4,171 6,987 26,751
Operating
expenses: Depreciation and amortization 59,515 53,603 224,753
205,073 Direct operating expenses 7,840 8,108 33,076 27,142
Administrative expenses 11,122 11,247 45,399 44,197 Provision for
doubtful accounts 154 1,068 212
2,827 Total operating expenses 78,631
74,026 303,440 279,239 Operating
income 77,535 78,893 304,743 327,643
Other expenses:
Interest and debt expense 28,063 27,434 109,265 111,725 Write-off
of deferred financing costs 120 1,422 5,192 4,000 Net loss (gain)
on interest rate swaps 370 (822
)
780 (8,947 )
Total other expenses
28,553 28,034 115,237
106,778 Income before income taxes 48,982 50,859 189,506
220,865 Income tax expense 16,927 17,750
65,461 77,699
Net income $
32,055 $ 33,109 $ 124,045
$ 143,166 Net income per common share—Basic $ 0.97
$ 0.99 $ 3.70 $ 4.28 Net
income per common share—Diluted $ 0.96 $ 0.98
$ 3.68 $ 4.25 Cash dividends paid per
common share $ 0.72 $ 0.70 $ 2.88 $ 2.68 Weighted average number of
common shares outstanding—Basic 33,110 33,491 33,482 33,483
Dilutive stock options and restricted stock 228 265
182 211 Weighted average number
of common shares outstanding—Diluted
33,338
33,756 33,664 33,694
TAL INTERNATIONAL
GROUP, INC.
Consolidated Statements of Cash
Flows
(Dollars in thousands)
Year Ended December 31, 2014
2013
2012
Cash flows from operating activities: Net income $ 124,045 $
143,166 $ 130,132 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
224,753 205,073 193,466 Amortization of deferred financing costs
7,729 7,260 5,827 Amortization of net loss on terminated derivative
instruments designated as cash flow hedges 2,479 3,020 3,290
Net (gain) on sale of leasing
equipment
(6,987 ) (26,751 ) (44,509 ) Net loss (gain) on interest rate swaps
780 (8,947 ) 2,469 Write-off of deferred financing costs 5,192
4,000 — Deferred income taxes 65,461 77,699 70,428 Stock
compensation charge 5,984 5,216 3,706 Changes in operating assets
and liabilities: Net equipment (purchased) sold for resale activity
(6,671 ) (11,186 ) 7,832 Net realized loss on interest rate swaps
terminated prior to their contractual maturities (4,953 ) (24,235 )
(49,124 ) Accounts receivable (11,507 ) (2,811 ) (14,872 ) Net
(deferred revenue) (4,462 ) (1,572 ) (9,048 ) Accounts payable and
other accrued expenses (720 ) (3,982 ) 3,145 Income taxes payable
67 (220 ) (119 ) Other assets (2,383 ) 958 7,587
Net cash provided by operating activities 398,807
366,688
310,210
Cash flows from investing activities:
Purchases of leasing equipment and investments in finance leases
(670,529 ) (660,492 ) (831,826 ) Proceeds from sale of equipment,
net of selling costs 165,990 140,724 133,367 Cash collections on
finance lease receivables, net of income earned 47,607 39,470
35,326 Other (253 ) 84 219
Net cash (used in)
investing activities (457,185 ) (480,214 ) (662,914 )
Cash
flows from financing activities: Purchases of treasury stock
(34,382 ) — — Stock options exercised, related activity, and excess
tax benefits from stock compensation (234 ) (235 ) (2,930 )
Financing fees paid under debt facilities (16,702 ) (13,897 )
(8,249 ) Borrowings under debt facilities and proceeds under
capital lease obligations 1,828,545 1,206,735 672,404 Payments
under debt facilities and capital lease obligations (1,605,666 )
(993,011 ) (304,094 ) (Increase) decrease in restricted cash (6,523
) 6,711 (1,371 ) Common stock dividends paid (96,403 ) (89,745 )
(78,090 )
Net cash provided by financing activities 68,635
116,558 277,670
Net increase in
unrestricted cash and cash equivalents $ 10,257 $ 3,032
$
(75,034 ) Unrestricted cash and cash equivalents, beginning of
period 68,875 65,843 140,877
Unrestricted
cash and cash equivalents, end of period $ 79,132 $
68,875
$ 65,843
Supplemental disclosures: Interest paid $
99,895 $ 101,535 $ 104,834 Income taxes (refunded) paid $ (67 ) $
225 $ (147 )
Supplemental non-cash investing activities:
Accrued and unpaid purchases of equipment $ 88,336 $ 112,268 $
111,176
The following table sets forth TAL’s equipment fleet
utilization(2) as of and for the quarter and year ended
December 31, 2014:
Average and Ending Utilization for
the Quarter Ended December 31, 2014
Average Utilization Ending Utilization 98.1 %
98.1 % (2) Utilization is computed by dividing TAL’s
total units on lease (in 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 December 31, 2014 (in units, TEUs and cost
equivalent units, or “CEUs”):
December 31, 2014 Equipment Fleet in
Units Equipment Fleet in TEUs Owned
Managed Total Owned
Managed Total Dry 1,174,154
15,553 1,189,707 1,901,299 27,183
1,928,482
Refrigerated 64,977 33 65,010 123,288 54 123,342
Special 55,388 792 56,180 100,680 1,385 102,065
Tank
9,282 — 9,282 9,282 — 9,282
Chassis 19,116 —
19,116 33,877
—
33,877
Equipment leasing fleet
1,322,917 16,378 1,339,295 2,168,426 28,622 2,197,048
Equipment
trading fleet 32,448 — 32,448
52,571 — 52,571
Total 1,355,365 16,378 1,371,743
2,220,997 28,622
2,249,619
Percentage 98.8
%
1.2 % 100.0 % 98.7
%
1.3 % 100.0 %
December 31, 2014
Equipment Fleet in CEUs Owned Managed
Total Operating leases 2,451,007 24,511 2,475,518
Finance leases 196,712 825 197,537
Equipment trading
fleet 105,229 0 105,229
Total 2,752,948 25,336 2,778,284
Percentage 99.1 % 0.9 % 100.0 %
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.
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 without
regard to items such as interest and debt expense, income tax
expense, depreciation and amortization, and gains and losses on
interest rate swaps, which can vary substantially from company to
company depending upon accounting methods and the book value of
assets, capital structure and the method by which assets were
acquired;
-- 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 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 twelve months ended
December 31, 2014 and 2013. We have also 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 twelve
months ended December 31, 2014 and 2013.
We have also provided a reconciliation of 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 December
31,
Twelve Months Ended December
31,
2014 2013 2014
2013 Net income $ 32,055 $ 33,109 $ 124,045
$ 143,166 Add: Depreciation and amortization 59,515 53,603
224,753 205,073 Interest and debt expense 28,063 27,434 109,265
111,725 Write-off of deferred financing costs 120 1,422 5,192 4,000
Income tax expense 16,927 17,750 65,461
77,699 EBITDA 136,680 133,318 528,716 541,663 Add: Net loss
(gain) on interest rate swaps 370 (822 ) 780 (8,947 ) Principal
payments on finance lease 11,338 10,387 47,607
39,470 Adjusted EBITDA $ 148,388 $ 142,883
$ 577,103 $ 572,186
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 December
31,
Twelve Months Ended December
31,
2014 2013 2014
2013 Income before income taxes $ 48,982 $ 50,859 $ 189,506
$ 220,865 Add: Write-off of deferred financing costs 120 1,422
5,192 4,000 Net loss (gain) on interest rate swaps 370 (822
) 780 (8,947 ) Adjusted pre-tax income $ 49,472
$ 51,459 $ 195,478 $ 215,918
Adjusted pre-tax income per fully diluted common share $1.48
$1.52 $5.81 $6.41 Weighted average
number of common shares outstanding—Diluted 33,338 33,756 33,664
33,694
Three Months Ended December
31,
Twelve Months Ended December
31,
2014 2013 2014
2013 Net income $ 32,055 $ 33,109 $ 124,045 $ 143,166 Add:
Write-off of deferred financing costs, net of tax(a) 78 921 3,398
2,592 Net loss (gain) on interest rate swaps, net of tax(a) 242
(537 ) 511 (5,799 ) Adjusted net income(a) $
32,375 $ 33,493 $ 127,954 $ 139,959
Adjusted net income per fully diluted common share $0.97
$0.99 $3.80 $4.15 Weighted
average number of common shares outstanding—Diluted
33,338
33,756 33,664 33,694
(a) The differences between Adjusted net income and reported net
income in the twelve months ended December 31, 2014 and 2013 were
due to net losses and gains on non-designated 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
Adjusted Pre-tax Return on Tangible Equity (Dollars in
Thousands)
Balance as of December 31,
2014
Balance as of December 31,
2013
Total stockholders' equity $ 666,528 $ 691,918 Net deferred
income tax liability
411,007
358,255 Net fair value of derivative instruments liability (asset)
8,496
(25,591 ) Goodwill
(74,523
) (74,523 ) Total adjusted tangible equity $ 1,011,508
$ 950,059 Average adjusted tangible equity(a)
$ 980,784 Adjusted pre-tax income
$
195,478
Adjusted pre-tax return on tangible equity
19.9
%
(a) Calculated by taking the average of the current year's and
the prior year's ending total adjusted tangible equity.
TAL International Group, Inc.John Burns, (914) 697-2900Senior
Vice President and Chief Financial OfficerInvestor Relations
Tal Education (NYSE:TAL)
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From Apr 2024 to May 2024
Tal Education (NYSE:TAL)
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From May 2023 to May 2024