Good day, ladies and gentlemen, and welcome to the Q4 2013 Air Lease Corp. Earnings Conference Call. My name is Lulu, and I will be your operator today. [Operator Instructions] As a reminder, ladies and gentlemen, this call is being recorded for replay purposes only. I would now like to turn this call over to Mr. Ryan McKenna, Head of Strategic Planning and Investor Relations. Please proceed, sir.

Good afternoon, everyone, and welcome to Air Lease Corporation's Fourth Quarter and Year End 2013 Earnings Call. This is Ryan McKenna, Vice President, and I'm joined this afternoon by Steve Hazy, our Chairman and Chief Executive Officer; John Plueger, our President and Chief Operating Officer; and Greg Willis, our Senior Vice President and Chief Financial Officer. Earlier today, we published our fourth quarter and year end results for fiscal year 2013. A copy of our earnings release is available on the investors section of our website at www.airleasecorp.com. This conference call is being webcast and recorded today, Thursday, February 27, 2014, and the webcast will be available for replay on our website. [Operator Instructions] Before we begin, please note that certain statements in this conference call, including certain answers to your questions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act including, without limitation, statements regarding our future operations and performance, revenues, operating expenses, other income and expense, and stock-based compensation expense. These statements and any projections as to the company's future performance represent management's estimates of future results and speak only as of today, February 27, 2014. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our filings with the Securities and Exchange Commission for a more detailed description of the risk factors that may affect our results. Air Lease Corporation assumes no obligation to update any forward-looking statements or information in light of new information or future events. In addition, certain financial measures we will use during this call, such as adjusted EBITDA and adjusted net income, are non-GAAP measures and have been adjusted to exclude charges relating to amortization of discounts and debt issuance costs and stock-based compensation expense, among other charges. A description of our reasons for utilizing these non-GAAP measures, as well as our definition of them and the reconciliation to corresponding GAAP measures, can be found in the earnings release we issued today. This release can be found in both the investors and the press section of our website at www.airleasecorp.com. Unauthorized recording of this conference call is not permitted. I would now like to turn the call over to our Chairman and Chief Executive Officer, Steve Hazy.

Thanks, Ryan, and good afternoon to all of you, and thank you for joining us today. I'm pleased to report that Air Lease increased its diluted EPS to $0.55 in the fourth quarter of 2013 compared with $0.38 in the fourth quarter of 2012, which is an increase of 44.7%. For the full year of 2013, ALC increased its diluted EPS to $1.80 per share from $1.28 a share in 2012, representing an increase of 40.6%. Similarly, our top line revenues for the fourth quarter of 2013 were $243 million versus $190 million in 2012, an increase of 27.8%. For the full year of 2013, Air Lease increased its revenues to $859 million from $656 million in 2012, yielding a 30.9% increase. During the fourth quarter of 2013, we increased pretax profit margin to an all-time high of 37%. For the full year of 2013, we generated a pretax profit margin of 34% and $293.4 million in pretax earnings. This was achieved through our core leasing operations, our focused efforts on reducing our cost of funds and sales and saving activities on aircraft. Reflecting our strengthening credit profile, we concluded the full year with a highly attractive overall composite cost of funds of 3.6%, which is 34 basis points below the prior year. Globally, passenger traffic continues to grow ahead of our expectations and we continue to see steady demand for aircraft. IATA, the International Air Transport Association, reported that passenger traffic for the full year of 2013 on a global basis increased 5.2% versus 2012, which IATA indicated was in line with the average annual growth rates for the past 30 years. This statistic is overwhelmingly positive for the health of the airline industry, and we have now seen several consecutive years of overall global airline profitability. The robust…

Thanks, Steve. Our aircraft lease placements continue to track with no significant change in portfolio overall lease rate factor. During the fourth quarter, demand remained strong from Europe, the Middle East and parts of Asia. We successfully delivered 11 aircraft from our order book and acquired 2 incremental aircraft in the secondary market, increasing our fleet to 193 aircraft. Now let me remind you, the full impact of the lease rentals in any quarter will not be realized until the following quarter, when we receive 3 full months of rent. Our average fleet age remained very low, at 3.7 years, with a long average of 7.1 years remaining on our leases. Over the course of 2013, we added 14 new airline customers to finish the year with 79 airline customers across 47 countries. We concluded the year with one of the largest order books in our industry, having 327 aircraft on order now, delivering through 2023. So having concluded all new aircraft placements in 2014 and '15, our focus now turns to 2016, where we'll begin transitioning towards strong order book of new generation aircraft, including A321 NEO, A350, Boeing 737 Max and Boeing 787 aircraft. The demand has been strong for our early delivery slots and the lease rates are in line with the expectations we had when we ordered the aircraft over the past few years. During the first quarter, we're scheduled to take delivery of 5 new aircraft from our order book ratably over the quarter. Our business is predicated on long term aircraft leasing operations and the timing of deliveries within a quarter as no impact on our long-term strategy or profitability. During the full year, ALC recorded $18.9 million in gains on aircraft sales, trading and other activity. Much of this activity occurred during the…

Thanks, John. We ended 2013 with total debt outstanding of $5.9 billion, as compared to $4.4 billion in 2012. This included total unsecured debt of $4.3 billion, as compared to $2.6 billion in 2012. Since our inception, we have built a globally diversified 43 member banking group, which has provided us in excess of $4.4 billion in financing and we have successfully accessed the debt capital markets for $3.3 billion in unsecured financing. In 2013, we increased our unsecured debt, as a percentage of total debt, to 73.5%, as compared to 60.2% in 2012. Our fixed rate debt as a percentage of total debt, increased to 62%, as compared to 53.9% in 2012. Additionally, we have reduced our composite cost of funds to 3.6% as compared to 3.94% in 2012. During the fiscal year ended December 31, 2013, we raised $2.6 billion in debt financing. This was comprised principally of $1.3 billion in senior unsecured notes and $957 million in additional capacity under our syndicated unsecured revolving credit facility, which now totals $2 billion. In the fourth quarter 2013, we raised $1.2 billion in debt financing. This was comprised principally of $885 million in senior unsecured notes and $300 million in additional capacity under our senior unsecured revolving credit facility. We ended the year with over $1.8 billion of available liquidity, providing us with a significant amount of financial flexibility. One of the strategic goals of Air Lease Corporation has been to finance the company, primarily through unsecured debt issuances in order for us to have increased operational flexibility when moving aircraft from one airline to another, and increase financial flexibility with unrestricted use of our cash when buying or selling aircraft assets. At ALC, we are able to make the best asset sales decisions for each aircraft without being influenced by financial penalties from breakage costs associated with secured lending, which erodes profit and combines the choice of which asset -- which aircraft assets to sell. We maintained our approach of building a conservative balance sheet, with targets of keeping our debt-to-equity ratio below 2.5 to 1, 90% of our debt both being unsecured and a fixed floating ratio of 70-30. Our business is optimized as an investment-grade borrowing. In November, we closed our debut investment-grade bonds, which received a tremendous demand in the marketplace, allowing us to upsize the offering to $700 million and tighten pricing to 3.375%. Both the tenure and rate achieved during the offering were great outcomes for our shareholders. There was a noticeable change in the buyer base for this issuance compared to prior deals. We observed high-yield buyers step back as the spread was much too tight than previous -- much tighter than previous issuances. The investment grade market is 10x the size of a high-yield market and our first deal has only scratched the surface. This concludes my review of the financing activities of the company and I will now turn it back to Ryan.

Thanks, Greg. That concludes management's remarks. [Operator Instructions] And now I'd like to hand the call over to the operator. Operator?

[Operator Instructions] Your first question comes from the line of Jason Arnold of RBC Capital Markets.

Steve, you touched on the secondary market acquisition as being an opportunity for you guys going forward. I was just wondering if you could comment on your view in your past experience of are these going to be kind of 1s and 2s or larger kind of number of opportunities that perhaps come up in terms of number of aircraft? And then outside of the currency items that you mentioned, are you seeing any additional emerging kind of opportunities, such as order book fallout or anything else like that from an opportunistic to add perspective?

All of the above, Jason. We are seeing opportunities for 1z, 2z pop-up situations to acquired aircraft, either a new position that's coming up the line very soon or a young used aircraft. We're also seeing some situations where certain customers of Boeing and Airbus, perhaps, order too many aircraft too soon. And they're going to rejiggle their delivery streams, so there could be some fallout opportunities there for us to both accelerate deliveries of our positions and perhaps pick up some aircraft at discounted prices. In that arena, we focused primarily on the single aisle at forms, although we look at 777s, A330-300s as well. But we're staying away from 4-engined airplanes. As far as the developing market question, we are seeing some divergence in growth rates in different parts of the world. Latin America, Southeast Asia, we could see some opportunities there as well. So we're closely tracking the market. Our team is out there traveling and in close contact with the airline customers. And if there are opportunities, you can be sure we'll take advantage of them.

Excellent. All right. And then just one quick follow-up on the gain on sale, can you guys give us a little bit more detail on the breakout there, it seems like there has been insurance loss perhaps involved in that number as well?

No, there's no -- I just want to make it clear to everyone on the line, in the fourth quarter of 2013, there was no insurance gains. All of the trading profits came from disposing of aircraft and spare engine and management fees that we've earned. The recognition of the loss of our Embraer 190, which occurred in the fourth quarter, in terms of insurance proceeds will not take place for the first quarter.

The next question is from the line of Jamie Baker/Mark Streeter of JPMorgan. Jamie N. Baker - JP Morgan Chase & Co, Research Division: Jamie Baker here with a two-part question related in a sense to one of your competitors. Have you had any conversations with AerCap about buying or potentially buying any assets? And secondly, with the Chinese consortium that was at one time interested in ILFC, having obviously, failed to materialize. How would you gauge the overall investor interest from China at this point? And is there an opportunity for Air Lease to step in and capitalize on that interest?

Yes. So both John and I will answer your question. First of all, I cannot comment on conversations that AerCap and Air Lease are having. But in terms of the Chinese prospective buyers of ILFC, we have really not had any direct approaches in the last several months, certainly not since that transaction did not materialize. But John can comment further on it.

No, I think it's fair to say that, I think there still remains interested parties across Asia, not necessarily just in China. But we really haven't had any material or meaningful conversations along those lines, really with any parties. But we know that they're out there. We anticipate that some other leasing companies are looking at other opportunities, and that's great. I think the good news for all of us in this space is that this has become a very attractive asset class for a number of buyers, a number of potential buyers. And we suspect that as the returns continue to do well, as the performance of Air Lease and other lessors continues to do well that, that interest will remain and will continue to be strong. Jamie N. Baker - JP Morgan Chase & Co, Research Division: Excellent. For a follow-up, I'm going to turn the mic over to my colleague, Mark Streeter. Mark Streeter - JP Morgan Chase & Co, Research Division: Yes, this one's for John, real quick as a follow-up to Jamie's question, we just saw Aircastle do a deal with LATAM. We've seen AerCap do deals with American stepping into order book position. Do you feel like you have enough access to product through your current order book with the manufacturers direct? Are there opportunities to step into some of these customer order books [indiscernible] or should we just assume you're just going to order more aircraft to refresh that pipeline?

This year we have 35 aircraft delivering and those have all been placed in long-term leases. We're always on the lookout for opportunities, but it has to be an attractive pricing that merits our consideration. And the overall economics of those transactions with an airline order book just have to make sense. And so far, we've not seen the kind of yields, the kind of returns that we can duplicate using our own ordered aircraft.

We're very comfortable, Mark, with our order book as it stands. We don't need to source additional aircraft through that order book or through other avenues in order to continue a good healthy growth rate. But I do suspect that over time, there will be customers that do either defer or fallout of the pipeline. And Steve mentioned earlier, on the signal outside, I think we'll see that. I think the manufacturers well know that we have our check books right at hand to write a check immediately, very quickly for those assets under the right pricing. And I think -- but I think that's nothing new. I think that's one of the thing that we're known for as a management team and have been known for, for many years.

Yes, also, keep in mind, Mark, that we have 15 brand-new 777-300ERs delivering, starting in the second quarter over the next 18 months. And all those 15 aircraft, which have a value collectively a lot north of $2 billion, are placed on long-term leases with top notch superior credit airlines throughout the world. None of the other lessors have that 777-300ER capability or near-term visibility in terms of incoming units that have been leased to prestigious high-quality carriers. So we have a pretty good handle on the widebody situation and our 777s that are coming in this year and next year will contribute significantly to our asset base and future long-term revenues.

Yes, the point really here, Mark, is that those 777s, the widebodies really give us a huge amount of capital boost. These are -- you have to buy 3 to 4 single-aisle aircraft in order to get the capital bang for the buck that you get for 1 twin-aisle. So we're very happy with our order book as it includes the larger capital cost aircraft that are on lease to premier customers. That really gives us a growth rate on our capital structure that we're happy with.

Yes, the first delivery will be made to British Airways, which will replace the 747-400. The following month, we have another 777-300ER delivering to Air New Zealand, also replacing a 747-400. Then we have another one to British Airways and so on. So we have a strong pipeline of widebody aircraft, we have an additional A330-300 later this year. So we don't need to approach airlines to step into their positions on economical terms that are not as attractive as what we're doing.

The next question is from the line of Mike Lindenberg of Deutsche Bank.

Just 2 questions here, gentleman. Just the one airplane that you sold in the quarter, a little bit more color around that? Was that a gain? What airplane was that?

We actually sold 4 aircraft during the quarter, including 2 aircraft that we're trading activities involving Boeing 737s. We sold a spare CFM56 engine. We sold our oldest A319 in line with our strategy of keeping our fleet young and averaging our fleet age down as much as we can. And then we also sold another aircraft from our portfolio.

Okay, good. And then, you know Steve, I just -- I want to go back to the point that you brought up about maybe seeing some opportunities in Asia, and you may have even mentioned about some airlines maybe sort of rejiggering some of their fleets. I mean if you look over the last 48 hours, we've had some results from some carriers out there and the numbers haven't been that good. And we're now seeing carriers, like AirAsia, indicate that they're going to defer airplanes over the next couple of years, Qantas as well, which to be frank, that is a good thing. And so I'm just -- I'm curious about the opportunities there and maybe does that potentially send a message back to the manufacturers? Do they maybe rethink some of this ramp up? I mean, what are your thoughts on that and then just some of the opportunities there?

Yes, I think there was a little bit of overenthusiasm in 2011, '12 and '13 in terms of ordering a lot of aircraft by a lot of airlines, many of which are not yet mature carriers. And there are a lot of issues that involve the rate of growth that these airlines anticipated. One of them is the slot constraints at a lot of the major airports, i.e. Singapore, the 2 airports in Tokyo, Hong Kong. There's not an unlimited amount of slots available at the major population centers in China, East Asia and Southeast Asia. And I think what some of these airlines are now finding is it's difficult to sustain a 30% to 40% growth when you can't deploy those aircraft in high-density markets. So what we're seeing now is sort of a reality check, where some of these customers of Airbus and Boeing are looking in the mirror and realizing they cannot deploy all of these aircraft they have on order profitably, which will cause a number of things to happen. One, restructuring of their order streams, which would include deferments, which means we can accelerate some of our positions. And there could also be acquisition opportunities. And John can comment further on his views.

No, I mean, look I'll just share with you one comment from one of our Board members yesterday, our Board meeting was that they've been going to Southeast Asia for many years and, just for example, using the, example, Kuala Lumpur, it used to be going into all these airports that you would expedite a normal approach and landing, et cetera. Now for the past, I would say, a year or so, he made a very pointed comment, which is true, that there hasn't been one time, going into Kuala Lumpur, when he hasn't had to be held at a high altitude, step down holding and do on the airports, just strictly as a function of congestion. So I think to Steve's point, the airport infrastructure limitation may be proving to be a bigger handicap along with pilot shortfall. We see a lot of airlines, the major airlines in China, particularly talking to us a lot about the lack of pilots. And so these 2 infrastructure kinds of constraints, I think are starting to have an impact across Asia.

But that's not to say that Southeast Asia, China and East Asia will not grow. We're continuing to see strong demand for aircraft, we've seen traffic growth, but the rate of growth on a larger base is more difficult to sustain at these double-digit levels. So we are going to see some rationalization. We are seeing the impact of the low-cost carriers on some of the legacy airlines, and I think Qantas is a good example of that. Some of the traffic flow patterns are changing. A lot more of the long haul traffic is now going through the Gulf or bypassing some of the old traditional hubs. So there are some landscape dynamics that are altering the exact precise demand for new aircraft. And you can rest assure that Air Lease is there working with the manufacturers and these airlines to see what this opportunity does for us to profitable transactions or accelerate deliveries into earlier slots and obviously, lower acquisition costs.

The next question is from the line of Scott Valentin of FBR Capital Markets. Scott Valentin - FBR Capital Markets & Co., Research Division: Just a question in terms of your business approach, I know that, obviously, emerging markets from time to time, show some volatility, but is there anything, is there any way you change or do you change your business approach at all to adjust for this? Or it's just kind of how you manage in the short-term and the long-term business strategy is unchanged?

Scott, we look at each individual airline customer and perspective customer and the environment in which they're operating. We look at the local, political situation. We look at geopolitical factors. We look at country limits. We look at customer limits. We look at the competitive landscape that these airlines operate in. So I can assure you that our whole team is very, very focused on watching developments, whether it's in Latin America or certain parts of Africa or Southeast Asia or the former Soviet republics. We're extremely focused on keeping a close eye on developments with the goal of minimizing our risk profiles and working with those airlines that are succeeding.

Let me make an overall comment, Scott. It’s been true for many, many years and certainly true for our management team. Our team thrives in profits on volatility. I mean, if this were a steady-state business growing 2% a year, stable everything else like this, there'd be much less need for leasing overall. It is the very volatility that drives people to leasing and leasing solutions and we, I think, have a pretty well-demonstrated long-term track record of taking advantage of that. So volatility is something we're used to, we're very mindful of all the points that Steve has raised and our placements, et cetera. But we don't view emerging market volatility as a problem, we truly view it as an opportunity. And I think we've got a track record to back that up.

Also with our unsecured financing profile, where we do not have mortgages or security interests on our fleet, we can easily mobilize and move assets and redeploy them in other regions. And that's the flexibility that I think earlier John and Greg described, which gives us a tremendous advantage compared to other lessors that have their aircraft tied up with all sorts of secured financings. Scott Valentin - FBR Capital Markets & Co., Research Division: Okay, just one follow up. I know the goal is 70-30 fixed floating for the debt structure. But in terms of debt tenure, and the leases tend to be longer term, just wondering what type of maybe gap if you think about a 5 or 6 or whatever the way the average maturity would be of your debt. How do you compare that to the leased terms and how do you manage that risk?

Yes, sure. Scott, it's Greg. You can look at during the year, we continue to push out the average life of our debt. We've held off going longer on our debt capital markets issuances until we had an investment-grade rating. Now that we have 2 investment-grade ratings, I think you'll look to see us do longer and longer pieces of debt because we didn't want to load up on coupon nor covenant packages. But I think over time, you'll see us look to match what the average life of our debt up with the way the average we have in [ph] leased term.

And Scott, keep in mind, this is Steve, that if we do a 12-year lease on a new plane, it doesn't mean that we're going to own that aircraft for 12 years. We could very well dispose of that aircraft in year 8, 9 or 10. So what we don't want to have is debt on that piece of equipment that's longer than the time that we're going to own the airplane.

Yes.

So 7 years is probably kind of a sweet spot for us.

Yes, one other comment on this, from an operational point of view. What you really don't want to have, and we've looked over many years, you don't want to have 2 events at a lease expiration. You don't want to have a remarketing event but you also don't want to have a refinancing event simultaneously, where that lender now has to go and be with you and the approval or blessing of the next lessee. So we actually don't want this kind of matching.

The next question is from the line of Arren Cyganovich of Evercore.

Just in terms of -- you clearly look like you have enough on your plate for existing purchases that are scheduled for this year, but if there were to be a larger opportunity for you, do you have any constraints from a capital perspective? It looks like you're getting close to your full year leverage target of 2.5x. Would you -- are you still against raising equity capital if the right opportunity came about?

We're not looking at raising any capital whatsoever. We've mentioned in our call and several conversations that we are on the program of aircraft sales, much more for 2014. We did sell airplanes in '13, including a couple from our lease portfolio, that will accelerate to a larger pace in 2014. And that's how typically we managed a great tool in managing our debt equity ratio. So we don't see any constraints nor do we see any opportunities of such large fleets and such large dollar volumes that would push us up against that equity constraints. I mean, those opportunities, I mean you're talking of billions of dollars here, and really we don't see that. So within the framework and the realm that we're operating, no, we don't see any limitations for opportunistic buys. In fact, our track record demonstrates from day 1, we in fact, do continue to take advantage of opportunistic transactions. Don't forget, we acquired 2 additional aircraft this quarter over and above our pipeline, and we'll continue to do that in 2014 as those opportunities arise.

But we are mindful of our balance sheet management and we have our own internal constraints that we don't want to overleverage the company. And you'll continue to see quality earnings and those retained earnings will fall back to increasing our shareholders' equity, which will allow us to keep growing.

Great. As a follow-up with your comments about production increases and kind of monitoring this closely. What would you actually be looking at specifically to see if the supply is actually causing any disruption in the market? Is it just simply just looking at the lease rates and value of aircraft that you're coming across?

Well, so far we have not seen any of what they call white tails, and that's an aircraft that is built by Boeing and Airbus and at the time of the delivery doesn't have a paint job or a customer. We've not seen that. I think the manufacturers are actually overbooked. To the best of our knowledge, both Airbus and Boeing have got more orders in '14, '15 and '16 that they will produce and published that they'll produce. So they're busy juggling their own skyline to meet those contractual requirements. Notwithstanding that, we think there could be some fallouts in number of situations where Air Lease could either step into the shoes of a buyer, on favorable terms, or enable us to accelerate deliveries of some of our aircraft that are further out on our skyline.

Yes, if you look at it just simply from a supply chain perspective, the supply chain to Airbus and Boeing is still constrained. We had a number of ATR aircraft that were delayed in 2013, and we've already -- we're going to continue to have some in 2014, but also we'll have a few A321s delayed by a month or so in 2014. We've adjusted that into our operating plans. But these delays are because of largely supply chain constraints. Whether it is a widget or some other aspect, it is very difficult to see any immediate this year further increases in production rates, simply because it's hard to crank them out where they are. So I think, just keep in mind, if that's a natural constraint as -- I know Airbus just recently announced a plan in the future to increase production up to 46 a month on a 320 for the single-aisle family but that's in the future. I'm talking -- your question is 2014 and in 2014, just as we did in 2013, we are seeing a few notices of delays here, that is strictly a result of supply chain constraints.

Yes, and keep in mind that Airbus production will be spread across 4 plants, including 1 in China, 1 in Alabama, 1 in Hamburg, Germany, 1 in Toulouse, France. Also as you know, Boeing had some challenges still getting their 10 airplanes a month production rate on the 787 Dreamliner. So as John indicated, each of the manufacturers is working full steam ahead and are pretty close to the limits of what the supply chain can generate to support those production schedules.

The next question is from the line of John Godyn of Morgan Stanley.

Steve, just thinking about some of the questions that have been asked by other analysts about sort of risks and opportunities that you referenced within the context of rising production rates. Few people in the industry have seen as many cycles as you, I was hoping you could just sort of take a step back and offer an outlook on where we are in the early stage cycle broadly from here?

That's a good question that we ponder every day we come to work. A lot of it depends on the global recovery. We're still not totally out of the woods as a result of financial crisis. We have high unemployment rates in the U.S. In the rest of the world, in Europe, particularly in Southern Europe, there's still a lot of catching up to do. And frankly, economic growth and production are still not where it needs to be. So I would correlate air traffic growth trends are very much parallelled to economic development and growth in all regions of the world. What we are seeing, however, is that oil prices seem to be sort of stabilized within a reasonable range that the airlines have adjusted to. And that was a single large component of cost volatility that the airlines we have to wrestle with starting in 2006 and thereafter. So the energy prices seem to be under control. What we're seeing now in terms of traffic growth constraints is what John Plueger touched upon, and that's the infrastructure, air traffic control, airport facilities, slots, gates, regulatory constraints, air traffic congestion, those are the issues that we think about and we work with our customers to overcome. And those are the lids on growth. And as economic growth continues to build, we see sort of a lag between the development of airports and air traffic control monetization has really limiting factors in the growth of the airline industry.

That's very helpful. And if I can ask one follow up for John. John, you talked about some of the gains and the team has talked about booking gains in 2013 and '14, perhaps at a higher rate than in the past. I was wondering, do you think that this trend of booking gains has even more permanence and persistence than that? As we think about how the portfolio evolves from here, could we see gains just become a more permanent picture of your EPS trend as we look even '15 and '16?

John, I guess I would just be a little hesitant to state it quite that way. We're traders, and we're opportunists, and sometimes those opportunities are there, and many times, they're not. I think we bought all of our aircraft right, even from the first day that we opened the doors of this company. The sales that we have executed from our fleet have been profitable sales. Let me answer in kind of a different way. We learned here in our prior lives, you never want to be, ever, in a position to be a forced seller. And that comes from having a strong balance sheet, which we believe we've built and will continue to have. So again, I would focus more the attention that these are opportunistic transactions. We were fortunate to be able to do a number of them in the fourth quarter. But as I said in my remarks, John, it really is very hard to predict. We are certainly looking, as Steve said, our people are out there. But we're very disciplined about it. And I know this is the toughest part for us to predict, so I'd just stop, just short of really of saying, yes, we're going to see a lot more of this in '15 or '16. A lot of it will depend upon the macro factors that Steve cited, how the overall industry is, how airlines are feeling, what airline may need to dump airplanes for cash, et cetera. And I just learned from a long time, this is the single hardest part of our business to forecast. Even in our prior lives, we used to say leases are easy, revenues are easy on those, but we can never forecast the actual sales. And I wish I could give you more depth in the colors than that, just know that it's a focus that we are very mindful of for growth in our profitability and enhancements to our margin. We will just do what we have been doing and then we act upon it when we see it. But I don't think you should be taking a firm, this is going to happen all the time, every quarter, et cetera, et cetera. I would stop short of that.

Yes, just 2 more observations on that. One is that the financing climate right now has improved in 2013 and the outlook looks pretty positive for lenders to actually be willing to lend on midlife assets. If you go back to 2010, 2011, there was a liquidity shortage from the banking community on lending to what I'd call used assets, and the main focus was financing new aircraft. Now what we're seeing is that the buyers of these aircraft are able to access bank term financing, obviously, on a higher margin than what a new aircraft would command. So that's a favorable trend, and I think that will cause more trading activity to be sustained by reasonable financing. The second thing that all of you should bear in mind is that we have an aircraft out on lease. We have the luxury of selling that at any given point in time. But as long as we don't sell it, it's still a profitable revenue and income contributor to our company. So what we're looking for is a situation or situations where the gain from the aircraft sales exceed the net present value of what we think that lease will generate during its remaining life. So it's a complex analysis. We'll continue to sell aircraft, but I don't think we want to make a prediction as to what the quarterly impact is going to be in 2014.

Gentlemen, we have no further question in the queue. I will now hand it back to Mr. Ryan McKenna for closing remarks.

That concludes our call for today. Thank you for your participation, and we look forward to speaking with you at the end of Q1.

Thank you ladies and gentlemen. You may now disconnect. That concludes your presentation.