Financial Data and Key Metrics Changes - Air Lease Corporation generated quarterly revenues of $659 million, an increase of approximately 18% compared to the same quarter last year [7] - Earnings per share reached $1.10, up 22% from the previous year's third quarter [7] - Interest expense increased from 3.07% to 3.67% due to rising composite cost of funds [29] - Cash flows from operations rose 34% year-over-year, benefiting from strong airline customer cash collection efforts [29] Business Line Data and Key Metrics Changes - The company purchased eight new aircraft, adding approximately $450 million in flight equipment, and sold eight aircraft for about $350 million in sales proceeds [8] - The utilization rate of the fleet remained strong at 99.9% during the third quarter [8] - The sales pipeline stands at $1.8 billion, including $700 million of aircraft classified as held for sale and $1.1 billion subject to letters of intent [12] Market Data and Key Metrics Changes - Global air travel demand increased by 25% to 30% year-over-year, with international volumes rising approximately 30% [15][19] - Passenger load factors are strong, currently at 85% in October, with an expectation of around 81% for the full year 2023 [21] - The Asia-Pacific region saw international traffic nearly double compared to the prior year, indicating significant recovery [20] Company Strategy and Development Direction - The company has a $23 billion forward order book extending through 2029, positioning it strongly in the current environment [11] - The strategy focuses on maximizing lease rates and returns on valuable new aircraft delivery positions [11] - The company remains positive about its business outlook, benefiting from high-demand aircraft and limited supply [16] Management's Comments on Operating Environment and Future Outlook - Management noted that the current conflict in the Middle East has led to operational challenges but is being monitored closely [14] - There are no major signs of macroeconomic crosswinds impacting aircraft demand, with strong bookings reported by major airlines [15][22] - The company anticipates continued strong demand for new and fuel-efficient commercial aircraft, despite some seasonal fluctuations [15][22] Other Important Information - The Board of Directors approved a 5% increase in the quarterly dividend distribution to $0.21 per share [18] - The company has two aircraft on lease in Israel, with the government providing insurance for those aircraft [14] Q&A Session Summary Question: Impact of GTF on fourth quarter sales margin - Management expects the impact to be progressive over the next 8 to 12 months, with increasing demand and asset values [36][37] Question: Buyers of aircraft sales - Sales are mainly to other leasing companies, with a focus on maintaining a steady stream of aircraft sales [38] Question: Share buybacks consideration - Capital allocation including share buybacks is a consideration, but priority is given to reducing the debt-equity ratio to maintain investment grade ratings [42][43] Question: Economics of lease extensions vs. new marketing - Most airlines prefer to extend leases due to current demand, leading to higher lease rates [46][49] Question: Expectations for deliveries - Management is cautious about fourth quarter deliveries due to ongoing issues with manufacturers [56][57] Question: Freighter market considerations - The cargo market has softened, and the company currently has only one freighter aircraft, which has minimal impact [59][60] Question: Pressure on ultra-low-cost carriers - Management does not have concerns regarding softening aircraft demand, citing strong bookings from major airlines [62][63]

[PART I—FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements, management's discussion, market risk disclosures, and controls and procedures for the period [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Air Lease Corporation as of September 30, 2023, including balance sheets, statements of operations, cash flows, and detailed notes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $29.7 billion as of September 30, 2023, driven by flight equipment growth, with total liabilities at $22.7 billion and shareholders' equity at $7.0 billion Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$29,672,225** | **$28,396,705** | | Flight equipment, net | $25,595,314 | $24,538,385 | | Cash and cash equivalents | $512,084 | $766,418 | | **Total Liabilities** | **$22,711,172** | **$21,750,342** | | Debt financing, net | $18,645,843 | $18,641,063 | | **Total Shareholders' Equity** | **$6,961,053** | **$6,646,363** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2023 total revenues increased 17.5% year-over-year to $659.4 million, with net income rising to $132.5 million, and nine-month net income reaching $393.6 million, recovering from a prior-year loss Q3 2023 vs Q3 2022 Performance (in thousands, except per share) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $659,364 | $561,334 | +17.5% | | Rental of flight equipment | $604,027 | $541,397 | +11.6% | | Interest Expense | $175,464 | $135,510 | +29.5% | | Net Income | $132,450 | $110,381 | +20.0% | | Diluted EPS | $1.10 | $0.90 | +22.2% | Nine Months Ended Sep 30 Performance (in thousands, except per share) | Metric | 9M 2023 | 9M 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,968,409 | $1,715,692 | +14.7% | | Write-off of Russian fleet | $0 | $802,352 | N/A | | Net Income/(Loss) | $393,571 | $(242,334) | N/A | | Diluted EPS | $3.25 | $(2.45) | N/A | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, operating cash flow increased to $1.28 billion, investing cash flow decreased to $1.67 billion, and financing cash flow significantly decreased to $122.1 million due to higher debt repayments Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,282,306 | $958,563 | | Net cash used in investing activities | $(1,668,686) | $(2,715,595) | | Net cash provided by financing activities | $122,097 | $1,765,708 | | **Net (decrease)/increase in cash** | **$(264,283)** | **$8,676** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail the company's business, debt, fleet, and commitments, including owning 448 aircraft, managing 79, and having 351 on order, with total debt at $18.8 billion - As of September 30, 2023, the company owned **448 aircraft**, managed **79 aircraft**, and had **351 new aircraft** on order from Boeing and Airbus[23](index=23&type=chunk) Debt Financing Summary (in thousands) | Debt Type | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total unsecured debt | $18,520,966 | $18,698,066 | | Total secured debt | $312,326 | $125,363 | | **Total debt financing** | **$18,833,292** | **$18,823,429** | - The company has commitments to purchase **351 aircraft** through 2028, with an estimated aggregate commitment of **$22.6 billion**. Deliveries may be delayed through 2029[50](index=50&type=chunk) - On November 3, 2023, the board of directors increased the quarterly cash dividend on Class A common stock by **5% to $0.21 per share**[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 17.5% Q3 2023 revenue increase to $659.4 million, a $25.6 billion fleet net book value, $6.6 billion liquidity, and 100% orderbook placement through 2025, noting strong demand and manufacturing delays - Q3 2023 revenues increased **17.5% YoY to $659.4 million**, driven by fleet growth and increased sales activity[88](index=88&type=chunk) - The company ended Q3 2023 with total liquidity of **$6.6 billion** and an aggregate borrowing capacity of **$5.4 billion** under its revolving credit facility[87](index=87&type=chunk) - As of September 30, 2023, **100%** of the committed orderbook for aircraft delivering through the end of 2025 has been placed on long-term leases[86](index=86&type=chunk) [Our Fleet](index=25&type=section&id=Our%20Fleet) As of September 30, 2023, the company owned 448 aircraft with a $25.6 billion net book value, a weighted-average age of 4.6 years, and a remaining lease term of 7.0 years, with Europe and Asia as key regions Fleet Metrics | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Net book value | $25.6 billion | $24.5 billion | | Owned fleet (count) | 448 | 417 | | Managed fleet (count) | 79 | 85 | | Aircraft on order | 351 | 398 | | Weighted-average fleet age | 4.6 years | 4.5 years | | Weighted-average remaining lease term | 7.0 years | 7.1 years | Geographic Diversification by Net Book Value | Region | % of Total (Sep 30, 2023) | | :--- | :--- | | Europe | 36.8% | | Asia (excluding China) | 30.0% | | Central/South America & Mexico | 8.5% | | The Middle East and Africa | 8.3% | | China | 7.3% | [Aircraft Industry and Sources of Revenues](index=29&type=section&id=Aircraft%20Industry%20and%20Sources%20of%20Revenues) Global air traffic recovery drives high aircraft demand and rising lease rates, though increases lag interest rate hikes, while manufacturing delays and engine flaws constrain supply, potentially benefiting lease rates and aircraft values - Global passenger traffic was up **28%** in August 2023 compared to the prior year, driving increased demand for aircraft[112](index=112&type=chunk) - Lease rates have been increasing due to high demand, rising interest rates, and inflation, but continue to lag the pace of interest rate hikes[114](index=114&type=chunk) - Manufacturing flaws in Pratt & Whitney GTF engines are expected to increase the number of A320/A321neo aircraft on the ground through 2026, potentially leading to further delivery delays and benefiting lease rates for other narrowbody aircraft[118](index=118&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q3 2023 with $6.6 billion in liquidity, $18.8 billion in total debt (85.1% fixed-rate, 98.3% unsecured), and a composite cost of funds of 3.67%, with significant future commitments for aircraft purchases and debt obligations - Total available liquidity was **$6.6 billion** at the end of Q3 2023[120](index=120&type=chunk) Debt Profile | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Debt Outstanding | $18.8 billion | $18.8 billion | | % Fixed-rate | 85.1% | 91.3% | | % Unsecured | 98.3% | 99.3% | | Composite Interest Rate | 3.67% | 3.07% | - Capital allocation priorities are: 1) investing in modern aircraft, 2) maintaining an investment-grade balance sheet, and 3) returning cash to shareholders via dividends and share repurchases[122](index=122&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q3 2023 rental revenue grew to $604.0 million, aircraft sales revenue increased to $55.3 million, and interest expense rose to $175.5 million, leading to a nine-month net income of $362.3 million, a significant recovery from the prior year's loss - Q3 2023 rental revenue increased to **$604.0 million**, up from $541.4 million in Q3 2022, primarily due to fleet growth[158](index=158&type=chunk) - Q3 2023 interest expense increased to **$175.5 million** from $135.5 million in Q3 2022, driven by a higher composite cost of funds[160](index=160&type=chunk) - For the nine months ended Sep 30, 2023, net income was **$362.3 million**, compared to a net loss of **$273.6 million** for the same period in 2022. The 2022 period included an **$802.4 million** write-off related to aircraft detained in Russia[172](index=172&type=chunk)[176](index=176&type=chunk) Reconciliation to Adjusted Net Income Before Income Taxes (in thousands) | | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | :--- | :--- | | Net income/(loss) attributable to common stockholders | $122,025 | $99,956 | $362,296 | $(273,609) | | Adjustments (Amortization, Stock Comp, Taxes, etc.) | $54,982 | $46,384 | $157,408 | $775,317 | | **Adjusted net income before income taxes** | **$177,007** | **$146,340** | **$519,704** | **$501,708** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from $2.8 billion in floating-rate debt, where a 1.0% rate increase would add $28.1 million to annual interest expense, and minimal foreign exchange risk due to U.S. dollar-denominated contracts - A **1.0% increase** in interest rates on the company's **$2.8 billion** of floating-rate debt would increase annual interest expense by approximately **$28.1 million**[182](index=182&type=chunk) - Foreign exchange risk is considered low as most contracts are denominated in U.S. dollars. However, a stronger U.S. dollar poses a risk to lessees who earn revenue in local currencies[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - The company's Certifying Officers concluded that disclosure controls and procedures were effective as of September 30, 2023[189](index=189&type=chunk) - No material changes were made to the company's internal control over financial reporting during the third quarter of 2023[190](index=190&type=chunk) [PART II—OTHER INFORMATION](index=47&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, other disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is pursuing legal action against insurers to recover losses from aircraft detained in Russia, a matter not expected to materially adversely affect the company as assets were already written off - The company filed a lawsuit in December 2022 against its insurers to recover losses from aircraft detained in Russia, for which a net write-off of approximately **$771.5 million** was recorded in 2022[192](index=192&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2022, have been reported - No material changes in risk factors were reported from those disclosed in the 2022 Form 10-K[194](index=194&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[195](index=195&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) The company reported no information regarding Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - None[200](index=200&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, amendments to purchase agreements, and XBRL data files

Air Lease Corporation (NYSE:AL) Q2 2023 Earnings Conference Call August 3, 2023 4:30 PM ET Company Participants Jason Arnold - Head of Investor Relations John Plueger - President and Chief Executive Officer Steven Hazy - Executive Chairman Gregory Willis - Executive Vice President and Chief Financial Officer Conference Call Participants Jamie Baker - JPMorgan Tom Fitzgerald - TD Cowen Jack Fowler - Goldman Sachs Steve Trent - Citigroup Operator Good afternoon. My name is Kayla and I will be your conference ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35121 AIR LEASE CORPORATION (Exact name of registrant as specified in its charter) Delaware 27-1840403 (State or other jur ...

Call Start: 16:30 January 1, 0000 5:12 PM ET Air Lease Corporation (NYSE:AL) Q1 2023 Earnings Conference Call May 1, 2023 16:30 ET Company Participants Jason Arnold - Head of Investor Relations John Plueger - President & Chief Executive Officer Steve Hazy - Executive Chairman Greg Willis - Executive Vice President & Chief Financial Officer Conference Call Participants Catherine O'Brien - Goldman Sachs Helane Becker - Cowen & Company Hillary Cacanando - Deutsche Bank Operator Good afternoon. My name is Regin ...

[Note About Forward-Looking Statements](index=5&type=section&id=Note%20About%20Forward-Looking%20Statements) This section cautions investors that the report contains forward-looking statements regarding the airline industry, capital market access, geopolitical impacts, aircraft delivery delays, inflation, and interest rates, which are not guarantees of future performance and involve risks and uncertainties - The report contains forward-looking statements concerning various business and economic factors, including the state of the airline industry, access to capital, the impact of the Russia-Ukraine conflict, aircraft delivery delays, inflation, and rising interest rates[8](index=8&type=chunk) - Key risk factors that could cause actual results to differ materially include the inability to obtain capital, increases in borrowing costs, manufacturer delivery failures, inability to recover losses on aircraft in Russia, changes in aircraft value and lease rates, and lessee financial condition[9](index=9&type=chunk) [PART I—FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements, management's discussion and analysis of financial condition and results of operations, market risk disclosures, and information on controls and procedures for the quarterly period ended March 31, 2023 Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Assets | $29,363,141 | $28,396,705 | | Flight equipment subject to operating leases, net | $25,749,518 | $24,538,385 | | Total Liabilities | $22,618,555 | $21,750,342 | | Debt financing, net | $19,447,601 | $18,641,063 | | Total Shareholders' Equity | $6,744,586 | $6,646,363 | Consolidated Statement of Operations Highlights (unaudited) | Account | Three Months Ended Mar 31, 2023 (in thousands) | Three Months Ended Mar 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $636,142 | $596,661 | | Write-off of Russian fleet | $0 | $802,352 | | Net Income/(Loss) | $128,720 | $(468,993) | | Net Income/(Loss) attributable to common stockholders | $118,295 | $(479,418) | | Diluted Earnings/(Loss) per share | $1.06 | $(4.21) | Consolidated Statement of Cash Flows Highlights (unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2023 (in thousands) | Three Months Ended Mar 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $348,490 | $254,694 | | Net cash used in investing activities | $(1,273,376) | $(620,569) | | Net cash provided by financing activities | $846,406 | $769,639 | [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Consolidated Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows for the periods ended March 31, 2023, along with detailed notes on company background, accounting policies, debt, fleet assets, and commitments [Company Background and Overview](index=10&type=section&id=Note%201.%20Company%20Background%20and%20Overview) Air Lease Corporation is a leading aircraft leasing company focused on purchasing modern, fuel-efficient commercial jet aircraft from manufacturers like Boeing and Airbus and leasing them to airlines globally, also selling aircraft and providing fleet management services - As of March 31, 2023, the company's portfolio consisted of **437 owned aircraft**, **86 managed aircraft**, and **376 aircraft on order** from manufacturers[19](index=19&type=chunk) [Debt Financing](index=10&type=section&id=Note%203.%20Debt%20Financing) The company's total debt financing increased to $19.6 billion as of March 31, 2023, from $18.8 billion at year-end 2022, with the majority being unsecured, and Q1 2023 saw new Medium-Term Notes and Sukuk financing, alongside an increased Revolving Credit Facility capacity Debt Financing Summary (in thousands) | Debt Type | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total unsecured debt | $19,521,871 | $18,698,066 | | Total secured debt | $120,416 | $125,363 | | **Total debt financing** | **$19,642,287** | **$18,823,429** | - In Q1 2023, the company issued **$700.0 million of 5.30% Medium-Term Notes** due 2028 and **$600.0 million of 5.85% trust certificates** in a Sukuk financing[26](index=26&type=chunk)[27](index=27&type=chunk) - In April 2023, the company amended and extended its Revolving Credit Facility, increasing total commitments to approximately **$7.2 billion** and extending the final maturity to May 2027[30](index=30&type=chunk) [Flight Equipment Subject to Operating Lease](index=13&type=section&id=Note%204.%20Flight%20equipment%20subject%20to%20operating%20lease) The net book value of the company's flight equipment grew to $25.7 billion as of March 31, 2023, as it continues to pursue uncertain insurance claims for aircraft detained in Russia, for which a significant write-off was recognized in 2022 - The net book value of flight equipment increased from **$24.5 billion** at year-end 2022 to **$25.7 billion** as of March 31, 2023, primarily due to the purchase of new aircraft[35](index=35&type=chunk) - The company is vigorously pursuing insurance claims for losses related to aircraft detained in Russia by filing a lawsuit against its insurers in December 2022; as of May 1, 2023, **20 owned aircraft remain detained in Russia**[37](index=37&type=chunk)[38](index=38&type=chunk) [Commitments and Contingencies](index=14&type=section&id=Note%205.%20Commitments%20and%20Contingencies) As of March 31, 2023, the company had commitments to purchase 376 new aircraft from Boeing and Airbus through 2029, with an estimated aggregate commitment of $24.2 billion, noting that these delivery schedules are subject to significant manufacturer delays Aircraft Purchase Commitments (as of March 31, 2023) | Period | Estimated Commitment (in thousands) | | :--- | :--- | | 2023 | $4,889,889 | | 2024 | $5,357,669 | | 2025 | $5,081,295 | | 2026 | $3,869,866 | | 2027 | $2,478,928 | | Thereafter | $2,563,357 | | **Total** | **$24,241,004** | - The company has **376 aircraft on order**, including **172 Airbus A320/321neo family** and **89 Boeing 737 MAX family aircraft**; deliveries are expected to be delayed by manufacturers[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [Subsequent Events](index=19&type=section&id=Note%2014.%20Subsequent%20Events) On April 28, 2023, the company's board of directors approved quarterly cash dividends for its Class A common stock and its Series A, B, and C Preferred Stock - A quarterly cash dividend of **$0.20 per share** was declared for Class A common stock, payable on July 7, 2023[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 2023 performance, highlighting a 6.6% revenue increase and a return to profitability, covering fleet growth, order book, industry trends, liquidity, capital resources, and detailed operating results [First Quarter Overview](index=20&type=section&id=First%20Quarter%20Overview) In Q1 2023, the company's fleet net book value grew to $25.7 billion, with 22 new aircraft purchased, resulting in 437 owned aircraft, a 6.6% year-over-year revenue increase to $636.1 million, and a significant turnaround to $118.3 million net income attributable to common stockholders from a prior-year loss driven by the Russian fleet write-off - Total revenues for Q1 2023 increased by **6.6% to $636.1 million** compared to Q1 2022, driven by fleet growth[79](index=79&type=chunk) - Reported net income of **$118.3 million**, or **$1.06 per diluted share**, compared to a net loss of **$479.4 million**, or **$4.21 per diluted share**, in Q1 2022; the prior year's loss was primarily due to the **$802.4 million write-off of the Russian fleet**[80](index=80&type=chunk)[144](index=144&type=chunk) - The company ended Q1 2023 with **437 owned aircraft**, a globally diversified customer base of **118 airlines in 63 countries**, and a lease utilization rate of **99.9%**[76](index=76&type=chunk) - As of March 31, 2023, the company had an order book of **376 aircraft** and total committed minimum future rental payments of **$30.5 billion**[77](index=77&type=chunk) [Our Fleet](index=21&type=section&id=Our%20Fleet) As of March 31, 2023, the company's owned fleet had a net book value of $25.7 billion, with a weighted-average age of 4.5 years and a remaining lease term of 7.1 years, geographically diversified with Europe and Asia (excluding China) as largest regions, and an order book of 376 aircraft, though continued delivery delays from manufacturers are anticipated Fleet Metrics | Metric | March 31, 2023 (in billions) | December 31, 2022 (in billions) | | :--- | :--- | :--- | | Net book value | $25.7 | $24.5 | | Weighted-average fleet age | 4.5 years | 4.5 years | | Weighted-average remaining lease term | 7.1 years | 7.1 years | | Owned fleet (count) | 437 | 417 | | Aircraft on order (count) | 376 | 398 | Geographic Diversification by Net Book Value (Mar 31, 2023) | Region | % of Total Net Book Value | | :--- | :--- | | Europe | 33.0% | | Asia (excluding China) | 29.4% | | China | 10.8% | | The Middle East and Africa | 8.6% | | Central & South America, Mexico | 8.3% | | U.S. and Canada | 6.5% | | Pacific, Australia, and New Zealand | 3.4% | - The company expects delivery delays for a majority of the **376 aircraft** in its orderbook and notes that at current production rates, these delays could extend through **2028**[90](index=90&type=chunk)[96](index=96&type=chunk) [Aircraft Industry and Sources of Revenues](index=24&type=section&id=Aircraft%20Industry%20and%20Sources%20of%20Revenues) The commercial airline industry is experiencing a strong recovery, with IATA reporting a 56% increase in passenger traffic in February 2023 year-over-year, which, coupled with manufacturer delivery delays, is increasing demand for ALC's aircraft and driving lease rates higher, despite airlines facing higher operating costs, with the industry expected to return to profitability in 2023 - Global air travel continues to recover, with IATA reporting total passenger traffic up **56% in February 2023 vs. the prior year**; IATA expects global passenger departures to return to **2019 levels by 2024**[99](index=99&type=chunk) - Increased demand for aircraft, rising interest rates, and inflation are contributing to **higher lease rates**; the company expects this trend to continue[100](index=100&type=chunk) - Airline customers are facing higher operating costs from fuel, interest rates, inflation, and labor shortages, but strong demand is providing a counterbalance[101](index=101&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2023 with $6.5 billion in available liquidity, prioritizing unsecured, fixed-rate debt, with total debt at $19.6 billion (88.0% fixed-rate, 99.4% unsecured) and a composite cost of funds of 3.42%, with material cash requirements primarily for aircraft purchases and debt service over the next five years - Ended Q1 2023 with **$6.5 billion in available liquidity**, comprising **$0.7 billion in unrestricted cash** and **$5.8 billion available** under its unsecured revolving credit facility[104](index=104&type=chunk) Debt Profile as of March 31, 2023 | Metric | Value | | :--- | :--- | | Total Debt Outstanding | $19.6 billion | | Percentage Unsecured | 99.4% | | Percentage Fixed-Rate | 88.0% | | Composite Cost of Funds | 3.42% | - The company expects to make between **$4.0 billion and $5.0 billion in aircraft investments in 2023**[115](index=115&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's operating results for the three months ended March 31, 2023, versus the same period in 2022, highlighting increased rental revenue from fleet growth, higher interest expense due to rising rates and debt balances, and the significant impact of the 2022 Russian fleet write-off on the year-over-year comparison, with adjusted net income before income taxes decreasing due to lower end-of-lease revenue and higher expenses Reconciliation to Adjusted Net Income Before Income Taxes (in thousands) | Line Item | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net income/(loss) attributable to common stockholders | $118,295 | $(479,418) | | Amortization of debt discounts and issuance costs | $13,073 | $13,198 | | Write-off of Russian fleet | $0 | $802,352 | | Stock-based compensation expense | $5,896 | $(2,523) | | Income tax expense/(benefit) | $29,546 | $(132,720) | | **Adjusted net income before income taxes** | **$166,810** | **$200,889** | - Rental revenue increased to **$617.8 million** in Q1 2023 from **$566.6 million** in Q1 2022, driven by fleet growth, but was partially offset by a decrease in end-of-lease revenue compared to the prior year, which included revenue from Russian lease terminations[140](index=140&type=chunk) - Interest expense rose to **$164.7 million** from **$130.5 million** in the prior-year period, due to a higher average debt balance and an increased composite cost of funds[142](index=142&type=chunk) - Selling, general and administrative (SG&A) expenses increased to **$47.6 million** from **$32.8 million**, primarily due to higher insurance premiums and aircraft transition costs[146](index=146&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to interest rate risk from its floating-rate debt, partially mitigated by lease adjusters, while foreign exchange risk is minimal due to U.S. dollar denominated transactions - The company is exposed to interest rate risk on its **$2.4 billion of floating-rate debt** as of March 31, 2023; a hypothetical **1.0% increase** in the composite interest rate would increase annual interest expense by approximately **$23.5 million**[155](index=155&type=chunk) - Foreign exchange risk is limited as most transactions are in U.S. dollars; exposure on **C$400.0 million of notes** is effectively hedged with a cross-currency swap[157](index=157&type=chunk)[158](index=158&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2023, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were **effective**[160](index=160&type=chunk) - No changes occurred during the quarter ended March 31, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[161](index=161&type=chunk) [PART II—OTHER INFORMATION](index=39&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This part provides information on legal proceedings, risk factors, unregistered sales of equity securities, defaults upon senior securities, and a list of exhibits [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a significant legal proceeding against its insurers, having filed a lawsuit in December 2022 to recover losses related to its aircraft detained in Russia, for which it had previously recorded a write-off of approximately $771.5 million - In December 2022, the company filed a lawsuit against its insurers in California, seeking recovery for losses on aircraft detained in Russia; the suit alleges **breach of contract** and **breach of the covenant of good faith and fair dealing**[163](index=163&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been **no material changes in risk factors** from those discussed in the Annual Report on Form 10-K for the year ended December 31, 2022[165](index=165&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[166](index=166&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, credit agreements, employment agreements, and certifications required by the Sarbanes-Oxley Act - The report includes various exhibits, such as amendments to credit agreements, executive employment agreements, and CEO/CFO certifications[171](index=171&type=chunk)[172](index=172&type=chunk)

Financial Data and Key Metrics Changes - The company generated a record total revenue of $602 million in Q4 2022, with diluted EPS at $1.21 per share [7][27] - Interest expense increased by 16% year-over-year due to higher average debt balances and an uptick in the composite cost of funds from 2.79% to 3.07% [27][28] - The adjusted pretax return on equity improved despite the pandemic's trailing effects [29] Business Line Data and Key Metrics Changes - The company purchased 16 new aircraft during the quarter, adding approximately $1 billion of flight equipment to the balance sheet, and sold five aircraft generating gains of approximately $28 million [7][10] - The utilization rate for the full year 2022 remained robust at 99.6% [7] Market Data and Key Metrics Changes - Passenger traffic globally increased by over 60% year-over-year in 2022, with international traffic up as much as 153% [18][20] - The Asia-Pacific market saw a significant rise of over 360% year-over-year in 2022 [19] Company Strategy and Development Direction - The company aims to capitalize on post-pandemic growth driven by passenger traffic and airline yields, with a focus on delivering new, environmentally friendly aircraft [12][15] - The company has a strong order book with delivery positions extending through 2028, making its available delivery positions more valuable [14] Management's Comments on Operating Environment and Future Outlook - Management expressed skepticism about Airbus and Boeing meeting their production rate goals in the next two to three years due to ongoing supply chain challenges [9][10] - The company expects to receive approximately $45 billion of aircraft deliveries in 2023, with $1.3 billion expected in Q1 [10] Other Important Information - The Board declared a $0.20 per share common stock dividend for the quarter, reflecting confidence in the business [17] - The company maintains a strong liquidity position of $6.9 billion and a large unencumbered asset base of $27 billion [31] Q&A Session Summary Question: What is the expected lag between interest rate increases and lease rate increases? - Management indicated that it is difficult to put a specific timeline on the lag, emphasizing supply-demand dynamics as a booster to lease rates [35][36] Question: Is the reduction in exposure to China part of a strategy to mitigate geopolitical risk? - Management confirmed that they continuously evaluate geographic exposure and are seeing growth opportunities in other regions, leading to a decrease in exposure to China [37][38] Question: How can the benefit from stronger lease rates be quantified? - Management noted that while they cannot provide specific metrics, they are experiencing strong demand for both new aircraft and lease extensions [43][44] Question: What are the capital-raising intentions for this year? - Management plans to raise $3 billion to $4 billion, depending on aircraft purchases and sales, with a focus on accessing markets at opportune times [51][52] Question: Why did the rental flight equipment number decrease despite a larger fleet? - Management explained that the decrease is due to holdover effects from COVID-related lease restructurings and the impact of the Russia situation [63][64]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35121 AIR LEASE CORPORATION (Exact name of registrant as specified in its charter) Delaware 27-1840403 (State or other jurisdiction of i ...

Air Lease Corporation (NYSE:AL) Q3 2022 Earnings Conference Call November 3, 2022 4:30 PM ET Company Participants Jason Arnold – Head-Investor Relations Steve Hazy – Executive Chairman John Plueger – Chief Executive Officer and President Greg Willis – Executive Vice President and Chief Financial Officer Conference Call Participants Hillary Cacanando – Deutsche Bank Jamie Baker – JPMorgan Moshe Orenbuch – Credit Suisse Mariana Perez Mora – Bank of America Operator Good afternoon. My name is Paula, and I will ...