Air Lease (AL) - 2025 Q3 - Quarterly Results

Financial Performance - Revenues for Q3 2025 increased by 5.1% to $725.4 million compared to $690.2 million in Q3 2024, with a nine-month revenue increase of 8.6% to $2,195.4 million[1] - Net income attributable to common stockholders for Q3 2025 was $135.4 million, a 47.8% increase from $91.6 million in Q3 2024, with diluted earnings per share rising to $1.21 from $0.82[1] - Total revenues and other income for Q3 2025 reached $725.4 million, a 5.0% increase from $690.2 million in Q3 2024[31] - Net income attributable to common stockholders for Q3 2025 was $135.4 million, up 47.8% from $91.6 million in Q3 2024[31] - Basic earnings per share increased to $1.21 in Q3 2025, compared to $0.82 in Q3 2024, reflecting a 47.6% growth[31] - Adjusted net income before income taxes for Q3 2025 was $144.5 million, compared to $140.2 million in Q3 2024, a 3.3% increase[35] - The adjusted pre-tax margin for Q3 2025 was 19.9%, slightly down from 20.3% in Q3 2024[35] - Net income for the nine months ended September 30, 2025, was $907,455, compared to $314,783 in 2024, representing a significant increase[44] Revenue Sources - Total rental of flight equipment revenue for Q3 2025 increased by approximately 9% to $681 million compared to Q3 2024, driven by fleet growth and increased portfolio lease yield[6] - The company recognized a net benefit of approximately $60 million from the settlement of insurance claims related to its former Russian fleet, recovering 104% of the write-off recorded in March 2022[9] - The company reported proceeds from settlement of insurance claims amounting to $727,572 in 2025, which was not present in 2024[44] Debt and Financing - Total debt financing as of September 30, 2025, was $20.2 billion, with 75.7% at a fixed rate and a composite cost of funds of 4.29%[18] - As of September 30, 2025, total debt financing was $20,340 million, a slight decrease from $20,390 million on December 31, 2024[19] - The composite interest rate increased to 4.29% from 4.14% in the previous period[19] - The percentage of total debt at a fixed rate decreased to 75.74% from 79.00%[19] Assets and Liabilities - Total assets as of September 30, 2025, were $33,386 million, up from $32,278 million at the end of 2024[29] - Total liabilities increased to $25,045 million from $24,745 million[29] - The company ended Q3 2025 with $29.3 billion in committed minimum future rental payments, consisting of $19.6 billion from the existing fleet and $9.7 billion from future deliveries[9] - As of September 30, 2025, the net book value of the fleet increased to $29.5 billion, with 503 owned aircraft, up from 489 at the end of 2024[12] Cash Flow and Dividends - Net cash provided by operating activities increased to $1,320,553 in 2025 from $1,247,055 in 2024, reflecting a growth of approximately 5.9%[44] - Cash paid during the period for interest was $712,557 in 2025, up from $590,697 in 2024, indicating a rise of about 20.6%[44] - Net cash used in investing activities decreased to $(1,406,473) in 2025 from $(2,678,168) in 2024, showing an improvement of approximately 47.5%[44] - A quarterly cash dividend of $0.22 per share was approved, to be paid on January 8, 2026, to holders of record as of December 4, 2025[9] - Cash dividends paid on Class A common stock increased slightly to $(73,679) in 2025 from $(70,092) in 2024[44] Mergers and Acquisitions - The company entered into a merger agreement to be acquired by Sumisho Air Lease Corporation, with a total valuation of approximately $7.4 billion, or $28.2 billion including debt obligations[5] - The proposed merger is subject to various risks, including regulatory approvals and potential disruptions to business operations[24] - The company did not host a conference call or provide guidance due to an ongoing acquisition transaction[21] Operational Metrics - Total expenses for Q3 2025 were $540.4 million, a decrease of 3.5% from $559.9 million in Q3 2024[31] - Interest expense for Q3 2025 was $228.4 million, up from $217.5 million in Q3 2024, indicating an increase of 5.0%[31] - The company reported a pre-tax return on common equity of 17.6% for the trailing twelve months ended September 30, 2025, compared to 9.7% for the same period in 2024[31] - The weighted-average diluted common shares outstanding for Q3 2025 were 112.3 million, compared to 111.8 million in Q3 2024[37] - The company recorded a gain on aircraft sales, trading, and other activities of $(125,108) in 2025, compared to $(149,018) in 2024, indicating a reduced loss[44] - Total depreciation of flight equipment was $914,433 in 2025, compared to $849,374 in 2024, marking an increase of about 7.7%[44]