Air Lease Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Air Lease Corp. filed its Q1 2024 10-Q, detailing financial positions as of March 31, 2024.</b>

AI Summary

AIR LEASE CORP (AL) filed a Quarterly Report (10-Q) with the SEC on May 6, 2024. Air Lease Corp. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's principal business is aircraft leasing. The filing includes financial data for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023. Key financial statement components like common stock, preferred stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income are detailed for these periods.

Why It Matters

For investors and stakeholders tracking AIR LEASE CORP, this filing contains several important signals. This 10-Q provides an updated view of Air Lease Corp.'s financial health and operational status for the first quarter of 2024, crucial for investors assessing current performance. The detailed financial data allows stakeholders to track changes in equity, debt, and other balance sheet items compared to previous periods, informing investment decisions.

Risk Assessment

Risk Level: medium — AIR LEASE CORP shows moderate risk based on this filing. The filing is a standard 10-Q, which provides a snapshot of financial health but does not contain forward-looking statements or significant new risk disclosures that would elevate the risk level beyond medium.

Analyst Insight

Investors should review the detailed balance sheet changes and compare key financial metrics to prior periods to understand the company's financial trajectory.

Key Numbers

• 2024-03-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-06 — Filing Date (FILED AS OF DATE)
• 2024-01-01 — Quarter Start Date (Period for financial data)
• 2023-03-31 — Prior Year Q1 End Date (Period for financial data comparison)

Key Players & Entities

• AIR LEASE CORP (company) — FILER
• 2000 AVENUE OF THE STARS (address) — BUSINESS ADDRESS
• LOS ANGELES (location) — BUSINESS ADDRESS CITY
• 271840403 (tax_id) — IRS NUMBER
• DE (state) — STATE OF INCORPORATION
• 7359 (sic_code) — STANDARD INDUSTRIAL CLASSIFICATION
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-05-06 (date) — FILED AS OF DATE

FAQ

Industry Context

Air Lease Corporation operates in the aircraft leasing industry, providing commercial jet aircraft to airlines worldwide.

Regulatory Implications

This filing is a standard quarterly report (10-Q) submitted to the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the changes in 'Additional Paid-In Capital' and 'Retained Earnings' from Q4 2023 to Q1 2024.
2. Compare the equity structure (Common Class A, Common Class B, Preferred Stock) between March 31, 2024, and March 31, 2023.
3. Note any significant changes in 'Accumulated Other Comprehensive Income' and investigate potential causes.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-06: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This 10-Q filing provides the financial snapshot for Q1 2024, allowing for comparison against the Q1 2023 filing and the year-end 2023 filing.

Filing Documents

• al-20240331.htm (10-Q) — 1182KB
• ex102-q124.htm (EX-10.2) — 64KB
• ex103-q124.htm (EX-10.3) — 36KB
• ex104-q124.htm (EX-10.4) — 181KB
• ex-311xq124.htm (EX-31.1) — 9KB
• ex-312xq124.htm (EX-31.2) — 9KB
• ex-321xq124.htm (EX-32.1) — 5KB
• ex-322xq124.htm (EX-32.2) — 5KB
• 0001628280-24-020612.txt (&nbsp;) — 6154KB
• al-20240331.xsd (EX-101.SCH) — 49KB
• al-20240331_cal.xml (EX-101.CAL) — 73KB
• al-20240331_def.xml (EX-101.DEF) — 248KB
• al-20240331_lab.xml (EX-101.LAB) — 585KB
• al-20240331_pre.xml (EX-101.PRE) — 426KB
• al-20240331_htm.xml (XML) — 555KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION Item 1

Financial Statements

Financial Statements Consolidated Balance Sheets—March 31, 2024 and December 31, 2023 (unaudited) 5 Consolidated Statements of Income and Other Comprehensive Income—Three Months Ended March 31, 2024 and 2023 (unaudited) 6 Consolidated Statements of Shareholders' Equity—Three Months Ended March 31, 2024 and 2023 (unaudited) 7 Consolidated Statements of Cash Flows—Three Months Ended March 31, 2024 and 2023 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 38 Item 4

Controls and Procedures

Controls and Procedures 39

—OTHER INFORMATION

PART II—OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 39 Item 1A

Risk Factors

Risk Factors 40 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3 Defaults Upon Senior Securities 40 Item 4 Mine Safety Disclosures 40 Item 5 Other Information 40 Item 6 Exhibits 40

Signatures

Signatures 43 3 Table of Contents NOTE ABOUT FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q and other publicly available documents may contain or incorporate statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this Form 10-Q and include statements regarding, among other matters, the state of the airline industry, our access to the capital and debt markets, the impact of Russia's invasion of Ukraine and the impact of sanctions imposed on Russia, the impact of the Israel Hamas conflict, aircraft and engine delivery delays and manufacturing flaws, our aircraft sales pipeline and expectations, changes in inflation and interest rates and other macroeconomic conditions and other factors affecting our financial condition or results of operations. Words such as "can," "could," "may," "predicts," "potential," "will," "projects," "continuing," "ongoing," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and "should," and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements, or industry results to vary materially from our future results, performance or achievements, or those of our industry, expressed or implied in such forward-looking statements. Such factors include, among others: our inability to obtain additional capital on favorable terms, or at all, to acquire aircraft, service our debt obligations and refinance maturing debt obligations; increases in our cost of borrowing, decreases in our credit ratings or changes in interest rates; our inability to generate sufficient returns on our aircraft investments through strategic acquisition

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Air Lease Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS (In thousands, except share and par value amounts) March 31, 2024 December 31, 2023 (unaudited) Assets Cash and cash equivalents $ 554,373 $ 460,870 Restricted cash 1,552 3,622 Flight equipment subject to operating leases 32,273,883 31,787,241 Less accumulated depreciation ( 5,729,380 ) ( 5,556,033 ) 26,544,503 26,231,208 Deposits on flight equipment purchases 1,088,363 1,203,068 Other assets 2,723,644 2,553,484 Total assets $ 30,912,435 $ 30,452,252 Liabilities and Shareholders' Equity Accrued interest and other payables $ 1,160,132 $ 1,164,140 Debt financing, net of discounts and issuance costs 19,479,961 19,182,657 Security deposits and maintenance reserves on flight equipment leases 1,594,069 1,519,719 Rentals received in advance 138,181 143,861 Deferred tax liability 1,308,221 1,281,837 Total liabilities $ 23,680,564 $ 23,292,214 Shareholders' Equity Preferred Stock, $ 0.01 par value; 50,000,000 shares authorized; 10,600,000 (aggregate liquidation preference of $ 850,000 ) shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively $ 106 $ 106 Class A common stock, $ 0.01 par value; 500,000,000 shares authorized; 111,366,501 and 111,027,252 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively 1,114 1,110 Class B Non-Voting common stock, $ 0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding — — Paid-in capital 3,286,122 3,287,234 Retained earnings 3,943,867 3,869,813 Accumulated other comprehensive income 662 1,775 Total shareholders' equity $ 7,231,871 $ 7,160,038 Total liabilities and shareholders' equity $ 30,912,435 $ 30,452,252 (See Notes to Consolidated Financial Statements) 5 Table of Contents Air Lease Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (In thousands, except share and per share a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Company Background and Overview Air Lease Corporation (the "Company", "ALC", "we", "our" or "us") is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Hzy. The Company is principally engaged in purchasing the most modern, fuel-efficient, new technology commercial jet aircraft directly from aircraft manufacturers, such as The Boeing Company ("Boeing") and Airbus S.A.S. ("Airbus"). The Company leases these aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of March 31, 2024, the Company owned 472 aircraft, managed 73 aircraft and had 320 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its fleet to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee. Note 2. Basis of Preparation and Critical Accounting Policies The Company consolidates financial statements of all entities in which the Company has a controlling financial interest, including the accounts of any Variable Interest Entity in which the Company has a controlling financial interest and for which it is the primary beneficiary. All material intercompany balances are eliminated in consolidation. The accompanying Consolidated Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited Consolidated Financial Statements include all adjustments, co

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 3. Debt Financing The Company's consolidated debt as of March 31, 2024 and December 31, 2023 is summarized below: March 31, 2024 December 31, 2023 (in thousands) Unsecured Senior unsecured securities $ 16,307,719 $ 16,329,605 Term financings 1,608,450 1,628,400 Revolving credit facility 1,453,000 1,100,000 Total unsecured debt financing 19,369,169 19,058,005 Secured Export credit financing 201,417 204,984 Term financings 97,111 100,471 Total secured debt financing 298,528 305,455 Total debt financing 19,667,697 19,363,460 Less: Debt discounts and issuance costs ( 187,736 ) ( 180,803 ) Debt financing, net of discounts and issuance costs $ 19,479,961 $ 19,182,657 As of March 31, 2024, management of the Company believes it is in compliance in all material respects with the covenants in its debt agreements, including minimum consolidated shareholders' equity, minimum consolidated unencumbered assets, and an interest coverage ratio test. Senior unsecured securities (including Medium-Term Note Program) As of March 31, 2024 and December 31, 2023, the Company had $ 16.3 billion in senior unsecured securities outstanding. During the three months ended March 31, 2024, the Company issued (i) $ 500.0 million in aggregate principal amount of 5.10 % Medium-Term Notes due 2029 (ii) Canadian dollar ("C$") denominated debt of C$ 400.0 million in additional aggregate principal amount of 5.40 % Medium-Term Notes due 2028 ("2024 C$ notes") and (iii) Euro ("") denominated debt of 600.0 million in aggregate principal amount of 3.70 % Medium-Term Notes due 2030 ("2024 notes"). The 2024 C$ notes issued in 2024 have the same terms as, and constitute a single tranche with, the C$ 500.0 million aggregate principal amount of 5.40 % Medium-Term Notes issued in November 2023. The Company hedged the 2024 C$ notes through a cross-currency swap that converts the borrowing rate to a fixed 5.95 % U.S. dollar de

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) In April 2024, the Company amended and extended its Revolving Credit Facility through an amendment that, among other things, extended the final maturity date from May 5, 2027 to May 5, 2028 and amended the total revolving commitments thereunder to approximately $ 7.8 billion as of May 5, 2024. As of May 6, 2024, lenders held revolving commitments totaling approximately $ 7.5 billion that mature on May 5, 2028, commitments totaling $ 25.0 million that mature on May 5, 2027, $ 210.0 million that mature on May 5, 2026 and commitments totaling $ 25.0 million that mature on May 5, 2025. Borrowings under the Revolving Credit Facility continue to accrue interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility) plus a margin of 1.05 % per year. The Company is required to pay a facility fee of 0.20 % per year in respect of total commitments under the Revolving Credit Facility. Interest rate and facility fees are subject to changes in the Company's credit ratings. Secured debt financings As of March 31, 2024, the Company had an outstanding balance of $ 298.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $ 441.4 million. As of December 31, 2023, the Company had an outstanding balance of $ 305.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $ 445.9 million. All of the Company's secured obligations as of March 31, 2024 and December 31, 2023 are recourse in nature. Maturities Maturities of debt outstanding as of March 31, 2024 are as follows (in thousands): Years ending December 31, 2024 $ 1,726,518 2025 2,422,736 2026 4,441,613 2027 4,161,117 2028 2,987,622 Thereafter 3,928,091 Total $ 19,667,697 Note 4. Flight equipment subject to operating lease The following table summarizes the activities for the Company's flight equipment subject to operating lease for the three months en

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Update on Russian fleet As previously disclosed in the Company's filings with the U.S. Securities and Exchange Commission, in June 2022, the Company and certain of its subsidiaries submitted insurance claims to the insurers on its aviation insurance policies to recover losses relating to aircraft detained in Russia for which the Company recorded a net write-off of its interests in its owned and managed aircraft totaling approximately $ 771.5 million for the year ended December 31, 2022. In December 2022, the Company filed suit in the Los Angeles County Superior Court of the State of California against its aviation insurance carriers in connection with its previously submitted insurance claims for which a trial date has been set for April 17, 2025. The Company continues to have significant claims against its aviation insurance carriers and will continue to vigorously pursue all available insurance claims and its related insurance litigation, and all rights and remedies therein. Collection, timing and amounts of any future insurance and related recoveries and the outcome of the Company's ongoing insurance litigation remain uncertain at this time. On January 19, 2024, the Company filed suit in the High Court of Justice, Business & Property Courts of England & Wales, Commercial Court against the Russian airlines' aviation insurers and reinsurance insurers (collectively, the "Airlines' Insurers") seeking recovery under the Russian airlines' insurance policies for aircraft that remain in Russia. The lawsuit against the Airlines' Insurers is in the early stages and no trial date has been set. As of May 6, 2024, 16 aircraft previously included in the Company's owned fleet are still detained in Russia. The operators of these aircraft have continued to fly most of the aircraft notwithstanding the termination of leasing activities and the Company's ongoing demands for the return of its assets. Note 5. Flight Equ

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