Air Lease Corporation (ALC) (NYSE: AL) announces financial results for the three and nine months ended September 30, 2024.

“Demand for commercial aircraft remains high, and we are continuing to place aircraft at rising lease rates, while also harvesting solid gains on sales from our existing fleet – underscoring the deep value embedded in our young $28 billion fleet and $18 billion forward orderbook,” said John L. Plueger, Chief Executive Officer and President, and Steven F. Udvar-Házy, Executive Chairman of the Board.

Third Quarter 2024 Results

The following table summarizes our operating results for the three and nine months ended September 30, 2024 and 2023 (in millions, except per share amounts and percentages):

Operating Results

Key Financial Ratios

Highlights

• During the third quarter, we took delivery of 20 aircraft from our orderbook, representing approximately $1.9 billion in aircraft investments, ending the period with 485 aircraft in our owned fleet and approximately $32 billion in total assets.
• Sold nine aircraft during the third quarter for approximately $340 million in sales proceeds. During the twelve months ended September 30, 2024, we sold $1.4 billion in aircraft by net book value for sales proceeds of $1.5 billion.
• We have approximately $1.5 billion of aircraft in our sales pipeline¹, which includes $741 million in flight equipment held for sale as of September 30, 2024 and $745 million of aircraft subject to letters of intent.
• We have placed 100% and 95% of our committed orderbook on long-term leases for aircraft delivering through the end of 2025 and 2026, respectively, and have placed approximately 63% of our entire orderbook delivering through 2029.
• We ended the quarter with $29.7 billion in committed minimum future rental payments consisting of $17.6 billion in contracted minimum rental payments on the aircraft in our existing fleet and $12.1 billion in minimum future rental payments related to aircraft which will deliver during the last three months of 2024 through 2028.
• During the quarter, we entered into a variety of committed term loans totaling approximately $1.0 billion, which displays our ability to access various financing alternatives.
• In September 2024, we issued $300.0 million in 6.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series D.
• In October 2024, we redeemed all outstanding shares of our 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A.
• On November 6, 2024, our board of directors increased our quarterly cash dividend by 5%, from $0.21 per share to $0.22 per share on our outstanding Class A common stock. The next quarterly dividend of $0.22 per share will be paid on January 9, 2025 to holders of record of our Class A common stock as of December 12, 2024.

Financial Overview

Our rental revenues for the three months ended September 30, 2024 increased by 3.5%, to $625 million, as compared to the three months ended September 30, 2023. The increase in our rental revenues is primarily due to the growth of our fleet, partially offset by a decline in end of lease revenue of approximately $12 million as compared to the prior period due to fewer aircraft returns during the three months ended September 30, 2024, as well as a slight decrease in our lease yields due to the sales of older aircraft with higher lease yields and the purchases of new aircraft with lower initial lease yields.

Our aircraft sales, trading and other revenues for the three months ended September 30, 2024 increased by 17%, to $65 million, as compared to the three months ended September 30, 2023 primarily driven by an increase in gains from aircraft sales. We recorded $42 million in gains from the sale of nine aircraft for the three months ended September 30, 2024, compared to $39 million in gains from the sale of eight aircraft for the three months ended September 30, 2023.

Our net income attributable to common stockholders for the three months ended September 30, 2024, was $92 million, or $0.82 per diluted share, as compared to $122 million, or $1.10 per diluted share, for the three months ended September 30, 2023. The decrease from the prior year period is primarily due to higher interest expense, driven by the increase in our composite cost of funds and overall outstanding debt balance, partially offset by an increase in our revenues as discussed above.

Adjusted net income before income taxes during the three months ended September 30, 2024, was $140 million, or $1.25 per adjusted diluted share, as compared to $177 million, or $1.59 per adjusted diluted share, for the three months ended September 30, 2023. Adjusted net income before income taxes decreased primarily due to higher interest expense, driven by the increase in our composite cost of funds and overall outstanding debt balance, partially offset by an increase in our revenues as discussed above.

Flight Equipment Portfolio

As of September 30, 2024, the net book value of our fleet increased to $27.9 billion, compared to $26.2 billion as of December 31, 2023. As of September 30, 2024, we owned 485 aircraft in our aircraft portfolio, comprised of 356 narrowbody aircraft and 129 widebody aircraft, and we managed 64 aircraft. The weighted average fleet age and weighted average remaining lease term of flight equipment subject to operating lease as of September 30, 2024 was 4.6 years and 7.1 years, respectively. We had a globally diversified customer base comprised of 117 airlines in 59 countries as of September 30, 2024.

The following table summarizes the key portfolio metrics of our fleet as of September 30, 2024 and December 31, 2023:

The following table details the regional concentration of our flight equipment subject to operating leases:

The following table details the composition of our owned fleet by aircraft type:

Debt Financing Activities

We ended the third quarter of 2024 with total debt financing, net of discounts and issuance costs, of $20.2 billion. As of September 30, 2024, 81.0% of our total debt financing was at a fixed rate and 97.3% was unsecured. As of September 30, 2024, our composite cost of funds was 4.21%. We ended the quarter with total liquidity of $7.5 billion.

As of the end of the periods presented, our debt portfolio was comprised of the following components (dollars in millions, except percentages):

Conference Call

In connection with this earnings release, Air Lease Corporation will host a conference call on November 7, 2024 at 4:30 PM Eastern Time to discuss the Company's financial results for the third quarter of 2024.

Investors can participate in the conference call by dialing 1 (888) 660-6652 domestic or 1 (646) 960-0554 international. The passcode for the call is 5952437.

The conference call will also be broadcast live through a link on the Investors page of the Air Lease Corporation website at www.airleasecorp.com. Please visit the website at least 15 minutes prior to the call to register, download and install any necessary audio software. A replay of the broadcast will be available on the Investors page of the Air Lease Corporation website.

For your convenience, the conference call can be replayed in its entirety beginning on November 7, 2024 until 11:59 PM ET on November 14, 2024. If you wish to listen to the replay of this conference call, please dial 1 (800) 770-2030 domestic or 1 (647) 362-9199 international and enter passcode 5952437.

About Air Lease Corporation (NYSE: AL)

Air Lease Corporation is a leading global aircraft leasing company based in Los Angeles, California that has airline customers throughout the world. Air Lease Corporation and its team of dedicated and experienced professionals are principally engaged in purchasing new commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions. Air Lease Corporation routinely posts information that may be important to investors in the “Investors” section of its website at www.airleasecorp.com. Investors and potential investors are encouraged to consult Air Lease Corporation’s website regularly for important information. The information contained on, or that may be accessed through, Air Lease Corporation’s website is not incorporated by reference into, and is not a part of, this press release.

Forward-Looking Statements

This press release contains 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 press release and include statements regarding, among other matters, our future aircraft deliveries and rental revenues, which may be impacted by aircraft and engine delivery delays and manufacturing flaws, including as a result of the Boeing labor strike among other factors, our aircraft sales pipeline and expectations and payment of our future dividends. 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 aircraft acquisitions and profitable leasing;
• the failure of an aircraft or engine manufacturer to meet its contractual obligations to us, including or as a result of labor strikes, aviation supply chain constraints, manufacturing flaws or technical or other difficulties with aircraft or engines before or after delivery;
• our ability to recover losses related to aircraft detained in Russia, including through insurance claims and related litigation;
• obsolescence of, or changes in overall demand for, our aircraft;
• changes in the value of, and lease rates for, our aircraft, including as a result of aircraft oversupply, manufacturer production levels, our lessees’ failure to maintain our aircraft, inflation, and other factors outside of our control;
• impaired financial condition and liquidity of our lessees, including due to lessee defaults and reorganizations, bankruptcies or similar proceedings;
• increased competition from other aircraft lessors;
• the failure by our lessees to adequately insure our aircraft or fulfill their contractual indemnity obligations to us, or the failure of such insurers to fulfill their contractual obligations;
• increased tariffs and other restrictions on trade;
• changes in the regulatory environment, including changes in tax laws and environmental regulations;
• other events affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, such as the threat or realization of epidemic diseases, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors; and
• any additional factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2023, and other Securities and Exchange Commission (“SEC”) filings, including future SEC filings.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations. You are therefore cautioned not to place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not intend and undertake no obligation to update any forward-looking information to reflect actual results or events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

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