AL Air Lease Corporation

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

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

$ change

 

% change

 

 

2024

 

 

 

2023

 

 

$ change

 

% change

Revenues

$

690.2

 

 

$

659.4

 

 

$

30.8

 

 

4.7

%

 

$

2,020.8

 

 

$

1,968.4

 

 

$

52.4

 

 

2.7

%

Operating expenses

 

(559.9

)

 

 

(494.3

)

 

 

(65.6

)

 

13.3

%

 

 

(1,627.5

)

 

 

(1,481.2

)

 

 

(146.3

)

 

9.9

%

Income before taxes

 

130.2

 

 

 

165.0

 

 

 

(34.8

)

 

(21.1

)%

 

 

393.3

 

 

 

487.2

 

 

 

(93.9

)

 

(19.3

)%

Net income attributable to common stockholders

$

91.6

 

 

$

122.0

 

 

$

(30.4

)

 

(24.9

)%

 

$

279.5

 

 

$

362.3

 

 

$

(82.8

)

 

(22.9

)%

Diluted earnings per share

$

0.82

 

 

$

1.10

 

 

$

(0.28

)

 

(25.5

)%

 

$

2.50

 

 

$

3.25

 

 

$

(0.75

)

 

(23.1

)%

Adjusted net income before income taxes(1)

$

140.2

 

 

$

177.0

 

 

$

(36.8

)

 

(20.8

)%

 

$

423.8

 

 

$

519.7

 

 

$

(95.9

)

 

(18.5

)%

Adjusted diluted earnings per share before income taxes(1)

$

1.25

 

 

$

1.59

 

 

$

(0.34

)

 

(21.4

)%

 

$

3.79

 

 

$

4.67

 

 

$

(0.88

)

 

(18.8

)%

Key Financial Ratios

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Pre-tax margin

18.9%

 

25.0%

 

19.5%

 

24.8%

Adjusted pre-tax margin(1)

20.3%

 

26.8%

 

21.0%

 

26.4%

Pre-tax return on common equity (trailing twelve months)

9.7%

 

10.6%

 

9.7%

 

10.6%

Adjusted pre-tax return on common equity (trailing twelve months)(1)

10.1%

 

11.5%

 

10.1%

 

11.5%

——————————————————————

(1)

Adjusted net income before income taxes, adjusted diluted earnings per share before income taxes, adjusted pre-tax margin and adjusted pre-tax return on common equity have been adjusted to exclude the effects of certain non-cash items, one-time or non-recurring items that are not expected to continue in the future and certain other items. See note 1 under the Consolidated Statements of Operations included in this earnings release for a discussion of the non-GAAP measures and a reconciliation to their most comparable GAAP financial measures.

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.

——————————————————————

1 Aircraft in our sales pipeline is as of September 30, 2024, and includes letters of intent and sale agreements signed through November 7, 2024.

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:

 

September 30, 2024

 

December 31, 2023

Net book value of flight equipment subject to operating lease

$

27.9 billion

 

$

26.2 billion

Weighted-average fleet age(1)

4.6 years

 

4.6 years

Weighted-average remaining lease term(1)

7.1 years

 

7.0 years

 

 

 

 

Owned fleet(2)

485

 

463

Managed fleet

64

 

78

Aircraft on order

287

 

334

Total

836

 

875

 

 

 

 

Current fleet contracted rentals

$

17.6 billion

 

$

16.4 billion

Committed fleet rentals

$

12.1 billion

 

$

14.6 billion

Total committed rentals

$

29.7 billion

 

$

31.0 billion

 

 

 

 

(1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease.

(2) As of September 30, 2024 and December 31, 2023, our owned fleet count included 23 and 14 aircraft classified as flight equipment held for sale, respectively, and 14 and 12 aircraft classified as net investments in sales-type leases, respectively, which are all included in Other assets on the Consolidated Balance Sheet.

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

 

 

September 30, 2024

 

December 31, 2023

Region

 

% of Net Book Value

 

% of Net Book Value

Europe

 

41.0

%

 

37.7

%

Asia Pacific

 

36.4

%

 

39.8

%

Central America, South America, and Mexico

 

9.7

%

 

9.0

%

The Middle East and Africa

 

7.1

%

 

7.9

%

U.S. and Canada

 

5.8

%

 

5.6

%

Total

 

100.0

%

 

100.0

%

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

 

 

September 30, 2024

 

December 31, 2023

Aircraft type

 

Number of Aircraft

 

% of Total

 

Number of Aircraft

 

% of Total

Airbus A220-100

 

5

 

1.0

%

 

2

 

0.4

%

Airbus A220-300

 

17

 

 

3.5

%

 

13

 

 

2.8

%

Airbus A319-100

 

1

 

 

0.2

%

 

1

 

 

0.2

%

Airbus A320-200

 

26

 

 

5.4

%

 

28

 

 

6.0

%

Airbus A320-200neo

 

23

 

 

4.7

%

 

25

 

 

5.4

%

Airbus A321-200

 

21

 

 

4.3

%

 

23

 

 

5.0

%

Airbus A321-200neo

 

108

 

 

22.3

%

 

95

 

 

20.6

%

Airbus A330-200(1)

 

13

 

 

2.7

%

 

13

 

 

2.8

%

Airbus A330-300

 

5

 

 

1.0

%

 

5

 

 

1.1

%

Airbus A330-900neo

 

26

 

 

5.4

%

 

23

 

 

5.0

%

Airbus A350-900

 

17

 

 

3.5

%

 

14

 

 

3.0

%

Airbus A350-1000

 

8

 

 

1.6

%

 

7

 

 

1.5

%

Boeing 737-700

 

2

 

 

0.4

%

 

3

 

 

0.6

%

Boeing 737-800

 

64

 

 

13.2

%

 

73

 

 

15.8

%

Boeing 737-8 MAX

 

58

 

 

12.0

%

 

52

 

 

11.2

%

Boeing 737-9 MAX

 

30

 

 

6.2

%

 

29

 

 

6.3

%

Boeing 777-200ER

 

1

 

 

0.2

%

 

1

 

 

0.2

%

Boeing 777-300ER

 

24

 

 

4.9

%

 

24

 

 

5.2

%

Boeing 787-9

 

26

 

 

5.4

%

 

25

 

 

5.4

%

Boeing 787-10

 

9

 

 

1.9

%

 

6

 

 

1.3

%

Embraer E190

 

1

 

 

0.2

%

 

1

 

 

0.2

%

Total(2)

 

485

 

 

100.0

%

 

463

 

 

100.0

%

 

 

 

 

 

 

 

 

 

(1) As of September 30, 2024 and December 31, 2023, aircraft count includes two Airbus A330-200 aircraft classified as freighters.

(2) As of September 30, 2024 and December 31, 2023, our owned fleet count included 23 and 14 aircraft classified as flight equipment held for sale, respectively, and 14 and 12 aircraft classified as net investments in sales-type leases, respectively, which are all included in Other assets on the Consolidated Balance Sheet.

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):

 

September 30, 2024

 

December 31, 2023

Unsecured

 

 

 

Senior unsecured securities

$

16,429

 

 

$

16,330

 

Term financings

 

2,083

 

 

 

1,628

 

Revolving credit facility

 

1,286

 

 

 

1,100

 

Total unsecured debt financing

 

19,798

 

 

 

19,058

 

Secured

 

 

 

Term financings

 

358

 

 

 

101

 

Export credit financing

 

194

 

 

 

205

 

Total secured debt financing

 

552

 

 

 

306

 

 

 

 

 

Total debt financing

 

20,350

 

 

 

19,364

 

Less: Debt discounts and issuance costs

 

(188

)

 

 

(181

)

Debt financing, net of discounts and issuance costs

$

20,162

 

 

$

19,183

 

Selected interest rates and ratios:

 

 

 

Composite interest rate(1)

 

4.21

%

 

 

3.77

%

Composite interest rate on fixed-rate debt(1)

 

3.72

%

 

 

3.26

%

Percentage of total debt at a fixed-rate

 

81.05

%

 

 

84.71

%

 

 

 

 

(1) This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs.

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.

Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)

 

 

September 30, 2024

 

December 31, 2023

 

(unaudited)

Assets

 

 

 

Cash and cash equivalents

$

460,785

 

 

$

460,870

 

Restricted cash

 

4,565

 

 

 

3,622

 

Flight equipment subject to operating leases

 

33,853,006

 

 

 

31,787,241

 

Less accumulated depreciation

 

(5,958,105

)

 

 

(5,556,033

)

 

 

27,894,901

 

 

 

26,231,208

 

Deposits on flight equipment purchases

 

1,050,268

 

 

 

1,203,068

 

Other assets

 

2,743,310

 

 

 

2,553,484

 

Total assets

$

32,153,829

 

 

$

30,452,252

 

Liabilities and Shareholders’ Equity

 

 

 

Accrued interest and other payables

$

1,072,033

 

 

$

1,164,140

 

Debt financing, net of discounts and issuance costs

 

20,161,860

 

 

 

19,182,657

 

Security deposits and maintenance reserves on flight equipment leases

 

1,757,104

 

 

 

1,519,719

 

Rentals received in advance

 

129,303

 

 

 

143,861

 

Deferred tax liability

 

1,357,832

 

 

 

1,281,837

 

Total liabilities

$

24,478,132

 

 

$

23,292,214

 

Shareholders’ Equity

 

 

 

Preferred Stock, $0.01 par value; 50,000,000 shares authorized at each of September 30, 2024 and December 31, 2023; 10,900,000 (aggregate liquidation preference of $1,150,000) shares issued and outstanding at September 30, 2024; 10,600,000 (aggregate liquidation preference of $850,000) shares issued and outstanding at December 31, 2023

$

109

 

 

$

106

 

Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,376,884 and 111,027,252 shares issued and outstanding at September 30, 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

 

3,598,407

 

 

 

3,287,234

 

Retained earnings

 

4,079,173

 

 

 

3,869,813

 

Accumulated other comprehensive (loss)/income

 

(3,106

)

 

 

1,775

 

Total shareholders’ equity

$

7,675,697

 

 

$

7,160,038

 

Total liabilities and shareholders’ equity

$

32,153,829

 

 

$

30,452,252

 

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share, per share amounts and percentages)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

(unaudited)

Revenues

 

 

 

 

 

 

 

 

Rental of flight equipment

 

$

625,180

 

 

$

604,027

 

 

$

1,849,014

 

 

$

1,833,533

 

Aircraft sales, trading and other

 

 

64,984

 

 

 

55,337

 

 

 

171,748

 

 

 

134,876

 

Total revenues

 

 

690,164

 

 

 

659,364

 

 

 

2,020,762

 

 

 

1,968,409

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

Interest

 

 

203,092

 

 

 

161,769

 

 

 

574,691

 

 

 

485,555

 

Amortization of debt discounts and issuance costs

 

 

14,371

 

 

 

13,695

 

 

 

40,772

 

 

 

40,414

 

Interest expense

 

 

217,463

 

 

 

175,464

 

 

 

615,463

 

 

 

525,969

 

 

 

 

 

 

 

 

 

 

Depreciation of flight equipment

 

 

290,132

 

 

 

267,393

 

 

 

849,374

 

 

 

795,659

 

Selling, general and administrative

 

 

44,418

 

 

 

42,770

 

 

 

137,592

 

 

 

136,216

 

Stock-based compensation expense

 

 

7,919

 

 

 

8,719

 

 

 

25,031

 

 

 

23,330

 

Total expenses

 

 

559,932

 

 

 

494,346

 

 

 

1,627,460

 

 

 

1,481,174

 

Income before taxes

 

 

130,232

 

 

 

165,018

 

 

 

393,302

 

 

 

487,235

 

Income tax expense

 

 

(26,261

)

 

 

(32,568

)

 

 

(78,519

)

 

 

(93,664

)

Net income

 

$

103,971

 

 

$

132,450

 

 

$

314,783

 

 

$

393,571

 

Preferred stock dividends

 

 

(12,325

)

 

 

(10,425

)

 

 

(35,258

)

 

 

(31,275

)

Net income attributable to common stockholders

 

$

91,646

 

 

$

122,025

 

 

$

279,525

 

 

$

362,296

 

 

 

 

 

 

 

 

 

 

Earnings per share of common stock:

 

 

 

 

 

 

 

 

Basic

 

$

0.82

 

 

$

1.10

 

 

$

2.51

 

 

$

3.26

 

Diluted

 

$

0.82

 

 

$

1.10

 

 

$

2.50

 

 

$

3.25

 

Weighted-average shares of common stock outstanding

 

 

 

 

 

 

 

 

Basic

 

 

111,376,884

 

 

 

111,027,252

 

 

 

111,308,222

 

 

 

110,997,619

 

Diluted

 

 

111,804,113

 

 

 

111,346,799

 

 

 

111,801,757

 

 

 

111,383,257

 

 

 

 

 

 

 

 

 

 

Other financial data

 

 

 

 

 

 

 

 

Pre-tax margin

 

 

18.9

%

 

 

25.0

%

 

 

19.5

%

 

 

24.8

%

Pre-tax return on common equity (trailing twelve months)

 

 

9.7

%

 

 

10.6

%

 

 

9.7

%

 

 

10.6

%

Adjusted net income before income taxes(1)

 

$

140,197

 

 

$

177,007

 

 

$

423,847

 

 

$

519,704

 

Adjusted diluted earnings per share before income taxes(1)

 

$

1.25

 

 

$

1.59

 

 

$

3.79

 

 

$

4.67

 

Adjusted pre-tax margin(1)

 

 

20.3

%

 

 

26.8

%

 

 

21.0

%

 

 

26.4

%

Adjusted pre-tax return on common equity (trailing twelve months)(1)

 

 

10.1

%

 

 

11.5

%

 

 

10.1

%

 

 

11.5

%

(1)

Adjusted net income before income taxes (defined as net income attributable to common stockholders excluding the effects of certain non-cash items, one-time or non-recurring items that are not expected to continue in the future and certain other items), adjusted pre-tax margin (defined as adjusted net income before income taxes divided by total revenues), adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) and adjusted pre-tax return on common equity (defined as adjusted net income before income taxes divided by average common shareholders' equity) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income attributable to common stockholders, pre-tax margin, earnings per share, diluted earnings per share and pre-tax return on common equity, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations.

 

 

 

Management and our board of directors use adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity to assess our consolidated financial and operating performance. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash items, one-time or non-recurring items that are not expected to continue in the future and certain other items from our operating results. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity, however, should not be considered in isolation or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity do not reflect our cash expenditures or changes in our cash requirements for our working capital needs. In addition, our calculation of adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity may differ from the adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity or analogous calculations of other companies in our industry, limiting their usefulness as a comparative measure.

 

 

 

The following table shows the reconciliation of the numerator for adjusted pre-tax margin (in thousands, except percentages):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(unaudited)

Reconciliation of the numerator for adjusted pre-tax margin (net income attributable to common stockholders to adjusted net income before income taxes):

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

91,646

 

 

$

122,025

 

 

$

279,525

 

 

$

362,296

 

Amortization of debt discounts and issuance costs

 

14,371

 

 

 

13,695

 

 

 

40,772

 

 

 

40,414

 

Stock-based compensation expense

 

7,919

 

 

 

8,719

 

 

 

25,031

 

 

 

23,330

 

Income tax expense

 

26,261

 

 

 

32,568

 

 

 

78,519

 

 

 

93,664

 

Adjusted net income before income taxes

$

140,197

 

 

$

177,007

 

 

$

423,847

 

 

$

519,704

 

 

 

 

 

 

 

 

 

Denominator for adjusted pre-tax margin:

 

 

 

 

 

Total revenues

$

690,164

 

 

$

659,364

 

 

$

2,020,762

 

 

$

1,968,409

 

Adjusted pre-tax margin(a)

 

20.3

%

 

 

26.8

%

 

 

21.0

%

 

 

26.4

%

 

 

 

 

 

 

 

 

(a) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues

The following table shows the reconciliation of the numerator for adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts):

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(unaudited)

Reconciliation of the numerator for adjusted diluted earnings per share net income attributable to common stockholders to adjusted net income before income taxes):

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

91,646

 

$

122,025

 

$

279,525

 

$

362,296

Amortization of debt discounts and issuance costs

 

14,371

 

 

 

13,695

 

 

 

40,772

 

 

 

40,414

 

Stock-based compensation expense

 

7,919

 

 

 

8,719

 

 

 

25,031

 

 

 

23,330

 

Income tax expense

 

26,261

 

 

 

32,568

 

 

 

78,519

 

 

 

93,664

 

Adjusted net income before income taxes

$

140,197

 

 

$

177,007

 

 

$

423,847

 

 

$

519,704

 

 

 

 

 

 

 

 

 

Denominator for adjusted diluted earnings per share:

 

 

 

 

 

 

 

Weighted-average diluted common shares outstanding

 

111,804,113

 

 

 

111,346,799

 

 

 

111,801,757

 

 

 

111,383,257

 

Adjusted diluted earnings per share before income taxes(b)

$

1.25

 

 

$

1.59

 

 

$

3.79

 

 

$

4.67

 

 

 

 

 

 

 

 

 

(b) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by weighted-average diluted common shares outstanding

The following table shows the reconciliation of pre-tax return on common equity to adjusted pre-tax return on common equity (in thousands, except percentages):

 

 

Trailing Twelve Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

(unaudited)

Reconciliation of the numerator for adjusted pre-tax return on common equity (net income attributable to common stockholders to adjusted net income before income taxes):

 

 

 

Net income attributable to common stockholders

$

490,151

 

 

$

497,182

 

Amortization of debt discounts and issuance costs

 

54,410

 

 

 

53,896

 

Recovery of Russian fleet

 

(67,022

)

 

 

(30,877

)

Stock-based compensation expense

 

36,316

 

 

 

29,134

 

Income tax expense

 

123,868

 

 

 

128,529

 

Adjusted net income before income taxes

$

637,723

 

 

$

677,864

 

 

 

 

 

Reconciliation of denominator for pre-tax return on common equity to adjusted pre-tax return on common equity:

 

 

 

Common shareholders' equity as of beginning of the period

$

6,111,053

 

 

$

5,678,434

 

Common shareholders' equity as of end of the period

$

6,525,697

 

 

$

6,111,053

 

Average common shareholders' equity

$

6,318,375

 

 

$

5,894,744

 

 

 

 

 

Adjusted pre-tax return on common equity(c)

 

10.1

%

 

 

11.5

%

 

 

 

 

(c) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

(unaudited)

Operating Activities

 

 

 

Net income

$

314,783

 

 

$

393,571

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation of flight equipment

 

849,374

 

 

 

795,659

 

Stock-based compensation expense

 

25,031

 

 

 

23,330

 

Deferred taxes

 

77,324

 

 

 

91,410

 

Amortization of prepaid lease costs

 

77,271

 

 

 

54,962

 

Amortization of discounts and debt issuance costs

 

40,772

 

 

 

40,414

 

Gain on aircraft sales, trading and other activity

 

(149,018

)

 

 

(147,174

)

Changes in operating assets and liabilities:

 

 

 

Other assets

 

(3,509

)

 

 

40,496

 

Accrued interest and other payables

 

29,494

 

 

 

(6,380

)

Rentals received in advance

 

(14,467

)

 

 

(3,982

)

Net cash provided by operating activities

 

1,247,055

 

 

 

1,282,306

 

Investing Activities

 

 

 

Acquisition of flight equipment under operating lease

 

(2,816,375

)

 

 

(2,782,507

)

Payments for deposits on flight equipment purchases

 

(461,788

)

 

 

(249,231

)

Proceeds from aircraft sales, trading and other activity

 

884,045

 

 

 

1,568,420

 

Acquisition of aircraft furnishings, equipment and other assets

 

(284,050

)

 

 

(205,368

)

Net cash used in investing activities

 

(2,678,168

)

 

 

(1,668,686

)

Financing Activities

 

 

 

Net proceeds from preferred stock issuance

 

295,532

 

 

 

—

 

Cash dividends paid on Class A common stock

 

(70,092

)

 

 

(66,587

)

Cash dividends paid on preferred stock

 

(35,258

)

 

 

(31,275

)

Tax withholdings on stock-based compensation

 

(9,384

)

 

 

(3,354

)

Net change in unsecured revolving facility

 

186,000

 

 

 

758,000

 

Proceeds from debt financings

 

3,541,706

 

 

 

1,783,973

 

Payments in reduction of debt financings

 

(2,781,604

)

 

 

(2,566,518

)

Debt issuance costs

 

(10,626

)

 

 

(10,590

)

Security deposits and maintenance reserve receipts

 

328,351

 

 

 

269,171

 

Security deposits and maintenance reserve disbursements

 

(12,654

)

 

 

(10,723

)

Net cash provided by financing activities

 

1,431,971

 

 

 

122,097

 

Net increase/(decrease) in cash

 

858

 

 

 

(264,283

)

Cash, cash equivalents and restricted cash at beginning of period

 

464,492

 

 

 

780,017

 

Cash, cash equivalents and restricted cash at end of period

$

465,350

 

 

$

515,734

 

Supplemental Disclosure of Cash Flow Information

 

 

 

Cash paid during the period for interest, including capitalized interest of $32,859 and $31,708 at September 30, 2024 and 2023, respectively

$

590,697

 

 

$

532,922

 

Cash paid for income taxes

$

22,746

 

 

$

6,250

 

Supplemental Disclosure of Noncash Activities

 

 

 

Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment and other assets

$

838,170

 

 

$

620,280

 

Flight equipment subject to operating leases reclassified to flight equipment held for sale

$

1,143,096

 

 

$

1,411,564

 

Flight equipment subject to operating leases reclassified to investment in sales-type lease

$

74,017

 

 

$

33,641

 

Cash dividends declared on Class A common stock, not yet paid

$

23,389

 

 

$

22,205

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241106007599/en/

Investors: Jason Arnold Vice President, Investor Relations Email: investors@airleasecorp.com

Media: Laura Woeste Senior Manager, Media and Investor Relations Email: press@airleasecorp.com

Ashley Arnold Senior Manager, Media and Investor Relations Email: press@airleasecorp.com