10-Q 1 al-20220331.htm 10-Q al-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐    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)
Delaware27-1840403
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
2000 Avenue of the Stars,Suite 1000N90067
Los Angeles,California
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (310) 553-0555

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common StockALNew York Stock Exchange
6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series AAL PRANew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐

1
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

At May 4, 2022, there were 110,858,351 shares of Air Lease Corporation’s Class A common stock outstanding.

2

Air Lease Corporation and Subsidiaries

Form 10-Q
For the Quarterly Period Ended March 31, 2022

TABLE OF CONTENTS
Page


3
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, including the impact of Russia’s invasion of Ukraine and the impact of sanctions imposed on Russia, our access to the capital markets, the impact of lease deferrals and other accommodations, aircraft delivery delays 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 or changes in interest rates;
•    our inability to generate sufficient returns on our aircraft investments through strategic acquisition and profitable leasing;
•    the failure of an aircraft or engine manufacturers to meet its delivery obligations to us, including or as a result of technical or other difficulties with aircraft before or after delivery;
•    the extent to which the Russian invasion of Ukraine and the impact of sanctions imposed by the United States, European Union, United Kingdom and other countries affect our business, including our efforts to pursue insurance claims to recover losses related to aircraft that remain in Russia;
•    the extent to which the COVID-19 pandemic impacts our business;
•    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, 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;
•    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, 2021, “Part II — Item 1A. Risk Factors,” in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and other 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.
4
PART I—FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

Air Lease Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and par value amounts)

March 31, 2022December 31, 2021
(unaudited)
Assets
Cash and cash equivalents$1,490,765 $1,086,500 
Restricted cash21,291 21,792 
Flight equipment subject to operating leases26,552,246 27,101,808 
Less accumulated depreciation(4,267,934)(4,202,804)
22,284,312 22,899,004 
Deposits on flight equipment purchases1,626,874 1,508,892 
Other assets1,451,607 1,452,534 
Total assets$26,874,849 $26,968,722 
Liabilities and Shareholders’ Equity
Accrued interest and other payables$544,280 $611,757 
Debt financing, net of discounts and issuance costs17,824,725 17,022,480 
Security deposits and maintenance reserves on flight equipment leases1,120,234 1,173,831 
Rentals received in advance135,642 138,816 
Deferred tax liability880,383 1,013,270 
Total liabilities$20,505,264 $19,960,154 
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, 2022 and December 31, 2021, respectively
$106 $106 
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,317,259 and 113,987,154 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively
1,113 1,140 
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding
— — 
Paid-in capital3,259,105 3,399,245 
Retained earnings3,109,331 3,609,885 
Accumulated other comprehensive loss(70)(1,808)
Total shareholders’ equity$6,369,585 $7,008,568 
Total liabilities and shareholders’ equity$26,874,849 $26,968,722 

(See Notes to Consolidated Financial Statements)

5
Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(In thousands, except share and per share amounts)


Three Months Ended
 March 31,
20222021
(unaudited)
Revenues
Rental of flight equipment$566,554 $468,095 
Aircraft sales, trading and other30,107 6,732 
Total revenues596,661 474,827 
Expenses
Interest117,277 117,986 
Amortization of debt discounts and issuance costs13,198 12,025 
Interest expense130,475 130,011 
Depreciation of flight equipment235,308 208,965 
Write-off of Russian fleet802,352 — 
Selling, general and administrative32,762 26,914 
Stock-based compensation(2,523)5,408 
Total expenses1,198,374 371,298 
(Loss)/income before taxes(601,713)103,529 
Income tax benefit/(expense)132,720 (19,437)
Net (loss)/income$(468,993)$84,092 
Preferred stock dividends(10,425)(3,844)
Net (loss)/income attributable to common stockholders$(479,418)$80,248 
Other comprehensive income/(loss):
Foreign currency translation adjustment(3,019)(3,807)
Change in fair value of hedged transactions5,230 2,221 
Total tax (expense)/benefit on other comprehensive income/loss(473)339 
Other comprehensive income/(loss), net of tax1,738 (1,247)
Total comprehensive (loss)/income attributable for common stockholders$(477,680)$79,001 
(Loss)/Earnings per share of common stock:
Basic$(4.21)$0.70 
Diluted$(4.21)$0.70 
Weighted-average shares outstanding
Basic113,894,867 113,958,403 
Diluted113,894,867 114,237,109 
Dividends declared per share of common stock$0.185 $0.16 

(See Notes to Consolidated Financial Statements)

6
Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share and per share amounts)
Preferred Stock Class A
Common Stock 		 Class B Non-Voting
Common Stock 		Accumulated
Other
Comprehensive
 Income/(Loss)
(unaudited)SharesAmount SharesAmount SharesAmountPaid-in
Capital		Retained
Earnings		Total
Balance at December 31, 202110,600,000 $106 113,987,154 $1,140 — $— $3,399,245 $3,609,885 $(1,808)$7,008,568 
Issuance of common stock upon vesting of restricted stock units— — 477,656 5 — — (3)— — 2 
Common stock repurchased— — (2,959,458)(30)— — (129,519)— — (129,549)
Stock-based compensation — — — — — — (2,523)— — (2,523)
Cash dividends (declared $0.185 per share of Class A common stock)
— — — — — — — (21,136)— (21,136)
Cash dividends (declared on preferred stock)— — — — — — — (10,425)— (10,425)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax— — — — — — — — 1,738 1,738 
Tax withholdings on stock based compensation— — (188,093)(2)— — (8,095)— — (8,097)
Net loss— — — — — — — (468,993)— (468,993)
Balance at March 31, 202210,600,000 $106 111,317,259 $1,113 — $— $3,259,105 $3,109,331 $(70)$6,369,585 
Preferred Stock Class A
Common Stock 		 Class B Non-Voting
Common Stock 		Accumulated
Other
Comprehensive
 Income/(Loss)
(unaudited)SharesAmount SharesAmount SharesAmountPaid-in
Capital		Retained
Earnings		Total
Balance at December 31, 202010,000,000 $100 113,852,896 $1,139 — $— $2,793,178 $3,277,599 $325 $6,072,341 
Issuance of preferred stock300,000 3 — — — — 295,446 — — 295,449 
Issuance of common stock upon exercise of options and vesting of restricted stock units— — 425,232 4 — — 1,437 — — 1,441 
Stock-based compensation— — — — — — 5,408 — — 5,408 
Cash dividends (declared $0.16 per share of Class A common stock)
— — — — — — — (18,259)— (18,259)
Cash dividends (declared on preferred stock)— — — — — — — (3,844)— (3,844)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax— — — — — — — — (1,247)(1,247)
Tax withholdings on stock based compensation— — (157,266)(2)— — (7,167)— — (7,169)
Net income— — — — — — — 84,092 — 84,092 
Balance at March 31, 202110,300,000 $103 114,120,862 $1,141 — $— $3,088,302 $3,339,588 $(922)$6,428,212 

(See Notes to Consolidated Financial Statements)
7
Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
 March 31,
20222021
(unaudited)
Operating Activities
Net (loss)/income$(468,993)$84,092 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment235,308 208,965 
Write-off of Russian fleet802,352 — 
Stock-based compensation(2,523)5,408 
Deferred taxes(133,360)18,577 
Amortization of debt discounts and issuance costs13,198 12,025 
Amortization of prepaid lease costs13,193 10,790 
Gain on aircraft sales, trading and other activity(66,791)(99)
Changes in operating assets and liabilities:
Other assets(74,560)(35,323)
Accrued interest and other payables(64,068)(59,914)
Rentals received in advance938 (10,231)
Net cash provided by operating activities254,694 234,290 
Investing Activities
Acquisition of flight equipment under operating lease(395,402)(404,379)
Payments for deposits on flight equipment purchases(172,943)(103,382)
Proceeds from aircraft sales, trading and other activity750 — 
Acquisition of aircraft furnishings, equipment and other assets(52,974)(41,923)
Net cash used in investing activities(620,569)(549,684)
Financing Activities
Issuance of common stock upon exercise of options— 1,441 
Cash dividends paid on Class A common stock(21,088)(18,216)
Common shares repurchased(97,644)— 
Net proceeds from preferred stock issuance— 295,449 
Cash dividends paid on preferred stock(10,425)(3,844)
Tax withholdings on stock-based compensation(8,095)(7,169)
Proceeds from debt financings1,497,615 791,645 
Payments in reduction of debt financings(708,847)(1,157,577)
Debt issuance costs(2,740)(1,335)
Security deposits and maintenance reserve receipts125,727 21,278 
Security deposits and maintenance reserve disbursements(4,864)(11,852)
Net cash provided / (used) by financing activities769,639 (90,180)
Net increase / (decrease) in cash403,764 (405,574)
Cash, cash equivalents and restricted cash at beginning of period1,108,292 1,757,767 
Cash, cash equivalents and restricted cash at end of period$1,512,056 $1,352,193 
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $9,365 and $13,543 at March 31, 2022 and 2021, respectively
$179,026 $177,685 
Cash paid for income taxes$3,446 $1,101 
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment$85,791 $176,618 
Cash dividends declared on Class A common stock, not yet paid$21,136 $18,259 

(See Notes to Consolidated Financial Statements)
8
Air Lease Corporation and Subsidiaries
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-Házy. 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, 2022, the Company owned 370 aircraft, managed 87 aircraft and had 451 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, consisting only of normal, recurring adjustments, which are in the opinion of management necessary to present fairly the Company’s financial position, results of operations and cash flows at March 31, 2022, and for all periods presented. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results expected for the year ending December 31, 2022. These financial statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Reclassifications

Certain reclassifications have been made in the prior year’s consolidated financial statements to conform to the classifications in 2022.

Note 3.    Debt Financing

The Company’s consolidated debt as of March 31, 2022 and December 31, 2021 is summarized below:

March 31, 2022December 31, 2021
(in thousands)
Unsecured
Senior notes $17,695,077 $16,892,058 
Term financings 195,275 167,000 
        Total unsecured debt financing17,890,352 17,059,058 
Secured
Term financings 123,452 126,660 
Export credit financing 16,637 18,301 
        Total secured debt financing140,089 144,961 
Total debt financing 18,030,441 17,204,019 
Less: Debt discounts and issuance costs(205,716)(181,539)
Debt financing, net of discounts and issuance costs$17,824,725 $17,022,480 

9
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



Senior unsecured notes (including Medium-Term Note Program)

As of March 31, 2022, the Company had $17.7 billion in senior unsecured notes outstanding. As of December 31, 2021, the Company had $16.9 billion in senior unsecured notes outstanding.

During the three months ended March 31, 2022, the Company issued $1.5 billion in aggregate principal amount of senior unsecured notes comprised of (i) $750.0 million in aggregate principal amount of 2.20% Medium-Term Notes due 2027, and (ii) $750.0 million in aggregate principal amount of 2.875% Medium-Term Notes due 2032.

Unsecured revolving credit facility

As of March 31, 2022 and December 31, 2021, the Company did not have any amounts outstanding under its unsecured revolving credit facility (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility are used to finance the Company’s working capital needs in the ordinary course of business and for other general corporate purposes.

As of March 31, 2022, borrowings under the Revolving Credit Facility accrued interest at LIBOR 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 increases or decreases based on declines or improvements in the credit ratings for the Company’s debt.

In April 2022, the Company amended and extended its Revolving Credit Facility through an amendment that, among other things, extended the final maturity date from May 5, 2025 to May 5, 2026 and, after giving effect to $65.0 million in commitments that matured on May 5, 2022, increased the total revolving commitments to approximately $7.0 billion as of May 5, 2022. As of May 5, 2022, lenders held revolving commitments totaling approximately $6.5 billion that mature on May 5, 2026, commitments totaling $132.5 million that mature on May 5, 2025 and commitments totaling $400.0 million that mature on May 5, 2023. The amended Revolving Credit Facility also replaced LIBOR with Term SOFR as the benchmark interest rate and made certain conforming changes related thereto. As a result of the amendment, borrowings under the amended Revolving Credit Facility accrue interest at the Adjusted Term SOFR (as defined in the Revolving Credit Facility), plus a margin of 1.05% per year subject to increases or decreases based on declines or improvements in the credit ratings for the Company’s debt.

Other debt financings

From time to time, the Company enters into other debt financings such as unsecured term financings and secured term financings, including export credit. As of March 31, 2022, the outstanding balance on other debt financings was $335.4 million and the Company had pledged three aircraft as collateral with a net book value of $219.7 million. As of December 31, 2021, the outstanding balance on other debt financings was $312.0 million and the Company had pledged three aircraft as collateral with a net book value of $222.2 million.

Maturities

Maturities of debt outstanding as of March 31, 2022 are as follows:
 (in thousands)
Years ending December 31,
2022$1,376,451 
20232,538,951 
20242,894,628 
20252,327,389 
20263,472,845 
Thereafter 5,420,177 
Total$18,030,441 

10
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



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 ended March 31, 2022:

(in thousands)
Net book value as of December 31, 2021$22,899,004 
Additions490,888 
Depreciation(235,308)
Transfers to net investments in sales-type leases(79,255)
Write-off of Russian fleet(791,017)
Net book value as of March 31, 2022$22,284,312 
Accumulated depreciation as of March 31, 2022$(4,267,934)

Write-off of Russian fleet

In response to the sanctions against certain industry sectors and parties in Russia, in March 2022, the Company terminated all of its leasing activities in Russia, including 24 aircraft in its owned fleet. As of May 5, 2022, 21 aircraft in the Company’s owned fleet remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the termination of leasing activities and our repeated demands for the return of our assets. While the Company maintains title to the aircraft, the Company has determined that it is unlikely it will regain possession of the aircraft that have not been returned and that remain in Russia. As such, during the three months ended March 31, 2022, the Company recognized a loss from asset write-offs of its interests in owned aircraft that remain in Russia, totaling approximately $791.0 million. The 21 aircraft that remain in Russia have been removed from the Company’s owned fleet count. The Company is vigorously pursuing insurance claims to recover its losses relating to these aircraft. Collection, timing and amounts of any insurance recoveries is uncertain.

11
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



Note 5.    Commitments and Contingencies

Aircraft Acquisition

During the quarter ended March 31, 2022, the Company increased its committed orderbook by entering into agreements with Boeing to purchase 50 aircraft, which includes the conversion of three 787-9 aircraft to 18 737 MAX aircraft. In addition, the Company canceled five aircraft in its orderbook that were slated for delivery in Russia. As of March 31, 2022, the Company had commitments to purchase 451 aircraft from Boeing and Airbus for delivery through 2028, with an estimated aggregate commitment of $28.8 billion.

The table is subject to change based on Airbus and Boeing delivery delays. As noted below, the Company expects delivery delays for some aircraft deliveries in its orderbook. The Company remains in discussions with Boeing and Airbus to determine the extent and duration of delivery delays; however, the Company is not yet able to determine the full impact of the delivery delays.

Estimated Delivery Years
Aircraft Type20222023202420252026ThereafterTotal
Airbus A220-100/3004 17 23 20 12 — 76 
Airbus A320/321neo(1)
24 24 26 23 32 64 193 
Airbus A330-900neo7 6 4 — — — 17 
Airbus A350-900/1000
3 3 3 — — — 9 
Airbus A350F— — — — 2 5 7 
Boeing 737-8/9 MAX25 31 35 18 16 — 125 
Boeing 787-9/103 7 8 6 — — 24 
Total(2)
66 88 99 67 62 69 451 
(1) The Company’s Airbus A320/321neo aircraft orders include 27 long-range variants and 49 extra long-range variants.
(2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation.

Pursuant to our purchase agreements with Boeing and Airbus, we agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, however for the last several years, manufacturing delays have significantly delayed the planned purchases of our aircraft on order with Boeing and Airbus. The Company is currently experiencing delivery delays with both Boeing and Airbus aircraft. However, the most significant delivery delays are with the Company’s aircraft orders for Boeing 787 aircraft.

During 2020, Boeing began to experience manufacturing issues on its 787 aircraft, which resulted in significant aircraft delivery delays. Boeing has halted 787 deliveries and has not indicated when they will resume. Accordingly, we have not taken delivery of any 787s since the halting of the deliveries, and the timing of deliveries of the aircraft for the remainder of this year and potentially beyond remains uncertain.

The aircraft purchase commitments discussed above could also be impacted by lease cancellations. The Company's leases typically provide that the Company and the airline customer each have a cancellation right related to certain aircraft delivery delays. The Company’s purchase agreements with Boeing and Airbus also generally provide that the Company and the manufacturer each have cancellation rights that typically parallel the Company’s cancellation rights in its leases. The Company’s leases and its purchase agreements with Boeing and Airbus generally provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause.
12
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




Commitments for the acquisition of these aircraft, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $28.8 billion at March 31, 2022, are as follows:

(in thousands)
Years ending December 31,
2022$4,446,438 
20236,049,551 
20246,400,067 
20254,006,352 
20263,491,754 
Thereafter 4,450,903 
Total
$28,845,065 


The Company has made non-refundable deposits on the aircraft for which the Company has commitments to purchase of $1.6 billion and $1.5 billion as of March 31, 2022 and December 31, 2021, respectively, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits. Further, the Company would be exposed to breach of contract claims by its lessees and manufacturers.

Note 6.    Rental Income

At March 31, 2022, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s owned fleet, which have been delivered as of March 31, 2022 are as follows:

(in thousands)
Years ending December 31,
2022 (excluding the three months ended March 31, 2022)$1,547,862 
20231,952,007 
20241,826,854 
20251,678,155 
20261,485,049 
Thereafter 5,605,989 
Total
$14,095,916 

Note 7. (Loss)/Earnings Per Share

Basic (loss)/earnings per share is computed by dividing net (loss) income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s two classes of common stock, Class A and Class B non-voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of March 31, 2022, the Company did not have any Class B non-voting common stock outstanding.    

Diluted earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. Since the Company was in a loss position for the three months ended March 31, 2022, diluted net loss per share is the same as basic net loss per share for the period as the inclusion of all potential common shares outstanding would have been anti-dilutive. For the three months ended March 31, 2022, the Company excluded 249,781 potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. For the three months ended March 31, 2021, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. The Company excluded 1,046,967 and 1,085,311
13
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



shares related to restricted stock units for which the performance metric had yet to be achieved as of March 31, 2022 and 2021, respectively.

The following table sets forth the reconciliation of basic and diluted (loss)/earnings per share:
Three Months Ended
 March 31,
20222021
(in thousands, except share and per share)
Basic (loss)/earnings per share:
Numerator
Net (loss)/income $(468,993)$84,092 
Preferred stock dividends(10,425)(3,844)
Net (loss)/income attributable to common stockholders
$(479,418)$80,248 
Denominator
Weighted-average common shares outstanding 113,894,867 113,958,403 
Basic (loss)/earnings per share $(4.21)$0.70 
Diluted (loss)/earnings per share:
Numerator
Net (loss)/income$(468,993)$84,092 
Preferred stock dividends(10,425)(3,844)
Net (loss)/income attributable to common stockholders
$(479,418)$80,248 
Denominator
Number of shares used in basic computation 113,894,867113,958,403
Weighted-average effect of dilutive securities —278,706
Number of shares used in per share computation 113,894,867114,237,109
Diluted (loss)/earnings per share $(4.21)$0.70 

Note 8.    Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring and Non-recurring Basis

The Company has a cross-currency swap related to its Canadian dollar Medium-Term Notes which were issued in December 2019. The fair value of the swap as a foreign currency exchange derivative is categorized as a Level 2 measurement in the fair value hierarchy and is measured on a recurring basis. As of March 31, 2022 and December 31, 2021, the estimated fair value of the foreign currency exchange derivative asset was $19.4 million and $14.1 million, respectively.

Financial Instruments Not Measured at Fair Values

The fair value of debt financing is estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities, which would be categorized as a Level 2 measurement in the fair value hierarchy. The estimated fair value of debt financing as of March 31, 2022 was $17.5 billion compared to a book value of $18.0 billion. The estimated fair value of debt financing as of December 31, 2021 was $17.6 billion compared to a book value of $17.2 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at March 31, 2022, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at March 31, 2022 and December 31, 2021 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.

14
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



Note 9.    Shareholders’ Equity

The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, the Company had 111,317,259 and 113,987,154 Class A common shares issued and outstanding, respectively. The Company was authorized to issue 10,000,000 shares of Class B common stock, $0.01 par value at March 31, 2022 and December 31, 2021. The Company did not have any shares of Class B non-voting common stock, $0.01 par value, issued or outstanding as of March 31, 2022 or December 31, 2021.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, the Company had 10.0 million shares of 6.15% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $250.0 million ($25.00 per share), 300,000 shares of 4.65% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share) and 300,000 shares of 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share).

The following table summarizes the Company’s preferred stock issued and outstanding as of March 31, 2022 (in thousands, except for share amounts and percentages):
Shares Issued and Outstanding as of March 31, 2022Carrying Value
as of March 31, 2022		Issue DateDividend Rate in Effect at March 31, 2022Next dividend rate reset dateDividend rate after reset date
Series A10,000,000 $250,000 March 5, 20196.150 %March 15, 2024
3M LIBOR plus 3.65%
Series B300,000 300,000 March 2, 20214.650 %June 15, 2026
5 Yr U.S. Treasury plus 4.076%
Series C300,000 300,000 October 13, 20214.125 %December 15, 2026
5 Yr U.S. Treasury plus 3.149%
Total Preferred Stock10,600,000 $850,000 

During the three months ended March 31, 2022, the Company repurchased 2,959,458 shares of its Class A common stock under its stock repurchase program at an average purchase price of $43.77 per share.

In April 2022, the Company repurchased an additional 461,416 shares of its Class A common stock under the Company’s stock repurchase plan at an average purchase price of $44.33 per share. Such repurchases completed the repurchase of the entire $150.0 million of outstanding shares authorized under the Company’s stock repurchase plan. The plan terminated in April 2022 upon completion of such repurchase.

Note 10.     Stock-based Compensation

On May 7, 2014, the stockholders of the Company approved the Air Lease Corporation 2014 Equity Incentive Plan (the “2014 Plan”). Upon approval of the 2014 Plan, no new awards may be granted under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). As of March 31, 2022, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 4,199,596. The Company has issued RSUs with four different vesting criteria: those RSUs that vest based on the attainment of book-value goals, those RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals, time based RSUs that vest ratably over a time period of three years and RSUs that cliff vest at the end of a one or two year period.

As of March 31, 2022, the Company had no outstanding Stock Options and no unrecognized compensation costs related to outstanding Stock Options. For the three months ended March 31, 2022 and 2021, there were no stock-based compensation expenses related to Stock Options. For the three months ended March 31, 2022, the Company recorded a net reversal of previously recognized stock based compensation of $2.5 million. The Company recorded $5.4 million of stock-based compensation expense related to RSUs for the three months ended March 31, 2021. The decrease in stock-based compensation relates to reductions in the underlying vesting estimates of certain book value RSUs as the performance criteria is no longer being considered probable of being achieved.

15
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



Restricted Stock Units

Compensation cost for RSUs is measured at the grant date based on fair value and recognized over the vesting period. The fair value of book value and time based RSUs is determined based on the closing market price of the Company’s Class A common stock on the date of grant, while the fair value of RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals is determined at the grant date using a Monte Carlo simulation model. Included in the Monte Carlo simulation model were certain assumptions regarding a number of highly complex and subjective variables, such as expected volatility, risk-free interest rate and expected dividends. To appropriately value the award, the risk-free interest rate is estimated for the time period from the valuation date until the vesting date and the historical volatilities were estimated based on a historical timeframe equal to the time from the valuation date until the end date of the performance period.

During the three months ended March 31, 2022, the Company granted 629,903 RSUs of which 137,729 are TSR RSUs and 220,437 are book value RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the three months ended March 31, 2022:
Unvested Restricted Stock Units
Number of
Shares		Weighted-Average
Grant-Date
Fair Value
Unvested at December 31, 20211,571,415 $43.88 
Granted629,903 $48.06 
Vested(471,867)$42.23 
Forfeited/canceled(146,306)$40.03 
Unvested at March 31, 20221,583,145 $46.11 
Expected to vest after March 31, 20221,399,784 $46.74 

As of March 31, 2022, there was $47.5 million of unrecognized compensation cost related to unvested stock-based payments granted to employees. Total unrecognized compensation cost will be recognized over a weighted-average remaining period of 2.34 years.

Note 11. Aircraft Under Management

As of March 31, 2022, the Company managed 87 aircraft across three aircraft management platforms. The Company managed 48 aircraft through its Thunderbolt platform, 34 aircraft through the Blackbird investment funds and five on behalf of financial institutions.

The Company managed 34 aircraft on behalf of third-party investors, through two investment funds, Blackbird I and Blackbird II. These funds invest in commercial jet aircraft and lease them to airlines throughout the world. The Company provides management services to these funds for a fee. As of March 31, 2022, the Company's non-controlling interests in each fund were 9.5% and are accounted for under the equity method of accounting. The Company’s investments in these funds aggregated $62.4 million and $73.2 million as of March 31, 2022 and December 31, 2021, respectively, and are included in Other assets on the Consolidated Balance Sheets.

Additionally, the Company continues to manage aircraft that it sells through its Thunderbolt platform. The Thunderbolt platform facilitates the sale of mid-life aircraft to investors while allowing the Company to continue the management of these aircraft for a fee. As of March 31, 2022, the Company managed 48 aircraft across three separate transactions. The Company has non-controlling interests in two of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. The Company’s total investment in aircraft sold through its Thunderbolt platform was $8.8 million and $9.3 million as of March 31, 2022 and December 31, 2021, respectively and is included in Other assets on the Consolidated Balance Sheets.

In response to the sanctions against certain industry sectors and parties in Russia, in March 2022 the Company terminated all of its leasing activities in Russia, including eight aircraft from its managed fleet. As of May 5, 2022, six aircraft in the Company’s managed fleet remain in Russia. While the Company maintains title to the aircraft, the Company has determined that it is unlikely it will regain possession of the aircraft that have not been returned and that remain in Russia. As a result, during the three months ended March 31, 2022, the Company recognized asset write-offs of $11.4 million related to its investments in the managed platforms that own such aircraft.
16
Air Lease Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




Note 12. Net Investment in Sales-type Leases

As of March 31, 2022, the Company had four A320-200 aircraft on lease to an airline with terms that meet the criteria of being classified as a sales-type lease.

Net investment in sales-type leases was included in Other assets in the Company’s Consolidated Balance Sheets based on the present value of fixed payments under the contract and the residual value of the underlying asset, discounted at the rate implicit in the lease. The Company’s investment in sales-type leases consisted of the following (in thousands):

March 31, 2022
Future minimum lease payments to be received$98,810 
Estimated residual values of leased flight equipment36,675 
Less: Unearned income(22,782)
Net Investment in Sales-type Leases$112,703 

As of March 31, 2022, future minimum lease payments to be received on sales-type leases were as follows:

(in thousands)
Years ending December 31,
2022 (excluding the three months ended March 31, 2022)$6,970 
20239,840 
20249,840 
20259,840 
20269,840 
Thereafter52,480 
Total$98,810 

Note 13. Subsequent Events

On May 4, 2022, the Company’s board of directors approved quarterly dividends for the Company’s Class A common stock and Series A, B and C Preferred Stock. The following table summarizes the details of the dividends that were declared:

Title of each classCash dividend per shareRecord DatePayment Date
Class A Common Stock$0.185 June 7, 2022July 8, 2022
Series A Preferred Stock$0.384375 May 31, 2022June 15, 2022
Series B Preferred Stock$11.625 May 31, 2022June 15, 2022
Series C Preferred Stock$10.3125 May 31, 2022June 15, 2022

17

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our Consolidated Financial Statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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-Házy. We are 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”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our fleet to third-parties, including other leasing companies, financial services companies, airlines and other investors. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by gains from aircraft sales and our management fees.

First Quarter Overview

As of March 31, 2022, the net book value of our fleet was $22.3 billion, compared to $22.9 billion as of December 31, 2021. During the three months ended March 31, 2022, we purchased and took delivery of eight aircraft from our new order pipeline, one aircraft from the secondary market and wrote-off the net book value of 21 aircraft that remain in Russia, ending the period with a total of 370 aircraft in our owned aircraft portfolio. The weighted average age of our fleet was 4.5 years and the weighted average lease term remaining was 7.0 years as of March 31, 2022. Our managed fleet was 87 aircraft as of March 31, 2022 as compared to a managed fleet of 92 aircraft as of December 31, 2021. We have a globally diversified customer base comprised of 114 airlines in 60 countries as of March 31, 2022. As of May 5, 2022, all aircraft in our fleet, except for three aircraft, were subject to lease agreements or letters of intent.

During the quarter ended March 31, 2022, we increased our committed orderbook by entering into agreements with Boeing to purchase 50 aircraft, which includes the conversion of three 787-9 aircraft to 18 737 MAX aircraft. In addition, we canceled five aircraft in our orderbook that were slated for delivery in Russia. As of March 31, 2022, we had commitments to purchase 451 aircraft from Boeing and Airbus for delivery through 2028, with an estimated aggregate commitment of $28.8 billion.

We have placed approximately 97% of our committed orderbook on long-term leases for aircraft delivering through the end of 2023 and have placed 52% of our entire orderbook. We ended the first quarter of 2022 with $29.5 billion in committed minimum future rental payments, consisting of $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and $15.4 billion in minimum future rental payments related to aircraft which will deliver between 2022 through 2026.

We typically finance the purchase of aircraft and our business with available cash balances, internally generated funds, including through aircraft sales, preferred stock issuances, and debt financings. During the three months ended March 31, 2022, we issued $750.0 million in aggregate principal amount of 2.20% Medium-Term Notes due 2027, and $750.0 million in aggregate principal amount of 2.875% Medium-Term Notes due 2032. In addition, we ended the first quarter of 2022 with an aggregate borrowing capacity under our revolving credit facility of $6.8 billion and total liquidity of $8.3 billion. As of March 31, 2022, we had total debt outstanding of $18.0 billion, of which 95.1% was at a fixed rate and 99.2% was unsecured. As of March 31, 2022, our composite cost of funds raised through debt financings was 2.77%.

Our total revenues for the quarter ended March 31, 2022 increased by 25.7% to $596.7 million, compared to the quarter ended March 31, 2021. The increase in total revenues was primarily driven by the continued growth in our fleet, significantly lower cash basis and lease restructuring losses and the recognition of approximately $59.6 million in security deposits and maintenance reserve income resulting from the termination of our leasing activities in Russia as required by government sanctions.

During the first quarter of 2022, the industry continued to recover from the impact of COVID-19. As of March 31, 2022, we had $190.4 million in outstanding deferred rentals due to the impact of the COVID-19 pandemic as compared to $203.2 million as of December 31, 2021. Our collection rate and our lease utilization rate for the three months ended March 31, 2022 were 96.9% and
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99.5%, respectively. Our collection rate is defined as the sum of cash collected from lease rentals and maintenance reserves, including cash recovered from outstanding receivables from previous periods, as a percentage of the total contracted receivables due during the period and is calculated after giving effect to lease deferral arrangements made as of March 31, 2022. The calculation of our collection rate includes cash received and due from lease rentals and maintenance reserves for the 21 aircraft previously included in our owned fleet that remain in Russia through the date we terminated leasing activities. Lease utilization rate is calculated based on the number of days each aircraft, including the 21 aircraft previously included in our owned fleet that remain in Russia as of March 31, 2022, was subject to a lease or letter of intent during the period, weighted by the net book value of the aircraft.

During the three months ended March 31, 2022, we recorded a net loss attributable to shareholders of $479.4 million, or $4.21 per diluted share, as compared to net income attributable to shareholders of $80.2 million, or $0.70 per diluted share, in the prior period. Despite the continued growth of our fleet, our net income attributable to shareholders decreased due to the write-off of our interests in our owned and managed fleet that remain in Russia, totaling approximately $802.4 million for the quarter ended March 31, 2022.

After excluding the effects of the write-off and certain other adjustments described below, we recorded adjusted net income before income taxes for the three months ended March 31, 2022 of $200.9 million or $1.76 per diluted share. This increased by approximately 71.6% over the prior period results of $117.1 million or $1.03 per diluted share for the three months ended March 31, 2021. This was due to the continued growth of our fleet and the increase in revenues as discussed above. Adjusted net income before income taxes and adjusted diluted earnings per share before income taxes are measures of financial and operational performance that are not defined by U.S. Generally Accepted Accounting Principles (“GAAP”). See “Results of Operations” below for a discussion of adjusted net income before income taxes and adjusted diluted earnings per share before income taxes as non-GAAP measures and a reconciliation of these measures to net income attributable to common stockholders.

Impact of Russia-Ukraine Conflict

In connection with the ongoing conflict between Russia and Ukraine, the United States, European Union, United Kingdom and others have imposed, and may continue to impose, economic sanctions and export controls against certain industry sectors and parties in Russia. These sanctions include closures of airspace for aircraft operated by Russian controlled entities, bans on the leasing or sale of aircraft to Russian controlled entities, bans on the export and re-export of aircraft and aircraft components to Russian controlled entities or for use in Russia, and corresponding prohibitions on providing technical assistance, brokering services, insurance and reinsurance, as well as financing or financial assistance.

In response to the sanctions, in March 2022 we terminated all of our leasing activities in Russia, consisting of 24 aircraft in our owned fleet, eight aircraft in our managed fleet and the leasing activity relating to 29 aircraft that have not yet delivered from our orderbook, for which many have been subsequently placed. We also canceled five aircraft in our orderbook that were slated for delivery in Russia. Prior to the Russia-Ukraine conflict, we did not have any aircraft on lease in Belarus and had one aircraft on lease in Ukraine, which is currently located outside of Ukraine. During the quarter, we recognized approximately $59.6 million in security deposits and maintenance reserve income resulting from the termination of our leasing activities in Russia. As of May 5, 2022, 21 aircraft previously included in our owned fleet and six aircraft previously included in our managed fleet were not returned and remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the termination of leasing activities and our repeated demands for the return of our assets. The 21 aircraft previously included in our owned fleet represented 3.4% of our fleet by net book value as of March 31, 2022 and provided approximately $18.0 million per quarter in rental revenue. In addition, our future revenues and cash flows have been impacted by the termination of our leasing activities of the aircraft in Russia, which we have reflected in the table presented in Note 6 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

While we maintain title to the aircraft, we determined that it is unlikely we will regain possession of the aircraft that have not been returned and that remain in Russia. As a result, we recorded a write-off of our interests in our owned and managed aircraft that remain in Russia, totaling approximately $802.4 million for the quarter ended March 31, 2022. The 21 aircraft that remain in Russia have been removed from our owned fleet count as of March 31, 2022. Our lessees are primarily structured as triple net leases, whereby the lessee is responsible for all operating costs, including insurance. We are vigorously pursuing insurance claims to recover losses relating to our aircraft that remain in Russia. Collection, timing and amounts of any insurance recoveries is currently uncertain.

For more information regarding the risks we face relating to the Russia-Ukraine conflict, see “Part II — Item 1A. Risk Factors,” in this Quarterly Report on Form 10-Q.
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Our Fleet

References throughout this Quarterly Report on Form 10-Q to “our fleet” refer to the aircraft included in flight equipment subject to operating leases and do not include aircraft in our managed fleet or aircraft classified as net investments in sales-type leases unless the context indicates otherwise. Portfolio metrics of our fleet as of March 31, 2022 and December 31, 2021 are as follows:

March 31, 2022December 31, 2021
Net book value of flight equipment subject to operating lease
$22.3 billion$22.9  billion
Weighted-average fleet age(1)
4.5 years4.4 years
Weighted-average remaining lease term(1)
7.0 years7.2 years
Owned fleet370382
Managed fleet8792
Aircraft on order451431
Total
908905
Current fleet contracted rentals
$14.1  billion$14.8  billion
Committed fleet rentals
$15.4  billion$16.1  billion
Total committed rentals
$29.5  billion$30.9  billion
(1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease.

The following table sets forth the net book value and percentage of the net book value of our flight equipment subject to operating leases in the indicated regions based on each airline’s principal place of business as of March 31, 2022 and December 31, 2021:

March 31, 2022December 31, 2021
RegionNet Book
Value		% of TotalNet Book
Value		% of Total
(in thousands, except percentages)
Europe$6,746,925 30.2 %$7,439,993 32.5 %
Asia (excluding China)6,109,545 27.4 %5,952,981 26.0 %
China2,902,867 13.0 %2,934,224 12.8 %
The Middle East and Africa2,422,660 10.9 %2,447,919 10.7 %
U.S. and Canada1,596,215 7.2 %1,638,450 7.2 %
Central America, South America, and Mexico1,596,112 7.2 %1,566,133 6.8 %
Pacific, Australia, and New Zealand909,988 4.1 %919,304 4.0 %
Total $22,284,312 100.0 %$22,899,004 100.0 %

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The following table sets forth the number of aircraft in our owned fleet by aircraft type as of March 31, 2022 and December 31, 2021:
March 31, 2022December 31, 2021
Aircraft typeNumber of
Aircraft		% of TotalNumber of
Aircraft		% of Total
Airbus A319-1001 0.3 %1 0.3 %
Airbus A320-20028