10-Q 1 al-20240331.htm 10-Q al-20240331
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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, 2024

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
3.700% Medium-Term Notes, Series A, due April 15, 2030AL30New 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
1

“emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

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 3, 2024, there were 111,366,501 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, 2024

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, our access to the capital and debt markets, the impact of Russia’s invasion of Ukraine and the impact of sanctions imposed on Russia, the impact of the Israel Hamas conflict, aircraft and engine delivery delays and manufacturing flaws, our aircraft sales pipeline and expectations, changes in inflation and interest rates and other macroeconomic conditions and other factors affecting our financial condition or results of operations. Words such as “can,” “could,” “may,” “predicts,” “potential,” “will,” “projects,” “continuing,” “ongoing,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and “should,” and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements, or industry results to vary materially from our future results, performance or achievements, or those of our industry, expressed or implied in such forward-looking statements. Such factors include, among others:

our inability to obtain additional capital on favorable terms, or at all, to acquire aircraft, service our debt obligations and refinance maturing debt obligations;
increases in our cost of borrowing, decreases in our credit ratings or changes in interest rates;
our inability to generate sufficient returns on our aircraft investments through strategic acquisition and profitable leasing;
the failure of an aircraft or engine manufacturer to meet its contractual obligations to us, including or as a result of manufacturing flaws and 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.

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, 2024December 31, 2023
(unaudited)
Assets
Cash and cash equivalents$554,373 $460,870 
Restricted cash1,552 3,622 
Flight equipment subject to operating leases32,273,883 31,787,241 
Less accumulated depreciation(5,729,380)(5,556,033)
26,544,503 26,231,208 
Deposits on flight equipment purchases1,088,363 1,203,068 
Other assets2,723,644 2,553,484 
Total assets$30,912,435 $30,452,252 
Liabilities and Shareholders’ Equity
Accrued interest and other payables$1,160,132 $1,164,140 
Debt financing, net of discounts and issuance costs19,479,961 19,182,657 
Security deposits and maintenance reserves on flight equipment leases1,594,069 1,519,719 
Rentals received in advance138,181 143,861 
Deferred tax liability1,308,221 1,281,837 
Total liabilities$23,680,564 $23,292,214 
Shareholders’ Equity
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,600,000 (aggregate liquidation preference of $850,000) shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
$106 $106 
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,366,501 and 111,027,252 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
1,114 1,110 
Class B Non-Voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding
  
Paid-in capital3,286,122 3,287,234 
Retained earnings3,943,867 3,869,813 
Accumulated other comprehensive income662 1,775 
Total shareholders’ equity$7,231,871 $7,160,038 
Total liabilities and shareholders’ equity$30,912,435 $30,452,252 

(See Notes to Consolidated Financial Statements)

5

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


Three Months Ended
March 31,
20242023
(unaudited)
Revenues
Rental of flight equipment$614,329 $617,773 
Aircraft sales, trading and other48,981 18,369 
Total revenues663,310 636,142 
Expenses
Interest181,595 151,613 
Amortization of debt discounts and issuance costs13,108 13,073 
Interest expense194,703 164,686 
Depreciation of flight equipment277,260 259,680 
Selling, general and administrative47,743 47,614 
Stock-based compensation expense8,275 5,896 
Total expenses527,981 477,876 
Income before taxes135,329 158,266 
Income tax expense(27,463)(29,546)
Net income$107,866 $128,720 
Preferred stock dividends(10,425)(10,425)
Net income attributable to common stockholders$97,441 $118,295 
Other comprehensive income/(loss):
Foreign currency translation adjustment$18,444 $(830)
Change in fair value of hedged transactions(19,860)148 
Total tax benefit on other comprehensive income/loss303 146 
Other comprehensive income/(loss), net of tax(1,113)(536)
Total comprehensive income attributable for common stockholders$96,328 $117,759 
Earnings per share of common stock:
Basic$0.88 $1.07 
Diluted$0.87 $1.06 
Weighted-average shares of common stock outstanding
Basic111,174,593 110,943,552 
Diluted111,529,770 111,199,996 
Dividends declared per share of common stock$0.21 $0.20 

(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 StockClass A
Common Stock
Class B Non‑Voting
Common Stock
Accumulated Other
Comprehensive Income/(Loss)
(unaudited)SharesAmountSharesAmountSharesAmountPaid‑in
Capital
Retained
Earnings
Total
Balance at December 31, 202310,600,000 $106 111,027,252 $1,110  $ $3,287,234 $3,869,813 $1,775 $7,160,038 
Issuance of common stock upon vesting of restricted stock units— — 567,154 6 — — — — — 6 
Stock-based compensation expense— — — — — — 8,275 — — 8,275 
Cash dividends (declared $0.21 per share of Class A common stock)
— — — — — — — (23,387)— (23,387)
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— — — — — — — — (1,113)(1,113)
Tax withholdings on stock based-compensation— — (227,905)(2)— — (9,387)— — (9,389)
Net income— — — — — — — 107,866 — 107,866 
Balance at March 31, 202410,600,000 $106 111,366,501 $1,114  $ $3,286,122 $3,943,867 $662 $7,231,871 

Preferred StockClass A
Common Stock
Class B Non‑Voting
Common Stock
Accumulated Other
Comprehensive Income/(Loss)
(unaudited)SharesAmountSharesAmountSharesAmountPaid‑in
Capital
Retained
Earnings
Total
Balance at December 31, 202210,600,000 $106 110,892,097 $1,109  $ $3,255,973 $3,386,820 $2,355 $6,646,363 
Issuance of common stock upon vesting of restricted stock units— — 198,437 2 — — — — — 2 
Stock-based compensation expense— — — — — — 5,896 — — 5,896 
Cash dividends (declared $0.20 per share of Class A common stock)
— — — — — — — (22,203)— (22,203)
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— — — — — — — — (536)(536)
Tax withholdings on stock based-compensation— — (75,116)(1)— — (3,230)— — (3,231)
Net income— — — — — — — 128,720 — 128,720 
Balance at March 31, 202310,600,000 $106 111,015,418 $1,110  $ $3,258,639 $3,482,912 $1,819 $6,744,586 


(See Notes to Consolidated Financial Statements)
7

Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
20242023
(unaudited)
Operating Activities
Net income$107,866 $128,720 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment277,260 259,680 
Stock-based compensation expense8,275 5,896 
Deferred taxes26,687 28,726 
Amortization of discounts and debt issuance costs13,108 13,073 
Amortization of prepaid lease costs24,336 18,323 
Gain on aircraft sales, trading and other activity(51,346)(41,650)
Changes in operating assets and liabilities:
Other assets(16,829)(26,907)
Accrued interest and other payables(12,438)(45,493)
Rentals received in advance(5,589)8,122 
Net cash provided by operating activities371,330 348,490 
Investing Activities
Acquisition of flight equipment under operating lease(706,179)(1,236,828)
Payments for deposits on flight equipment purchases (4,000)
Proceeds from aircraft sales, trading and other activity200,401 21,391 
Acquisition of aircraft furnishings, equipment and other assets(124,546)(53,939)
Net cash used in investing activities(630,324)(1,273,376)
Financing Activities
Cash dividends paid on Class A common stock(23,316)(22,178)
Cash dividends paid on preferred stock(10,425)(10,425)
Tax withholdings on stock-based compensation(9,384)(3,229)
Net change in unsecured revolving facility353,000 653,000 
Proceeds from debt financings1,428,212 1,352,766 
Payments in reduction of debt financings(1,476,877)(1,209,971)
Debt issuance costs(1,694)(3,159)
Security deposits and maintenance reserve receipts93,464 93,377 
Security deposits and maintenance reserve disbursements(2,553)(3,775)
Net cash provided by financing activities350,427 846,406 
Net increase/(decrease) in cash91,433 (78,480)
Cash, cash equivalents and restricted cash at beginning of period464,492 780,017 
Cash, cash equivalents and restricted cash at end of period$555,925 $701,537 



8

Air Lease Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
20242023
(unaudited)
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $11,412 and $10,658 at March 31, 2024 and 2023, respectively
$203,581 $197,935 
Cash paid for income taxes$3,033 $3,571 
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$155,214 $227,738 
Flight equipment subject to operating leases reclassified to flight equipment held for sale$276,094 $80,036 
Flight equipment subject to operating leases reclassified to investment in sales-type lease$33,629 $ 
Cash dividends declared on Class A common stock, not yet paid$23,387 $22,203 

(See Notes to Consolidated Financial Statements)
9

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, 2024, the Company owned 472 aircraft, managed 73 aircraft and had 320 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its fleet to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee.

Note 2. Basis of Preparation and Critical Accounting Policies

The Company consolidates financial statements of all entities in which the Company has a controlling financial interest, including the accounts of any Variable Interest Entity in which the Company has a controlling financial interest and for which it is the primary beneficiary. All material intercompany balances are eliminated in consolidation. The accompanying Consolidated Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

The accompanying unaudited Consolidated Financial Statements include all adjustments, 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, 2024, and for all periods presented. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results expected for the year ending December 31, 2024. 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, 2023.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The new requirements will be effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is still evaluating the impact of ASU 2023-09 but does not expect the application of this guidance to have a material impact on its financial statement disclosures.

10

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

Note 3. Debt Financing

The Company’s consolidated debt as of March 31, 2024 and December 31, 2023 is summarized below:

March 31, 2024December 31, 2023
(in thousands)
Unsecured
Senior unsecured securities$16,307,719 $16,329,605 
Term financings 1,608,450 1,628,400 
Revolving credit facility1,453,000 1,100,000 
        Total unsecured debt financing19,369,169 19,058,005 
Secured
Export credit financing 201,417 204,984 
Term financings 97,111 100,471 
        Total secured debt financing298,528 305,455 
Total debt financing 19,667,697 19,363,460 
Less: Debt discounts and issuance costs(187,736)(180,803)
Debt financing, net of discounts and issuance costs$19,479,961 $19,182,657 

As of March 31, 2024, management of the Company believes it is in compliance in all material respects with the covenants in its debt agreements, including minimum consolidated shareholders’ equity, minimum consolidated unencumbered assets, and an interest coverage ratio test.

Senior unsecured securities (including Medium-Term Note Program)

As of March 31, 2024 and December 31, 2023, the Company had $16.3 billion in senior unsecured securities outstanding.

During the three months ended March 31, 2024, the Company issued (i) $500.0 million in aggregate principal amount of 5.10% Medium-Term Notes due 2029 (ii) Canadian dollar (“C$”) denominated debt of C$400.0 million in additional aggregate principal amount of 5.40% Medium-Term Notes due 2028 (“2024 C$ notes”) and (iii) Euro (“€”) denominated debt of €600.0 million in aggregate principal amount of 3.70% Medium-Term Notes due 2030 (“2024 € notes”).

The 2024 C$ notes issued in 2024 have the same terms as, and constitute a single tranche with, the C$500.0 million aggregate principal amount of 5.40% Medium-Term Notes issued in November 2023. The Company hedged the 2024 C$ notes through a cross-currency swap that converts the borrowing rate to a fixed 5.95% U.S. dollar denominated rate. The Company also hedged the 2024 € notes through a cross-currency swap that converts the borrowing rate to a fixed 5.441% U.S. dollar denominated rate. The swaps have been designated as cash flow hedges with changes in the fair value of the derivative recognized in other comprehensive income/(loss). See Note 9. “Fair Value Measurements” for additional details on the fair value of the swaps.

Syndicated unsecured revolving credit facility

As of March 31, 2024 and December 31, 2023, the Company had $1.5 billion and $1.1 billion, respectively, outstanding under its syndicated 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.
11

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


In April 2024, the Company amended and extended its Revolving Credit Facility through an amendment that, among other things, extended the final maturity date from May 5, 2027 to May 5, 2028 and amended the total revolving commitments thereunder to approximately $7.8 billion as of May 5, 2024. As of May 6, 2024, lenders held revolving commitments totaling approximately $7.5 billion that mature on May 5, 2028, commitments totaling $25.0 million that mature on May 5, 2027, $210.0 million that mature on May 5, 2026 and commitments totaling $25.0 million that mature on May 5, 2025. Borrowings under the Revolving Credit Facility continue to accrue interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility) plus a margin of 1.05% per year. The Company is required to pay a facility fee of 0.20% per year in respect of total commitments under the Revolving Credit Facility. Interest rate and facility fees are subject to changes in the Company’s credit ratings.

Secured debt financings

As of March 31, 2024, the Company had an outstanding balance of $298.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $441.4 million. As of December 31, 2023, the Company had an outstanding balance of $305.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $445.9 million. All of the Company’s secured obligations as of March 31, 2024 and December 31, 2023 are recourse in nature.

Maturities

Maturities of debt outstanding as of March 31, 2024 are as follows (in thousands):
Years ending December 31,
2024$1,726,518 
20252,422,736 
20264,441,613 
20274,161,117 
20282,987,622 
Thereafter 3,928,091 
Total$19,667,697 



Note 4. Flight equipment subject to operating lease

The following table summarizes the activities for the Company’s flight equipment subject to operating lease for the three months ended March 31, 2024:

(in thousands)
Net book value as of December 31, 2023$26,231,208 
Purchase of aircraft900,278 
Depreciation(277,260)
Flight equipment subject to operating leases reclassified to flight equipment held for sale(276,094)
Flight equipment subject to operating leases reclassified to investment in sales-type lease(33,629)
Net book value as of March 31, 2024$26,544,503 
Accumulated depreciation as of March 31, 2024$(5,729,380)




12

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

Update on Russian fleet

As previously disclosed in the Company’s filings with the U.S. Securities and Exchange Commission, in June 2022, the Company and certain of its subsidiaries submitted insurance claims to the insurers on its aviation insurance policies to recover losses relating to aircraft detained in Russia for which the Company recorded a net write-off of its interests in its owned and managed aircraft totaling approximately $771.5 million for the year ended December 31, 2022. In December 2022, the Company filed suit in the Los Angeles County Superior Court of the State of California against its aviation insurance carriers in connection with its previously submitted insurance claims for which a trial date has been set for April 17, 2025. The Company continues to have significant claims against its aviation insurance carriers and will continue to vigorously pursue all available insurance claims and its related insurance litigation, and all rights and remedies therein. Collection, timing and amounts of any future insurance and related recoveries and the outcome of the Company’s ongoing insurance litigation remain uncertain at this time.

On January 19, 2024, the Company filed suit in the High Court of Justice, Business & Property Courts of England & Wales, Commercial Court against the Russian airlines’ aviation insurers and reinsurance insurers (collectively, the “Airlines’ Insurers”) seeking recovery under the Russian airlines’ insurance policies for aircraft that remain in Russia. The lawsuit against the Airlines’ Insurers is in the early stages and no trial date has been set.

As of May 6, 2024, 16 aircraft previously included in the Company’s owned fleet are still detained in Russia. The operators of these aircraft have continued to fly most of the aircraft notwithstanding the termination of leasing activities and the Company’s ongoing demands for the return of its assets.

Note 5. Flight Equipment Held for Sale

As of March 31, 2024, the Company had 17 aircraft, with a carrying value of $666.4 million, which were classified as held for sale and included in Other assets on the Consolidated Balance Sheets. The Company expects the sale of all 17 aircraft to be completed in 2024. As of March 31, 2024, the Company held an aggregate of $305.8 million in purchase deposits pursuant to sale agreements related to six of the 17 aircraft, which amount is included in Accrued interest and other payables on the Consolidated Balance Sheets.

During the three months ended March 31, 2024, the Company transferred eight aircraft from flight equipment subject to operating lease and completed the sale of five aircraft from its held for sale portfolio. The Company ceases recognition of depreciation expense once an aircraft is classified as held for sale. As of December 31, 2023, the Company had 14 aircraft, with a carrying value of $605.1 million, which were held for sale and included in Other assets on the Consolidated Balance Sheets.

The following table summarizes the activities for the Company’s held for sale for the three months ended March 31, 2024 based on carrying value:
(in thousands)
Flight equipment held for sale as of December 31, 2023$605,104 
Flight equipment subject to operating leases reclassified to flight equipment held for sale276,094 
Aircraft sales(214,798)
Flight equipment held for sale as of March 31, 2024$666,400 

Note 6. Commitments and Contingencies

Aircraft Acquisition

As of March 31, 2024, the Company had commitments to purchase 320 aircraft from Airbus and Boeing for delivery through 2029, with an estimated aggregate commitment of $20.9 billion. The following table shows the Company’s contractual delivery commitment schedule as of March 31, 2024:




13

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

Estimated Delivery Years
Aircraft TypeLast 9 months of 20242025202620272028ThereafterTotal
Airbus A220-100/30016 11 15 17   59 
Airbus A320/321neo(1)
14 11 30 50 36 4 145 
Airbus A330-900neo6 1     7 
Airbus A350-900/10003      3 
Airbus A350F 4 2 1 7 
Boeing 737-8/9 MAX202721 7 2  77 
Boeing 787-9/1011101    22 
Total(2)
706067 78 40 5 320 
(1) The Company’s Airbus A320/321neo aircraft orders include seven long-range variants and 49 extra long-range variants.
(2) The table above reflects aircraft deliveries based on contractual documentation and production adjustments as communicated by Airbus and Boeing through May 6, 2024. The Company’s contractual delivery commitment schedule is subject to a number of factors outside its control, including ongoing delays by Airbus and Boeing for some aircraft, and the Company cannot guarantee delivery of any particular aircraft at any specific time notwithstanding its contractual delivery commitment schedule.

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

Pursuant to the Company’s purchase agreements with Airbus and Boeing, the Company agrees 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 impacted the planned purchases of the Company’s aircraft on order with Airbus and Boeing. The Company is currently experiencing delivery delays with both Airbus and Boeing aircraft.

In January 2024, the FAA ordered the temporary grounding of certain Boeing 737-9 MAX aircraft after the in-flight loss of a mid-cabin exit door plug in one aircraft. The 737-9 MAX aircraft has since returned to service; however, Boeing will not be allowed by the FAA to increase 737 MAX production rates until quality control issues are resolved. Due to these production constraints, the Company expects further delivery delays on our 737 MAX aircraft orders, and the Company is unable to estimate when Boeing 737 MAX production rates will normalize.

The aircraft purchase commitments discussed above could also be impacted by cancellations. The Company’s purchase agreements with Airbus and Boeing generally provide each of the Company and the manufacturers with cancellation rights for delivery delays starting at one year after the original contractual delivery date, regardless of cause. In addition, the Company’s lease agreements generally provide each of the Company and the lessee with cancellation rights related to certain aircraft delivery delays that typically parallel the cancellation rights in the Company’s purchase agreements.

Commitments for the acquisition of these aircraft, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $20.9 billion as of March 31, 2024, are as follows (in thousands):

Years ending December 31,
2024 (excluding the three months ended March 31, 2024)
$5,521,459 
20254,245,270 
20263,804,021 
20274,626,120 
20282,330,499 
Thereafter 354,227 
Total $20,881,596 

14

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

The Company has made non-refundable deposits on flight equipment purchases of $1.1 billion and $1.2 billion as of March 31, 2024 and December 31, 2023, 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 and may also be exposed to breach of contract claims by its lessees as well as the manufacturers.

Note 7. Rental Income

As of March 31, 2024, 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, 2024 are as follows (in thousands):

Years ending December 31,
2024 (excluding the three months ended March 31, 2024)
$1,824,562 
20252,328,165 
20262,088,796 
20271,888,157 
20281,710,994 
Thereafter6,717,010 
Total$16,557,684 

Note 8. Earnings Per Share

Basic earnings per share is computed by dividing net 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, 2024, the Company did not have any Class B non-voting common stock outstanding.    

Diluted earnings per share takes into account the vesting of restricted stock units using the treasury stock method. For the three months ended March 31, 2024, and 2023, 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 1,084,610 and 969,698 shares related to restricted stock units for which the performance metric had yet to be achieved as of March 31, 2024 and 2023, respectively.

15

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

The following table sets forth the reconciliation of basic and diluted earnings per share:
Three Months Ended
March 31,
20242023
(in thousands, except share and per share)
Basic earnings per share:
Numerator
Net income$107,866 $128,720 
Preferred stock dividends(10,425)(10,425)
Net income attributable to common stockholders$97,441 $118,295 
Denominator
Weighted-average shares outstanding111,174,593 110,943,552 
Basic earnings per share$0.88 $1.07 
Diluted earnings per share:
Numerator
Net income$107,866 $128,720 
Preferred stock dividends(10,425)(10,425)
Net income attributable to common stockholders$97,441 $118,295 
Denominator
Number of shares used in basic computation111,174,593110,943,552
Weighted-average effect of dilutive securities355,177 256,444
Number of shares used in per share computation111,529,770 111,199,996 
Diluted earnings per share$0.87 $1.06 

Note 9. Fair Value Measurements

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

The Company has four cross-currency swaps, which were issued in December 2019, November 2023, February 2024 and March 2024, related to its Canadian dollar and Euro Medium-Term Notes. The fair value of these swaps as a foreign currency exchange derivative are categorized as a Level 2 measurement in the fair value hierarchy and are measured on a recurring basis. As of March 31, 2024, the estimated fair value of one of the Company’s foreign exchange swaps was a derivative asset of $5.6 million and the remaining three swaps was a derivative liability of $8.5 million. As of December 31, 2023, the estimated fair value of the Company’s foreign exchange swaps was a derivative asset of $17.0 million. Derivative assets are included in Other assets on the Company’s Consolidated Balance Sheets while derivative liabilities are included in Accrued interest and other payables on the Company’s Consolidated Balance Sheets.

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, 2024 was $19.0 billion compared to a book value of $19.7 billion. The estimated fair value of debt financing as of December 31, 2023 was $18.7 billion compared to a book value of $19.4 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at March 31, 2024, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at March 31, 2024 and December 31, 2023 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.
16

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


Note 10.     Shareholders’ Equity

The Company was authorized to issue up to 500,000,000 shares of Class A common stock, $0.01 par value, at March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company had 111,366,501 and 111,027,252 shares of Class A common stock issued and outstanding, respectively. The Company authorized for issuance up to 10,000,000 shares of Class B common stock, $0.01 par value at March 31, 2024 and December 31, 2023. 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, 2024 or December 31, 2023.

The Company was authorized to issue up to 50,000,000 shares of preferred stock, $0.01 par value, at March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, 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, 2024 (in thousands, except for share amounts and percentages):
Shares Issued and Outstanding as of March 31, 2024
Liquidation Preference
as of
March 31, 2024(2)
Issue Date
Dividend Rate in Effect at March 31, 2024(3)
Next dividend rate reset dateDividend rate after reset date
Series A10,000,000 $250,000 March 5, 2019
3M Term SOFR(1) plus 3.65%
June 15, 2024
3M Term SOFR(1) plus 3.65%
Series B300,000 300,000 March 2, 20214.65%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%
Total10,600,000 $850,000 
(1) 3M Term SOFR includes a credit spread adjustment of 0.10%.
(2) The Series A Preferred Stock has a redemption price of $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date without accumulation of any undeclared dividends. The Series B Preferred Stock and Series C Preferred Stock each have a redemption price of $1,000.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date without accumulation of any undeclared dividends.
(3) Dividends on preferred stock are discretionary and non-cumulative. When declared, dividends on the Series A Preferred Stock are reset quarterly and payable quarterly in arrears and dividends on the Series B Preferred Stock and Series C Preferred Stock are reset every five years and payable quarterly in arrears.

Note 11.     Stock-based Compensation

On May 3, 2023, the stockholders of the Company approved the Air Lease Corporation 2023 Equity Incentive Plan (the “2023 Plan”). As of March 31, 2024, the number of shares of Class A Common Stock available for new award grants under the 2023 Plan is approximately 3,719,460. The Company has issued restricted stock units (“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.

The Company recorded $8.3 million and $5.9 million of stock-based compensation expense related to RSUs for the three months ended March 31, 2024 and 2023, respectively.
17

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 time based and book value 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 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, 2024, the Company granted 810,284 RSUs of which 133,438 are TSR RSUs and 308,421 are book value RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the three months ended March 31, 2024:
Unvested Restricted Stock Units
Number of
Shares
Weighted-Average
Grant-Date
Fair Value
Unvested at December 31, 2023
1,607,575 $46.44 
Granted810,284 $41.34 
Vested (1)
(567,154)$45.26 
Forfeited/canceled(75,779)$54.03 
Unvested at March 31, 2024
1,774,926 $44.16 
Expected to vest after March 31, 2024
2,009,069 $44.08 
(1) During the three months ended March 31, 2024, 247,258 performance based RSUs and 319,896 time-based RSUs vested.

As of March 31, 2024, there was $58.1 million of unrecognized compensation expense related to unvested stock-based payments granted to employees. Total unrecognized compensation expense will be recognized over a weighted-average remaining period of 2.12 years.

Note 12. Aircraft Under Management

As of March 31, 2024, the Company managed 73 aircraft across two aircraft management platforms. The Company managed 40 aircraft through its Thunderbolt platform and 33 aircraft through the Blackbird investment funds.

As of March 31, 2024, the Company managed 33 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, 2024, 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 $69.5 million and $69.4 million as of March 31, 2024 and December 31, 2023, 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, 2024, the Company managed 40 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 as of each of March 31, 2024 and December 31, 2023 and is included in Other assets on the Consolidated Balance Sheets.

As of May 6, 2024, two aircraft in the Company’s managed fleet remain in Russia. While the respective managed platform 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.

18

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

On November 6, 2023, Thunderbolt I entered into an agreement to sell all aircraft in its portfolio, consisting of 13 aircraft. As servicer of Thunderbolt I, the Company is facilitating the sale and transfer of the aircraft. During the three months ended March 31, 2024, Thunderbolt I completed the sale of four of the 13 aircraft.

Note 13. Net Investment in Sales-type Leases

As of March 31, 2024 and December 31, 2023, the Company had sales-type leases for 13 aircraft and 12 aircraft in its owned fleet, respectively.

Net investment in sales-type leases are 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, 2024December 31, 2023
Future minimum lease payments to be received$315,151 $285,443 
Estimated residual values of leased flight equipment117,415 108,688 
Less: Unearned income(57,291)(53,412)
Net Investment in Sales-type Leases$375,275 $340,719 

As of March 31, 2024, future minimum lease payments to be received on sales-type leases were as follows:
(in thousands)
Years ending December 31,
2024 (excluding the three months ended March 31, 2024)
$25,516 
202534,022 
202634,022 
202734,022 
202834,022 
Thereafter153,547 
Total$315,151 

Note 14. Subsequent Events

On May 3, 2024, the Company’s board of directors approved quarterly cash dividends for the Company’s Class A common stock and Series A, Series B and Series 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$0.21 June 4, 2024July 8, 2024
Series A Preferred Stock$0.592675 May 31, 2024June 15, 2024
Series B Preferred Stock$11.625 May 31, 2024June 15, 2024
Series C Preferred Stock$10.3125 May 31, 2024June 15, 2024

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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 Airbus S.A.S. (“Airbus”) and The Boeing Company (“Boeing”), 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

During the three months ended March 31, 2024, we purchased 14 new aircraft from Airbus and Boeing and sold five aircraft. We ended the first quarter with a total of 472 aircraft in our owned fleet. The net book value of our fleet1 grew by 1.2% to $26.5 billion as of March 31, 2024 compared to $26.2 billion as of December 31, 2023. The weighted average age of our fleet was 4.7 years and the weighted average lease term remaining was 7.0 years as of March 31, 2024. Our managed fleet was comprised of 73 aircraft as of March 31, 2024 compared to 78 aircraft as of December 31, 2023. We have a globally diversified customer base comprised of 120 airlines in 62 countries as of March 31, 2024. We continued to maintain a strong lease utilization rate of 100.0% for the three months ended March 31, 2024.

As of March 31, 2024, we had commitments to purchase 320 aircraft from Airbus and Boeing for delivery through 2029, with an estimated aggregate commitment of $20.9 billion. We have placed 100% of our committed orderbook on long-term leases for aircraft delivering through the end of 2025 and have placed 63% of our entire orderbook. We ended the first quarter of 2024 with $30.6 billion in committed minimum future rental payments, consisting of $16.6 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.0 billion in minimum future rental payments related to aircraft which will deliver between 2024 through 2028.

We finance the purchase of aircraft and our business with our available cash balances and internally generated funds, which includes cash flows from our leases, as well as aircraft sales and debt financing activities. Our debt financing strategy is focused on raising unsecured debt in the global bank and debt capital markets, with limited utilization of government guaranteed export credit or other forms of secured financing. We ended the first quarter of 2024 with an aggregate borrowing capacity under our unsecured revolving credit facility of approximately $6.0 billion and total liquidity of $6.5 billion. As of March 31, 2024, we had total debt outstanding of $19.7 billion, of which 83.3% was at a fixed rate and 98.5% was unsecured, and in the aggregate, our composite cost of funds was 4.03%.

Our total revenues for the quarter ended March 31, 2024 increased by 4.3% to $663.3 million, compared to the quarter ended March 31, 2023. The increase in total revenues was primarily driven by the continued growth of our fleet and an increase in sales activity, partially offset by a decrease in end of lease revenue. During the three months ended March 31, 2024, we recognized $23.0 million in gains from the sale of five aircraft and $12.7 million in end of lease revenue from the return of two aircraft. During the first quarter of 2023, we recognized $8.8 million from the sale of two aircraft and $34.7 million in end of lease revenue from the return of 10 aircraft.

During the three months ended March 31, 2024, we recorded net income attributable to common stockholders of $97.4 million, or $0.87 per diluted share, as compared to net income attributable to common stockholders of $118.3 million, or $1.06 per diluted share, for the three months ended March 31, 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, partially offset by the increase in revenues discussed above.
1 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, flight equipment held for sale or aircraft classified as net investments in sales-type leases unless the context indicates otherwise.
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Our adjusted net income before income taxes2 excludes 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. For the three months ended March 31, 2024, we recorded adjusted net income before income taxes of $146.3 million, or $1.31 per adjusted diluted share, compared to an adjusted net income before income taxes of $166.8 million, or $1.50 per adjusted diluted share, for the three months ended March 31, 2023. Adjusted net income before income taxes decreased primarily due to higher interest expense driven by the increase in our composite cost of funds, partially offset by the increase in revenues discussed above.

Our Fleet

We continue to own one of the youngest fleets among aircraft lessors, including some of the most fuel-efficient commercial jet aircraft available. Our fleet, based on net book value, increased by 1.2%, to $26.5 billion as of March 31, 2024, compared to $26.2 billion as of December 31, 2023. During the three months ended March 31, 2024, we purchased 14 new aircraft from Airbus and Boeing and sold five aircraft. We ended the period with a total of 472 aircraft in our owned fleet. As of March 31, 2024, the weighted average fleet age and weighted average remaining lease term of our fleet were 4.7 years and 7.0 years, respectively. We also managed 73 aircraft as of March 31, 2024.

Our portfolio metrics as of March 31, 2024 and December 31, 2023 are as follows:
March 31, 2024December 31, 2023
Net book value of flight equipment subject to operating lease
$26.5 billion$26.2 billion
Weighted-average fleet age(1)
4.7 years4.6 years
Weighted-average remaining lease term(1)
7.0 years7.0 years
Owned fleet(2)
472463
Managed fleet7378
Aircraft on order320334
Total
865875
Current fleet contracted rentals
$16.6 billion$16.4  billion
Committed fleet rentals
$14.0  billion$14.6  billion
Total committed rentals
$30.6  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 March 31, 2024 and December 31, 2023, our owned fleet count included 17 and 14 aircraft classified as flight equipment held for sale and 13 and 12 aircraft classified as net investments in sales-type leases, respectively, which are all included in Other assets on the Consolidated Balance Sheet.
2 Adjusted net income before income taxes excludes 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 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.
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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, 2024 and December 31, 2023:

March 31, 2024December 31, 2023
RegionNet Book
Value
% of TotalNet Book
Value
% of Total
(in thousands, except percentages)
Europe$10,343,225 39.0 %$9,881,024 37.7 %
Asia Pacific10,191,471 38.4 %10,456,435 39.8 %
Central America, South America, and Mexico2,395,119 9.0 %2,361,089 9.0 %
The Middle East and Africa2,045,638 7.7 %2,062,420 7.9 %
U.S. and Canada1,569,050 5.9 %1,470,240 5.6 %
Total$26,544,503 100.0 %$26,231,208 100.0 %

The following table sets forth our top five lessees by net book value as of March 31, 2024:

March 31, 2024
Lessee% of Total
Virgin Atlantic5.4 %
EVA Air4.7 %
ITA4.7 %
Air France-KLM Group4.4 %
Vietnam Airlines4.0 %
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The following table sets forth the number of aircraft in our owned fleet by aircraft type as of March 31, 2024 and December 31, 2023:
March 31, 2024December 31, 2023
Aircraft typeNumber of
Aircraft
% of TotalNumber of
Aircraft
% of Total
Airbus A220-1000.6 %0.4 %
Airbus A220-30014 3.0 %13 2.8 %
Airbus A319-1000.2 %0.2 %
Airbus A320-20028 5.9 %28 6.0 %
Airbus A320-200neo26 5.5 %25 5.4 %
Airbus A321-20023 4.9 %23 5.0 %
Airbus A321-200neo100 21.2 %95 20.6 %
Airbus A330-200(1)
13 2.8 %13 2.8 %
Airbus A330-3001.1 %1.1 %
Airbus A330-900neo22 4.7 %23 5.0 %
Airbus A350-90014 3.0 %14 3.0 %
Airbus A350-10001.7 %1.5 %
Boeing 737-7000.6 %0.6 %
Boeing 737-80071 15.0 %73 15.8 %
Boeing 737-8 MAX55 11.7 %52 11.2 %
Boeing 737-9 MAX29 6.1 %29 6.3 %
Boeing 777-200ER0.2 %0.2 %
Boeing 777-300ER24 5.1 %24 5.2 %
Boeing 787-925 5.3 %25 5.4 %
Boeing 787-101.2 %1.3 %
Embraer E1900.2 %0.2 %
Total(2)
472 100.0 %463 100.0 %
(1) As of March 31, 2024 and December 31, 2023, aircraft count includes two Airbus A330-200 aircraft classified as a freighter.
(2) As of March 31, 2024 and December 31, 2023, our owned fleet count included 17 and 14 aircraft classified as flight equipment held for sale and 13 and 12 aircraft classified as net investments in sales-type leases, respectively, which are all included in Other assets on the Consolidated Balance Sheet.
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As of March 31, 2024, we had contractual commitments to acquire a total of 320 new aircraft for delivery through 2029. The following tables show our contractual delivery commitment schedule and our expected delivery commitment schedule as of March 31, 2024:

Contractual commitment schedule
Estimated Delivery Years
Aircraft TypeLast 9 months of 20242025202620272028ThereafterTotal
Airbus A220-100/30016 11 15 17 — — 59 
Airbus A320/321neo(1)
14 11 30 50 36 145 
Airbus A330-900neo— — — — 
Airbus A350-900/1000— — — — — 
Airbus A350F— — — 
Boeing 737-8/9 MAX20 27 21 — 77 
Boeing 787-9/1011 10 — — — 22 
Total(2)
70 60 67 78 40 320 
(1) Our Airbus A320/321neo aircraft orders include seven long-range variants and 49 extra long-range variants.
(2) The table above reflects aircraft deliveries based on contractual documentation and production adjustments as communicated by Airbus and Boeing through May 6, 2024. Our contractual delivery commitment schedule is subject to a number of factors outside our control, including ongoing delays by Airbus and Boeing for some aircraft, and we cannot guarantee delivery of any particular aircraft at any specific time notwithstanding our contractual delivery commitment schedule.

Expected commitment schedule
Estimated Delivery Years
Aircraft TypeLast 9 months of 20242025202620272028ThereafterTotal
Airbus A220-100/30012 14 14 17 — 59 
Airbus A320/321neo(1)
14 11 22 46 43 145 
Airbus A330-900neo— — — — 
Airbus A350-900/1000— — — — — 
Airbus A350F— — — 
Boeing 737-8/9 MAX12 30 21 12 — 77 
Boeing 787-9/1010 — — — 22 
Total(2)
53 66 63 78 50 10 320 
(1) Our Airbus A320/321neo aircraft orders include seven long-range variants and 49 extra long-range variants.
(2) The table above reflects our contractual commitment schedule adjusted to reflect production and delivery estimates by management as of May 6, 2024. Our expected delivery schedule is subject to a number of factors outside our control, including ongoing delays by Airbus and Boeing for some aircraft, and we cannot guarantee delivery of any particular aircraft at any specific time notwithstanding our expected commitment schedule. For more information on the risks and uncertainties impacting our aircraft deliveries, see “Part I—Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023.


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Contractual and expected commitments for the acquisition of these aircraft as of March 31, 2024 are as follows (in thousands):

Years ending December 31,ContractualExpected
2024 (excluding the three months ended March 31, 2024)
$5,521,459 $4,165,419 
20254,245,270 4,421,568 
20263,804,021 4,200,176 
20274,626,120 4,587,718 
20282,330,499 2,881,996 
Thereafter 354,227 624,719 
Total $20,881,596 $20,881,596 

The tables above are subject to change based on Airbus and Boeing delivery delays. As noted above, we expect delivery delays for some of the aircraft in our orderbook. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays; however, we are not currently able to determine the full impact of these delays.

Aircraft Delivery Delays

Pursuant to our purchase agreements with Airbus and Boeing, 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 impacted the planned purchases of our aircraft on order with both Airbus and Boeing.

In January 2024, the FAA ordered the temporary grounding of certain Boeing 737-9 MAX aircraft after the in-flight loss of a mid-cabin exit door plug in one aircraft. The 737-9 MAX aircraft has since returned to service; however, Boeing will not be allowed by the FAA to increase 737 MAX production rates until quality control issues are resolved. Due to these production constraints, we expect further delivery delays on our 737 MAX aircraft orders, and we are unable to estimate when Boeing 737 MAX production rates will normalize.

Our purchase agreements with Airbus and Boeing generally provide each of us and the manufacturers with cancellation rights for delivery delays starting at one year after the original contractual delivery date, regardless of cause. In addition, our lease agreements generally provide each of us and the lessees with cancellation rights related to certain aircraft delivery delays that typically parallel the cancellation rights in our purchase agreements.

As a result of continued manufacturing delays described herein, our aircraft delivery schedule could continue to be subject to material changes and delivery delays are expected to extend beyond 2024.

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The following table, which is subject to change based on Airbus and Boeing delivery delays, shows the number of new aircraft contractually scheduled to be delivered as of March 31, 2024, along with the lease placements of such aircraft as of May 6, 2024. Airbus and Boeing have expressed their desire to increase production rates on several aircraft types; however, they have yet to meaningfully increase production. At current production rates, we do not see delivery delays improving in the near term. In addition, the Pratt & Whitney GTF engine manufacturing flaws and Boeing’s enhancement of their quality control procedures could further impact delivery delays of new Airbus A320neo family aircraft and the Boeing 737 MAX, respectively. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays, but we are not currently able to determine the full impact of these delays.

Delivery YearNumber
Leased
Number of
Aircraft
% Leased
20247070 100.0 %
20256060 100.0 %
20264967 73.1 %
20272378 29.5 %
2028140 2.5 %
Thereafter — %
Total 203320

Aircraft Industry and Sources of Revenues

Our revenues are principally derived from operating leases with airlines throughout the world. As of March 31, 2024, we had a globally diversified customer base of 120 airlines in 62 different countries, with over 95% of our business revenues from airlines domiciled outside of the U.S., and we anticipate that most of our revenues in the future will be generated from foreign customers.

We believe the current airline operating environment is favorably positioned for us and the broader commercial aircraft leasing industry. Factors such as increases in population growth and the size of the global middle class as well as air travel demand, and improved global economic health and development positively affect the long-term performance of the commercial aircraft leasing industry. In addition, factors and trends including increased airline financing needs, OEM supply chain challenges and backlogs, the rising price of jet fuel, and environmental sustainability objectives impact the commercial aircraft leasing industry in the short-term and may increase the demand for our aircraft.

Passenger traffic volume has historically expanded at a faster rate than global GDP growth, in part due to the expansion of the global middle class and the ease and affordability of air travel, which we expect to continue. The International Air Transport Association (“IATA”) reported that passenger traffic was up 14% in March 2024 relative to the prior year period, primarily due to continued strength in international traffic and healthy continued expansion of domestic traffic globally. International traffic in March rose 19% relative to the prior year, benefiting from robust continued international travel expansion in the Asia Pacific region, as well as strong international expansion in all other major markets reported by IATA. Global domestic traffic rose 7% in March as compared to the prior year period, led by traffic growth in China. Meanwhile, passenger load factors also continue to rise and are persisting at historically high levels, which is compounding airline demand for additional aircraft. IATA reported total global passenger load factors of 82% for March 2024, as compared to 81% in the prior year period and 79% for full-year 2022.

As global air traffic continues to expand, we are experiencing increased demand for our aircraft through new lease requests and lease extension requests. Airline forward ticket sales as reported by IATA remained healthy in the first quarter 2024, illustrating continued support for traffic volume into 2024. We expect the need for airlines to replace aging aircraft will also increase the demand for newer, more fuel efficient aircraft. As a result, we believe many airlines will look to lessors for these new aircraft. In addition, both Airbus and Boeing have ongoing delivery delays which have been further compounded by engine manufacturer delays, as well as shorter on-wing engine time of most new technology engines. These delays have impacted and may continue to impact the ability of Airbus and Boeing to meet their contractual delivery obligations to us. We also expect that relatively low levels of widebody retirements in recent years could lead to an accelerated replacement cycle of older widebody aircraft in the near future.

The increased demand for our new aircraft, combined with elevated interest rates and inflation, helped to increase lease rates on new lease agreements and lease extensions during the three months ended March 31, 2024. However, lease rate increases continue to lag behind interest rate increases. We expect that lease rates will continue to increase as airlines adjust to a persistently higher interest
26

rate environment and our funding advantage relative to our airline customers widens. Lease rates are influenced by several factors above and beyond interest rates, including aircraft demand, supply technicals, supply chain disruptions, environmental initiatives and other factors that may result in a change in lease rates regardless of the interest rate environment and therefore, are difficult to project or forecast. We also believe the increase in lease rates and the tightening of credit markets may result in a shortfall of available capital to finance aircraft purchases, which could increase the demand for leasing.

Airline reorganizations, liquidations, or other forms of bankruptcies occurring in the industry may include some of our aircraft customers and result in the early return of aircraft or changes in our lease terms. Our airline customers are facing higher operating costs as a result of higher fuel costs, increased interest rates, inflation, foreign currency risk, ongoing labor shortages and disputes, as well as delays and cancellations caused by the global air traffic control system and airports, although the magnitude of underlying pre-pandemic demand returning to the market is offering a strong counterbalance to these increased costs.

We believe the aircraft leasing industry has remained resilient over time across a variety of global economic conditions and remain optimistic about the long-term fundamentals of our business. We believe leasing will continue to be an attractive form of aircraft financing for airlines because less cash and financing is required for the airlines, lessors maintain key delivery positions, and it provides fleet flexibility while eliminating residual value risk for lessees.

Update on Russian Fleet

As previously disclosed in our filings with the U.S. Securities and Exchange Commission, in June 2022, we and certain of our subsidiaries submitted insurance claims to the insurers on our aviation insurance policies to recover losses relating to aircraft detained in Russia for which we recorded a net write-off of our interests in our owned and managed aircraft totaling approximately $771.5 million for the year ended December 31, 2022. In December 2022, we filed suit in the Los Angeles County Superior Court of the State of California against our aviation insurance carriers in connection with our previously submitted insurance claims for which a trial date has been set for April 17, 2025. We continue to have significant claims against our aviation insurance carriers and will continue to vigorously pursue all available insurance claims and our related insurance litigation, and all rights and remedies therein. Collection, timing and amounts of any future insurance and related recoveries and the outcome of our ongoing insurance litigation remain uncertain at this time. See “Part II — Item 1. Legal Proceedings” for more information on our ongoing litigation proceedings regarding aircraft that remain detained in Russia.

As of May 6, 2024, we maintain title to 16 aircraft previously included in our owned fleet that are still detained in Russia. While we remain in ongoing settlement discussions regarding these aircraft, the operators of these aircraft have continued to fly most of the aircraft notwithstanding the termination of leasing activities. It is uncertain whether any of these discussions will result in any settlement or receipt of settlement proceeds and, if so, in what amount.

Liquidity and Capital Resources

Overview

We ended the first quarter of 2024 with available liquidity of $6.5 billion, which was comprised of unrestricted cash of $554.4 million and undrawn balances under our unsecured revolving credit facility of approximately $6.0 billion. We finance the purchase of aircraft and our business operations using our available cash balances and internally generated funds, which includes cash flows from our leases, as well as aircraft sales and debt financing activities. We aim to maintain investment-grade credit metrics and focus our debt financing strategy on funding our business primarily on an unsecured basis with mostly fixed-rate debt issued in the public bond market. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another. We also have the ability to seek debt financing secured by our assets, as well as financings supported through government-guaranteed export credit agencies for future aircraft deliveries. Our access to a variety of financing alternatives and the global capital markets, including capital raises through unsecured public notes denominated in U.S. dollars or various foreign currencies, private capital, bank debt, secured debt and preferred stock issuances serves as a key advantage in managing our liquidity. Ongoing aircraft delivery delays as a product of manufacturer delays are expected to further reduce our aircraft investment and debt financing needs for the next 12 months and potentially beyond.

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We ended the first quarter of 2024 with total debt outstanding of $19.7 billion, of which 83.3% was at a fixed rate and 98.5% was unsecured, and in the aggregate, our composite cost of funds was 4.03%. As of December 31, 2023, we had total debt outstanding of $19.4 billion, of which 84.7% was at a fixed rate and 98.4% of which was unsecured, and in the aggregate, our composite cost of funds was 3.77%.

Capital Allocation Strategy

We have a balanced approach to capital allocation based on the following priorities, ranked in order of priority: first, investing in modern, in-demand aircraft to profitably grow our core aircraft leasing business while maintaining strong fleet metrics and creating sustainable long-term shareholder value; second, maintaining our investment grade balance sheet utilizing unsecured debt as our primary form of financing; and finally, in line with the aforementioned priorities, returning excess cash to shareholders through our dividend policy as well as regular evaluation of share repurchases, as appropriate.

Material Cash Sources and Requirements

We believe that we have sufficient liquidity from available cash balances, cash generated from ongoing operations, available commitments under our unsecured revolving credit facility and general ability to access the capital and debt markets for opportunistic debt financings to satisfy the operating requirements of our business through at least the next 12 months. Our long-term debt financing strategy is focused on continuing to raise primarily unsecured debt in the global bank and investment grade capital markets. Our material cash sources include:

Unrestricted cash: We ended the first quarter of 2024 with $554.4 million in unrestricted cash.
Lease cash flows: We ended the first quarter of 2024 with $30.6 billion in committed minimum future rental payments comprised of $16.6 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.0 billion in minimum future rental payments related to aircraft which will deliver between 2024 through 2028. These rental payments are a primary driver of our short and long-term operating cash flow. As of March 31, 2024, our minimum future rentals on our existing non-cancellable operating leases for the next 12 months was $2.4 billion. For further detail on our minimum future rentals for the remainder of 2024 and thereafter, see “Notes to Consolidated Financial Statements” under “Item 1. Financial Statements” in this Quarterly Report on Form 10-Q.
Unsecured revolving credit facility: After giving effect to the amendment signed in April 2024, our $7.8 billion revolving credit facility is syndicated across 52 financial institutions from various regions of the world, diversifying our reliance on any individual lending institution. The final maturity for the facility is May 2028, although we expect to refinance this facility in advance of that date. The facility contains standard investment grade covenants and does not condition our ability to borrow on the lack of a material adverse effect on us or the general economy. As of March 31, 2024, we had $1.5 billion outstanding under our unsecured revolving credit facility.
Senior unsecured securities: We are a frequent issuer in the investment grade capital markets, opportunistically issuing unsecured notes, primarily through our Medium-Term Note Program at attractive cost of funds and other senior unsecured securities. During the three months ended March 31, 2024, we issued (i) $500.0 million in aggregate principal amount of 5.10% Medium-Term Notes due 2029 (ii) Canadian dollar (“C$”) denominated debt of C$400.0 million in aggregate principal amount of 5.40% Medium-Term Notes due 2028 and (iii) Euro (“€”) denominated debt of €600.0 million in aggregate principal amount of 3.70% Medium-Term Notes due 2030. We expect to have continued access to the investment grade bond market and other unsecured securities in the future, although we continue to anticipate that interest rates for issuances in the near term will remain elevated compared to those available prior to 2022.
Unsecured bank facilities: We have active dialogue with a variety of global financial institutions and enter into new unsecured credit facilities from time to time as a means to supplement our liquidity and sources of funding. These loans are typically pre-payable without penalty at any time offering us significant flexibility in different rate environments.
Aircraft sales: Proceeds from the sale of aircraft help supplement our liquidity position. We have $1.4 billion of aircraft in our sales pipeline, which includes $666.4 million of aircraft classified as flight equipment held for sale as of March 31, 2024 and $698.0 million of aircraft subject to letters of intent3. We expect the sale of the majority of our aircraft classified as flight equipment held for sale to be completed in 2024. We expect to sell approximately $1.5 billion in aircraft for the full year 2024 and continue to see robust demand in the secondary market to support our aircraft sales program.
3 While our management’s historical experience is that non-binding letters of intent for aircraft sales generally lead to binding contracts, we cannot be certain that we will ultimately execute binding sales agreements for all or any of the aircraft subject to letters of intent or predict the timing of closing for any such aircraft sales.
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Other sources: In addition to the above, we generate liquidity through cash received from security deposits and maintenance reserves from our lease agreements, other sources of debt financings (including secured bank term loans, export credit and private placements), as well as issuances of preferred stock.

Tighter monetary policies in the United States and other countries since early 2022 resulted in rapid interest rate increases over a relatively short period of time and many are predicting that rates may remain elevated. This higher interest rate environment has resulted in increased borrowing costs for us and will result in increased borrowing costs until interest rates decline. Historically, there has been a lag between a rise in interest rates and subsequent increases in lease rates. While we have experienced increasing lease rates on new lease agreements and lease extensions since 2023, which are serving to partially offset increased borrowing costs, lease rate increases continue to lag the rapid increase in interest rates. We believe that lease rates should continue to increase as airlines adjust to a persistently higher rate environment and our funding advantage relative to our airline customers widens. In addition, lease rates are influenced by several factors above and beyond interest rates, including supply technicals driven by aircraft demand, supply chain disruptions, environmental initiatives and other factors that may result in a change in lease rates regardless of the interest rate environment.

As of March 31, 2024, we were in compliance in all material respects with the covenants contained in our debt agreements. While a ratings downgrade would not result in a default under any of our debt agreements, it could adversely affect our ability to issue debt and obtain new financings, or renew existing financings, and it would increase the interest rate applicable to certain of our financings. Our liquidity plans are subject to a number of risks and uncertainties, including those described in “Part I—Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Our material cash requirements are primarily comprised of aircraft purchases, debt service payments and general operating expenses. The amount of our cash requirements depends on a variety of factors, including, the ability of aircraft manufacturers to meet their contractual delivery obligations to us, the ability of our lessees to meet their contractual obligations with us, the timing of aircraft sales from our fleet, the timing and amount of our debt service obligations, potential aircraft acquisitions, and the general economic environment in which we operate.

Our material cash requirements as of March 31, 2024, are principally as follows (in thousands):

Last 9 months of 20242025202620272028ThereafterTotal
Contractual purchase commitments(1)
$5,521,459 $4,245,270 $3,804,021 $4,626,120 $2,330,499 $354,227 $20,881,596 
Long-term debt obligations 1,726,518 2,422,736 4,441,613 4,161,117 2,987,622 3,928,091 19,667,697 
Interest payments on debt outstanding(2)
582,648 747,752 645,956 437,789 240,849 276,239 2,931,233 
Total$7,830,625 $7,415,758 $8,891,590 $9,225,026 $5,558,970 $4,558,557 $43,480,526 
(1) Contractual purchase commitments reflect future Airbus and Boeing aircraft deliveries based on contractual documentation and production adjustments as communicated by Airbus and Boeing through May 6, 2024.
(2) Future interest payments on floating rate debt are estimated using floating rates in effect at March 31, 2024, which is inclusive of any cross-currency hedging arrangements.

The actual delivery dates of the aircraft in our commitments table and the expected time for payment of such aircraft may differ from our estimates and could be further impacted by the pace at which Airbus and Boeing can deliver aircraft, among other factors. As a result, the timing of our contractual purchase commitments shown in the table above may not reflect when the aircraft investments are eventually made. For 2024, we currently expect to make between $4.5 billion and $5.5 billion in aircraft investments.

The above table does not include any tax payments we may pay nor any dividends we may pay on our preferred stock or common stock.
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Cash Flows

Our cash flows provided by operating activities increased by 6.6% or $22.8 million, to $371.3 million for the three months ended March 31, 2024 as compared to $348.5 million for the three months ended March 31, 2023. Our cash flow provided by operating activities during the three months ended March 31, 2024 increased primarily due to the continued growth of our fleet and an increase in customer cash collections as compared to the three months ended March 31, 2023. Our cash flows used in investing activities was $630.3 million for the three months ended March 31, 2024 and $1.3 billion for the three months ended March 31, 2023. This decrease was due to the timing of aircraft purchases and an increase in our sales and trading activity. Our cash flow provided by financing activities was $350.4 million for the three months ended March 31, 2024 as compared to $846.4 million for the three months ended March 31, 2023. The decrease is primarily due to a decrease in debt borrowings, partially offset by an increase in repayments. Our financing activities are mainly driven by changes in our investing activities.

Debt

Our debt financing at March 31, 2024 and December 31, 2023 is summarized below:

March 31, 2024December 31, 2023
(in thousands, except percentages)
Unsecured
Senior unsecured securities$16,307,719 $16,329,605 
Term financings 1,608,450 1,628,400 
Revolving credit facility1,453,000 1,100,000 
        Total unsecured debt financing19,369,169 19,058,005 
Secured
Export credit financing 201,417 204,984 
Term financings 97,111 100,471 
        Total secured debt financing298,528 305,455 
Total debt financing 19,667,697 19,363,460 
Less: Debt discounts and issuance costs(187,736)(180,803)
Debt financing, net of discounts and issuance costs$19,479,961 $19,182,657 
Selected interest rates and ratios:
Composite interest rate(1)
4.03 %3.77 %
Composite interest rate on fixed-rate debt(1)
3.51 %3.26 %
Percentage of total debt at a fixed-rate83.27 %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.

Senior unsecured securities (including Medium-Term Note Program)

As of March 31, 2024 and December 31, 2023, we had $16.3 billion in senior unsecured securities outstanding.

During the three months ended March 31, 2024, we issued (i) $500.0 million in aggregate principal amount of 5.10% Medium-Term Notes due 2029 (ii) Canadian dollar (“C$”) denominated debt of C$400.0 million in additional aggregate principal amount of 5.40% Medium-Term Notes due 2028 (“2024 C$ notes”) and (iii) Euro (“€”) denominated debt of €600.0 million in aggregate principal amount of 3.70% Medium-Term Notes due 2030 (“2024 € notes”).

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The C$ notes issued in 2024 have the same terms as, and constitute a single tranche with, the C$500.0 million aggregate principal amount of 5.40% Medium-Term Notes issued in November 2023. We hedged the 2024 C$ notes through a cross-currency swap that converts the borrowing rate to a fixed 5.95% U.S. dollar denominated rate. We hedged the 2024 € notes through a cross-currency swap that converts the borrowing rate to a fixed 5.441% U.S. dollar denominated rate. The swaps have been designated as cash flow hedges with changes in the fair value of the derivative recognized in other comprehensive income/(loss). See Note 9 of Notes to Consolidated Financial Statements included in Item 1 for additional details on the fair value of the swaps.

Syndicated unsecured revolving credit facility

As of March 31, 2024 and December 31, 2023, we had $1.5 billion and $1.1 billion, respectively, outstanding under our syndicated unsecured revolving credit facility (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.

In April 2024, we amended and extended our Revolving Credit Facility through an amendment that, among other things, extended the final maturity date from May 5, 2027 to May 5, 2028 and amended the total revolving commitments thereunder to approximately $7.8 billion as of May 5, 2024. As of May 6, 2024, lenders held revolving commitments totaling approximately $7.5 billion that mature on May 5, 2028, commitments totaling $25.0 million that mature on May 5, 2027, $210.0 million that mature on May 5, 2026 and commitments totaling $25.0 million that mature on May 5, 2025. Borrowings under the Revolving Credit Facility continue to accrue interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility) plus a margin of 1.05% per year. We are required to pay a facility fee of 0.20% per year in respect of total commitments under the Revolving Credit Facility. Interest rate and facility fees are subject to changes in our credit ratings.

The Revolving Credit Facility provides for certain covenants, including covenants that limit our subsidiaries’ ability to incur, create, or assume certain unsecured indebtedness, and our subsidiaries’ abilities to engage in certain mergers, consolidations, and asset sales. The Revolving Credit Facility also requires us to comply with certain financial maintenance covenants including minimum consolidated shareholders’ equity, minimum consolidated unencumbered assets, and an interest coverage test. In addition, the Revolving Credit Facility contains customary events of default. In the case of an event of default, the lenders may terminate the commitments under the Revolving Credit Facility and require immediate repayment of all outstanding borrowings.

Secured debt financings

As of March 31, 2024, we had an outstanding balance of $298.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $441.4 million. As of December 31, 2023, we had an outstanding balance of $305.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $445.9 million. All of our secured obligations as of March 31, 2024 and December 31, 2023 are recourse in nature.

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Preferred equity

The following table summarizes our preferred stock issued and outstanding as of March 31, 2024 (in thousands, except for share amounts and percentages):
Shares Issued and Outstanding as of March 31, 2024
Liquidation Preference
as of March 31, 2024(2)
Issue Date
Dividend Rate in Effect at March 31, 2024(3)
Next dividend rate reset dateDividend rate after reset date
Series A10,000,000 $250,000 March 5, 2019
3M Term SOFR(1) plus 3.65%
June 15, 2024
3M Term SOFR(1) plus 3.65%
Series B300,000 300,000 March 2, 20214.650%June 15, 20265 Yr U.S. Treasury plus 4.076%
Series C300,000 300,000 October 13, 20214.125%December 15, 20265 Yr U.S. Treasury plus 3.149%
Total10,600,000 $850,000 
(1) 3M Term SOFR includes a credit spread adjustment of 0.10%
(2) The Series A Preferred Stock has a redemption price of $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date without accumulation of any undeclared dividends. The Series B Preferred Stock and Series C Preferred Stock each have a redemption price of $1,000.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date without accumulation of any undeclared dividends.
(3) Dividends on preferred stock are discretionary and non-cumulative. When declared, dividends on the Series A Preferred Stock are reset quarterly and payable quarterly in arrears and dividends on the Series B Preferred Stock and Series C Preferred Stock are reset every five years and payable quarterly in arrears.

For more information regarding our preferred stock issued and outstanding, see Note 5 of Notes to Consolidated Financial Statements included in Part III, Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2023.

The following table summarizes the quarterly cash dividends that we paid during the three months ended March 31, 2024 on our outstanding Series A, Series B and Series C Preferred Stock (in thousands):

Payment Date
Title of each classMarch 15, 2024
Series A Preferred Stock$3,844
Series B Preferred Stock$3,487
Series C Preferred Stock$3,094

Off‑balance Sheet Arrangements

We have not established any unconsolidated entities for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. We have, however, from time to time established subsidiaries or trusts for the purpose of leasing aircraft or facilitating borrowing arrangements which are included in our balance sheet.

We have non-controlling interests in two investment funds in which we own 9.5% of the equity of each fund. We account for our interest in these funds under the equity method of accounting due to our level of influence and involvement in the funds. Also, we manage aircraft that we have sold through our Thunderbolt platform. In connection with the sale of certain aircraft portfolios through our Thunderbolt platform, we hold non-controlling interests of approximately 5.0% in two entities. These investments are accounted for under the cost method of accounting.


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Credit Ratings

In 2024, Kroll Bond Ratings and Standard and Poor’s reaffirmed our corporate rating, long-term debt credit rating and outlook. Our investment-grade corporate and long-term debt credit ratings help us to lower our cost of funds and broaden our access to attractively priced capital. The following table summarizes our current credit ratings:


Rating AgencyLong-term DebtCorporate RatingOutlook