Company Quick10K Filing
Air Lease
Price42.50 EPS5
Shares113 P/E9
MCap4,814 P/FCF5
Net Debt13,563 EBIT765
TEV18,376 TEV/EBIT24
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-14
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-02-21
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-02-23
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-02-25
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-02-26
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-07
10-Q 2014-03-31 Filed 2014-05-08
10-K 2013-12-31 Filed 2014-02-27
10-Q 2013-09-30 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-08
10-Q 2013-03-31 Filed 2013-05-09
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-14
10-K 2011-12-31 Filed 2012-03-09
10-Q 2011-09-30 Filed 2011-11-10
10-Q 2011-06-30 Filed 2011-08-12
10-Q 2011-03-31 Filed 2011-05-16
8-K 2020-08-17 Other Events, Exhibits
8-K 2020-08-06 Earnings, Exhibits
8-K 2020-08-06 Regulation FD, Exhibits
8-K 2020-06-24
8-K 2020-05-07
8-K 2020-05-07
8-K 2020-05-06
8-K 2020-02-14
8-K 2020-02-14
8-K 2020-01-14
8-K 2019-12-20
8-K 2019-12-17
8-K 2019-12-05
8-K 2019-11-19
8-K 2019-11-07
8-K 2019-11-07
8-K 2019-09-16
8-K 2019-08-08
8-K 2019-08-08
8-K 2019-06-05
8-K 2019-06-03
8-K 2019-05-23
8-K 2019-05-09
8-K 2019-05-09
8-K 2019-05-08
8-K 2019-05-03
8-K 2019-03-05
8-K 2019-02-26
8-K 2019-02-21
8-K 2019-02-21
8-K 2019-01-23
8-K 2019-01-08
8-K 2018-11-29
8-K 2018-11-20
8-K 2018-11-14
8-K 2018-11-08
8-K 2018-11-08
8-K 2018-11-07
8-K 2018-09-17
8-K 2018-09-10
8-K 2018-08-09
8-K 2018-08-09
8-K 2018-06-18
8-K 2018-06-11
8-K 2018-05-10
8-K 2018-05-10
8-K 2018-05-09
8-K 2018-05-02
8-K 2018-03-26
8-K 2018-02-22
8-K 2018-02-22
8-K 2018-01-16
8-K 2018-01-08
8-K 2018-01-05

AL 10Q Quarterly Report

Part I - Financial Information
Item 1.Financial Statements
Note 1. Company Background and Overview
Note 2. Basis of Preparation and Critical Accounting Policies
Note 3. Debt Financing
Note 4. Commitments and Contingencies
Note 5. Rental Income
Note 6. Earnings per Share
Note 7. Fair Value Measurements
Note 8. Shareholders' Equity
Note 9. Stock - Based Compensation
Note 10. Aircraft Under Management
Note 11. Flight Equipment Held for Sale
Note 12. Impact of Covid - 19 Pandemic
Note 13. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 al-20200630xex10d1.htm
EX-10.2 al-20200630xex10d2.htm
EX-10.3 al-20200630xex10d3.htm
EX-10.4 al-20200630xex10d4.htm
EX-10.5 al-20200630xex10d5.htm
EX-31.1 al-20200630xex31d1.htm
EX-31.2 al-20200630xex31d2.htm
EX-32.1 al-20200630xex32d1.htm
EX-32.2 al-20200630xex32d2.htm

Air Lease Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
25201510502012201420172020
Assets, Equity
0.60.50.40.20.10.02012201420172020
Rev, G Profit, Net Income
1.10.60.1-0.5-1.0-1.52012201420172020
Ops, Inv, Fin

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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 June 30, 2020

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)

Delaware

27-1840403

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

2000 Avenue of the Stars, Suite 1000N
Los Angeles, California

90067

(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 class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock

AL

New York Stock Exchange

6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A

AL PRA

New York Stock Exchange

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

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

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

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company

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 August 5, 2020, there were 113,778,906 shares of Air Lease Corporation’s Class A common stock outstanding.

Air Lease Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended June 30, 2020

TABLE OF CONTENTS

Page

Note About Forward-Looking Statements

3

PART I—FINANCIAL INFORMATION

Item 1

Financial Statements

4

Consolidated Balance Sheets—June 30, 2020 and December 31, 2019 (unaudited)

4

Consolidated Statements of Income and Comprehensive Income—Three and Six Months Ended June 30, 2020 and 2019 (unaudited)

5

Consolidated Statement of Shareholders’ Equity—Three and Six Months Ended June 30, 2020 and 2019 (unaudited)

6

Consolidated Statements of Cash Flows—Six Months Ended June 30, 2020 and 2019 (unaudited)

8

Notes to Consolidated Financial Statements (unaudited)

9

Item 2

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

18

Item 3

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4

Controls and Procedures

35

PART II—OTHER INFORMATION

Item 1

Legal Proceedings

36

Item 1A

Risk Factors

36

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3

Defaults Upon Senior Securities

36

Item 4

Mine Safety Disclosures

36

Item 5

Other Information

36

Item 6

Exhibits

37

Signatures

39

2

NOTE ABOUT FORWARD-LOOKING STATEMENTS

Statements in this quarterly report on Form 10-Q that are not historical facts may constitute “forward-looking statements,” including any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. These statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in such statements, including as a result of the following factors, among others:

the extent to which the coronavirus (“COVID-19”) pandemic and measures taken to contain its spread ultimately impact our business, results of operation and financial condition;
our inability to obtain additional financing on favorable terms, if required, to complete the acquisition of sufficient aircraft as currently contemplated or to fund the operations and growth of our business;
our inability to obtain refinancing prior to the time our debt matures;
our inability to make acquisitions of, or lease, aircraft on favorable terms;
our inability to sell aircraft on favorable terms or to predict the timing of such sales;
impaired financial condition and liquidity of our lessees;
changes in overall demand for commercial aircraft leasing and aircraft management services;
deterioration of economic conditions in the commercial aviation industry generally;
potential natural disasters and terrorist attacks and the amount of our insurance coverage, if any, relating thereto;
increased maintenance, operating or other expenses or changes in the timing thereof;
changes in the regulatory environment, including tariffs and other restrictions on trade;
our inability to effectively oversee our managed fleet;
the failure of any manufacturer to meet its contractual aircraft delivery obligations to us, including or as a result of technical or other difficulties with aircraft before or after delivery, resulting in our inability to deliver the aircraft to our lessees;
other factors affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, including natural disasters, pandemics (such as COVID-19) and measures taken to contain its spread, and governmental actions; and
the factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2019, “Part II — Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and other SEC filings, including future SEC filings.

The factors noted above and the risks included in our other SEC filings may be increased or intensified as a result of the COVID-19 pandemic, including as a result of the recent resurgence of the COVID-19 virus in certain parts of the world, including the United States, and any future resurgences of the virus. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. See the risk factor in “Part II — Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, “The coronavirus (COVID-19) pandemic and related efforts to mitigate the pandemic have impacted our business, and the extent to which the COVID-19 pandemic and measures taken to contain its spread ultimately impact our business will depend on future developments, which are highly uncertain and are difficult to predict.” 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 undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

3

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)

    

June 30, 2020

    

December 31, 2019

 

(unaudited)

Assets

Cash and cash equivalents

$

926,435

$

317,488

Restricted cash

 

15,555

 

20,573

Flight equipment subject to operating leases

 

22,067,957

 

21,286,154

Less accumulated depreciation

 

(2,959,884)

 

(2,581,817)

 

19,108,073

 

18,704,337

Deposits on flight equipment purchases

 

1,790,935

 

1,564,188

Other assets

 

1,152,722

 

1,102,569

Total assets

$

22,993,720

$

21,709,155

Liabilities and Shareholders’ Equity

Accrued interest and other payables

$

497,709

$

516,497

Debt financing, net of discounts and issuance costs

 

14,639,045

 

13,578,866

Security deposits and maintenance reserves on flight equipment leases

 

1,037,233

 

1,097,061

Rentals received in advance

 

131,951

 

143,692

Deferred tax liability

 

817,981

 

749,495

Total liabilities

$

17,123,919

$

16,085,611

Shareholders’ Equity

Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,000,000 shares of 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (aggregate liquidation preference of $250,000) issued and outstanding at June 30, 2020 and December 31, 2019, respectively

 

100

 

100

Class A common stock, $0.01 par value; 500,000,000 shares authorized; 113,777,723 and 113,350,267 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

 

1,138

 

1,134

Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding

 

 

Paid-in capital

 

2,781,832

 

2,777,601

Retained earnings

 

3,089,082

 

2,846,106

Accumulated other comprehensive loss

(2,351)

(1,397)

Total shareholders’ equity

$

5,869,801

$

5,623,544

Total liabilities and shareholders’ equity

$

22,993,720

$

21,709,155

(See Notes to Consolidated Financial Statements)

4

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share and per share amounts)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2020

    

2019

    

2020

    

2019

(unaudited)

 

Revenues

Rental of flight equipment

$

497,869

$

463,870

$

994,556

$

919,609

Aircraft sales, trading and other

 

23,480

 

7,525

 

38,180

 

17,837

Total revenues

 

521,349

 

471,395

 

1,032,736

 

937,446

Expenses

Interest

 

102,693

 

96,824

 

210,234

 

186,044

Amortization of debt discounts and issuance costs

 

10,233

 

8,712

 

20,761

 

17,252

Interest expense

 

112,926

 

105,536

 

230,995

 

203,296

Depreciation of flight equipment

 

194,020

 

171,689

 

382,915

 

331,160

Selling, general and administrative

 

26,581

 

27,771

 

54,903

 

57,473

Stock-based compensation

 

3,892

 

5,863

 

8,321

 

10,037

Total expenses

 

337,419

 

310,859

 

677,134

 

601,966

Income before taxes

 

183,930

 

160,536

 

355,602

 

335,480

Income tax expense

 

(36,305)

 

(32,231)

 

(70,826)

 

(69,081)

Net income

$

147,625

$

128,305

$

284,776

$

266,399

Preferred stock dividends

(3,844)

(4,271)

(7,688)

(4,271)

Net income available to common stockholders

$

143,781

$

124,034

$

277,088

$

262,128

Other Comprehensive Income/(Loss):

Change in foreign currency translation adjustment

(10,239)

13,238

Change from current period hedged transaction

10,905

(14,481)

Total tax benefit/(expense) on other comprehensive income/loss

(142)

289

Other Comprehensive income/(loss) available for common stockholders, net of tax

524

(954)

Total comprehensive income available for common stockholders

$

144,305

$

124,034

$

276,134

$

262,128

Earnings per share of common stock:

Basic

$

1.26

$

1.11

$

2.44

$

2.36

Diluted

$

1.26

$

1.10

$

2.43

$

2.33

Weighted-average shares outstanding

Basic

 

113,690,839

 

111,371,790

 

113,581,392

 

111,196,011

Diluted

 

113,773,127

 

112,807,023

 

113,840,929

 

112,598,623

Dividends declared per share of common stock

$

0.15

$

0.13

$

0.30

$

0.26

(See Notes to Consolidated Financial Statements)

5

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

Class B Non-

Accumulated

Class A

Voting

Other

Preferred Stock

Common Stock

Common Stock

Paid-in

Retained

Comprehensive

(unaudited)

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Capital

  

Earnings

  

(Loss)/Income

  

Total

Balance at December 31, 2019

10,000,000

$

100

113,350,267

$

1,134

$

$

2,777,601

$

2,846,106

$

(1,397)

$

5,623,544

Issuance of common stock upon vesting of restricted stock units and upon exercise of options

 

480,978

4

2,021

2,025

Dividends declared on preferred stock

(3,844)

(3,844)

Stock-based compensation

 

4,429

4,429

Cash dividends (declared $0.15 per share of Class A common stock)

 

(17,045)

(17,045)

Change in foreign currency translation adjustment and from current period hedged transaction

 

(1,478)

(1,478)

Tax withholding related to vesting of restricted stock units and exercise of stock options

 

(191,334)

(2)

(8,411)

(8,413)

Net income

 

137,151

137,151

Balance at March 31, 2020

 

10,000,000

$

100

113,639,911

$

1,136

$

$

2,775,640

$

2,962,368

$

(2,875)

$

5,736,369

Issuance of common stock upon vesting of restricted stock units and upon exercise of options

144,417

2

2,500

2,502

Issuance of preferred stock

Dividends declared on preferred stock

 

(3,844)

(3,844)

Stock-based compensation

 

3,892

3,892

Cash dividends (declared $0.15 per share of Class A common stock)

(17,067)

(17,067)

Change in foreign currency translation adjustment and from current period hedged transaction

 

524

524

Tax withholding related to vesting of restricted stock units and exercise of stock options

(6,605)

(200)

(200)

Net income

147,625

147,625

Balance at June 30, 2020

10,000,000

$

100

113,777,723

$

1,138

$

$

2,781,832

$

3,089,082

$

(2,351)

$

5,869,801

6

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

Class B Non-

Accumulated

Class A

Voting

Other

Preferred Stock

Common Stock

Common Stock

Paid-in

Retained

Comprehensive

(unaudited)

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Capital

  

Earnings

  

Income

    

Total

Balance at December 31, 2018

$

110,949,850

$

1,110

$

$

2,474,238

$

2,331,552

$

$

4,806,900

Issuance of common stock upon vesting of restricted stock units and upon exercise of options

263,218

2

439

441

Issuance of preferred stock

10,000,000

100

242,141

242,241

Stock-based compensation

 

4,174

4,174

Cash dividends (declared $0.13 per share of Class A common stock)

 

(14,445)

(14,445)

Tax withholding related to vesting of restricted stock units and exercise of stock options

 

(94,899)

(1)

(3,587)

(3,588)

Net income

 

138,094

138,094

Balance at March 31, 2019

 

10,000,000

$

100

111,118,169

$

1,111

 

$

$

2,717,405

$

2,455,201

$

$

5,173,817

Issuance of common stock upon vesting of restricted stock units and upon exercise of options

547,957

6

10,791

10,797

Issuance of preferred stock

(111)

(111)

Dividends declared on preferred stock

(4,271)

(4,271)

Stock-based compensation

5,863

5,863

Cash dividends (declared $0.13 per share of Class A common stock)

(14,516)

(14,516)

Net income

 

128,305

128,305

Balance at June 30, 2019

10,000,000

$

100

111,666,126

$

1,117

 

$

$

2,733,948

$

2,564,719

$

$

5,299,884

(See Notes to Consolidated Financial Statements)

7

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Six Months Ended

June 30, 

    

2020

    

2019

 

(unaudited)

Operating Activities

Net income

$

284,776

$

266,399

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

Depreciation of flight equipment

 

382,915

 

331,160

Stock-based compensation

 

8,321

 

10,037

Deferred taxes

 

68,773

 

69,081

Amortization of debt discounts and issuance costs

 

20,761

 

17,252

Amortization of prepaid lease costs

21,210

14,851

Gain on aircraft sales, trading and other activity

 

(24,642)

 

(14,924)

Changes in operating assets and liabilities:

Other assets

 

(265,775)

 

(127,442)

Accrued interest and other payables

 

(16,256)

 

85,218

Rentals received in advance

 

(11,741)

 

4,616

Net cash provided by operating activities

 

468,342

 

656,248

Investing Activities

Acquisition of flight equipment under operating lease

 

(550,034)

 

(1,962,211)

Payments for deposits on flight equipment purchases

 

(399,028)

 

(448,653)

Proceeds from aircraft sales, trading and other activity

 

134,609

 

249,764

Acquisition of aircraft furnishings, equipment and other assets

 

(88,110)

 

(175,926)

Net cash used in investing activities

 

(902,563)

 

(2,337,026)

Financing Activities

Issuance of common stock upon exercise of options

 

4,526

 

11,236

Cash dividends paid on Class A common stock

 

(34,049)

 

(28,866)

Preferred dividends paid

(7,687)

(4,271)

Tax withholdings on stock-based compensation

 

(8,611)

 

(3,587)

Net change in unsecured revolving facility

 

(20,000)

 

199,000

Proceeds from debt financings

 

2,386,061

 

2,032,137

Payments in reduction of debt financings

 

(1,295,549)

 

(920,723)

Net proceeds from preferred stock issuance

242,130

Debt issuance costs

 

(4,219)

 

(7,327)

Security deposits and maintenance reserve receipts

 

72,852

 

142,685

Security deposits and maintenance reserve disbursements

 

(55,174)

 

(16,532)

Net cash provided by financing activities

 

1,038,150

 

1,645,882

Net increase/(decrease) in cash

 

603,929

 

(34,896)

Cash, cash equivalents and restricted cash at beginning of period

 

338,061

 

322,998

Cash, cash equivalents and restricted cash at end of period

$

941,990

$

288,102

Supplemental Disclosure of Cash Flow Information

Cash paid during the period for interest, including capitalized interest of $26,185 and $31,602 at June 30, 2020 and 2019, respectively

$

229,801

$

210,808

Cash paid for income taxes

$

2,372

$

3,291

Supplemental Disclosure of Noncash Activities

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

$

201,623

$

711,432

Cash dividends declared on common stock, not yet paid

$

17,066

$

14,516

(See Notes to Consolidated Financial Statements)

8

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.   Company Background and Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from 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 June 30, 2020, the Company owned a fleet of 301 aircraft in its operating lease portfolio, managed 81 aircraft and had 393 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its operating lease portfolio 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 June 30, 2020, and for all periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020. 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, 2019.

Note 3.  Debt Financing

The Company’s consolidated debt as of June 30, 2020 and December 31, 2019 (dollars in thousands):

    

June 30, 

    

December 31, 

    

2020

    

2019

Unsecured

Senior notes

$

13,509,411

$

12,357,811

Term financings

 

972,625

 

883,050

Revolving credit facility

 

 

20,000

Total unsecured debt financing

 

14,482,036

 

13,260,861

Secured

Term financings

 

298,552

 

428,824

Export credit financing

 

28,283

 

31,610

Total secured debt financing

 

326,835

 

460,434

Total debt financing

 

14,808,871

 

13,721,295

Less: Debt discounts and issuance costs

 

(169,826)

 

(142,429)

Debt financing, net of discounts and issuance costs

$

14,639,045

$

13,578,866

9

The Company’s secured obligations as of June 30, 2020 and December 31, 2019 are summarized below (dollars in thousands):

    

June 30, 

    

December 31, 

2020

2019

Nonrecourse

$

$

128,460

Recourse

 

326,835

 

331,974

Total secured debt financing

$