| Delaware | 27-1840403 | ||||
(State or other jurisdiction of incorporation or organization) |
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2000 Avenue of the Stars, | Suite 1000N | ||||||||||
| Los Angeles, | California | 90067 | |||||||||
| (Address of principal executive offices) |
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Name of each exchange Class A Common Stock New York ☒ ☐ 10-K 2022 Page FORWARD LOOKING STATEMENTS 2023 through 2028. 2022. income attributable to common stockholders. Geographic Diversification Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 Amount of Amount of Amount of Rental Rental Rental Region Revenue % of Total Revenue % of Total Revenue % of Total (in thousands, except percentages) Europe $ 450,628 31.1 % $ 400,491 29.9 % $ 380,295 32.4 % Asia (excluding China) 332,284 22.9 % 308,658 23.1 % 223,284 19.0 % China 324,147 22.3 % 293,206 21.9 % 265,450 22.6 % The Middle East and Africa 116,799 8.1 % 106,300 7.9 % 90,416 7.7 % Central America, South America, and Mexico 102,205 7.0 % 112,068 8.4 % 114,672 9.8 % U.S. and Canada 76,685 5.3 % 69,918 5.2 % 54,294 4.6 % Pacific, Australia, and New Zealand 47,987 3.3 % 48,361 3.6 % 46,133 3.9 % Total $ 1,450,735 100.0 % $ 1,339,002 100.0 % $ 1,174,544 100.0 % December 31, 2017 December 31, 2016 Net Book Net Book Region Value % of Total Value % of Total (in thousands, except percentages) Europe $ 4,205,431 31.7 % $ 3,547,294 29.5 % Asia (excluding China) 2,981,339 22.4 % 2,739,554 22.7 % China 2,720,124 20.5 % 2,779,546 23.0 % The Middle East and Africa 1,481,825 11.2 % 935,968 7.8 % Central America, South America, and Mexico 926,732 7.0 % 937,287 7.8 % U.S. and Canada 599,367 4.5 % 647,743 5.4 % Pacific, Australia, and New Zealand 365,432 2.7 % 454,533 3.8 % Total $ 13,280,250 100.0 % $ 12,041,925 100.0 % December 31, 2017 December 31, 2016 December 31, 2015 Number of Number of Number of Region Customers(1) % of Total Customers(1) % of Total Customers(1) % of Total Europe 31 34.0 % 27 31.8 % 27 30.0 % Asia (excluding China) 18 19.8 % 18 21.2 % 19 21.1 % U.S. and Canada 11 12.1 % 12 14.1 % 11 12.2 % The Middle East and Africa 11 12.1 % 7 8.2 % 8 8.9 % China 9 9.9 % 9 10.6 % 12 13.4 % Central America, South America, and Mexico 9 9.9 % 9 10.6 % 11 12.2 % Pacific, Australia, and New Zealand 2 2.2 % 3 3.5 % 2 2.2 % Total 91 100.0 % 85 100.0 % 90 100.0 % For the years ended December 31, fleet net book value as of December 31, 2022. We also have a global customer base with the average country representing approximately 1.8% of our fleet net book value as of December 31, 2022. In addition to our focus on commercial aircraft, we have expanded our focus to include the cargo market based on customer demand. aircraft upon delivery. We may also, from time to time, work with our airline customers to assist them in obtaining financing for aircraft. to remarket the aircraft and sign a follow-on lease six to 12 months ahead of the scheduled expiry of the initial lease term. structured as operating leases with fixed rates and terms and typically require cash security deposits and maintenance reserve payments. In addition, our leases are all structured as triple net leases, whereby the insolvency or bankruptcy occurs, we typically have less control over, and would most likely incur greater costs in connection with, the restructuring of the lease or the repossession of the aircraft. As of December 31, 2022, we had a managed fleet of 85 aircraft. agencies so that our interests are not prejudiced by any act or omission of the lessee. Lease agreements generally require hull and liability limits to be in U.S. dollars, which are shown on the certificate of insurance. risks and in all territories in which our aircraft operate. For example, following the Russia-Ukraine conflict, Russia, Ukraine and Belarus are now generally excluded from coverage in our contingent liability, contingent hull and contingent hull war insurance consistent with insurance market terms available at the time these policies were last renewed. Government Regulation Corporate Information Name Executive Chairman of the Board of Directors John L. Plueger Chief Executive Officer, President and Director Carol H. Forsyte Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer Gregory B. Willis Executive Vice President and Chief Financial Officer Executive Vice President, Marketing John D. Poerschke Executive Vice President of Aircraft Procurement and Specifications substantial indebtedness will require significant capital to refinance our outstanding indebtedness and to acquire aircraft; our inability to make our debt payments and obtain incremental capital may have a material adverse effect on our business. non-financial covenants and our need to comply with them, the flexibility we have to operate our business may be limited. lessee bankruptcies may increase in the future. Based on historical rates of airline defaults and bankruptcies, The aircraft leasing business has experienced periods of aircraft oversupply at various times in the past, including during the COVID-19 pandemic, as a result of the 2008 financial crisis and during the period following the September 11, 2001 terrorist their customers by increasing fares in a manner that fully offsets increased fuel costs. In addition, they may not be able to manage this risk by appropriately hedging their exposure to fuel price fluctuations. Airlines that do hedge their fuel costs can also be adversely affected by swift movements in fuel prices if such airlines are required as a result to post cash collateral under hedge agreements. Therefore, if fuel prices materially increase or show significant volatility, our lessees are likely to incur higher costs or generate lower revenues, which may affect their ability to meet their obligations to us. A sustained period of lower fuel costs may also adversely affect regional economies that depend on oil revenue, including those in which certain The appreciation of the U.S. dollar could negatively impact reduced net income. We operate in multiple jurisdictions and may become subject to a wide range of income and other taxes. If we are unable to execute our business in jurisdictions with favorable tax treatment, our operations may be subject to significant income and other taxes. Moreover, as our aircraft are operated by our lessees in multiple states and foreign jurisdictions, we may have nexus or taxable presence as a result of our aircraft landings in various states or foreign jurisdictions. Such landings may result in us being subject to various foreign, state and local taxes in such states or foreign jurisdictions. Further, any changes in tax laws in any of the jurisdictions that subject us to income or other taxes, such as increases in tax rates or limitations on our ability to deduct certain expenses from taxable income, such as depreciation expense and interest expense, could materially affect our tax obligations and effective tax rate. To the extent such changes are within the United States, we may be disproportionately impacted as compared to our competitor aircraft lessors. For example, certain provisions of the Tax Cuts and Jobs Act that phased into effect in 2022 may limit our ability to deduct interest expense from taxable income in future financial statements. Further, in August 2022, United States Congress passed the Inflation Reduction Act of 2022. The key tax provisions applicable to us are a 15% corporate minimum tax on adjusted book income and a 1% excise tax on stock repurchases effective January 1, 2023. We currently do not expect these fines as well as reputational harm. We have in place training programs for our employees with respect to FCPA, OFAC, UKBA, export controls and similar laws and Provisions in Delaware law and our restated certificate of incorporation and amended and restated bylaws may inhibit a takeover of us, which could entrench management or cause the decline. stock. Aircraft Type 2018 2019 2020 2021 2022 Thereafter Total Airbus A319-100 — — — 1 — — 1 Airbus A320-200 3 3 7 6 1 20 40 Airbus A320-200neo — — — — — 5 5 Airbus A321-200 1 — 1 — 1 26 29 Airbus A321-200neo — 1 — — — 4 5 Airbus A330-200 — 4 — — 2 9 15 Airbus A330-300 — — 1 — 1 3 5 Airbus A350-900 — — — — — 2 2 Boeing 737-700 — 2 — 1 — — 3 Boeing 737-800 1 10 7 6 11 67 102 Boeing 737-8 MAX — — — — — 2 2 Boeing 767-300ER — 1 — — — — 1 Boeing 777-200ER — — 1 — — — 1 Boeing 777-300ER — — — 4 4 16 24 Boeing 787-9 — — — — — 8 8 Embraer E190 — — 1 — — — 1 Total 5 21 18 18 20 162 244 Aircraft Type 2018 2019 2020 2021 2022 Thereafter Total Airbus A321-200 2 — — — — — 2 Airbus A320/321neo(1) 14 35 27 22 25 25 148 Airbus A330-900neo 5 5 4 7 6 2 29 Airbus A350-900/1000 4 2 4 5 3 — 18 Boeing 737-7/8/9 MAX 12 27 27 35 27 — 128 Boeing 787-9/10 7 12 9 7 8 — 43 Total(2) 44 81 71 76 69 27 368 Number of Number Delivery Year Aircraft Leased % Leased 2018 44 44 100.0 % 2019 81 77 95.1 % 2020 71 33 46.5 % 2021 76 6 7.9 % 2022 69 2 2.9 % Thereafter 27 — — % Total 368 162 policies in amounts and with the coverage and deductibles we believe are adequate, based on the nature and risks of our business, historical experience and industry standards. outstanding. As of February Fiscal Year 2017 Quarters Ended: High Low March 31, 2017 $ 40.12 $ 34.64 June 30, 2017 $ 38.74 $ 34.91 September 30, 2017 $ 42.74 $ 37.91 December 31, 2017 $ 48.31 $ 41.12 Fiscal Year 2016 Quarters Ended: High Low March 31, 2016 $ 32.85 $ 22.73 June 30, 2016 $ 32.38 $ 24.93 September 30, 2016 $ 29.95 $ 25.63 December 31, 2016 $ 37.02 $ 28.21 Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 Dividends declared per share $ 0.325 $ 0.225 $ 0.170 Number of securities remaining available for Number of securities to be Weighted-average exercise future issuance under issued upon exercise of price of outstanding equity compensation plans outstanding options, options, warrants and (excluding securities Plan Category warrants and rights rights reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 2,858,158 $ 20.37 5,795,999 Equity compensation plans not approved by security holders — — — Total 2,858,158 $ 20.37 5,795,999 Performance Graph Comparison of 5 Year Cumulative Total Return 2022 Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, 2017 2016 2015 2014 2013 (in thousands, except share and per share amounts) Operating data: Rentals of flight equipment $ 1,450,735 $ 1,339,002 $ 1,174,544 $ 991,241 $ 836,516 Aircraft sales, trading and other(1) 65,645 80,053 48,296 59,252 22,159 Total revenues 1,516,380 1,419,055 1,222,840 1,050,493 858,675 Expenses(1) 906,850 838,817 829,887 655,717 565,233 Income before taxes 609,530 580,238 392,953 394,776 293,442 Income tax benefit/(expense)(3) 146,622 (205,313) (139,562) (138,778) (103,031) Net income $ 756,152 $ 374,925 $ 253,391 $ 255,998 $ 190,411 Adjusted net income before income taxes(2) $ 657,838 $ 622,871 $ 507,982 $ 438,596 $ 338,683 Net income per share: Basic $ 7.33 $ 3.65 $ 2.47 $ 2.51 $ 1.88 Diluted $ 6.82 $ 3.44 $ 2.34 $ 2.38 $ 1.80 Adjusted diluted earnings per share before income taxes(2) $ 5.94 $ 5.67 $ 4.64 $ 4.03 $ 3.16 Cash dividends declared per share: $ 0.325 $ 0.225 $ 0.170 $ 0.130 $ 0.105 Weighted average shares outstanding: Basic 103,189,175 102,801,161 102,547,774 102,142,828 101,529,137 Diluted 111,657,564 110,798,727 110,628,865 110,192,771 108,963,550 Cash flow data: Net cash flows provided by (used in): Operating activities $ 1,059,713 $ 1,020,078 $ 839,795 $ 769,018 $ 654,213 Investing activities (2,143,951) (2,005,516) (2,152,801) (1,805,657) (2,185,894) Financing activities 1,101,640 1,103,565 1,186,862 1,049,285 1,571,765 As of December 31, 2017 2016 2015 2014 2013 (in thousands, except aircraft data) Balance sheet data: Flight equipment subject to operating leases (net of accumulated depreciation) $ 13,280,250 $ 12,041,925 $ 10,813,475 $ 8,953,804 $ 7,613,135 Total assets 15,614,164 13,975,616 12,355,098 10,691,180 9,242,355 Total debt, net of discounts and issuance costs 9,698,785 8,713,874 7,712,421 6,630,758 5,763,068 Total liabilities 11,486,722 10,593,429 9,335,186 7,919,118 6,718,921 Shareholders’ equity 4,127,442 3,382,187 3,019,912 2,772,062 2,523,434 Other operating data: Aircraft lease portfolio at period end: Owned 244 237 240 213 193 Managed 50 30 29 17 4 Year Ended December 31, 2017 2016 2015 2014 2013 (unaudited) Reconciliation of net income to adjusted net income before income taxes: Net income $ 756,152 $ 374,925 $ 253,391 $ 255,998 $ Amortization of debt discounts and issuance costs 29,454 30,942 30,507 27,772 23,627 Stock-based compensation 19,804 16,941 17,022 16,048 21,614 Settlement — — 72,000 — — Insurance recovery on settlement (950) (5,250) (4,500) — — Provision for income taxes (146,622) 205,313 139,562 138,778 103,031 Adjusted net income before income taxes $ 657,838 $ 622,871 $ 507,982 $ 438,596 $ 338,683 Reconciliation of denominator of adjusted margin before income taxes: Total revenues 1,516,380 1,419,055 1,222,840 1,050,493 858,675 Insurance recovery on settlement (950) (5,250) (4,500) — — Total revenues, excluding insurance recovery on settlement 1,515,430 1,413,805 1,218,340 1,050,493 858,675 Adjusted margin before income taxes 43.4 % 44.1 % 41.7 % 41.8 % 39.4 % Year Ended December 31, 2017 2016 2015 2014 2013 (unaudited) Reconciliation of net income to adjusted diluted earnings per share before income taxes: Net income $ 756,152 $ 374,925 $ 253,391 $ 255,998 $ 190,411 Amortization of debt discounts and issuance costs 29,454 30,942 30,507 27,772 23,627 Stock-based compensation 19,804 16,941 17,022 16,048 21,614 Settlement — — 72,000 — — Insurance recovery on settlement (950) (5,250) (4,500) — — Provision for income taxes (146,622) 205,313 139,562 138,778 103,031 Adjusted net income before income taxes $ 657,838 $ 622,871 $ 507,982 $ 438,596 $ 338,683 Assumed conversion of convertible senior notes 5,842 5,780 5,806 5,811 5,783 Adjusted net income before income taxes plus assumed conversions $ 663,680 $ 628,651 $ 513,788 $ 444,407 $ 344,466 Weighted-average diluted shares outstanding 111,657,564 110,798,727 110,628,865 110,192,771 108,963,550 Adjusted diluted earnings per share before income taxes $ 5.94 $ 5.67 $ 4.64 $ 4.03 $ 3.16 2023 through 2028. 2022. income attributable to common stockholders. 2022. December 31, 2017 December 31, 2016 Aggregate net book value $ 13.3 billion $ 12.0 billion Weighted-average fleet age(1) 3.8 years 3.8 years Weighted average remaining lease term(1) 6.8 years 6.9 years Owned fleet 244 237 Managed fleet 50 30 Order book 368 363 Current fleet contracted rentals $ 10.1 billion $ 9.4 billion Committed fleet rentals $ 13.3 billion $ 14.4 billion Total committed rentals $ 23.4 billion $ 23.8 billion The following table sets forth the net book value and percentage of the net book value of our flight equipment subject to operating December 31, 2017 December 31, 2016 Net Book Net Book Region Value % of Total Value %of Total (in thousands, except percentages) Europe $ 4,205,431 31.7 % $ % Asia (excluding China) 2,981,339 22.4 % 22.7 % China 2,720,124 20.5 % 23.0 % The Middle East and Africa 1,481,825 11.2 % % Central America, South America, and Mexico 926,732 7.0 % % U.S. and Canada 599,367 4.5 % % Pacific, Australia, and New Zealand 365,432 2.7 % % Total $ 100.0 % $ 100.0 % December 31, 2017 December 31, 2016 Number of Number of Aircraft type Aircraft(1) % of Total Aircraft(1) % of Total Airbus A319-100 1 0.4 % % Airbus A320-200 40 16.4 % % Airbus A320-200neo 5 2.1 % % Airbus A321-200 29 11.9 % % Airbus A321-200neo 5 2.1 % — — % Airbus A330-200 15 6.2 % % Airbus A330-300 5 2.0 % % Airbus A350-900 2 0.9 % — — % Boeing 737-700 3 1.2 % % Boeing 737-800 102 41.8 % % Boeing 737-8 MAX 2 0.8 % — — % Boeing 767-300ER 1 0.4 % % Boeing 777-200ER 1 0.4 % % Boeing 777-300ER 24 9.8 % % Boeing 787-9 8 3.3 % 3 % Embraer E190 1 0.3 % 6 % Total 244 100.0 % 237 100.0 % As of December 31, Aircraft Type 2018 2019 2020 2021 2022 Thereafter Total Airbus A321-200 2 — — — — — 2 Airbus A320/321neo(1) 14 35 27 22 25 25 148 Airbus A330-900neo 5 5 4 7 6 2 29 Airbus A350-900/1000 4 2 4 5 3 — 18 Boeing 737-7/8/9 MAX 12 27 27 35 27 — 128 Boeing 787-9/10 7 12 9 7 8 — 43 Total(2) 44 81 71 76 69 27 368 shown in the following table. The table is subject to change based on Airbus Number of Number Delivery Year Aircraft Leased % Leased 2018 44 44 100.0 % 2019 81 77 95.1 % 2020 71 33 46.5 % 2021 76 6 7.9 % 2022 69 2 2.9 % Thereafter 27 — — % Total 368 162 delays. lessees. Our December 31, 2017 December 31, 2016 (in thousands, except percentages) Unsecured Senior notes $ 8,019,871 $ Revolving credit facility 847,000 Term financings 203,704 Convertible senior notes 199,983 Total unsecured debt financing 9,270,558 Secured Term financings 484,036 Export credit financing 44,920 51,574 Total secured debt financing 528,956 671,341 Total debt financing 9,799,514 8,802,025 Less: Debt discounts and issuance costs (100,729) (88,151) Debt financing, net of discounts and issuance costs $ 9,698,785 $ 8,713,874 Selected interest rates and ratios: Composite interest rate(1) 3.20 % 3.42 % Composite interest rate on fixed-rate debt(1) 3.27 % 3.69 % Percentage of total debt at fixed-rate 85.42 % 83.48 % material adverse effect on us or the general economy. As of December 31, 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 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. Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 (in thousands, except share and per share amounts and percentages) Revenues Rental of flight equipment $ 1,450,735 $ 1,339,002 $ 1,174,544 Aircraft sales, trading, and other 65,645 80,053 48,296 Total revenues 1,516,380 1,419,055 1,222,840 Expenses Interest 257,917 255,259 235,637 Amortization of debt discounts and issuance costs 29,454 30,942 30,507 Interest expense 287,371 286,201 266,144 Depreciation of flight equipment 508,352 452,682 397,760 Settlement — — 72,000 Selling, general, and administrative 91,323 82,993 76,961 Stock-based compensation 19,804 16,941 17,022 Total expenses 906,850 838,817 829,887 Income before taxes 609,530 580,238 392,953 Income tax benefit/(expense) 146,622 (205,313) (139,562) Net income $ 756,152 $ 374,925 $ 253,391 Net income per share of Class A and B common stock Basic $ 7.33 $ $ Diluted $ 6.82 $ $ Weighted-average shares outstanding Basic 103,189,175 102,801,161 102,547,774 Diluted 111,657,564 110,798,727 110,628,865 Other financial data Pre-tax profit margin 40.2 % 40.9 % 32.1 % Adjusted net income before income taxes(1) $ 657,838 $ 622,871 $ 507,982 Adjusted margin before income taxes(1) 43.4 % 44.1 % 41.7 % Adjusted diluted earnings per share before income taxes(1) $ 5.94 $ 5.67 $ 4.64 from our operating results. Adjusted net income before income taxes, adjusted pre-tax margin, Year Ended December 31, 2017 2016 2015 (unaudited) Reconciliation of net income to adjusted net income before income taxes: Net income $ 756,152 $ 374,925 $ 253,391 Amortization of debt discounts and issuance costs 29,454 30,942 30,507 Stock-based compensation 19,804 16,941 17,022 Settlement — — 72,000 Insurance recovery on settlement (950) (5,250) (4,500) Provision for income taxes (146,622) 205,313 139,562 Adjusted net income before income taxes $ 657,838 $ 622,871 $ 507,982 Reconciliation of denominator of adjusted margin before income taxes: Total revenues 1,516,380 1,419,055 1,222,840 Insurance recovery on settlement (950) (5,250) (4,500) Total revenues, excluding insurance recovery on settlement 1,515,430 1,413,805 1,218,340 Adjusted margin before income taxes 43.4 % 44.1 % 41.7 % The following table shows the reconciliation of Year Ended December 31, 2017 2016 2015 (unaudited) Reconciliation of net income to adjusted diluted earnings per share before income taxes: Net income $ 756,152 $ 374,925 $ 253,391 Amortization of debt discounts and issuance costs 29,454 30,942 30,507 Stock-based compensation 19,804 16,941 17,022 Settlement — — 72,000 Insurance recovery on settlement (950) (5,250) (4,500) Provision for income taxes (146,622) 205,313 139,562 Adjusted net income before income taxes $ 657,838 $ 622,871 $ 507,982 Assumed conversion of convertible senior notes 5,842 5,780 5,806 Adjusted net income before income taxes plus assumed conversions $ 663,680 $ 628,651 $ 513,788 Weighted-average diluted shares outstanding 111,657,564 110,798,727 110,628,865 Adjusted diluted earnings per share before income taxes $ 5.94 $ 5.67 $ 4.64 2021 leasing activities in Russia. Depreciation expense common stockholders restructurings and cash basis accounting. 2018 2019 2020 2021 2022 Thereafter Total (in thousands) Long-term debt obligations $ 1,556,665 $ 1,043,758 $ 1,226,540 $ 1,847,849 $ 1,226,884 $ 2,897,818 $ 9,799,514 Interest payments on debt outstanding(1) 305,940 260,815 223,432 164,256 125,711 747,610 1,827,764 Purchase commitments 4,029,636 5,798,963 5,506,214 5,538,285 4,678,092 1,478,734 27,029,924 Operating leases 2,926 3,232 3,111 2,946 3,034 3,770 19,019 Total $ 5,895,167 $ 7,106,768 $ 6,959,297 $ 7,553,336 $ 6,033,721 $ 5,127,932 $ 38,676,221 Critical Accounting Estimates Flight equipment We record flight equipment at fair value if we determine the carrying value may not be recoverable. We principally use the income approach to measure the fair value of aircraft. The income approach is based on the present value of cash flows from contractual lease agreements and projected future lease payments, including contingent rentals, net of expenses, which extend to the end of the aircraft’s economic life in its highest and best use configuration, as well as a disposition value based on expectations of market participants. These valuations are considered Level 3 valuations, as the valuations contain significant income. Financial Condition and Results of Operations—Debt—Impact of LIBOR Transition.” date, subject to an outside limit on such adjustments. Page Financial Statements Air Lease Corporation and Subsidiaries December 31, 2017 December 31, 2016 (in thousands, except share and par value amounts) Assets Cash and cash equivalents $ 292,204 $ 274,802 Restricted cash 16,078 Flight equipment subject to operating leases 15,100,040 Less accumulated depreciation (1,819,790) (1,555,605) 13,280,250 Deposits on flight equipment purchases 1,562,776 Other assets 462,856 Total assets $ 15,614,164 $ 13,975,616 Liabilities and Shareholders’ Equity Accrued interest and other payables $ 309,182 $ 256,775 Debt financing, net of discounts and issuance costs 9,698,785 Security deposits and maintenance reserves on flight equipment leases 856,140 Rentals received in advance 104,820 Deferred tax liability 517,795 Total liabilities $ 11,486,722 $ 10,593,429 Shareholders’ Equity Preferred Stock, $0.01 par value; 50,000,000 shares authorized; no shares issued or outstanding — — Class A common stock, $0.01 par value; authorized 500,000,000 shares; issued and outstanding 103,621,629 and 102,844,477 shares at December 31, 2017 and December 31, 2016, respectively 1,036 1,010 Class B Non-Voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding — — Paid-in capital 2,260,064 2,237,866 Retained earnings 1,866,342 1,143,311 Total shareholders’ equity $ 4,127,442 $ 3,382,187 Total liabilities and shareholders’ equity $ 15,614,164 $ 13,975,616 Air Lease Corporation and Subsidiaries Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 (in thousands, except share and per share amounts) Revenues Rental of flight equipment $ 1,450,735 $ 1,339,002 $ 1,174,544 Aircraft sales, trading, and other 65,645 80,053 48,296 Total revenues 1,516,380 1,419,055 1,222,840 Expenses Interest 257,917 255,259 235,637 Amortization of debt discounts and issuance costs 29,454 30,942 30,507 Interest expense 287,371 286,201 266,144 Depreciation of flight equipment 508,352 452,682 397,760 Settlement — — 72,000 Selling, general, and administrative 91,323 82,993 76,961 Stock-based compensation 19,804 16,941 17,022 Total expenses 906,850 838,817 829,887 Income before taxes 609,530 580,238 392,953 Income tax benefit/(expense) 146,622 (205,313) (139,562) Net income $ 756,152 $ 374,925 $ 253,391 Net income per share of Class A and Class B common stock: Basic $ 7.33 $ 3.65 $ 2.47 Diluted $ 6.82 $ 3.44 $ 2.34 Weighted-average shares outstanding Basic 103,189,175 102,801,161 102,547,774 Diluted 111,657,564 110,798,727 110,628,865 (See Notes to Consolidated Financial Statements) Air Lease Corporation and Subsidiaries Class A Class B Non-Voting Preferred Stock Common Stock Common Stock Paid-in Retained Shares Amount Shares Amount Shares Amount Capital Earnings Total (in thousands, except share and per share amounts) Balance at December 31, 2014 — — 102,392,208 $ 1,010 — — $ 2,215,479 $ 555,573 $ 2,772,062 Issuance of common stock upon exercise of options and vesting of restricted stock units — — 321,395 — — — 177 — 177 Stock-based compensation expense — — — — — — 17,022 — 17,022 Cash dividends (declared $0.17 per share) — — — — — — — (17,438) (17,438) Tax withholdings on stock based compensation — — (130,934) — — — (5,302) — (5,302) Net income — — — — — — — 253,391 253,391 Balance at December 31, 2015 — — 102,582,669 $ 1,010 — — $ 2,227,376 $ 791,526 $ 3,019,912 Issuance of common stock upon exercise of options and vesting of restricted stock units — — 452,759 — — — 96 — 96 Stock-based compensation expense — — — — — — 16,941 — 16,941 Cash dividends (declared $0.225 per share) — — — — — — — (23,140) (23,140) Tax withholdings on stock based compensation — — (190,951) — — — (6,547) — (6,547) Net income — — — — — — — 374,925 374,925 Balance at December 31, 2016 — — 102,844,477 $ 1,010 — — $ 2,237,866 $ 1,143,311 $ 3,382,187 Cumulative effect adjustment upon adoption of ASU 2016-09 — — — — — — — 458 458 Issuance of common stock upon exercise of options and vesting of restricted stock units — — 942,088 26 — — 9,320 — 9,346 Stock-based compensation expense — — — — — — 19,804 — 19,804 Cash dividends (declared $0.325 per share) — — — — — — — (33,579) (33,579) Tax withholdings on stock based compensation — — (164,936) — — — (6,926) — (6,926) Net income — — — — — — — 756,152 756,152 Balance at December 31, 2017 — — 103,621,629 $ 1,036 — — $ 2,260,064 $ 1,866,342 $ 4,127,442 Air Lease Corporation and Subsidiaries Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 (in thousands) Operating Activities Net income $ 756,152 $ 374,925 $ 253,391 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of flight equipment 508,352 452,682 397,760 Stock-based compensation 19,804 16,941 17,022 Deferred taxes (146,622) 205,313 138,608 Amortization of discounts and debt issuance costs 29,454 30,942 30,507 Gain on aircraft sales, trading and other activity (55,073) (58,880) (41,072) Changes in operating assets and liabilities: Other assets (108,622) (55,728) 11,336 Accrued interest and other payables 50,832 45,983 16,635 Rentals received in advance 5,436 7,900 15,608 Net cash provided by operating activities 1,059,713 1,020,078 839,795 Investing Activities Acquisition of flight equipment under operating lease (1,972,009) (1,914,093) (2,088,646) Payments for deposits on flight equipment purchases (773,981) (868,091) (597,170) Proceeds from aircraft sales, trading and other activity 779,489 988,040 752,747 Acquisition of furnishings, equipment and other assets (177,450) (211,372) (219,732) Net cash used in investing activities (2,143,951) (2,005,516) (2,152,801) Financing Activities Issuance of common stock upon exercise of options 9,264 20 60 Cash dividends paid (30,933) (20,555) (16,405) Tax withholdings on stock-based compensation (6,926) (5,890) (5,302) Net change in unsecured revolving facilities 81,000 46,000 151,000 Proceeds from debt financings 2,183,824 2,021,966 1,232,384 Payments in reduction of debt financings (1,303,499) (1,093,910) (328,248) Net change in restricted cash (78) 528 (9,059) Debt issuance costs (5,855) (5,042) (4,518) Security deposits and maintenance reserve receipts 226,064 218,754 218,380 Security deposits and maintenance reserve disbursements (51,221) (58,306) (51,430) Net cash provided by financing activities 1,101,640 1,103,565 1,186,862 Net increase (decrease) in cash 17,402 118,127 (126,144) Cash and cash equivalents at beginning of period 274,802 156,675 282,819 Cash and cash equivalents at end of period $ 292,204 $ 274,802 $ 156,675 Supplemental Disclosure of Cash Flow Information Cash paid during the period for interest, including capitalized interest of $46,049, $40,883 and $40,118 at December 31, 2017 and 2016 and 2015, respectively $ 301,741 $ 293,969 $ 259,968 Supplemental Disclosure of Noncash Activities Buyer furnished equipment, capitalized interest, deposits on flight equipment purchases and seller financing applied to acquisition of flight equipment and other assets applied to payments for deposits on flight equipment purchases $ 644,206 $ 873,828 $ 944,469 Cash dividends declared, not yet paid $ 10,359 $ 7,714 $ 5,129 (See Notes to Consolidated Financial Statements) payments we expect to pay the lessee. These lease incentives are amortized as a reduction of Operations. Operations. and restricted cash Restricted cash consists of pledged security deposits, maintenance reserves, and rental payments related to secured aircraft financing arrangements. Operations. (ii) MR Leases As of December 31, 2022, the Company had four aircraft with a carrying value of $153.5 million, which were held for sale and included in Flight equipment subject to operating leases on the Consolidated Balance Sheets. As of December 31, 2021, the Company did not have any flight equipment classified as held for sale. Fair value measurements Use of estimates Note 2. Debt Financing December 31, 2017 December 31, 2016 (in thousands) Unsecured Senior notes $ 8,019,871 $ 6,953,343 Revolving credit facility 847,000 766,000 Term financings 203,704 211,346 Convertible senior notes 199,983 199,995 Total unsecured debt financing 9,270,558 8,130,684 Secured Term financings 484,036 619,767 Export credit financing 44,920 51,574 Total secured debt financing 528,956 671,341 Total debt financing 9,799,514 8,802,025 Less: Debt discounts and issuance costs (100,729) (88,151) Debt financing, net of discounts and issuance costs $ 9,698,785 $ 8,713,874 December 31, 2017 December 31, 2016 (in thousands) Nonrecourse $ 205,906 $ 245,155 Recourse 323,050 426,186 Total $ 528,956 $ 671,341 Number of aircraft pledged as collateral 21 25 Net book value of aircraft pledged as collateral $ 1,184,264 $ 1,421,657 recourse in nature. As of December 31, from for other general corporate purposes. 2023. Years ending December 31, (in thousands) 2018 $ 1,556,665 2019 1,043,758 2020 1,226,540 2021 1,847,849 2022 1,226,884 Thereafter 2,897,818 Total $ 9,799,514 Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 (in thousands) Interest on borrowings $ 303,966 $ 296,142 $ 275,755 Less capitalized interest (46,049) (40,883) (40,118) Interest 257,917 255,259 235,637 Amortization of discounts and deferred debt issue costs 29,454 30,942 30,507 Interest expense $ 287,371 $ 286,201 $ 266,144 Years ending December 31, (in thousands) 2018 $ 1,500,266 2019 1,453,702 2020 1,352,817 2021 1,252,878 2022 1,133,860 Thereafter 3,405,496 Total $ 10,099,019 During the year ended December 31, 2022, the Company recorded $68.8 million of overhaul revenue as a result of the termination of its leasing activities in Russia. Aircraft Type 2018 2019 2020 2021 2022 Thereafter Total Airbus A319-100 — — — 1 — — 1 Airbus A320-200 3 3 7 6 1 20 40 Airbus A320-200neo — — — — — 5 5 Airbus A321-200 1 — 1 — 1 26 29 Airbus A321-200neo — 1 — — — 4 5 Airbus A330-200 — 4 — — 2 9 15 Airbus A330-300 — — 1 — 1 3 5 Airbus A350-900 — — — — — 2 2 Boeing 737-700 — 2 — 1 — — 3 Boeing 737-800 1 10 7 6 11 67 102 Boeing 737-8 MAX — — — — — 2 2 Boeing 767-300ER — 1 — — — — 1 Boeing 777-200ER — — 1 — — — 1 Boeing 777-300ER — — — 4 4 16 24 Boeing 787-9 — — — — — 8 8 Embraer E190 — — 1 — — — 1 Total 5 21 18 18 20 162 244 Over 95% of December 31, 2017 December 31, 2016 Net Book Net Book Region Value(1) % of Total Value(1) % of Total (in thousands, except percentages) Europe $ 4,205,431 31.7 % $ 3,547,294 29.5 % Asia (excluding China) 2,981,339 22.4 % 2,739,554 22.7 % China 2,720,124 20.5 % 2,779,546 23.0 % The Middle East and Africa 1,481,825 11.2 % 935,968 7.8 % Central America, South America, and Mexico 926,732 7.0 % 937,287 7.8 % U.S. and Canada 599,367 4.5 % 647,743 5.4 % Pacific, Australia, and New Zealand 365,432 2.7 % 454,533 3.8 % Total $ 13,280,250 100.0 % $ 12,041,925 100.0 % December 31, 2017 December 31, 2016 December 31, 2015 Number of Number of Number of Region Customers(1) % of Total Customers(1) % of Total Customers(1) % of Total Europe 31 34.0 % 27 31.8 % 27 30.0 % Asia (excluding China) 18 19.8 % 18 21.2 % 19 21.1 % U.S. and Canada 11 12.1 % 12 14.1 % 11 12.2 % The Middle East and Africa 11 12.1 % 7 8.2 % 8 8.9 % China 9 9.9 % 9 10.6 % 12 13.4 % Central America, South America, and Mexico 9 9.9 % 9 10.6 % 11 12.2 % Pacific, Australia, and New Zealand 2 2.2 % 3 3.5 % 2 2.2 % Total 91 100.0 % 85 100.0 % 90 100.0 % The following table sets forth the dollar amount and percentage of Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 Amount of Amount of Amount of Rental Rental Rental Region Revenue % of Total Revenue % of Total Revenue % of Total (in thousands, except percentages) Europe $ 450,628 31.1 % $ 400,491 29.9 % $ 380,295 32.4 % Asia (excluding China) 332,284 22.9 % 308,658 23.1 % 223,284 19.0 % China 324,147 22.3 % 293,206 21.9 % 265,450 22.6 % The Middle East and Africa 116,799 8.1 % 106,300 7.9 % 90,416 7.7 % Central America, South America, and Mexico 102,205 7.0 % 112,068 8.4 % 114,672 9.8 % U.S. and Canada 76,685 5.3 % 69,918 5.2 % 54,294 4.6 % Pacific, Australia, and New Zealand 47,987 3.3 % 48,361 3.6 % 46,133 3.9 % Total $ 1,450,735 100.0 % $ 1,339,002 100.0 % $ 1,174,544 100.0 % Tax Year Ended December 31, 2017 2016 2015 (in thousands) Current: Federal $ — $ — $ — State 380 30 — Foreign 3,853 848 1,003 Deferred: Federal (150,850) 203,882 138,517 State (5) 553 42 Foreign — — — Provision for income taxes $ (146,622) $ 205,313 $ 139,562 Year Ended December 31, 2017 2016 2015 Amount Percent Amount Percent Amount Percent (in thousands, except percentages) Income taxes at statutory federal rate $ 213,336 35.0 % $ 203,083 35.0 % $ 137,541 35.0 % Impact of tax legislation (354,127) (58.1) — — — — Foreign tax credit (10,873) (1.8) — — — — State income taxes, net of federal income tax effect and other 5,042 0.9 2,230 0.4 2,021 0.5 Provision for income taxes $ (146,622) (24.0) % $ 205,313 35.4 % $ 139,562 35.5 % As of December 31, December 31, 2017 December 31, 2016 (in thousands) Assets (Liabilities) Equity compensation $ 12,744 $ 21,477 Net operating losses 10,143 48,215 Foreign tax credit 14,577 — Rents received in advance 22,076 34,883 Accrued bonus 1,777 4,631 Straight-line rents (1,967) 3,057 Other 1,912 7,877 Aircraft depreciation (579,057) (787,200) Net deferred tax assets/(liabilities) $ (517,795) $ (667,060) NOL Tax Credit Carryforwards Carryforwards (in thousands) 2018-2022 $ — $ 20 Thereafter 54,115 14,558 Total carryforwards $ 54,115 $ 14,578 Aircraft Type 2018 2019 2020 2021 2022 Thereafter Total Airbus A321-200 2 — — — — — 2 Airbus A320/321neo(1) 14 35 27 22 25 25 148 Airbus A330-900neo 5 5 4 7 6 2 29 Airbus A350-900/1000 4 2 4 5 3 — 18 Boeing 737-7/8/9 MAX 12 27 27 35 27 — 128 Boeing 787-9/10 7 12 9 7 8 — 43 Total(2) 44 81 71 76 69 27 368 The table is subject to change based on Airbus agreements. Years ending December 31, (in thousands) 2018 $ 4,029,636 2019 5,798,963 2020 5,506,214 2021 5,538,285 2022 4,678,092 Thereafter 1,478,734 Total $ 27,029,924 Years ending December 31, (in thousands) 2018 $ 2,926 2019 3,232 2020 3,111 2021 2,946 2022 3,034 Thereafter 3,770 Total $ 19,019 Note Year Ended Year Ended Year Ended December 31, 2017 December 31, 2016 December 31, 2015 (in thousands, except share and per share amounts) Basic net income per share: Numerator Net income $ 756,152 $ 374,925 $ 253,391 Denominator Weighted-average common shares outstanding 103,189,175 102,801,161 102,547,774 Basic net income per share $ 7.33 $ 3.65 $ 2.47 Diluted net income per share: Numerator Net income $ 756,152 $ 374,925 $ 253,391 Assumed conversion of convertible senior notes 5,842 5,780 5,806 Net income plus assumed conversions $ 761,994 $ 380,705 $ 259,197 Denominator Number of shares used in basic computation 103,189,175 102,801,161 102,547,774 Weighted-average effect of dilutive securities 8,468,389 7,997,566 8,081,091 Number of shares used in per share computation 111,657,564 110,798,727 110,628,865 Diluted net income per share $ 6.82 $ 3.44 $ 2.34 2022, the estimated fair value of the foreign currency exchange derivative liability was $2.5 million. As of December 31, 2021, the estimated fair value of the foreign currency exchange derivative asset was $14.1 million. Stock Options are generally granted for a term of 10 years and generally vest over a three-year period. As of December 31, 2022, the Company does not have any outstanding stock options. The Company has not granted any stock options since 2011. Remaining Aggregate Exercise Contractual Term Intrinsic Value Shares Price (in years) (in thousands)(1) Balance at December 31, 2014 3,312,158 $ 20.40 5.49 46,077 Granted — — — — Exercised (3,000) $ 20.00 — 49 Forfeited/canceled — — — — Balance at December 31, 2015 3,309,158 $ 20.40 4.50 43,287 Granted — — — — Exercised (1,000) $ 20.00 — 14 Forfeited/canceled — — — — Balance at December 31, 2016 3,308,158 $ 20.40 3.50 46,086 Granted — — — — Exercised (450,000) $ 20.59 — 9,397 Forfeited/canceled — — — — Balance at December 31, 2017 2,858,158 $ 20.37 2.49 79,230 Vested and exercisable as of December 31, 2017 2,858,158 $ 20.37 2.49 79,230 Options Exercisable Options Outstanding and Vested Weighted- Weighted Average Average Number of Remaining Life Number of Remaining Life Range of exercise prices Shares (in years) Shares (in years) $20.00 2,738,158 2.46 2,738,158 2.46 $28.80 120,000 3.32 120,000 3.32 $20.00 - $28.80 2,858,158 2.49 2,858,158 2.49 Restricted Stock Units 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. Unvested Restricted Stock Units Weighted- Average Number of Grant-Date Shares Fair Value Unvested at December 31, 2016 $ 37.47 Granted $ 45.05 Vested (367,016) $ 36.07 Forfeited/canceled (103,874) $ 48.22 Unvested at December 31, 2017 1,163,700 $ 40.24 Quarter Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2016 2016 2016 2016 2017 2017 2017 2017 (in thousands, except per share amounts) Revenues $ 343,328 $ 350,139 $ 355,101 $ 370,487 $ 360,187 $ 380,957 $ 376,765 $ 398,471 Income before taxes 143,991 142,271 144,573 149,403 133,878 155,869 154,119 165,664 Net income 92,858 91,803 93,276 96,988 84,937 100,925 99,188 471,102 Net income per share: Basic $ 0.90 $ 0.89 $ 0.91 $ 0.94 $ 0.83 $ 0.98 $ 0.96 $ 4.56 Diluted $ 0.85 $ 0.84 $ 0.86 $ 0.89 $ 0.78 $ 0.92 $ 0.90 $ 4.22 2022. Agreement”) and Mr. Plueger (the “Plueger Ireland Employment Agreement,” and together with the Udvar-Házy Ireland Employment Agreement, the “Ireland Employment Agreements”). 2023, and is incorporated herein by reference. Ethics or any waivers of such provisions granted to executive officers and directors. Page Financial Statements Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 3.1 Restated Certificate of Incorporation of Air Lease Corporation S‑1 333‑171734 3.1 January 14, 2011 3.2 8‑K 001‑35121 3.2 June 20, 2016 4.1 S‑1 333‑171734 4.1 March 25, 2011 4.2 S‑1 333‑171734 4.2 January 14, 2011 4.3 S‑3 333‑184382 4.4 October 12, 2012 4.4 8-K 001-35121 4.2 February 5, 2013 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 4.5 8-K 001-35121 4.2 November 19, 2013 4.6 8-K 001-35121 4.2 January 23, 2014 4.7 8-K 001-35121 4.2 March 11, 2014 4.8 8-K 001-35121 4.2 September 16, 2014 4.9 8-K 001-35121 4.3 September 16, 2014 4.10 8-K 001-35121 4.2 January 14, 2015 4.11 8-K 001-35121 4.2 August 18, 2015 4.12 8-K 001-35121 4.2 April 11, 2016 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 4.13 8-K 001-35121 4.2 August 15, 2016 4.14 8-K 001-35121 4.2 October 3, 2016 4.15 8-K 001-35121 4.2 March 8, 2017 4.16 8-K 001-35121 4.2 June 12, 2017 4.17 8-K 001-35121 4.2 November 20, 2017 4.18 8-K 001-35121 4.3 November 20, 2017 Certain instruments defining the rights of holders of long‑term debt of Air Lease Corporation and all of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed are being omitted pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S‑K. Air Lease Corporation agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. 10.1 8‑K 001‑35121 10.1 June 24, 2013 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.2 8-K 001-35121 10.1 July 29, 2014 10.3 10-Q 001-35121 10.5 May 8, 2014 10.4 8-K 001-35121 10.1 June 2, 2015 10.5 8-K 001-35121 10.2 June 2, 2015 10.6 10-K 001-35121 10.7 February 25, 2016 10.7 10-K 001-35121 10.8 February 25, 2016 10.8 8-K 001-35121 10.1 June 1, 2016 10.9 8-K 001-35121 10.2 June 1, 2016 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.10 10-K 001-35121 10.10 February 23, 2017 10.11 Filed herewith 10.12 Filed herewith 10.13 10-K 001-35121 10.11 February 23, 2017 10.14 10-K 001-35121 10.12 February 23, 2017 10.15 10-Q 001-35121 10.3 May 4, 2017 10.16 10-Q 001-35121 10.4 May 4, 2017 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.17 10-Q 001-35121 10.5 May 4, 2017 10.18 10-Q 001-35121 10.8 November 9, 2017 10.19 S‑1 333‑171734 10.2 January 14, 2011 10.20† 10‑Q 001‑35121 10.3 November 7, 2013 10.21† 10-Q 001-35121 10.2 November 6, 2014 10.22† 10-Q 001-35121 10.19 August 4, 2016 10.23† 10-Q 001-35121 10.20 August 4, 2016 10.24† 10-Q 001-35121 10.21 August 4, 2016 10.25† 10-Q 001-35121 10.22 August 4, 2016 10.26† 10-K 001-35121 10.21 February 23, 2017 Exhibit Incorporated by Reference Number Exhibit Description File No. Filing Date November 9, 2017 November 9, 2017 10-Q May 9, 2013 May 7, 2015 May 7, 2015 November 5, 2015 August 4, 2016 August 4, 2016 February 23, 2017 November 9, 2017 10-Q November 7, 2013 May 4, 2017 November 7, 2013 November 6, 2014 May 4, 2017 August 4, 2016 February 23, 2017 February 23, 2017 May 4, 2017 May 4, 2017 August 3, 2017 August 3, 2017 August 3, 2017 August 3, 2017 November 9, 2017 November 9, 2017 10-Q August 9, 2012 August 4, 2016 November 6, 2014 November 6, 2014 August 4, 2016 September 2, 2016 August 4, 2016 August 4, 2016 August 4, 2016 August 4, 2016 August 4, 2016 August 4, 2016 May 4, 2017 May 4, 2017 May 4, 2017 August 3, 2017 August 3, 2017 August 3, 2017 August 3, 2017 November 9, 2017 November 9, 2017 10-Q September 2, 2016 August 4, 2016 August 3, 2017 10-K May 9, 2013 February 22, 2011 May 8, 2014 February 26, 2015 10-Q May 10-K 10.2 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.93§ 10-Q 001-35121 10.6 May 4, 2017 10.94§ 10-Q 001-35121 10.7 May 4, 2017 10.95§ 10-Q 001-35121 10.8 May 4, 2017 10.96§ 10-Q 001-35121 10.2 August 4, 2016 10.97§ 10-Q 001-35121 10.3 August 4, 2016 10.98 Form of Indemnification Agreement with directors and officers S‑1 333‑171734 10.12 February 22, 2011 10.99§ Filed herewith 10.100§ 10-Q 001-35121 10.1 May 4, 2017 12.1 Filed herewith 21.1 Filed herewith 23.1 Filed herewith 31.1 Filed herewith 31.2 Filed herewith Exhibit Incorporated by Reference Number Exhibit Description File No. Filing Date Furnished herewith 32.2 Furnished herewith Filed herewith 1933 or (ii) omitted portions of the referenced exhibit pursuant to Item 601(b) of Regulation S-K because it (a) is not material and (b) would be competitively harmful if publicly disclosed. Chief Financial Officer /s/ Steven F. Executive Chairman of the Board of Directors February Steven F. /s/ John L. Plueger February John L. Plueger /s/ Matthew J. Hart February Matthew J. Hart /s/ Yvette Hollingsworth Clark February Cheryl Gordon Krongard /s/ Marshall O. Larsen February Robert A. Milton /s/ Ian M. Saines February Ian M. SainesTitle of each class Trading Symbol(s)
on which registeredAL 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A AL PRA New York Stock Exchange well‑knownwell-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑TS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☒ (Check One):Large accelerated filer ☒Accelerated filer ☐Non‑accelerated☐Non-accelerated filer ☐
(Do not check if a
smaller reporting company)Smaller reporting company ☐ Emerging growth company ☐ non‑affiliatesnon-affiliates was approximately $3.6$3.5 billion on June 30, 2017,2022, based upon the last reported sales price on the New York Stock Exchange. As of February 21, 2018,15, 2023, there were 103,621,629110,912,629 shares of Class A common stock outstanding.20182023 Annual Meeting of Shareholders, have beenwhich will be filed with the Securities and Exchange Commission within 120 days after the end of the 2022 fiscal year, are incorporated by reference into Part III of this report.Report.10‑K20174363637383942456466969696Item 9C. Item 10. 979797979798210‑K10-K and other publicly available documents may contain or incorporate statements that constitute forward‑lookingforward-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‑K10-K and include statements regarding, among other matters, the state of the airline industry, our access to the capital markets, our ability to restructure leasesthe impact of Russia’s invasion of Ukraine and repossessthe impact of sanctions imposed on Russia, the impact of lease deferrals and other accommodations, aircraft delivery delays, the structureimpact of our leases, regulatory matters pertaining to compliance with governmental regulations,inflation, rising 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‑lookingforward-looking statements. Any such forward‑lookingforward-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‑lookingforward-looking statements. Such factors include, among others, general commercial aviation industry, economic, and business conditions, which will, among other things, affect demand for aircraft, availability, and creditworthiness of current and prospective lessees,lessees; lease rates,rates; availability and cost of financing and operating expenses,expenses; governmental actions and initiatives,initiatives; and environmental and safety requirements, as well as the factors discussed under “Item 1A. Risk Factors,”Factors” in this Annual Report on Form 10‑K. We10-K. 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‑lookingforward-looking information to reflect actual results or future events or circumstances.circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.3 transport aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S.(“Airbus”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease portfoliofleet to third parties, including other leasing companies, financial services companies, airlines and airlines.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 the gains from our aircraft sales and trading activities and our management fees.the Pacific Rim, Latin America,Europe, the Middle East and Africa, U.S. and Canada, Central America, South America and Mexico, and the Pacific, Australia and New Zealand. As air travel continues to recover from the impact of the COVID-19 pandemic, we expect demand for our modern fuel-efficient aircraft will continue to increase. In markets such as the United States and Western Europe, Africa, and North America. our strategy is to focus on the replacement market as many airlines look to replace aging aircraft with new, modern technology, fuel efficient jet aircraft. In less saturated markets, including parts of Asia, in addition to the replacement market, we serve customers expanding their fleets.relatively higher lease rates compared to those in more mature markets.operating lease portfoliofleet reduces the risks associated with individual lessee defaults and adverse geopolitical and regional economic events. We mitigate the risks associated with cyclical variations in the airline industry by managing customer concentrations and lease maturities in our operating lease portfoliofleet to minimize periods of concentrated lease expirations. In order to maximize residual values and minimize the risk of obsolescence, our strategy is to own an aircraft during the first third of its expected 2525-year useful life.useful life.We ended 2017 with 244 ownedDecember 31, 2022, we purchased 60 new aircraft from Boeing and Airbus, purchased one aircraft from the secondary market, sold six aircraft and 50wrote-off our interests in 21 aircraft in our managedowned fleet portfolio. Asthat were detained in Russia. However, in October 2022, we recovered one of December, 31, 2017,these aircraft. See “Impact of Russia-Ukraine conflict” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for further discussion. We ended the year with a total of 417 aircraft in our owned fleet. The net book value of our fleet increasedgrew by 10.3%,7.2% to $24.5 billion as of December 31, 2022 compared to $22.9 billion as of December 31, 2016, to $13.3 billion, with a2021. The weighted average age of our fleet was 4.5 years and the weighted average lease term remaining was 7.1 years as of 6.8 years and a weighted average ageDecember 31, 2022. Our managed fleet was comprised of 3.8 years.85 aircraft as of December 31, 2022 as compared to 92 aircraft as of December 31, 2021. We have a globally diversified customer base comprised of 91117 airlines in 55 countries. As62 countries as of February 22, 2018, allDecember 31, 2022. We continue to have a strong lease utilization rate of our aircraft in our operating lease portfolio were subject to lease agreements.During 2017, we increased our total commitments with Airbus and Boeing by a net 35 aircraft. 99.6% for the year ended December 31, 2022.2017,2022, we had commitments to purchase 368398 aircraft from AirbusBoeing and BoeingAirbus for delivery through 2023,2029, with an estimated aggregate commitment of $27.0$25.5 billion. We have placed approximately 90% of our committed orderbook on long-term leases for aircraft delivering through the end of 2024 and have placed 60% of our entire orderbook. We ended 20172022 with $23.4$31.4 billion in committed minimum future rental payments, and placed 79%consisting of our order book on long-term leases for aircraft delivering through 2020. This includes $10.1$15.6 billion in contracted minimum rental payments on the aircraft in our existing fleet and $13.3$15.8 billion in minimum future rental payments related to aircraft which will deliver between 2018 and 2022.includingfrom our aircraft salesleasing and tradingsales activities, and debt financings. Our debt financing strategy is focused on raising unsecured debt in the globala limited utilization of government guaranteed export credit or other forms of secured financing. In 2017,2022, we issued approximately $2.2 billion senior unsecured notes with an average interest rate of 3.16%, with maturities ranging from 2022 to 2027 and in January 2018, we issued (i) $550.0 million in aggregate principal amount of senior unsecured notes due 2021 that bearwith maturities ranging from 2027 to 2032 with a weighted average interest at a rate of 2.50% and (ii) $700.0 million in aggregate principal amount of senior unsecured notes due 2025 that bear interest at a rate of 3.25%3.59%. In 2017, we increased our unsecured4revolving credit facility capacity to approximately $3.8 billion, representing an 18.6% increase from 2016 and extended the final maturity to May 5, 2021. In February 2018, we further increased the capacity of our unsecured revolving credit facility by 4.7% to approximately $3.9 billion. Borrowings under our unsecured revolving credit facility will bear interest at LIBOR plus a margin of 1.05% per year. We ended 20172022 with total debt outstanding net of discounts and issuance costs, of $9.7$18.8 billion, of which 85.4%91.3% was at a fixed rate and 94.6%99.3% of which was unsecured. OurAs of December 31, 2022, our composite cost of funds decreased to 3.20% as of December 31, 2017 from 3.42% as of December 31, 2016.On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”)raised through debt financings was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax law by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. As a result of the Tax Reform Act, we recorded an estimated tax benefit of $354.1 million or $3.16 per diluted share due to the remeasurement of deferred tax assets and liabilities for the quarter ended December 31, 2017.In 2017,3.07%. increased by 6.9% to $1.5 billion, compared to 2016. The increase in our total revenues is primarily due to the $1.2 billion increase in the net book value of our operating lease portfolio. Our net income for the year ended December 31, 20172022 increased by 11.0% to $2.3 billion as compared to 2021. The increase in total revenues was $756.2primarily driven by the continued growth in our fleet and significantly lower COVID-19 related lease restructuring and cash basis losses.$6.82net loss of $1.24 per diluted share, as compared to $374.9net income attributable to shareholders of $408.2 million, or $3.44$3.57 per diluted share, for the year ended December 31, 2016. The increase in2021. Despite the growth of our fleet, the decrease was due to the net income and diluted earnings per shareimpact of the write-off of our Russian fleet, which totaled approximately $771.5 million for the year ended December 31, 2017 was due to the $1.2 billion increase in the net book value2022. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information on our operating lease portfolio, and the re-measurement of our U.S. deferred tax liabilities associated with the enactment of the Tax Reform Act, resulting in a tax benefit of $354.1 million. Our pre-tax profit marginfinancial results for the year ended December 31, 2017 was 40.2% as compared to 40.9% for the year ended December 31, 2016.such as settlement expense, net of recoveries, that are not expected to continue in the future and certain other items. Our adjusteditems, such as the net impact of the write-off of our Russian fleet. Adjusted net income before income taxes for the year ended December 31, 2017 was $657.82022 increased 11.9% to $659.9 million or $5.94compared to $589.7 million for the year ended December 31, 2021. Adjusted net income before income taxes per diluted share comparedincreased 14.4% to $622.9 million, or $5.67$5.89 per adjusted diluted share for the year ended December 31, 2016. Our2022 compared to $5.15 per adjusted margin before income taxesdiluted share for the year ended December 31, 2017 was 43.4% compared to 44.1%2021. Our adjusted net income before income taxes and adjusted diluted earnings per share before income taxes increased for the year ended December 31, 2016. 2022 as compared to 2021, primarily due to the continued growth of our fleet and the increase in revenues. before income taxes, adjusted margin 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 Note 2“Results of Operations” in “Item 6. Selected7. Management’s Discussion and Analysis of Financial Data”Condition and Results of Operations” of this Annual Report on Form 10-K 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.Our fleet, based on10.3%7.2% to $13.3$24.5 billion as of December 31, 20172022 compared to $12.0$22.9 billion as of December 31, 2016.2021. As of December 31, 2017,2022, we owned 244417 aircraft in our aircraft portfolio, comprised of 188306 narrowbody jet aircraft and 56111 widebody jet aircraft, with a weighted average age of 3.8 years.aircraft. As of December 31, 2016, we owned 237 aircraft, comprised of 188 narrowbody jet aircraft and 49 widebody jet aircraft, with a2022, the weighted average fleet age and weighted average remaining lease term of 3.8 years. In addition, we alsoour fleet was 4.5 years and 7.1 years, respectively. We had a managed 50 jet aircraft for third party owners on a fee basis asfleet of December 31, 2017 compared to 30 jet85 aircraft as of December 31, 2016.2022 compared to 92 as of December 31, 2021. References throughout this Annual Report on Form 10-K to “our fleet” refer to the aircraft included in flight equipment subject to operating leases and do not include aircraft in our managed fleet or aircraft classified as net investments in sales-type leases unless the context indicates otherwise.5rentalRental of flight equipment revenues attributable to the respective geographical regions based on each airline’s principal place of business:Year Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020Region Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total (in thousands, except percentages) Asia (excluding China) Asia (excluding China) $ 625,355 28.2 % $ 558,020 27.9 % $ 573,722 29.5 % Europe 611,091 27.6 % 564,479 28.2 % 525,543 27.0 % China 359,976 16.3 % 352,375 17.6 % 341,121 17.5 % The Middle East and Africa 251,243 11.3 % 210,977 10.5 % 220,017 11.3 % U.S. and Canada 143,266 6.5 % 130,717 6.5 % 106,694 5.5 % Central America, South America and Mexico Central America, South America and Mexico 141,638 6.4 % 104,315 5.2 % 88,113 4.5 % Pacific, Australia, and New Zealand 81,939 3.7 % 82,454 4.1 % 91,410 4.7 % Total $ 2,214,508 100.0 % $ 2,003,337 100.0 % $ 1,946,620 100.0 % 20172022 and 2016:2021:Year Ended
December 31, 2022Year Ended
December 31, 2021Region Net Book
Value% of Total Net Book
Value% of Total (in thousands, except percentages) Europe $ 7,985,317 32.5 % $ 7,439,993 32.5 % Asia (excluding China) 7,144,188 29.1 % 5,952,981 26.0 % China 2,792,022 11.4 % 2,934,224 12.8 % The Middle East and Africa 2,253,342 9.3 % 2,447,919 10.7 % Central America, South America, and Mexico 1,924,216 7.8 % 1,566,133 6.8 % U.S. and Canada 1,557,260 6.3 % 1,638,450 7.2 % Pacific, Australia, and New Zealand 882,040 3.6 % 919,304 4.0 % Total $ 24,538,385 100.0 % $ 22,899,004 100.0 % 2017, 20162022 and 2015,2021, we owned and managed leased aircraft to customers in the following regions based on each airline'sairline’s principal place of business:(1)A customer is an airline with its own operating certificate.Year Ended
December 31, 2022Year Ended
December 31, 2021Region % of Total % of Total Europe 49 41.9 % 50 42.5 % Asia (excluding China) 23 19.7 % 22 18.6 % The Middle East and Africa 14 12.0 % 14 11.9 % U.S. and Canada 13 11.1 % 13 11.0 % China 8 6.8 % 9 7.6 % Central America, South America and Mexico 7 6.0 % 7 5.9 % Pacific, Australia, and New Zealand 3 2.5 % 3 2.5 % Total 117 100.0 % 118 100.0 % 62017, 2016,2022, 2021, and 2015,2020, China was the only individual country that represented at least 10% of our rental revenue based on each airline's principal place of business. In 2017, 2016, and 2015,business; however, no rental revenue from any individual airline representedcontributed more than 10% or moreto our rental revenue. Our customer base is highly diversified, with our average customer representing approximately 1.0% of our rental revenue. transport aircraft. Our strategy is to order new aircraft directly from the manufacturers. When placing new aircraft orders with the manufacturers, we strategically target the replacement of aging aircraft with modern technology aircraft. Additionally, we look to supplement our order pipeline with opportunistic purchases of aircraft in the secondary market and participate in sale-leaseback transactions with airlines.with inwithin the global market. Additionally, we study the effects of global airline passenger traffic growth in order to determine the likely demand for our new aircraft.Often timesOftentimes, we are able to achieve lower pricing through direct bulk purchase contracts with the component manufacturers than would be achievable if we relied on the airframe manufacturers sourcedto source the components for the airplane. Manufacturersaircraft themselves. Airframe manufacturers such as Boeing and Airbus install thisthese buyer furnished equipment in our aircraft during the final assembly process at their facilities. With this purchasing strategy, we are able to both meet specific customer configuration requirements and lower theour total acquisition cost of the aircraft.a complex industry withand constantly evolving competition, code shares (where two or more airlines sharedue to changes in the same flight), alliances,competitive landscape and passenger traffic patterns. This requires frequent updatingFleet flexibility is key to the airlines’ ability to effectively operate and compete in their respective markets. Operating leases offer airlines significant fleet flexibility within an airline’s fleet. The operating lease allows airlinesby allowing them to effectively adapt and manage their fleets through varying market conditions without bearing the full financial risk associated with these capital intensive assets which have an expected useful life of 25 years. This fleet flexibility enables airlines to more effectively operate and compete in their respective markets. We work closely with our airline customers throughout the world to help optimize their long-term aircraft fleet strategies.long termlong-term leases, staggering lease maturities, balancing aircraft type exposures, and maintaining a young fleet age. We believe that diversification of our operating lease portfoliofleet reduces the risks associated with individual customer defaults and the impact of adverse geopolitical and regional economic events. In order to maximize residual values and minimize the risk of obsolescence, our strategy is generally to own an aircraft for approximately the first third of its expected 25 year25-year useful life.long‑standinglong-standing relationships. Prior to leasing an aircraft, we evaluate the competitive positioning of the airline, the strength and quality of the management team, and the financial performance of the airline. Management obtains and reviews relevant business materials from all prospective customers before entering into a lease agreement. Under certain circumstances, the customer may be required to obtain guarantees or other financial support from a sovereign entity or a financial institution. We work closely with our existing customers and potential lessees to develop customized lease structures that address their specific needs. We typically enter into a lease agreement 18 to 36 months in advance of the delivery of a new aircraft from our order book.orderbook. Once the aircraft has been delivered and operated by the airline, we look7contain the following key provisions:·our leases are primarily structured as operating leases, whereby we retain the residual rights to the aircraft;· lessee is responsible for all operating costs including taxes, insurance, and aircraft maintenance;·our leases typically require all payments be made in U.S. dollars;·our leases are typically for fixed rates and terms;·our leases typically require cash security deposits and maintenance reserve payments; and·our leases contain provisions which require payment whether or not the aircraft is operated, irrespective of the circumstances.The lessee is responsible for all operating costs, including taxes, insurance and maintenance and also contain provisions which require payment whether or not the aircraft is operated, irrespective of the circumstances. Substantially all of our leases require payments to be made in U.S. dollars.to performfor performing all maintenance of the aircraft and returnreturning the aircraft and its components in a specified return condition. Generally, we receive a cash deposit and maintenance reserves as security for the lessee’s performance of its obligations under the lease and the condition of the aircraft upon return. In addition, most leases contain extensive provisions regarding our remedies and rights in the event of a default by a lessee. The lessee generally is required to continue to make lease payments under all circumstances, including periods during which the aircraft is not in operation due to maintenance or grounding.insignificantimmaterial to us.8lessees.airline customers. When we repossess an aircraft leased in a foreign country, we generally expect to export the aircraft from the lessee’s jurisdiction. In some very limited situations, the lessees may not fully cooperate in returning the aircraft. In those cases, we will take appropriate legal action, a process that could ultimately delay the return and export of the aircraft. In addition, in connection with the repossession of an aircraft, we may be required to pay outstanding mechanics’ liens, airport charges, and navigation fees and other amounts secured by liens on the repossessed aircraft. These charges could relate to other aircraft that we do not own but were operated by the lessee.ninesix to 12 months in advance of the lease’s expiration if a lessee desires to renew or extend the lease. Requiring lessees to provide us with such advance notice provides our management team with an extended period of time to consider a broad set of alternatives with respect to the aircraft, including assessing general market and competitive conditions and preparing to remarket or sell the aircraft. If a lessee fails to provide us with notice, the lease will automatically expire at the end of the term, and the lessee will be required to return the aircraft pursuant to the conditions in the lease. OurAs discussed above, our leases contain detailed provisions regarding the required condition of the aircraft and its components upon redeliveryreturn at the end of the lease term.long termlong-term leases, and sell the aircraft when they near the end of the first third of their expected 25 year25-year economic useful lives.life. We typically sell aircraft that are currently operated by an airline with multiple years of lease term remaining on the contract, in order to achieve the maximum disposition value of the aircraft. Buyers of the aircraft may include other leasing companies, financial institutions, airlines and airlines.other investors. We also, from time to time, buy and sell aircraft on an opportunistic basis for trading profits. In the past three years ended December 31, 2017, we sold 101 aircraft. Additionally, as discussed below, we may provide management services to buyers of our aircraft assetassets for a fee.third partythird-party investors and owners of aircraft portfolios for a management fee. This allows us to better serve our airline customers and expand our existing airline customer base by providing additional leasing opportunities beyond our own aircraft portfolio, new order pipeline, and customer or regional concentration limits.debt financings.an array of financing products. We have structured the Companyaim to have investment grademaintain investment-grade credit metrics and focus our debt financing strategy has focused on funding our business primarily on an unsecured basis.basis with mostly fixed-rate debt from public bond offerings. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another. We may,also have the ability to a limited extent, utilizeseek debt financing secured by our assets, as well as financings supported through the Export-Import Bank of the United States and other export credit or other forms of secured financing.all‑riskall-risk hull insurance, and war‑riskwar-risk insurance covering risks such as hijacking, terrorism (butbut excluding coverage for weapons of mass destruction and nuclear events), confiscation, expropriation, seizure, and nationalization. We generally require a certificate of insurance from the lessee’s insurance broker prior to delivery of an aircraft. Generally, all9operations.operations and based on available insurance coverages. We generally require that the certificates of insurance contain, among other provisions, a provision prohibiting cancellation or material change without at least 30 days’ advance written notice to the insurance broker (who would be obligated to give us prompt notice), except in the case of hull war and liability war insurance policies, which customarily only provide seven days’ advance written notice for cancellation and may be subject to shorter notice under certain market conditions. Furthermore, the insurance is primary and not contributory, and we require that all insurance carriers be required to waive rights of subrogation against us.agreed‑valueagreed-value basis acceptable to us and usually exceeds the book value of the aircraft. In cases where we believe that the agreed value stated in the lease is not sufficient, we make arrangements to cover such deficiency, which would include the purchase of additional “Total Loss Only” coverage for the deficiency.includeincludes provisions for bodily injury, property damage, passenger liability, cargo liability, and such other provisions reasonably necessary in commercial passenger and cargo airline operations. We expect that such certificates of insurance list combined comprehensive single liability limits of not less than $500.0$500 million for Airbus and Boeing aircraft and $200.0 million for Embraer S.A. (“Embraer”).aircraft. As a standard in the industry, airline operator'soperator’s policies contain a sublimit for third-party war risk liability generally in the amount of at least $150.0$150 million. We require each lessee to purchase higher limits of third-party war risk liability or obtain an indemnity from its respective government.bio‑hazardousbio-hazardous materials, and electromagnetic pulsing. Exclusions for the same type of perils could be introduced into liability policies in the future.Separately,risks.WeWhile we are one of the largest aircraft lessors operating on a global scale.scale, the aircraft leasing industry is diversified with a large number of competitors. We face competition from aircraft manufacturers, banks, financial institutions, other leasing companies, aircraft brokers and airlines. Some of our competitors may have greater operating and financial resources and access to lower capital costs than we have. Competition for leasing transactions is based on a number of factors, including delivery dates, lease rates, lease terms, other lease provisions, aircraft condition, and the availability in the marketplace of the types of aircraft required to meet the needs of airline customers. Competition in the purchase and sale of used aircraft is based principally on the availability of used aircraft, price, the terms of the lease to which an aircraft is subject, and the creditworthiness of the lessee, if any.10"OFAC"“OFAC”) impose restrictions on the operation of U.S.-made goods, such as aircraft and engines, in sanctioned countries, as well as on the ability of U.S. companies to conduct business with entities in those countries.countries and with other entities or individuals subject to blocking orders. The U.S. Patriot Act of 2001 (the “Patriot Act”) prohibits financial transactions by U.S. persons, including U.S. individuals, entities, and charitable organizations, with individuals and organizations designated as terrorists and terrorist supporters by the U.S. Secretary of State or the U.S. Secretary of the Treasury. The U.S. Customs and Border Protection, a law enforcement agency of the U.S. Department of Homeland Security, enforces regulations related to the import of aircraft into the United States for maintenance or lease and the importation of parts into the U.S. for installation.EmployeesEmissions Scope Emissions Source Emissions Factor Employed Scope 1 (Direct) Natural Gas
Diesel Backup Generators
Aviation Fuel• Natural gas: US EPA's Emission Factors for Greenhouse Gas Inventories, dated April 2022, were applied. For all natural gas emission sources at international locations, the UK Government GHG Conversion Factors for Company Reporting, dated January 2022, were applied.
• Diesel for backup generators: CGHGP Emission Factors from Cross Sector Tools, dated May 2017, were applied.
• Aviation fuel: Aviation fuel emission factors within the UK Government GHG Conversion Factors for Company Reporting dated January 2022 were applied.Scope 2 (Indirect - Location-Based) Electricity
Chilled WaterThe appropriate eGRID region was identified from the US EPA's Emission Factors for Greenhouse Inventories, dated April 2022, (if a U.S. facility) or a publicly available regional factor (if international facility). The most recently published electricity emission factor from the Sustainable Energy Authority of Ireland was applied to Dublin and the Carbon Footprint Country specific Electricity Grid Greenhouse Gas Emission Factors, dated March 2022, was applied to Hong Kong. Carbon Dioxide Methane Nitrous Oxide Total Scope 1 Direct 4,394 3 42 4,439 Scope 2 Indirect - Location-Based 220 — 1 221 2017,2022, more than 30% of our employees are multicultural and over 50% are female. Our values and priorities are further specified in our code of conduct and our ethics-related compliance policies, procedures, trainings, and programs. Ethical and inclusive behavior is strongly promoted by the management team and these values are reflected in our long-term strategy and our way of doing business.87151 full-time employees. On average, our senior management team has approximately 27 years of experience in the commercial aviation industry. None of our employees are represented by a union or collective bargaining agreements.10‑K10-K and should not be considered part of this or any other report filed with the SEC. We will also provide these reports in electronic or paper format free of charge upon written request made to Investor Relations at 2000 Avenue of the Stars, Suite 1000N, Los Angeles, California 90067. Our SEC filings are also available free of charge on the SEC’s website at http://www.sec.gov. The public may also read and copy any document we file with the SEC at the11SEC’s public reference room located at 100 F Street NE, Washington, DC 20549. Please call the SEC at 1‑800‑SEC‑0330 for further information on the operation of the public reference room.Air Lease Corporation incorporated in Delaware and launched in February 2010. of the Company22, 2018,16, 2023, including his/her age and current position with the Company and business experienceCompany. All of our executive officers have been employed by us during the past five years.NameAgeCompany PositionPrior PositionsAge Company Position Steven F. Udvar‑HáUdvar-Házy71 (since July 2016)Chairman and Chief Executive Officer, February 2010-June 201663 (since July 2016)President, Chief Operating Officer and Director, March 2010-June 201655 (since September 2012)39 (since July 2016)Alex A. Khatibi Senior62Executive Vice President and Chief Financial Officer, March 2012-June 2016Marc H. Baer53Grant A. Levy 60 Executive Vice President, Marketing (since April 2010)and Commercial Affairs Jie Chen54Executive Vice President and Managing Director of Asia (since August 2010)Alex A. Khatibi57Executive Vice President (since April 2010)Kishore Korde44Executive Vice President, Marketing (since May 2015)Senior Vice President, Marketing, 2010-May 2015Grant A. Levy55Executive Vice President (since April 2010)56 (since February 2017)Senior Vice President of Aircraft Procurement and Specifications, March 2010-February 201712Relatingrelating to our capital requirements and debt financingsBusinesscannot assure you thatand our subsidiaries have a significant amount of indebtedness. As of December 31, 2022, our total consolidated indebtedness, net of discounts and issuance costs, was approximately $18.6 billion and our interest payments were approximately $533.9 million for the year ended December 31, 2022. We expect these amounts to grow as we acquire more aircraft. Our level of debt could have important consequences, including making it more difficult for us to satisfy our debt payment obligations and requiring a substantial portion of our cash flows to be dedicated to debt service payments; limiting our ability to obtain additional financing; increasing our vulnerability to negative economic and industry conditions; increasing our interest rate risk; and limiting our flexibility in planning for and reacting to changes in our industry.be ableneed to enter into profitable leases for any aircraft acquired,raise additional funds by accessing committed debt facilities, securing additional financing from banks or through capital markets offerings. We also need to maintain access to the capital and credit markets and other sources of financing in order to repay or refinance our outstanding debt obligations.failurewe have limited control, including general market conditions and interest rate fluctuations; periods of unexpected market disruption and volatility; the market's view of the quality of our assets, perception of our growth potential and assessment of our credit risk; the relative attractiveness of alternative investments; and the trading prices of our debt securities and preferred and common equity securities. Depending on market conditions at the time and our access to do so would negatively affectcapital, we may also have to rely more heavily on additional equity issuances or on less efficient forms of debt financing that may require a larger portion of our financial condition, cash flow from operations to service, thereby reducing funds available for our operations, future business opportunities and resultsother purposes. Further, the issuance of operations.We cannot assure you that we will be ableadditional shares of our outstanding preferred stock or any other preferred stock approved by our board of directors pursuant to enter into profitable leases uponour charter may result in such preferred stockholders having rights, preferences or privileges senior to existing Class A common stockholders, who would not have the acquisition of the aircraft we purchase in the future. Our financial condition, cash flow and results of operations depend upon our management team’s judgment and ability to evaluate the ability of lesseesapprove such issuance. These alternative measures may not be successful and may not permit us to make required repayments on our debt or meet our aircraft purchase commitments as they come due and other counterpartiescash needs. The issuance of additional equity may be dilutive to perform their obligationsexisting shareholders or otherwise may be on terms not favorable to us or existing shareholders.negotiate transaction documents.us, we may be forced to seek alternatives, such as to reduce or delay investments and aircraft purchases, or to sell aircraft. We cannot assure you that our management team will be able to perform such functions in a manner that will achieve our investment objectives, which would negatively affect our financial condition, cash flow and results of operations.Our business model depends on the continual leasing and remarketing of our aircraft, and wealso may not be able to satisfy funding requirements for any aircraft acquisition commitments then in place, which could force us to forfeit our deposits and/or expose us to potential breach of contract claims by our lessees and manufacturers.sonot correlate over time with the payments that would have been made on favorable terms,our indebtedness or Series A Preferred Stock, as applicable, if LIBOR was available in its current form.negatively affecthave a negative effect on our business and our ability to continue as a going concern. In addition, for our secured debt, if we are unable to repay such indebtedness when due and payable, the lenders under our secured debt could proceed against, among other things, the aircraft or other assets securing such indebtedness. As the result of the existence of these financial condition, cash flow and results of operations.depends on the continual leasing and remarketing ofresults are driven by our ability to acquire strategically attractive commercial passenger aircraft, profitably lease and re-lease them, and finally sell such aircraft in order to generate sufficient revenues to finance our growth and operations, pay our debt service obligations, and generate cash flowsmeet our other corporate and contractual obligations. We rely on our ability to negotiate and enter into leases with favorable lease terms and to evaluate the ability of lessees to perform their obligations to us prior to receiving the delivery of our orderbook aircraft from operations.the manufacturers. When our leases expire or our aircraft are returned prior to the date contemplated in the lease, we bear the risk of re-leasing or selling the aircraft. Because our leases are predominantly operating leases, only a portion of an aircraft’s value is recovered by the revenues generated from the lease and we may not be able to realize the aircraft’s residual value after lease expiration. Our ability to profitably purchase, lease, and remarketre-lease, sell or otherwise dispose of our aircraft will depend on conditions in the airline industry and general market and competitive conditions at the time the leases are entered intoof purchase, lease and expire. If we are not abledisposition. In addition to lease or remarket an aircraft orfactors linked to do so on favorable terms, we may be required to attempt to sell the aircraft to provide funds for our debt service obligations or operating expenses. Our ability to lease, remarket or sell the aircraft on favorable terms or without significant off-lease time and costs could be negatively affected by depressed conditions in the aviation industry governmentin general, other factors that may affect our ability to generate adequate returns from our aircraft include the maintenance and environmental regulations, increased operating costs includinghistory of the priceairframe and availabilityengines, the number of jet fuel, airline bankruptcies,operators using the effects of terrorism, war, natural disasters and/or epidemic diseases on airline passenger traffic trends, declines in the valuesparticular type of aircraft, and various other general market and competitive conditions and factors which are outside of our control.aircraft age. If we are unable to lease and remarketgenerate sufficient returns on our aircraft due to any of the above factors within or outside of our control, it may have an adverse impact on favorable terms, or at all, our financial condition, cash flow and results of operationsnet income.be negatively impacted.Our success depends in large part onaffect our ability to obtain capital on favorable termsfurther grow our fleet and net income.finance our growthacquire a total of 398 new aircraft for delivery through 2029. If we are unable to complete the purchase of such aircraft, we would face several risks, including forfeiting deposits and progress payments and having to repaypay and expense certain significant costs relating to these commitments; not realizing any of the benefits of completing the acquisitions; damage to our outstanding debt obligations as they mature.reputation and relationship with aircraft manufacturers; and defaulting on our lease commitments, which could result in monetary damages and damage to our reputation and relationships with lessees. If we determine that the capital required to satisfy these commitments is not available on terms we deem attractive, we may eliminate or reduce any then-existing dividend program to preserve capital to apply to such commitments. These risks, whether financial or reputational, would negatively affect our ability to further grow our fleet and net income.not ableunable to obtain capitalcomplete the sales of such aircraft on terms acceptable to us,the timeline anticipated, or at all, it would significantlycould impact our net income and may lead us to use alternative sources of liquidity to fund our operations such as additional capital markets issuances or borrowings under our revolving credit facility or other debt facilities.compete effectively in thegrow our fleet and our earnings.leasing marketis dominated by a limited number of airframe and would negatively affect our financial condition, cash flowengine manufacturers. As a result, we depend on these manufacturers’ ability to remain financially stable, produce products and results of operations.Growing our fleet will require substantial additional capital. Accordingly, we will need to obtain additional financing,related components which may not be availablemeet airlines’ demands and regulatory requirements, and fulfill any contractual obligations they have to us, on favorable terms or at all. Further, we must continue to have access to the capital markets and other sources of financingwhich is in order to repay our outstanding obligations as they mature. Our access to sources of financing will depend uponturn dependent on a number of factors over which we have limited control, including:·general market conditions;·the market’s view of the quality of our assets;13·the market’s perception of our growth potential;·interest rate fluctuations;·our current and potential future earnings and cash distributions; and·the market price of our Class A common stock.Weaknessesraw materials and manufactured components, changes in highly exacting performance requirements and product specifications, economic conditions, changes in the capitalregulatory environment and credit markets could negativelylabor relations and negotiations between manufacturers and their respective workforces. If manufacturers fail to meet their contractual obligations to us, we may experience:obtain financingremarket or sell at a profit, or at all, some of the aircraft in our fleet; andincreaseelect to cancel their lease with respect to such delayed aircraft. Any such cancellation could strain our relationship with such lessee going forward and would negatively affect our business.financing. For instance, duringoperating an aircraft, including maintenance which increases with aircraft age; and compliance with airworthiness directives. Obsolescence of certain aircraft may also trigger impairment charges, increase depreciation expense or result in losses related to aircraft asset value guarantees, if we provide such guarantees.2008 financial crisis, many companies experienced downward pressureavailability and cost of financing.their share pricesfavorable terms, ifhad limited or no access to the credit markets, often without regard to their underlying financial strength. If financial market disruptionour results of operations may be negatively impacted and volatility were to occur again, we cannot assure youmay result in impairment charges.willown or acquire could decline resulting in an impact to our earnings and cash flows.ablemore specific to access capital,certain types of aircraft in our fleet. For example, the effects of COVID-19 pandemic related travel restrictions, as well as, groundings and aircraft production delays, have each impacted, and may continue to impact lease rates or our ability to lease certain aircraft in our fleet or orderbook. Other factors include, but are not limited to: manufacturer production levels and technological innovation; the number of airlines operating the aircraft; our lessees’ failure to maintain our aircraft; the impact of decisions by the regulatory authority under which the aircraft is operated and any applicable airworthiness directives, service bulletins or other regulatory action that could negatively affectprevent or limit utilization of the aircraft. As a result of these factors, our financial conditionearnings and resultscash flows may be impacted by any decrease in the value of operations.In addition, if there are new regulatory capital requirements imposed on our private lenders, theyaircraft that we own or acquire or decrease in market rates for leases for these aircraft.limit,record an impairment charge or increasesell aircraft for a price less than its depreciated book value which may impact our financial results.costaircraft’s residual value over its estimated useful life. Our management team evaluates on a quarterly basis the need to perform an impairment test whenever facts or circumstances indicate a potential impairment has occurred. An assessment is performed whenever events or changes in circumstances indicate that the carrying amount of an aircraft may not be recoverable from their expected future undiscounted net cash flow. We develop the assumptions used in the recoverability assessment based on management's knowledge of, and historical experience in, the aircraft leasing market and aviation industry, as well as from information received from third-party industry sources. Factors considered in developing estimates for this assessment include changes in contracted lease rates, economic conditions, technology, and airline demand for a particular aircraft type. Any of our assumptions and estimates may prove to be inaccurate, which could adversely impact forecasted cash flow. In the event that an aircraft does not meet the recoverability test, the aircraft will be recorded at fair value, resulting in an impairment charge. Deterioration of future lease rates and the residual values of our aircraft could result in impairment charges which may have a significant impact on our financial results. The occurrence of unexpected events or changing conditions may also result in impairment charges. For a description of our impairment policy, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates—Flight equipment.”they provideincluding availability of governmental support; airline financial health may also have an impact. Finally, our lessees may also be affected by aircraft accidents, in particular a loss if the aircraft is damaged or destroyed by an event specifically excluded from insurance policies such as dirty bombs, biohazardous materials and electromagnetic pulsing.us. In general, this could potentially increase our financingincur higher costs and reduceto generate lower revenues which could adversely affect their ability to make lease payments. In addition, lease default levels will likely increase over time if economic conditions deteriorate.liquiditylessees received lease deferrals or require usother accommodations during the COVID-19 pandemic and we may agree to sell assets at an inopportune timedeferrals, restructurings and terminations in the ordinary course of our business in the future. If a lessee delays, reduces, or price.Iffails to make lease payments when due and if we are unable to raise additional fundsagree on a lease payment deferral or obtain capital on terms acceptablelease restructuring and we elect to us,terminate the lease, we may not be able to satisfy funding requirements forreceive all or any aircraft acquisition commitments then in place. If we are unable to satisfy our purchase commitments,payments still outstanding, and we may be forcedunable to forfeitre-lease the aircraft promptly and at favorable rates, if at all. While deferrals generally shift the timing of payments to a later period, restructurings and terminations generally permanently reduce our deposits. Further,lease revenue. If we would be exposed to potential breachperform a significant number of contract claims by our lesseesrestructurings and manufacturers. These risks may also be increased byterminations, the volatilityassociated reduction in lease revenue could materially and disruption in the capital and credit markets. Depending on market conditions at the time, we may have to rely more heavily on additional equity issuances, which may be dilutive to our stockholders, or on less efficient forms of debt financing that require a larger portion of our cash flow from operations, thereby reducing funds available for our operations, future business opportunities and other purposes. Further, because our charter permits the issuance of preferred stock, if our board of directors approves the issuance of preferred stock in a future financing transaction, such preferred stockholders may have rights, preferences or privileges senior to existing stockholders, and you will not have the ability to approve such a transaction. These risks would negativelyadversely affect our financial condition,results and cash flowflows.resultsreorganizations, bankruptcies or similar proceedings, may result in lost revenues and additional costs.operations.Incurring significant costs resultingour lessees have defaulted on their lease obligations or filed for bankruptcy or otherwise sought protection from lease defaults could negatively affectcreditors (collectively referred to as “bankruptcy”). One of our financial condition, cash flowlessees is subject to bankruptcy proceedings as of February 15, 2023 and results of operations.some of our lessees are likely to default on their lease obligations or file for bankruptcywe expect that we will experience additional lessee defaults and bankruptcies in the ordinary course of our business. Thoselikely would includeincluding legal and other expenses associated with court or other governmental proceedings, including the cost of posting security bonds or letters of credit necessary to effect repossession of the aircraft, particularly if the lessee is contesting the proceedings or is in bankruptcy. In addition, during any such proceedings the relevant aircraft would likely not be generating revenue.proceedings. We could also incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs and where such maintenance, refurbishment or repairs arewhen necessary to put the aircraft in suitable condition for remarketing or sale. We may also incur storage costs associated with any aircraft that we repossess and are unable to place immediately with another lessee. Even if we are able to immediately place a repossessed aircraft with another lessee, and we may not ultimately be able to do sore-lease the aircraft at a similar or favorable lease rate. It may also be necessary to pay offWe may suffer other negative consequences as a result ofdefault,fails to fulfill their obligations under the related terminationlease or enters into bankruptcy proceedings, the lessee may not make lease payments or may return aircraft to us before the lease expires. When a lessee files for bankruptcy with the intent of reorganizing its business, we may agree to adjust our lease terms, including reducing lease payments by a significant amount. Certain jurisdictions give rights to the trustee in a bankruptcy to assume or reject the lease or to assign it to a third party, or entitle the lessee or another third party to retain possession of the aircraft without paying lease and the repossessionrentals or performing all or some of the related aircraft. It is likely thatobligations under the relevant lease. If one or more airline bankruptcies result in a larger number of aircraft being available for purchase or lease over a short period of time, aircraft values and aircraft lease rates may be depressed, and additional grounded aircraft and lower market values could adversely affect our ability to sell our aircraft or lease or remarket our aircraft at favorable rates or at all.We anticipate that whenWhen a defaulting lessee is in bankruptcy protective administration, insolvency or similar proceedings, additional limitations may apply. CertainThere can be no assurance that jurisdictions give rights tothat have adopted the trustee in bankruptcy or a similar officer to assume or reject the lease or to assignCape Town Convention, which provides for uniformity and certainty for repossession of aircraft, will enforce it to a third party, or entitle the lessee or another third party to retain possession of the aircraft without paying lease rentals or14performing all or some of the obligations under the relevant lease.as written. In addition, certain of our lessees are owned, in whole or in part, by government‑relatedgovernment-related entities, which could complicate our efforts to repossess our aircraft in that lessee’s domicile.government’s jurisdiction. Accordingly, we may be delayed in, or prevented from, enforcing certain of our rights under a lease and in remarketing the affected aircraft. necessarily be able to export or deregister and profitably redeploy the aircraft. An aircraft cannot be registered in two countriesa timely manner or at the same time.all. Before an aviation authority will register an aircraft that has previously been registered in another country, it must receive confirmation that the aircraft has been deregistered by that country'scountry’s aviation authority. In order to deregister an aircraft, the lessee must comply with applicable laws and regulations, and the relevant governmental authority must enforce these laws and regulations. For instance, where a lessee or other operator flies only domestic routes in the jurisdiction in which the aircraft is registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. We may also incur significant costs in retrieving or recreating aircraft records required for registration of the aircraft, and in obtaining the Certificatea certificate of Airworthinessairworthiness for an aircraft. If, uponUpon a lessee default, we may incur significant costs in connection with repossessing our aircraft areand we may be delayed in repossessing our aircraft or are unable to obtain possession of our aircraft asaircraft.our financial condition, cash flowreorganizations, bankruptcies or similar proceedings as described above, which can vary by airline and results of operations would be negatively affected.If our lessees fail to discharge aircraft liens,jurisdiction among other factors, we may be obligated to pay theexperience lost revenues and additional costs.liens,lessors which would negatively affect our financial condition, cash flow and results of operations.In the normal course of their business, our lessees are likely to incur aircraft liens that secure the payment of airport fees and taxes, customs duties, air navigation charges, including charges imposed by Eurocontrol, the European Organization for the Safety of Air Navigation, landing charges, crew wages, salvage or other liens that may attach to our aircraft. These liens may secure substantial sums that may, in certain jurisdictions or for certain types of liens, particularly liens on entire fleets of aircraft, exceed the value of the particular aircraft to which the liens have attached. Aircraft may also be subject to mechanics’ liens as a result of routine maintenance performed by third parties on behalf of our lessees. Although we anticipate that the financial obligations relating to these liens are the responsibility of our lessees, if they fail to fulfill such obligations, the liens may attach to our aircraft and ultimately become our responsibility. In some jurisdictions, aircraft liens may give the holder thereof the right to detain or, in limited cases, sell or cause the forfeiture of the aircraft.Until they are discharged, these liens could impairimpact our ability to repossess, remarketexecute our long-term strategy.sell our aircraft.provide financial or maintenance services, or other inducements to potential lessees or buyers that we cannot, which could make them able to compete more effectively in certain markets we operate in. In addition, some competitors may have higher risk tolerances, lower investment return expectations or different risk or residual value assessments, which could allow them to consider a wider variety of investments, establish more relationships, bid more aggressively on aviation assets available for sale and offer lower lease rates or sale prices than we can. Our lessees may not complyprimary competitors are other aircraft leasing companies. The barriers to entry in the aircraft acquisition and leasing market are comparatively low, and new entrants with private equity, hedge fund, or other funding sources appear from time to time.anticipated obligations under their leasesaircraft necessary to dischargemeet the customer’s needs. Competition in the used aircraft liens arising duringmarket is driven by price, the terms of the leases. If they do not, welease to which an aircraft is subject and the creditworthiness of the lessee, if any. Our inability to compete successfully with our competitors may find it necessary to pay the claims secured by such aircraft liens in order to repossess the aircraft. Such payments would negatively affectimpact our financial condition, cash flow and results of operations.If our lessees fail to perform as expected and we decide to restructure or reschedule our leases, the restructuring and rescheduling would likely result in less favorable leases, which would negatively affect our financial condition, cash flow and results of operations.A lessee’s ability to perform its obligations under its lease will depend primarily on the lessee’s financial condition and cash flow, which may be affected by factors outsideexecute our control, including:
long-term strategy.·competition;·passenger and air cargo rates;·passenger and air cargo demand;·geopolitical and other events, including war, acts of terrorism, outbreaks of epidemic diseases and natural disasters;15·increases in operating costs, including the price and availability of jet fuel and labor costs;·labor difficulties, including pilot shortages;·economic conditions and currency fluctuations in the countries and regions in which the lessee operates; and·governmental regulation and associated fees affecting the air transportation business.Many of our airline customers do not have investment grade credit profiles. We anticipate that some of our lessees will experience a weakened financial condition or suffer liquidity problems. This could lead to a lessee experiencing difficulties in performing under the terms of our lease agreement. This could result in the lessee seeking relief under some of the terms of our lease agreement, or it could result in us electing to repossess the aircraft.Any future downturns in the airline industry could greatly exacerbate the weakened financial condition of some of these lessees and further increase the risk of delayed, missed or reduced rental payments. We may not correctly assess the credit risk of a lessee, or may not charge lease rates which correctly reflect the related risks, and as a result,Our lessees may not be ablefail to satisfyadequately insure our aircraft or fulfill their financial and otherindemnity obligations, under their leases. A delayed, missed or reduced rental payment from a lessee would decrease our revenues and cash flow. If we, in the exercise of our remedies under a lease, repossess an aircraft, we may not receive all or any of the past-due or deferred payments and we may not be able to remarket theadequately insure our aircraft, promptly or at favorable rates, if at all.It is likely that restructurings and/or repossessions with some of our lessees will occur in the future. The terms and conditions of possible lease restructurings or reschedulingwhich may result in a significant reductionincreased costs and liabilities.lease revenue, which may negatively affect our financial results and growth prospects. If any request for payment restructuringsuch aircraft, or rescheduling is made and granted, reduced or deferred rental payments may be payable over allheld liable for losses on other legal theories or some part of the remaining term of the lease. The terms of any revised payment schedulesclaims may be unfavorable and such payments may not be made. Our default levels would likely increase over time if economic conditions deteriorate. If lesseesmade against us as the owner of a significant number ofan aircraft requiring us to expend resources in our aircraft defaulted on their leases, it would negatively affect our financial condition, cash flow and results of operations.Failure to obtain certain required licenses, consents and approvals could negatively affect our ability to remarket or sell aircraft, which would negatively affect our financial condition, cash flow and results of operations.Airlines are subject to extensive regulation under the laws of the jurisdictions in which they are registered and in which they operate.defense. As a result, we expectseparately purchase contingent liability insurance and contingent hull insurance on all aircraft in our owned fleet. While we believe our insurance is adequate both as to coverages and amounts based on industry standards in the current market, we cannot assure you that certain aspectswe are adequately insured against all risks and in all territories in which our aircraft operate. For example, following the Russia-Ukraine conflict, Russia, Ukraine and Belarus are now generally excluded from coverage in our contingent liability, contingent hull and contingent hull war insurance consistent with insurance market terms available at the time these policies were last renewed.our leases will require licenses, consents or approvals, including consents from governmental or regulatory authoritiesinsurance customary in the aviation industry and indemnify us for, certain payments under our leases and forinsure against, liabilities arising out of the import, export or deregistrationlessee’s use and operation of the aircraft. Subsequent changesLessees are also required to maintain public liability, property damage and all risk hull and war risk insurance on the aircraft at agreed upon levels. Some lessees may fail to maintain adequate insurance coverage during a lease term, which, although in applicable lawcontravention of the lease terms, could necessitate our taking some corrective action such as terminating the lease or administrative practicesecuring insurance for the aircraft. Moreover, even if our lessees retain specified levels of insurance, and indemnify us for, and insure against, liabilities arising out of their use and operation of the aircraft, we cannot assure you that we will not have any liability.increaseface, for which insurers may be unwilling to provide coverage or the cost to obtain such requirementscoverage may be prohibitively expensive. For example, following the terrorist attacks of September 11, 2001, aviation insurers significantly reduced the amount of insurance coverage available for claims resulting from acts of terrorism, war, dirty bombs, bio-hazardous materials, electromagnetic pulsing or similar events, and governmental consent, once given,increased the premiums for such third-party war risk and terrorism liability insurance and coverage in general. Similarly, following the Russia-Ukraine conflict, aviation insurers have, in some cases, reduced the scope of insurance coverage provided by policies and increased insurance premiums. Accordingly, our or our lessees’ insurance coverage could be withdrawn. Furthermore, consents neededinsufficient to cover all claims that could be asserted against us arising from the operation of our aircraft. Inadequate insurance coverage or default by lessees in connection withfulfilling their indemnification or insurance obligations will reduce the future remarketing or saleproceeds that would be received by us if we are sued and are required to make payments to claimants. Moreover, our lessees’ insurance coverage is dependent on the financial condition of an aircraft mayinsurance companies, which might not be forthcoming. Anyable to pay claims.these eventsone of our key officers which may negatively impact our business.negatively affectlead to a material disruption of our information technology (“IT”) systems or the IT systems of our third-party providers and the loss of business information, which may hinder our ability to remarketconduct our business effectively and may result in lost revenues and additional costs.sellinterruption from power outages, computer and telecommunications failures, computer viruses, security breaches, ransomware attacks, social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), fire and natural disasters. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm,which would negatively affectleasing information. We have, from time to time, experienced threats to our financial condition, cash flowdata and resultssystems, including malware and computer virus attacks. A cyberattack could adversely impact our daily operations and lead to the loss of operations.Our aircraftsensitive information, including our proprietary information and that of our customers, suppliers and employees. Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, reputational harm, interruptions in our operations, additional costs and liabilities. Applicable data privacy and security obligations may also require routine maintenance,us to notify relevant stakeholders of cyberattacks. Such disclosures are costly, and if they are not properly maintained, their valuethe disclosure or the failure to comply with such requirements could lead to adverse consequences. While we devote substantial resources to maintaining adequate levels of cyber-security, our resources and technical sophistication may declinebe unable to prevent all types of cyberattacks. We take steps to detect and remediate vulnerabilities in our IT systems, but we may not be able to leasedetect and remediate all vulnerabilities because the threats and techniques used to exploit the vulnerability change frequently and are often sophisticated in nature. Therefore, such vulnerabilities could be exploited but may not be detected until after a cyberattack has occurred. These vulnerabilities pose material risks to our business. Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. A cyberattack leading to a significant disruption of our IT systems or remarket such aircraft at favorable rates, if at all, which wouldof those of our third-party providers may negatively affect our financial condition, cash flow and results of operations.We may be exposedability to increased maintenance costs forconduct our aircraft associated with a lessee’s failure to properly maintain the aircraft or pay supplemental maintenance rent. If an aircraft is not properly maintained, its market value may decline, which would result in lower revenues from its lease or sale. We enter into leases pursuant to which the lessees are primarily responsible for many obligations, which include maintaining the aircraft and complying with all governmental requirements applicable to the lessee and the aircraft, including operational, maintenance, government agency oversight, registration requirements, service bulletins issued by aircraft manufacturers and airworthiness directives issued by aviation authorities. Failure of a lessee to perform required maintenance, or comply with the16applicable service bulletins and airworthiness directives during the term of a lease could result in a decrease in value of an aircraft, an inability to remarket an aircraft at favorable rates, if at all, or a potential grounding of an aircraft. Maintenance failures by a lessee would also likely require us to incur maintenance and modification costs upon the termination of the applicable lease, which could be substantial, to restore the aircraft to an acceptable condition prior to remarketing or sale. Even if we are entitled to receive supplemental maintenance rents, these rents may not cover the entire cost of actual maintenance required. Any failure by our lessees to meet their obligations to perform required scheduled maintenance or our inability to maintain our aircraft would negatively affect our financial condition, cash flow and results of operations.If we experience abnormally high maintenance or obsolescence issues with any of our aircraft or aircraft that we acquire, it would negatively affect our financial condition, cash flow and results of operations.Aircraft are long-lived assets, requiring long lead times to develop and manufacture, with particular types and models becoming obsolete or less in demand over time when newer, more advanced aircraft are manufactured. The weighted average age of our fleet was 3.8 years as of December 31, 2017. Our existing fleet, as well as the aircraft that we have ordered, have exposure to obsolescence, particularly if unanticipated events occur which shorten the life cycle of such aircraft types. These events include but are not limited to government regulation or changes in our airline customers’ preferences, including for instance, an increased demand for more fuel efficient aircraft. These events may shorten the life cycle for aircraft types in our fleet and, accordingly, may negatively impact lease rates, trigger impairment charges, increase depreciation expense or result in losses related to aircraft asset value guarantees, if we provide such guarantees.Further, variable expenses like fuel, crew size or aging aircraft corrosion control or modification programs and airworthiness directives could make the operation of older aircraft more costly to our lesseesbusiness effectively and may result in increased lessee defaultslost revenues and additional costs.attemptsreputational harm.renegotiateperform fleet management services such as leasing, remarketing, lease terms. management and sales services. These conflicts may arise because services we provide for these clients are also services which we provide for our own fleet, including placement of aircraft with lessees. Our current fleet management services agreements provide that we will use our reasonable commercial efforts in providing services. Nevertheless, despite these contractual waivers, competing with our fleet management clients in practice may result in strained relationships with them. Any conflicts of interest that arise between us and the clients which utilize our fleet management services may result in legal challenges or reputational harm to our business.incuracquire interests in similar entities controlled by third parties in order to take advantage of favorable financing opportunities or tax benefits, to share capital and/or operating risk, and/or to earn fleet management fees. Such interests involve significant risks that may not be present with other methods of ownership, including that:of these increased maintenance expenses and regulatory costs upon acquisition or remarketingall of our aircraft. Anyoriginal investment in such entity, which may result in losses on our investment and potential legal challenges or reputational harm.these expensesour control, including the threat or costs would negatively affect our financial condition, cash flow and resultsrealization of operations.If we acquire a high concentration of a particular model of aircraft, our financial condition, cash flow and results of operations would be negatively affected by changes in market demandepidemic diseases such as the COVID-19 pandemic, natural disasters, terrorist attacks, war or problems specific to that aircraft model.If we acquire a high concentration of a particular model of aircraft, our business and financial results could be negatively affected if the market demand for that model of aircraft declines. There are several scenarios which couldarmed hostilities between countries or non-state actors, may adversely affect the demand for an aircraft. These scenarios include butair travel, the financial condition of our lessees and of the aviation industry more broadly, and may ultimately impact our business.not limiteddetained in Russia totaling approximately $771.5 million. The COVID-19 pandemic has recently impacted air travel and our results of operations. According to ifIATA, December 2022 global domestic and international passenger traffic was 20% and 25%, respectively, lower compared to December 2019 passenger volume. As of December 31, 2022, we had $148.1 million in outstanding deferred rentals. In addition to lease deferral arrangements, we have from time to time agreed to restructure some of our lease agreements. As part of our lease restructuring agreements, we have typically modified our existing leases by extending the lease term and reducing our lease rates. We have also experienced and may still experience other impacts from COVID-19, including weaker demand for used aircraft, model is redesigneddefaults, bankruptcies or replacedreorganizations of our lessees, delays in delivery of aircraft, declines in placements of aircraft in our orderbook, and increased costs of borrowing. While we cannot currently reasonably estimate the extent to which these events will continue to impact our business, we expect our business, results of operations and financial condition will continue to be negatively impacted in the near term.its manufacturer,other epidemic diseases, such as severe acute respiratory syndrome, bird flu, swine flu, the Zika virus, and Ebola. Future epidemic diseases and other diseases, or if this aircraft model experiences designthe fear of such events could provoke responses that negatively affect passenger air travel. Air travel has also been disrupted in the past by terrorist attacks, war or technical problems,armed hostilities between countries or non-state actors, including the fear of such events, and the occurrence of natural disasters and other natural phenomena, such as extreme weather conditions, floods, earthquakes, and volcanic eruptions, which may become more frequent or severe as a result of climate change.ultimately leadadversely affect their ability to make lease payments to us or to obtain the groundingtypes and amounts of the aircraft model.insurance we require. This in turn could lead to the decline in valuelease restructurings and lease ratesrepossessions, impair our ability to remarket or otherwise dispose of such aircraft model, and ultimately we may not be able to lease such aircraft model on favorable terms or at all. For instance,all, or reduce the proceeds we receive for our fleet consists of a number of widebody aircraft and many of our new purchases will consist of newer, more fuel efficient models. Any changes in demand for these models or other models in our fleet could negatively affect our financial condition, cash flow and results of operations.The introduction of superior aircraft technology or a new line of aircraft in particular more fuel efficient aircraft,a disposition which may ultimately impact our business.causedecrease the aircraft that we own to become outdated or obsolete or oversuppliedvalue and therefore less desirable, which would negatively affect our financial condition, cash flow and results of operations.As manufacturers introduce technological innovations and new types of aircraft, somelease rates of the aircraft in our fleet could become less desirableresulting in an impact to potential lessees. In particular, the introduction recently of more fuel efficient aircraft has made some older models less attractiveour earnings and more difficult to lease. Technological innovations, increased fuel efficiency, improved operating economics and new models may increase the rate of obsolescence of existing aircraft faster than currently anticipated by our management. New aircraft manufacturers could emerge to produce aircraft that compete with the aircraft we own. The introduction of new technologies or introduction of a new type of aircraft, in particular more fuel efficient models, may negatively affect the value of the aircraft in our fleet.17In addition, the imposition of increased regulation regarding stringent noise or emissions restrictions may make some of our aircraft less desirable and accordingly less valuable in the marketplace. The development of new aircraft and engine options could decrease the desirability of certain aircraft in our fleet and/or aircraft that we have ordered. This could, in turn, reduce both future residual values and lease rates for certain types of aircraft in our portfolio. Any of these risks may negatively affect our ability to lease or sell our aircraft on favorable terms, if at all, which would negatively affect our financial condition, cash flow and results of operations.We are indirectly subject to many of the economic and political risks associated with emerging markets,including China, which could negatively affect our financial condition, cash flow and results of operations.Our business strategy emphasizes leasing aircraft to lessees outside of the United States, including to airlines in emerging market countries. Emerging market countries have less developed economies and infrastructure and are often more vulnerable to economic and geopolitical challenges and may experience significant fluctuations in gross domestic product, interest rates and currency exchange rates, as well as civil disturbances, government instability, nationalization and expropriation of private assets and the imposition of taxes or other charges by government authorities. The occurrence of any of these events in markets served by our lessees and the resulting economic instability that may arise, particularly if combined with high fuel prices, could negatively affect the value of our aircraft subject to lease in such countries, or the ability of our lessees, which operate in these markets, to meet their lease obligations. As a result, lessees that operate in emerging market countries may be more likely to default than lessees that operate in developed countries. In addition, legal systems in emerging market countries may be less developed, which could make it more difficult for us to enforce our legal rights in such countries.Further, demand for aircraft is dependent on passenger and cargo traffic, which in turn is dependent on general business and economic conditions. A decrease in passenger or cargo traffic may have a negative effect on our financial condition, cash flow and results of operations. Weak or negative economic growth in emerging markets may have an indirect effect on the value of the assets that we acquire if airlines and other potential lessees are negatively affected. Economic downturns can affect the values of the assets we purchase, which may have a negative effect on our financial condition, cash flow and results of operations.From time to time, the aircraft industry has experienced periods of oversupply during which lease rates and aircraft values have declined, and any future oversupply could negatively affect our financial condition, cash flow and results of operations.attacks and the 2008 financial crisis.attacks. The oversupply of a specific type of aircraft is likely to depress the lease rates for, and the value of, that type of aircraft, including upon sale. Further, over recent years, the airline industry has committed to a significant number of aircraft deliveries through order placements with manufacturers, and in response, aircraft manufacturers have generally raised their production output. The increaseIncreases in these production levels could result in an oversupply of relatively new aircraft if growth in airline traffic does not meet airline industry expectations.The supply and demand for Additionally, if overall lending capacity to purchasers of aircraft is affected by various cyclical and non-cyclical factors that are outsidedoes not increase in line with the increased aircraft production levels, the cost of our control, including:·passenger and air cargo demand;·airline operating costs, including fuel costs;·general economic conditions;·geopolitical events, including war, prolonged armed conflict and acts of terrorism;·outbreaks of communicable diseases and natural disasters;18·governmental regulation, including new airworthiness directives, statutory limits on the age of aircraft, and restrictions in certain jurisdictions on the age of aircraft for import, climate change initiatives and environmental regulation, and other factors leading to obsolescence of aircraft models;·interest and foreign exchange rates;·tariffs and other restrictions on trade;·the availability of credit;·airline restructurings and bankruptcies;·airline fleet planning that reduces capacity or changes the type of aircraft in demand;·manufacturer production levels and technological innovation;·discounting by manufacturers on aircraft types nearing end of production;·manufacturers merging or exiting the industry or ceasing to produce aircraft types;·new-entrant manufacturers producing additional aircraft models, or existing manufacturers producing new engine models or new aircraft models, in competition with existing aircraft models;·retirement and obsolescence of aircraft models;·reintroduction into service of aircraft previously in storage; and·airport and air traffic control infrastructure constraints.In addition, operating lessors maylending or ability to obtain debt to finance aircraft purchases could be sold or merged with other entities. These types of transactions may call for a reduction in the fleet of the new entity, which could increase supply levels of used and older aircraft in the market. Furthermore, recent and future political developments could result in increased regulation of trade, which could adversely impact demand for aircraft.Any of these factorsnegatively affected. Oversupply may produce sharp and prolonged decreases in aircraftmarket lease rates and values. They may have a negative effect on our ability to lease or remarket the aircraft in our fleet or in our order book. Any of these factors could negatively affect our financial condition, cash flow and results of operations.The value of the aircraft we acquire and the market rates for leases could decline, which would have a negative effect on our financial condition, cash flow and results of operations.Aircraft values and market rates for leases have from time to time experienced sharp decreases due to a number of factors including, but not limited to, decreases in passenger and air cargo demand, increases in fuel costs, government regulation and increases in interest rates. Operating leases place the risk of realization of residual values on aircraft lessors because only a portion of the equipment’s value is covered by contractual cash flows at lease inception. In addition to factors linked to the aviation industry generally, many other factors may affect the value of the aircraft that we acquire and market rates for leases, including:·the particular maintenance, damage, operating history and documentary records of the aircraft;·the geographical area where the aircraft is based and operates;19·the number of operators using that type of aircraft;·aircraft age;·the regulatory authority under which the aircraft is operated;·whether an aircraft is subject to a lease and, if so, whether the lease terms are favorable to the lessor;·any renegotiation of an existing lease on less favorable terms;·the negotiability of clear title free from mechanics’ liens and encumbrances;·any tax, customs, regulatory and other legal requirements that must be satisfied before the aircraft can be purchased, sold or remarketed;·grounding orders or other regulatory action that could prevent or limit utilization of our aircraft;·compatibility of aircraft configurations or specifications with other aircraft owned by operators of that type;·comparative value based on newly manufactured competitive aircraft; and·the availability of spare parts.Any decrease in the value of aircraft that we acquire and market rates for leases, which may result from the above factors or other unanticipated factors, would have a negative effect on our financial condition, cash flow and results of operations.Competition from other aircraft lessors, including lessors with greater resources or a lower cost of capital than ours, could negatively affect our financial condition, cash flow and results of operations.The aircraft leasing industry is highly competitive. Some of our competitors may have greater resources or a lower cost of capital than ours or may provide certain financial services, maintenance services or other inducements to potential lessees that we cannot provide; accordingly, they may be able to compete more effectively in one or more of the markets we conduct business in.In addition, we may encounter competition from other entities in the acquisition of aircraft such as:·airlines;·financial institutions;·special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft;·aircraft brokers;·public and private partnerships, investors and funds with more capital to invest in aircraft; and·other aircraft leasing companies that we do not currently consider our major competitors.Competition for a leasing transaction is based principally upon lease rates, delivery dates, lease terms, reputation, management expertise, aircraft condition, specifications and configuration and the availability of the types of aircraft necessary to meet the needs of the customer. Competition in the purchase and sale of aircraft is based principally20on the availability of the aircraft, the price, and where applicable the terms of the lease to which an aircraft is subject and the creditworthiness of the lessee. We will not always be able to compete successfully with our competitors, which could negatively affect our financial condition, cash flow and results of operations.The failure of any manufacturer to meet its delivery obligations to us would negatively affect our cash flow and results of operations.The supply of commercial aircraft is dominated by a few airframe manufacturers and a limited number of engine manufacturers. As a result, we are dependent on the success of these manufacturers in remaining financially stable, producing products and related components which meet the airlines’ demands and fulfilling any contractual obligations they may have to us.Should the manufacturers fail to respond appropriately to changes in the market environment or fail to fulfill any contractual obligations they might have to us, we may experience:·missed or late delivery of aircraft and a potential inability to meet our contractual obligations owed to any of our then lessees, resulting in potential lost or delayed revenues, lower growth rates and strained customer relationships;·an inability to acquire aircraft and related components on terms which will allow us to lease those aircraft to airline customers at a profit, resulting in lower growth rates or a contraction in our aircraft fleet;·a market environment with too many aircraft available, potentially creating downward pressure on demand for the anticipated aircraft in our fleet and reduced market lease rates and sale prices;·reduced demand for a particular manufacturer's product as a result of poor customer support, creating downward pressure on demand for those aircraft and engines in our fleet and reduced market lease rates and sale prices for those aircraft and engines; and·a reduction in our competitiveness due to deep discounting by the manufacturers, which may lead to reduced market lease rates and aircraft values and may affect our ability to remarket or sell at a profit, or at all, some of the aircraft in our fleet.There have been recent well‑publicized delays by airframe and engine manufacturers in meeting stated deadlines in bringing new aircraft to market. If there are manufacturing delays for aircraft for which we have made future lease commitments, some or all of our affected lessees could elect to terminate their lease arrangements with respect to such delayed aircraft. Any such termination could strain our relations with those lessees going forward and would negatively affect our cash flow and results of operations.Aircraft have limited economic useful lives and depreciate over time, which would negatively affect our financial condition, cash flow and results of operations.We depreciate our aircraft for accounting purposes on a straight-line basis to the aircraft’s residual value over its estimated useful life. If reduced demand for an aircraft causes a decline in its projected lease rates, or if we dispose of the aircraft for a price that is less than its depreciated book value on our balance sheet, then we will recognize a loss on the sale of the aircraft or potentially record an impairment charge. For this reason, our financial condition, cash flow and results of operations would be negatively affected.Failure to close our aircraft acquisition commitments could negatively affect our financial condition, cash flow and results of operations.As of December 31, 2017, we had entered into binding purchase commitments to acquire a total of 368 new aircraft for delivery through 2023. If we are unable to maintain our financing sources or find new sources of financing or21if the various conditions to our existing commitments are not satisfied, we may be unable to close the purchase of some or all of the aircraft which we have commitments to acquire. If our aircraft acquisition commitments are not closed for these or other reasons, we will be subject to several risks, including the following:·forfeiting deposits and progress payments and having to pay and expense certain significant costs relating to these commitments, such as actual damages, and legal, accounting and financial advisory expenses, not realizing any of the benefits of completing the transactions and damage to our reputation and relationship with aircraft manufacturers;·defaulting on our lease commitments, which could result in monetary damages and damage to our reputation and relationships with lessees; and·failing to capitalize on other aircraft acquisition opportunities that were not pursued due to our management’s focus on these commitments.If we determine that the capital we require to satisfy these commitments may not be available to us, either at all or on terms we deem attractive, we may eliminate or reduce any dividend program that may be in place at that time in order to preserve capital to apply to these commitments. These risks would negatively affect our financial condition, cash flow and results of operations.Certain of the agreements governing our indebtedness may limit our operational flexibility, our ability to effectively compete and our ability to grow our business as currently planned, which would negatively affect our financial condition, cash flow and results of operations.Certain of the agreements governing our indebtedness, including our credit facilities, contain financial and non-financial covenants, such as requirements that we comply with one or more of the following covenants: maximum debt-to-equity ratios, dividend restrictions, limitations on the ability of our subsidiaries to incur debt, minimum net worth and interest coverage ratios, change of control provisions, and prohibitions against our disposing of our aircraft or other aviation assets without a lender’s prior consent. Complying with such covenants may at times necessitate that we forego other opportunities, such as using available cash to grow our aircraft fleet or promptly disposing of less profitable aircraft or other aviation assets. Moreover, our failure to comply with any of these covenants would likely constitute a default under such agreements and could give rise to an acceleration of some, if not all, of our then outstanding indebtedness, which would have a negative effect on our business and our ability to continue as a going concern. If we were unable to repay the indebtedness when due and payable, secured lenders could proceed against, among other things, the aircraft securing such indebtedness, if any.In addition, we cannot assure you that our business will generate cash flow from operations in an amount sufficient to enable us to service our debt and grow our operations as planned. We cannot assure you that we will be able to refinance any of our debt on favorable terms, if at all. In addition, we cannot assure you that in the future we will be able to access long‑term financing or credit support on attractive terms, if at all, or qualify for guarantees, or obtain attractive terms for such guarantees, from the export credit agencies. Any inability to generate sufficient cash flow, maintain our existing fleet and facilities, or access long‑term financing or credit support would negatively affect our financial condition, cash flow and results of operations.Negative changes in our credit ratings may limit our ability to obtain financing or increase our borrowing costs which would negatively affect our financial condition, cash flow and results of operations.We are currently subject to periodic review by independent credit rating agencies S&P, Fitch and Kroll, each of which currently maintains investment grade credit ratings with respect to us and certain of our debt securities, and we may become subject to periodic review by other independent credit rating agencies in the future. An increase in the level of our outstanding indebtedness, or other events that could have a negative impact on our business, properties, financial condition, results of operations or prospects, may cause S&P, Fitch or Kroll, or, in the future, other rating agencies, to downgrade or withdraw the credit rating with respect to us or our debt securities, which could negatively impact our ability to secure financing and increase our borrowing costs.22We cannot assure you that these credit ratings will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn entirely by the applicable rating agency, if, in such rating agency’s sole judgment, circumstances so warrant. Ratings are not a recommendation to buy, sell or hold any security. Each agency’s rating should be evaluated independently of any other agency’s rating. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under further review for a downgrade, could increase our corporate borrowing costs and limit our access to the capital markets which would negatively affect our financial condition, cash flow and results of operations.An increase in our borrowing costs would negatively affect our financial condition, cash flow and results of operations.We finance many of the aircraft in our fleet through a combination of short-and long-term debt financings. As these debt financings mature, we may have to refinance these existing commitments by entering into new financings, which could result in higher borrowing costs, or repay them by using cash on hand or cash from the sale of our assets. Moreover, an increase in interest rates under the various debt financing facilities we have in place would have a negative effect onimpact our earnings and could makecash flows.leasing contracts unprofitable.A limited percentageand negatively impact our ability to execute on our long-term strategy.debt financings bear interest at a floating rate,lessees to operate our aircraft in certain jurisdictions, which may negatively impact our earnings and cash flows. For example, in early 2022, in connection with the ongoing conflict between Russia and Ukraine, the United States, European Union, United Kingdom and others imposed economic sanctions and export controls against certain industry sectors and parties in Russia. These sanctions include closures of airspace for aircraft operated by Russian airlines, bans on the leasing or sale of aircraft to Russian controlled entities, bans on the export and re-export of aircraft and aircraft components to Russian controlled entities or for use in Russia, and corresponding prohibitions on providing technical assistance, brokering services, insurance and reinsurance, as well as financing or financial assistance. In response to such thatactions, in March 2022 we terminated all of our interest expense would varyleasing activities in Russia.changes in the applicable reference rate.importation of the aircraft. As a result, increased tariffs will result in a higher cost for imported aircraft that our inabilitylessees may not be willing to sufficiently protect ourselves from changesassume and which could adversely impact demand for aircraft, creating an oversupply of aircraft and potentially placing downward pressure on lease rates and aircraft market values.our cost of borrowing, as reflected in our composite interest rate, may have a direct, negative impact on our net income. Our lease rental stream is generally fixed overOctober 2019, the life of our leases, whereas we have used floating-rate debt to finance a significant portion of our aircraft acquisitions. As of December 31, 2017, we had $1.4 billion in floating-rate debt. If interest rates increase, we would be obligated to make higher interest payments to the lenders of our floating-rate debt. Further, as we continue to incur fixed-rate debt, increased interest rates prevailing in the market at the timeOffice of the incurrence of such debt would also increase our interest expense. If our composite interest rateU.S. Trade Representative announced a 10% tariff on new aircraft imported from Europe, including Airbus aircraft. In March 2020, the tariffs on aircraft were raised to increase by 1.0%15%. In November 2020, the E.U. announced a 15% tariff on new aircraft imported into the E.U. from the U.S., we would expectincluding Boeing aircraft. In June 2021, the U.S. and the E.U. agreed to incur additional interest expense on our existing indebtedness as of December 31, 2017, of approximately $14.3 million on an annualized basis, which would negatively affect our financial condition, cash flow and results of operations.As such, if interest rates weretemporarily suspend all retaliatory tariffs related to rise sharply, we would notnew aircraft imports for five years.able to fully offset immediately the negative impact on our net income by increasing lease rates, even if the market were able to bear such increases in lease rates. Our leases are generally for multiple years with fixed lease rates over the life of the lease and, therefore, lags will exist because our lease ratestaken with respect to a particularexport controls, tariffs or trade relations between the U.S. and other countries. Accordingly, it is difficult to predict exactly how, and to what extent, such actions may impact our business, or the business of our lessees or aircraft cannot generally be increased untilmanufacturers. Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, may affect the expirationdemand for aircraft from our orderbook, increase the cost of aircraft components, delay production, impact the lease.The interest rates thatcompetitive position of certain aircraft manufacturers or prevent aircraft manufacturers from being able to sell aircraft in certain countries. In turn, this may impact where we obtain oncan place and deliver our debt financings have several components, including credit spreads, swap spreads, duration, and new issue premiums. These are all incremental to the underlying risk-free rates, as applicable. Volatility in our perceived risk of default or in a market sector’s risk of default willaircraft which may negatively impact our costability to execute on our long-term strategy.funds.We currently are not involvedprivate assets and the imposition of unexpected taxes or other charges by government authorities. This can result in any interest rate hedging activities, but we are contemplating engaging in hedging activities ineconomic and political instability which could negatively affect the future. Any such hedging activities will requireability of our lessees to meet their lease obligations leading to higher default rates, which could cause us to incur additional costs, and there can be no assurance that we will be able to successfully protect ourselves from any or all negative interest rate fluctuations at a reasonable cost.Our substantial indebtedness incurred to acquire our aircraft requires significant debt service payments which would negatively affect our financial condition, cash flow and results of operations.We and our subsidiaries have a significant amount of indebtedness. As of December 31, 2017, our total consolidated indebtedness, net of discounts and issuance costs, was approximately $9.7 billion and our interest payments were $301.7 million forrecord asset write-offs. For example, during the year ended December 31, 2017. Furthermore,2022, we expect this amountrecognized a net loss from asset-write-offs of our interests in owned and managed aircraft detained in Russia as a result of the Russia-Ukraine conflict totaling approximately $771.5 million. We also may experience challenges in leasing or re-leasing aircraft in markets experiencing economic instability. In addition, legal systems in all markets in which we operate may have different liability standards, which could make it more difficult for us to grow as we acquire more aircraft. Our levelenforce our legal rights in such countries, while legal systems in emerging market countries may also be less developed and less predictable. Doing business in countries around the world, including in emerging markets, has and may continue to expose our business to heightened risks and negatively impact our earnings and cash flows.debt could have important consequences, includingfuel represents a major expense to airlines that is not within their control, and significant increases in fuel costs or hedges that inaccurately assess the following:·making it more difficult for usdirection of fuel costs can adversely affect their operating results. Due to the competitive nature of the aviation industry, operators may be unable to pass on increases in fuel prices to satisfy our payment obligations with respect to our debt;23·limiting our ability to obtain additional financing to fund the acquisition of aircraft or for other corporate requirements;·requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for dividends, aircraft acquisitions and other general corporate purposes;·increasing our vulnerability to general negative economic and industry conditions;·exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our various credit facilities, are at variable rates of interest;·limiting our flexibility in planning for and reacting to changes in the aircraft industry;·placing us at a disadvantage compared to other competitors; and·increasing our cost of borrowing.agreements governingof our existing indebtedness contain financial maintenance covenants that require us to satisfy certain ratios and maintain minimum net worth, and other restrictive covenants that limitlessees operate. Should changes in fuel costs negatively affect our lessees or demand for our aircraft, our ability to engage in activities thatexecute our long-term strategy may be in our long‑term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, may result in the acceleration of some or all our debt, which would negatively affect our financial condition, cash flow and results of operations.Creditors of any subsidiaries we form for purposes of financing will have priority over our stockholders in the event of a distribution of such subsidiaries’ assets.Some of the aircraft we acquire are held in special-purpose, bankruptcy-remote subsidiaries of our Company. Liens on those assets will be held by a collateral agent for the benefit of the lenders under the respective facility. In addition, funds generated from the lease of aircraft generally are applied first to amounts due to lenders, with certain exceptions. Creditors of our subsidiaries will have priority over us, our stockholders and our creditors relating to debt that is not guaranteed or secured by our subsidiaries or their assets in any distribution of any such subsidiaries’ assets in a liquidation, reorganization or otherwise.Defaults by one or more of our significant airline customers would negatively affect our financial condition, cash flow and results of operations.The airline industry is cyclical, economically sensitive and highly competitive. Our lessees are affected by a number of factors over which we and they have limited control, including fare levels, air cargo rates, passenger air travel and air cargo demand, fuel prices and shortages, political or economic instability, currency fluctuations in the countries and regions in which the lessees operate, availability of financing and other circumstances affecting airline liquidity, terrorist activities, cyber risk, changes in national policy, competitive pressures, labor costs, labor actions, pilot shortages, aircraft accidents, insurance costs, recessions, health concerns, and other political or economic events negatively affecting the world or regional trading markets. Our lessees’ abilities to react to and cope with the volatile competitive environment in which they operate, as well as our own competitive environment, will likely affect our revenues and income. The loss of one or more of our significant airline customers or their inability to make operating lease payments due to financial difficulties, bankruptcy or otherwise could have a material negative effect on our cash flow and earnings. This, in turn, could result in a breach of the covenants contained in any of our long-term debt facilities, possibly resulting in accelerated amortization or defaults and would negatively affect our financial condition, cash flow and results of operations. In the event that a lessee defaults under a lease, any security deposit paid or letter of credit provided by the lessee may not be sufficient to cover the lessee’s outstanding or unpaid lease obligations and required maintenance and transition expenses.24 many of our lessees’ ability to honor the terms of their leases, which are generally denominated in U.S. dollars, and could therefore materially adversely affect our business, financial conditionmay result in lost revenues and results of operations.2017, less2022, more than 3%95% of our revenues were derived from customers who have their principal place of business inoutside the U.S. While we attempt to minimize our currency and exchange risks by negotiating themost leases designated payment currency in our leases to beis U.S. dollars, thedollars. The ability of our lessees to make lease payments to us in U.S. dollars may be adversely impacted in the event of an appreciating U.S. dollar.Our lessees may not be able to increase their revenues sufficiently to offset the impact of exchange rates on their lease payments and other expenses denominated in U.S. dollars. This is particularly true for non-U.S. airlines whose operations are primarily domestic. Currency volatility, particularly as witnessed recently in other emerging market countries, could impact the ability of some of our customers to meet their contractual obligations in a timely manner. Shifts in foreign exchange rates can be significant, are difficult to predict, and can occur quickly.Certainquickly as evidenced by the significant appreciation of the U.S. dollar in 2022. Should our subsidiaries may be restricted in their ability to make distributions to us which would negatively affect our financial condition and cash flow.The subsidiaries that hold our aircraft are legally distinct from us, and some of these subsidiaries are restricted from paying dividends or otherwise making funds available to us pursuant to agreements governing our indebtedness. Some of our principal debt facilities have financial covenants. If we are unable to comply with these covenants, then the amounts outstanding under these facilities may become immediately due and payable, cash generated by our subsidiaries affected by these facilities may be unavailable to us and/or we maylessees be unable to draw additional amounts under these facilities. The events that could cause somehonor the terms of our subsidiaries nottheir leases due to be in compliance with their loan agreements, such as a lessee default, may be beyond our control, but they nevertheless could have a substantial negative impact on the amount of our cash flow available to fund working capital, make capital expenditures and satisfy other cash needs. For these reasons our financial condition and cash flow would be negatively affected. For a descriptionappreciation of the operatingU.S. dollar, we may experience lost revenues and financial restrictions inreduced net income.debt facilities, see the section titled “Management’s DiscussionbusinessAnalysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”Our aircraft may not at all times be adequately insured either as a result of lessees failing to maintain sufficient insurance during the course of a lease or insurers not being willing to cover certain risks which would negatively affect our financial condition, cash flow and results of operations.We do not directly control the operation of any aircraft we acquire. Nevertheless, because we hold title, directly or indirectly, to such aircraft, we could be sued or held strictly liable for losses resulting from the operation of such aircraft, or may be held liable for those losses on other legal theories, in certain jurisdictions around the world, or claims may be made against us as the owner of an aircraft requiring us to expend resources in our defense. We require our lessees to obtain specified levels of insurance and indemnify us for, and insure against, liabilities arising out of their use and operation of the aircraft. Lessees are also required to maintain public liability, property damage and all risk hull and war risk insurance on the aircraft at agreed upon levels. Some lessees may fail to maintain adequate insurance coverage during a lease term, which, although in contravention of the lease terms, would necessitate our taking some corrective action such as terminating the lease or securing insurance for the aircraft, either of which could negatively affect our financial results. Moreover, even if our lessees retain specified levels of insurance, and indemnify us for, and insure against, liabilities arising out of their use and operation of the aircraft, we cannot assure you that we will not have any liability.In addition, there are certain risks or liabilities that our lessees may face, for which insurers may be unwilling to provide coverage or the cost to obtain such coverage may be prohibitively expensive. For example, following the terrorist attacks of September 11, 2001, non-government aviation insurers significantly reduced the amount of insurance coverage available for claims resulting from acts of terrorism, war, dirty bombs, bio-hazardous materials, electromagnetic pulsing or similar events. At the same time, they significantly increased the premiums for such third-25party war risk and terrorism liability insurance and coverage in general. Accordingly, we anticipate that our lessees’ insurance or other coverage may not be sufficient to cover all claims that could or will be asserted against us arising from the operation of our aircraft by our lessees. Inadequate insurance coverage or default by lessees in fulfilling their indemnification or insurance obligations will reduce the proceeds that would be received by us in the event that we are sued and are required to make payments to claimants. Moreover, our lessees’ insurance coverage is dependent on the financial condition of insurance companies, which might not be able to pay claims. A reduction in insurance proceeds otherwise payable to us as a result of any of these factors would negatively affect our financial condition, cash flow and results of operations.The death, incapacity or departure of key officers could harm our business and negatively affect our financial condition, cash flow and results of operations.We believe our senior management’s reputation and relationships with lessees, manufacturers, buyers and financiers of aircraft are a critical element to the success of our business. We depend on the diligence, skill and network of business contacts of our management team. We believe there are only a limited number of available qualified executives in the aircraft industry, and we therefore have encountered, and will likely continue to encounter, intense competition for qualified employees from other companies in our industry. Our future success will depend, to a significant extent, upon the continued service of our senior management personnel, particularly: Mr. Udvar-Házy, our founder, and Executive Chairman of the Board; Mr. Plueger, our Chief Executive Officer and President; and our other senior officers, each of whose services are critical to the success of our business strategies. We do not have employment agreements with Mr. Udvar-Házy or Mr. Plueger. If we were to lose the services of any of the members of our senior management team, it could negatively affect our financial condition, cash flow and results of operations.Conflicts of interest may arise between us and clients who will utilize our fleet management services, whichtaxes could negatively affect our business interests, cash flow and results of operations.Conflicts of interest may arise between us and third‑party aircraft owners, financiers and operating lessors who hire us to perform fleet management services such as leasing, re‑leasing, lease management and sales services. These conflicts may arise because services we anticipate providing for these clients are also services we will provide for our own fleet, including the placement of aircraft with lessees. We expect our fleet management services agreements will provide that we will use our reasonable commercial efforts in providing services, but, to the extent that we are in competition with the client for leasing opportunities, we will give priorityresults due to our own fleet. Nevertheless, despite these contractual waivers, competing with our fleet management clients in practice may result in strained relationships with them, which could negatively affect our business interests, cash flow and results ofmulti-jurisdictional operations.We may on occasion enter into strategic ventures with the intent that we would serve as the manager of such strategic ventures; however, entering into strategic relationships poses risks in that we most likely would not have complete control over the enterprise, and our financial condition, cash flow and results of operations could be negatively affected if we encounter disputes, deadlock or other conflicts of interest with our strategic partners.In addition to our Blackbird Capital I, LLC and Blackbird Capital II, LLC joint ventures discussed in Note 12 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for which we own non-controlling interests, we may on occasion enter into strategic ventures with third parties to take advantage of favorable financing opportunities or tax benefits, to share capital and/or operating risk, and/or to earn fleet management fees. Strategic ventures involve significant risks that may not be present with other methods of ownership, including that:·we may not realize a satisfactory return on our investment;·the strategic ventures may divert management’s attention from our core business;·our strategic venture partners could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments;26·our strategic venture partners might fail to fund their share of required capital contributions or fail to fulfill their other obligations;·our strategic venture partners may have competing interests in our markets that could create conflict of interest issues, particularly if aircraft owned by the strategic ventures are being marketed for lease or sale at a time when we also have comparable aircraft available for lease or sale.Although we anticipate that we would serve as the manager of any such strategic ventures, it has been our management’s experience that most strategic venture agreements will provide the non‑managing strategic partner certain veto rights over various significant actions, including the right to remove us as the manager under certain circumstances. If we were to be removed as the manager from a strategic venture that generates significant management fees, our financial results and growth prospects could be materially and negatively affected. In addition, if we were unable to resolve a dispute with a significant strategic partner that retains material managerial veto rights, we might reach an impasse that could require us to dissolve the strategic venture at a time and in a manner that could result in our losing some or all of our original investment in the strategic venture, which could have a negative effect on our financial condition, cash flow and results of operations.Our business and earnings are affected by general business, financial market and economic conditions throughout the world, which could have a negative effect on our financial condition, cash flow and results of operations.Our business and earnings are affected by general business, financial market and economic conditions throughout the world. As an aircraft leasing business with exposure to emerging markets, we are particularly exposed to downturns in these emerging markets. A recession or worsening of economic conditions, particularly if combined with high fuel prices, may have a material negative effect on the ability of our lessees to meet their financial and other obligations under our operating leases, which, if our lessees default on their obligations to us, could have a material negative effect on our cash flow and results of operations. General business and economic conditions that could affect us include the level and volatility of short-term and long-term interest rates, inflation, employment levels, bankruptcies, restructurings and mergers in the airline industry, demand for passenger and cargo air travel, volatility in both debt and equity capital markets, liquidity of the global financial markets, volatility in foreign exchange rates, the availability and cost of credit, investor confidence and the strength of the global economy and the local economies in which we operate. For these reasons our financial condition, cash flow and results of operations could be negatively affected.Because our leases are concentrated in certain geographical regions, we have concentrated exposure to the political and economic risks associated with those regions.Through our lessees and the countries in which they operate, we are exposed to the specific economic and political conditions and associated risks of those jurisdictions. For example, we have large concentrations of lessees in China, and therefore have increased exposure to the economic and political conditions in that country. These risks can include economic recessions, burdensome local regulations or, in extreme cases, increased risks of requisition of our aircraft. An adverse political or economic event in any region or country in which our lessees are concentrated or where we have a large number of aircraft could affect the ability of our lessees in that region or country to meet their obligations to us, or expose us to various legal or political risks associated with the affected jurisdictions, all of which could have a material and adverse effect on our financial results.Economic conditions and regulatory changes in the United States, United Kingdom and Europe could have an adverse effect on our business and results of operations.Following a referendum in June 2016 in which voters in the United Kingdom, or U.K., approved an exit from the European Union, or E.U., it is expected that the U.K. government will initiate a process, often referred to as Brexit, to leave the E.U. and will begin negotiating the terms of the U.K.'s future relationship with the E.U. The effects of Brexit will likely depend on the agreements that the U.K. is able to make to retain access to E.U. markets, either during a transitional period or more permanently. We lease aircraft to airlines in the E.U., including the U.K. We and the aviation industry face uncertainty regarding the impact of Brexit. Adverse consequences, such as instability in financial markets, deterioration in economic conditions, volatility in currency exchange rates or adverse changes in regulation of the27aviation industry or bilateral agreements governing air travel, could negatively affect our financial condition, cash flow and results of operations. These impacts may include increased costs of financing; downward pressure on demand for our aircraft and reduced market lease rates and lease margins; and a higher incidence, in the U.K. in particular and the E.U. generally, of lessee defaults or other events resulting in our lessees' failing to perform under our lease agreements.In the United States, any negative economic effects of instability resulting from changes in the political environment, international relations, existing trade agreements, import and export regulations, immigration, tariffs and customs duties as well as regulatory, environmental or tax policy changes, may negatively affect our financial condition, cash flow and results of operations. For example, unanticipated impacts of the Tax Cuts and Job Act of 2017 (the “Tax Act”), including as a result of changes in assumptions we make in our interpretation of the Tax Act and guidance related to application of the Tax Act that may be issued in the future may negatively affect our financial condition, cash flow and results of operations. Additionally, in the E.U., several countries will hold general and/or presidential elections in 2018, including Italy, Sweden and Ireland, and the outcome of these elections could create significant changes in, or create uncertainty regarding, laws, regulations and policies affecting our business.Any of the above effects of Brexit and U.S. political changes, and others that we may not be able to anticipate, could negatively impact our financial condition, cash flow and results of operations.Terrorist attacks, war or armed hostilities between countries or non-state actors, or the fear of such attacks, even if not made directly on the airline industry, could negatively affect lessees and the airline industry, which would negatively affect our cash flow and results of operations.Terrorist attacks, war or armed hostilities between countries or non-state actors, or the fear of such events, have historically had a negative impact on the aviation industry and could result in:·higher costs to the airlines due to the increased security measures;·decreased passenger demand and revenue due to the inconvenience of additional security measures or concerns about the safety of flying;·the imposition of ''no-fly zone'' or other restrictions on commercial airline traffic in certain regions;·uncertainty of the price and availability of jet fuel and the cost and practicability of obtaining fuel hedges;·higher financing costs and difficulty in raising the desired amount of proceeds on favorable terms, if at all;·significantly higher costs of aviation insurance coverage for future claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, or the unavailability of certain types of insurance;·inability of airlines to reduce their operating costs and conserve financial resources, taking into account the increased costs incurred as a consequence of such events;·special charges recognized by some operators, such as those related to the impairment of aircraft and engines and other long-lived assets stemming from the grounding of aircraft as a result of terrorist attacks, economic conditions and airline reorganizations; and·an airline's becoming insolvent and/or ceasing operations.For example, as a result of the September 11, 2001 terrorist attacks in the United States and subsequent terrorist attacks abroad, notably in the Middle East, Southeast Asia and Europe, increased security restrictions were implemented on air travel, costs for aircraft insurance and security measures increased, passenger and cargo demand for air travel decreased, and operators faced difficulties in acquiring war risk and other insurance at reasonable costs. Further, international sanctions against Russia and other countries, uncertainty regarding tensions between the United States and28North Korea, the situations in Iraq, Afghanistan, Egypt and Syria, the Israeli/Palestinian conflict, political instability in the Middle East and North Africa, the dispute between Japan and China, the recent tensions in the South China Sea and additional international hostilities could lead to further instability in these regions.Terrorist attacks, war or armed hostilities between countries or non-state actors, large protests or government instability, or the fear of such events, could adversely affect the aviation industry and the financial condition and liquidity of our lessees, as well as aircraft values and rental rates. In addition, such events may cause certain aviation insurance to become available only at significantly increased premiums or with reduced amounts of coverage insufficient to comply with the current requirements of aircraft lenders and lessors or by applicable government regulations, or not to be available at all. Although some governments provide for limited coverage under government programs for specified types of aviation insurance, these programs may not be available at the relevant time or governments may not pay under these programs in a timely fashion.Such events are likely to cause our lessees to incur higher costs and to generate lower revenues, which could result in a material adverse effect on their financial condition and liquidity, including their ability to make rental and other lease payments to us or to obtain the types and amounts of insurance we require. This in turn could lead to aircraft groundings or additional lease restructurings and repossessions, increase our cost of remarketing or selling aircraft, impair our ability to remarket or otherwise dispose of aircraft on favorable terms or at all, or reduce the proceeds we receive for our aircraft in a disposition.Changes in fuel costs could materially negatively affect our lessees and by extension the demand for our aircraft which would negatively affect our financial condition, cash flow and results of operations.Fuel costs represent a major expense to airlines, and fuel prices fluctuate widely depending primarily on international market conditions, geopolitical and environmental events, regulatory changes (including those related to greenhouse gas emissions) and currency exchange rates. If airlines are unable to increase ticket prices to offset fuel price increases, their cash flows will suffer. Political unrest in the Middle East and North Africa has historically generated uncertainty regarding the predictability of the world’s future oil supply, which has led to significant increases in fuel costs. Fuel costs may rise in the future. Other events can also significantly affect fuel availability and prices, including natural disasters, decisions by the Organization of the Petroleum Exporting Countries regarding their members’ oil output, and the increase in global demand for fuel from countries such as China.High fuel costs would likely have a material negative impact on airline profitability. Due to the competitive nature of the airline industry, airlines may not be able to pass on increases in fuel prices to their passengers by increasing fares. If airlines are successful in increasing fares, demand for air travel may be negatively affected. Higher and more volatile fuel prices may also have an impact on consumer confidence and spending, and thus may adversely impact demand for air transportation. In addition, airlines may not be able to manage fuel cost risk by appropriately hedging their exposure to fuel price fluctuations. The profitability and liquidity of those airlines that do hedge their fuel costs can also be adversely affected by swift movements in fuel prices, if such airlines are required to post cash collateral under their hedge agreements. If fuel prices increase, they are likely to cause our lessees to incur higher costs. A sustained period of lower fuel costs may adversely affect regional economies that depend on oil revenue, including those in which certain of our lessees operate. Consequently, these conditions may:·affect our lessees’ ability to make rental and other lease payments;·result in lease restructurings and aircraft repossessions;·increase our costs of maintaining and marketing aircraft;·impair our ability to remarket aircraft or otherwise sell our aircraft on a timely basis at favorable rates; or·reduce the sale proceeds received in the event of an aircraft sale.29Such effects would materially negatively affect demand for our aircraft, which would negatively affect our financial condition, cash flow and results of operations.A deterioration in the financial condition of the airline industry would have a negative impact on our ability to lease our aircraft which would negatively affect our financial condition, cash flow and results of operations.The financial condition of the airline industry is of particular importance to us because our aircraft are primarily leased to passenger airlines and we plan to continue to lease our aircraft to passenger airlines. Our ability to achieve our primary business objectives will depend on the financial condition and growth of the airline industry as well as the financial strength of our lessees and the lessees’ ability to manage their respective risks. However, these risks are generally out of our control, but because these risks have a significant impact on our intended airline customers, they will affect us as well. We may experience:·downward pressure on demand for our aircraft and reduced market lease rates and lease margins;·a higher incidence of lessee defaults, lease restructurings, repossessions and airline bankruptcies and restructurings, resulting in lower lease margins due to maintenance and legal costs associated with repossession, as well as lost revenue for the time our aircraft are off lease and possibly lower lease rates from our new lessees;·an inability to lease aircraft on commercially acceptable terms, resulting in lower lease margins due to aircraft not earning revenue and resulting in storage, insurance and maintenance costs;·a loss if the aircraft are damaged or destroyed by an event specifically excluded from insurance policies such as dirty bombs, bio-hazardous materials and electromagnetic pulsing; and·any changes in the general business, financial market, and economic conditions or the local economies in which lessees operate that negatively affect lessees.For these reasons our financial condition, cash flow and results of operations would be negatively affected.Epidemic diseases may hinder airline travel and reduce the demand for aircraft which would negatively affect our financial condition, cash flow and results of operations.Epidemic diseases, such as severe acute respiratory syndrome, bird flu, swine flu, the Zika virus, Ebola or other pandemic diseases negatively affected passenger demand for air travel in recent years. These epidemic diseases and other pandemic diseases, or the fear of such events, could provoke responses, including government-imposed travel restrictions, which could negatively affect passenger demand for air travel and the financial condition of the aviation industry. The consequences of these events may reduce the demand for aircraft and/or impair our lessees’ ability to satisfy their lease payment obligations to us, which in turn would negatively affect our financial condition, cash flow and results of operations.Natural disasters and other natural phenomena may disrupt air travel and reduce the demand for aircraft which would negatively affect our financial condition, cash flow and results of operations.Air travel can be disrupted, sometimes severely, by the occurrence of natural disasters and other natural phenomena. A natural disaster or other natural phenomena could cause disruption to air travel and could result in a reduced demand for aircraft and/or impair our lessees’ ability to satisfy their lease payment obligations to us, which in turn would negatively affect our financial condition, cash flow and results of operations.30The effects of various environmental regulations may negatively affect the airline industry, which may in turn cause lessees to default on their lease payment obligations to us which would negatively affect our financial condition, cash flow and results of operations.The airline industry is subject to increasingly stringent federal, state, local and international environmental laws and regulations concerning emissions to the air, discharges to surface and subsurface waters, safe drinking water, aircraft noise, the management of hazardous substances, oils and waste materials and other regulations affecting aircraft operations. Governmental regulations regarding aircraft and engine noise and emissions levels apply based on where the relevant aircraft is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircraft to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization (the “ICAO”) have specific standards for noise levels which applies to engines manufactured or certified on or after January 1, 2006. Currently, U.S. regulations would not require any phase-out of aircraft that qualify with the older standards applicable to engines manufactured or certified prior to January 1, 2006, but the European Union has established a framework for the imposition of operating limitations on aircraft that do not comply with the new standards and incorporates aviation-related emissions into the European union’s Emission Trading Scheme (the “ETS”). ICAO has also adopted new, more stringent noise level standards to apply to new airplane type design with a maximum certificated takeoff weight of 55,000 kg or more on or after December 31, 2017; or with maximum certificated takeoff weight of less than 55,000 kg on or after December 31, 2020. Additionally, the U.S. has adopted new noise regulations, effective November 3, 2017, to harmonize with the new ICAO standards. These regulations could limit the economic life of the aircraft and engines, reduce their value, limit our ability to lease or sell the non-compliant aircraft and engines or, if engine modifications are permitted, require us to make significant additional investments in the aircraft and engines to make them compliant.In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. These limits generally apply only to engines manufactured after 1999. Because aircraft engines are replaced from time to time in the normal course, it is likely that the number of such engines would increase over time. On October 6, 2016, 191 member states of the ICAO adopted the Carbon Offset and Reduction Scheme for International Aviation (“CORSIA”) which calls for a global market measure to help the aviation industry meet its goal of carbon-neutral growth after 2020. Baseline emissions levels will be measured in 2019-2020, after which airlines will purchase offsets for any increase in emissions from that level. The plan starts with a voluntary phase-in from 2021 through 2026, during which only routes between countries that choose to participate will be covered. At least 65 countries have indicated that they will participate in the voluntary phase, including the United States, Canada, China, and 28 EU countries. Concerns over global warming could result in more stringent limitations on the operation of aircraft powered by older, non-compliant engines, as well as newer engines. Future regulatory actions that may be taken by the U.S. government, other foreign governments or the ICAO to address concerns about climate change, noise and emissions from the aviation sector may include the imposition of requirements to purchase additional emission offsets or credits, which could require participation in emission trading (such as is required in the EU and by the CORSIA), substantial taxes on emissions and growth restrictions on airline operations, among other potential regulatory actions.European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft productivity. The European Parliament has confirmed that all emissions from flights within the European Union are subject to the ETS requirement, even those emissions that are emitted outside of the European Union. The European Union suspended the enforcement of the ETS requirements for international flights outside of the European Union due to a proposal issued by the ICAO in October 2013 to develop a global program to reduce international aviation emissions, which would be enforced by 2020. In response to this, the European Commission amended the ETS legislation through the end of 2017 so that only flights or portions thereof that take place in European regional airspace are subject to the ETS requirements. On December 13, 2017, the European Commission further amended the ETS legislation to extend the derogation of the ETS requirements through the end of 2023. The United States, China and other countries continue to oppose the inclusion of aviation emissions from outside of the E.U. in the ETS. Similar measures may be implemented in other jurisdictions as a result of environmental concerns.The potential impact of ETS and the new ICAO carbon standards on costs has not been completely identified. Limitations on emissions such as the ones in the European Union could favor younger, more fuel efficient aircraft since31they generally produce lower levels of emissions per passenger, which could adversely affect our ability to remarket or otherwise dispose of less efficient aircraft on a timely basis, at favorable terms, or at all. Concerns over global warming also could result in more stringent limitations on the operation of aircraft. Any of these regulations could limit the economic life of the aircraft and engines, reduce their value, limit our ability to lease or sell the compliant aircraft and engines or, if engine modifications are permitted, require us to make significant additional investments in the aircraft and engines to make them compliant, which would negatively affect our financial condition, cash flow and results of operations. Further, compliance with current or future regulations, taxes or duties imposed to deal with environmental concerns could cause lessees to incur higher costs and to generate lower net revenues, resulting in a negative impact on their financial conditions. For example, the United Kingdom doubled its air passenger duties, effective February 1, 2007, in recognition of the environmental costs of air travel. Consequently, such compliance may affect lessees’ ability to make rental and other lease payments and reduce the value we receive for the aircraft upon any disposition, which would negatively affect our financial condition, cash flow and results of operations.We operate in multiple jurisdictions and may become subject to a wide range of income and other taxes which would negatively affect our cash flow and results of operations.reasonschanges to have a material impact on our cash flowfinancial position; however, we will continue to evaluate the impact as further information becomes available.operations would be negatively affected.We areour customers.variousincreasingly stringent and evolving federal, state and local environmental laws, regulations, fees, taxes and reporting of air emissions, water surface and subsurface discharges, safe drinking water, aircraft noise, the management of hazardous substances, oils and waste materials and other regulations affecting aircraft operations. Governmental regulations and reporting regarding aircraft and engine noise and emissions levels apply based on where the relevant aircraft is registered and operated. These regulations, as well as the potential for new and more stringent regulations, could limit the economic life of aircraft and engines, reduce their value, limit our ability to lease or sell the non-compliant aircraft and engines or, if engine modifications are permitted, require us to make significant additional investments in the aircraft and engines to make them compliant. Further, compliance with current or future regulations, fees, taxes and reporting imposed to address environmental concerns could cause our lessees to incur higher costs and to generate lower revenues, which could adversely affect their ability to make lease payments to us.associated withrelated to transacting business in foreign countries which would negatively affect our cash flowmay result in increased liabilities including penalties and results of operations. agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, the Foreign Corrupt Practices Act (“FCPA”) and other federal statutes and regulations, including the International Traffic in Arms Regulations and those established by the Office of Foreign Assets Control (“OFAC”), laws and regulations applicable to our operations in Ireland and Hong Kong and, increasingly, similar or more restrictive foreign laws, rules and regulations, including the U.K. Bribery Act (“UKBA”), which may also apply to us. Under these laws and regulations, the government may require export licenses, may seek toor impose restrictions that would require modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities, and modifications to compliance programs, which may increase compliance costs, andcosts. Failure to implement changes may subject us to fines, penalties and other sanctions. A violation of these laws or regulations could negatively impact our business, operating results, and financial condition. Further, events in Ukraine and Crimea have resulted in the European Union and the United States imposing escalating sanctions on Russia and certain businesses and sectors and individuals in Russia, including the airline industry. For instance, the United States has imposed restrictions prohibiting U.S. individuals and entities, including their foreign branches or subsidiaries owned or controlled by such individuals or entities, from providing financial services or assistance in the form of new equity or debt with certain maturities to specified Russian individuals and entities. Additionally, the European Union has enacted similar restrictions in which citizens of European Union member states and corporations domiciled in European Union member states are prohibited from dealing with financial instruments having a maturity greater than 30 days with certain Russian entities. Russia has imposed its own sanctions on certain individuals in the United States and may impose other sanctions on the United States and the European Union and/or certain businesses or individuals from these regions. We cannot assure you that the current sanctions or any further sanctions imposed by the European Union, the United States or other international interests will not materially adversely affect our operations.In 2016, the United States and European Union lifted certain nuclear-related secondary sanctions as provided by the Joint Comprehensive Plan of Action (“JCPOA”) with Iran. Among other things, the sale or lease of civil passenger32aircraft to most Iranian airlines is now permitted, subject to receipt of an appropriate license. Transactions with sanctioned individuals and entities, including aircraft sale and lease transactions with such persons, remain prohibited, and the United States retains the authority to revoke the sanctions relief provided by the JCPOA if Iran fails to meet its commitments thereunder.regulations. There can be no assuranceregulations, but we cannot assure that our employees, consultants, sales agents, or associates will not engage in unlawful conduct for which we may be held responsible nor can there be assuranceor that our business partners will not engage in conduct whichthat could materially affect their ability to perform their contractual obligations to us or evenand result in our being held liable for such conduct. Moreover, whileViolation of laws or regulations may result in increased liabilities including penalties and fines as well as reputational harm.believe that we have beenexpect some of our leases will require licenses, consents or approvals, including consents from governmental or regulatory authorities for certain payments under our leases and for the import, export or deregistration of aircraft. Subsequent changes in applicable law or administrative practice may require additional licenses and consents or result in revocation of prior licenses and consents.with allefforts, may result in business interruption and increased costs and liabilities.sanctionsguidance, industry standards, external and internal privacy and security policies and contractual requirements) relating to personal data constantly evolve, as federal, state and foreign governments continue to adopt new measures addressing data privacy and processing (including collection, storage, transfer, disposal, disclosure, security and use) of personal data, and the interpretation and application of many existing privacy and data protection laws and regulations and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularlyU.S., Europe (including the E.U.’s General Data Protection Regulation and the California Consumer Privacy Act, as amended (“CCPA”)) and elsewhere impose stringent obligations. For example, the scope of certain laws may be unclear and may be subjectCCPA, which applies to change. Violations of the FCPA, OFAC, UKBAbusiness representative and other export control regulations,types of personal data, provides for civil penalties of up to $7,500 per violation and similarallows private litigants affected by certain data breaches to recover significant statutory damages. Such laws and regulations may be interpreted or applied in a manner that is inconsistent with each other and may complicate our existing data management practices. Evolving compliance and operational requirements under the privacy laws of the jurisdictions in which we operate, regulations, and other obligations have become increasingly burdensome and complex. Privacy-related claims or lawsuits initiated by governmental bodies, customers or other third parties, irrespective of the merits, could be time consuming, result in severe criminalcostly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), litigation (including class action claims), penalties and fines, require us to change our business practices or civil sanctions,cause business interruptions and we may be subject to other liabilities, which could negatively affect our cash flow and results of operations.A cyber‑attack that bypasses our information technology, or IT, security systems, causing an IT security breach, may lead to a material disruption of our IT systems and the loss of business information which may hinder our abilityadministrative, civil, or criminal liability.conduct our business effectively and may result in lost revenues and additional costs.Parts of our business depend on the secure operation of our computer systems to manage, process, store, and transmit information associated with aircraft leasing. We have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks. A cyber‑attack could adversely impact our daily operations and lead to the loss of sensitive information, including our own proprietary information and that of our customers, suppliers and employees. Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs and liability. While we devote substantial resources to maintaining adequate levels of cyber‑security, our resources and technical sophistication may not be adequate to prevent all types of cyber‑attacks.Material damage to, or interruptionsinvestment in our information systems as a result of external factors, staffing shortages and difficulties in updating our existing software or developing or implementing new software could have a material adverse effect on our business or results of operations.We depend largely upon our information technology systems in the conduct of all aspects of our operations. Such systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, fire and natural disasters. Damage or interruption to our information systems may require a significant investment to fix or replace them, and we may suffer interruptions in our operations in the interim. Potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations. Any material interruptions or failures in our information systems may have a material adverse effect on our business or results of operations.Our financial reporting for lease revenue may be impacted by a proposed new model for lease accounting.In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02 ("ASU 2016-02"), “Leases (Topic 842)”. The standard requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. Lessor accounting for operating leases would remain substantially unchanged. The standard will be effective for annual reporting periods beginning after December 15, 2018 for public entities. We plan to adopt the standard on its required effective date of January 1, 2019. We believe the standard will not have a material impact on our consolidated financial statements. We do not believe that the adoption of the standard will significantly impact our existing or potential lessees' economic decisions to lease aircraft.33Risks Related to Our Class A Common StockThe price of our Class A common stock historically has been volatile. This volatility may negatively affect the price of our Class A common stock.The Company’s stock continues to experience substantial price volatility. This volatility may negatively affect the price of our Class A common stock at any point in time. Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including:·variations in our quarterly or annual operating results;·actual or perceived reduction in our growth or expected future growth;·announcements concerning our competitors, the airline industry or the economy in general;·announcements concerning the availability of the type of aircraft we own;·general and industry-specific economic conditions;·changes in the price of aircraft fuel;·changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations;·additions or departures of key members of management;·any increased indebtedness we may incur in the future;·speculation or reports by the press or investment community with respect to us or our industry in general or the decision to suspend or terminate coverage in the future;·changes in market valuations of similar companies;·changes in or elimination of our dividend;·announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments;·changes or proposed changes in laws or regulations affecting the airline industry or enforcement of these laws and regulations, or announcements relating to these matters; and·general market, political and economic conditions, including any such conditions and local conditions in the markets in which our lessees are located.Broad market and industry factors may decrease the market price of our Class A common stock, regardless of our actual operating performance. The stock market in general has from time to time experienced extreme price and volume fluctuations, including periods of sharp decline. In the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.34 market price of our Class A common stock to decline and could entrench management.may consider to be in their best interests, including the ability of our board of directors to designate the terms of and issue new series of preferred stock, a prohibitionprohibitions on our stockholders from calling special meetings, of the stockholders, and advance notice requirements for stockholder proposals and director nominations. In addition,Further, we have not opted out of Section 203 of the Delaware General Corporation Law, which we have not opted out of, prohibits a public Delaware corporation from engaging in certain business combinations with an “interested stockholder” (as defined in such section) for a period of three years following the time that such stockholder became an interested stockholder without the prior consent of our board of directors. The effect of Section 203 of the Delaware General Corporation Law, as well asand these charter and bylaws provisions, may make the removal of our management more difficult. It may alsodifficult, impede a merger takeover or other business combination or discourage a potential acquirer from making a tender offer for our Class A common stock, which under certain circumstances, could reduce the market price of our Class A common stock.In the future, we attempt to obtain financing or to further increase our capital resources by issuing additional shares of Class A common stock, or more series of our preferred stock, or offering debt or additional equity securities, including commercial paper, medium‑termmedium-term notes, senior or subordinated notes, or new convertible or preferred shares.securities. Issuing additional shares of Class A common stock or other additional equity offerings may dilute the economic and voting rights of our existing stockholders or reduce the market price of our Class A common stock, or both.stock. Upon liquidation, holders of suchour debt securities, our outstanding preferred stock, and any new series of preferred shares,stock, if issued, and lenders with respect to other borrowings, would receive a distribution of our available assets prior to the holders of our Class A common stock. Preferred shares, if issued, couldOur outstanding preferred stock have a preferencepreferences with respect to liquidating distributions or a preference with respect toand dividend payments that could limitwhich limits our ability to pay dividends to the holders of our Class A common stock. Because ourstockholders, subject to certain conditions. Any new series of preferred stock could have similar or different preferences. Our decision to issue securities in anythe future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of oursuch issuances, which could be dilutive to Class A common stock bear the risk of our future offerings reducingstockholders and reduce the market price of our Class A common stock and diluting their shareholdings in us.paycontinue, or maintainmay elect to discontinue, paying dividends or wewhich may choose not to pay dividends, and the failure to pay or maintain dividends may negativelyadversely affect our sharestock price.the amount of any future quarterly dividends. Ourdividends, and our ability to continue to pay maintain or increase cash dividends to our shareholders is subject to theour board of director’s discretion of our Board of Directors and will depend on many factors, includingdepends on: our ability to comply with covenants inimposed by our financing documentsagreements and our outstanding preferred stock, that limit our ability to pay dividends and make certain other restricted payments to shareholders; the difficulty we may experiencepayments; difficulties in raising and the cost of additional capital and our ability to finance our aircraft acquisition commitments; our ability to re-finance our long-term financingsdebt before excess cash flows are no longer made available to us to pay dividends and for other purposes;it matures; our ability to negotiate and enforce favorable lease rates and other contractual terms; the level of demand for our aircraft; the economic condition of the commercial aviation industry generally; the financial condition and liquidity of our lessees; unexpected or increased expenses; the level and timing of capital expenditures,aircraft investments, principal repayments and other capital needs; the value of our aircraft portfolio; our compliance with loan to value, interest rate coverage and other financial tests in our financings;fleet; our results of operations financial condition and liquidity; general business conditions; restrictions imposed by our debt agreements; legal restrictions on the payment of dividends;dividends and other factors that our Boardboard of Directorsdirectors deems relevant. Some of these factors are beyond our control, and a change in any such factor could affect our ability to pay dividends on our common stock. In the future we may chooseelect not to pay dividends, or may not be ableunable to pay dividends or maintain or increase our current level of dividends, or increase them over time. The failure to maintain or pay dividendswhich may negatively affect our sharestock price.35
Future sales of our Class A common stock by our directors, executive officers or significant stockholders, or the perception these sales may occur, may cause our stock price to decline.None.2017,2022, we owned 417 aircraft in our operating leaseowned aircraft portfolio, consisted of 244 aircraft, comprised of 188306 narrowbody jet aircraft and 56111 widebody jet aircraft, with a weighted average age of 3.84.5 years.operatingowned fleet, excluding one aircraft that is currently not subject to a lease portfolioagreement, as of December 31, 2017,2022, updated through February 22, 2018:16, 2023:Aircraft Type 2023 2024 2025 2026 2027 Thereafter Total Airbus A220-300 — — — — — 4 4 Airbus A319-100 — — 1 — — — 1 Airbus A320-200 1 5 8 1 2 11 28 Airbus A320-200neo — — — — 4 19 23 Airbus A321-200 4 — 1 9 2 7 23 Airbus A321-200neo — 4 — 2 5 67 78 Airbus A330-200 3 3 1 — — 6 13 Airbus A330-300 — — 3 1 — 1 5 Airbus A330-900neo 1 — — — — 15 16 Airbus A350-900 — — — 1 1 11 13 Airbus A350-1000 — — — — — 6 6 Boeing 737-700 — 2 — — 2 — 4 Boeing 737-800 11 7 20 16 10 18 82 Boeing 737-8 MAX — 1 12 — 1 32 46 Boeing 737-9 MAX — — — — — 15 15 Boeing 777-200ER — — 1 — — — 1 Boeing 777-300ER — — 2 9 4 9 24 Boeing 787-9 — — — 1 2 24 27 Boeing 787-10 — — — — — 6 6 Embraer E190 — 1 — — — — 1 Total 20 23 49 40 33 251 416 2017,2022, we had committed to purchase the following new aircraft at an estimated aggregate purchase price (including adjustment for anticipated inflation) of approximately $27.0$25.5 billion for delivery as shown below. The recorded basis of aircraft may be adjusted upontable is subject to change based on Airbus and Boeing delivery to reflect changes in, among other items, actual inflation and the final cost of buyer furnished equipment.(1)Our Airbus A320/321neo aircraft orders include 55 long-range variants.(2)In addition to the aircraft from our orderbook,delays. As noted below, we have a commitment to purchase one used Boeing 737-800 aircraft from an airline, which is scheduled for delivery in 2018.36Airbus has informed us to expect several month delivery delays relating to certainfor some aircraft scheduled for delivery in 2018 and 2019. The delays have been reflected in our commitment schedules above. orderbook. We remain in discussions with Boeing and Airbus to determine the extent and duration of delivery delays; however, we are not yet able to determine the full impact of these delays. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our leases contain lessee cancellation clauses relatedFleet—Aircraft Delivery Delays” for more information.Estimated Delivery Years Aircraft Type 2023 2024 2025 2026 2027 Thereafter Total Airbus A220-100/300 14 26 20 12 — — 72 28 22 18 35 35 40 178 Airbus A330-900neo 7 6 — — — — 13 Airbus A350-900/1000 4 3 — — — — 7 Airbus A350F — — — 2 2 3 7 Boeing 737-7/8/9 MAX 30 37 19 16 — — 102 Boeing 787-9/10 5 4 10 — — — 19 88 98 67 65 37 43 398 (1) Our Airbus A320/321neo aircraft orders include 22 long-range variants and 49 extra long-range variants. (2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation. aircraftchange based on Airbus and Boeing delivery delays, typically for aircraft delays greater than one year. Our purchase agreements contain similar clauses. As of February 22, 2018, none of our lease contracts are subject to cancellation.As of December 31, 2017,shows the Company had a non-binding commitment to acquire up to five A350-1000 aircraft. Deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.Our new aircraft are being purchased pursuant to binding purchase agreements with each of Airbus and Boeing. These agreements establish pricing formulas (which include certain price adjustments based upon inflation and other factors) and various other terms with respect to the purchase of aircraft. Under certain circumstances, we have the right to alter the mix of aircraft types that we ultimately acquire.New Lease PlacementsOur current lease placements are progressing well and are in line with our expectations. As of February 22, 2018, we had entered into contracts for the leasenumber of new aircraft scheduled to be delivered as of December 31, 2022, along with the lease placements of such aircraft as of February 16, 2023. We expect delivery delays for all aircraft deliveries in our orderbook. Boeing and Airbus have expressed their desire to increase production rates on several aircraft types; however, they have yet to meaningfully increase production. At their current production pace, we do not currently see this improving the delivery delay situation through 2023 as follows:Delivery Year Total number of lease placements Number of aircraft in our orderbook % Leased 2023 88 88 100.0 % 2024 79 98 80.6 % 2025 36 67 53.7 % 2026 21 65 32.3 % 2027 14 37 37.8 % Thereafter 1 43 2.3 % Total 239 398 4488 aircraft to be delivered in 20182023 are comprised of 4386 binding leases and one non-binding letter of intent. Our lease commitments for 77 of the 81 aircraft to be delivered in 2019 are comprised of 70 binding leases and seventwo non-binding letters of intent. Our lease commitments for 3379 of the 7198 aircraft to be delivered in 20202024 are comprised of 2767 binding leases and six12 non-binding letters of intent. Our lease commitments consist of binding leases for six36 of the 7667 aircraft to be delivered in 2021 are all comprised of binding leases. Finally, our lease commitments for two2025, 21 of the 6965 aircraft to be delivered in 2022 are all comprised2026, and 14 of binding leases.the 37 aircraft to be delivered in 2027. We also have one aircraft to be delivered in 2028 that is subject to a non-binding letter of intent. While our management’s historical experience is that non-binding letters of intent for aircraft leases generally lead to binding contracts, we are notcannot be certain that we will ultimately execute binding agreements for alltheall aircraft that are scheduled to be delivered through 2023,in our orderbook, in making our lease placement decisions, we also take into consideration the anticipated growth in the aircraft leasing market and anticipated improvements in lease rates, which could lead us to determine that entering into particular lease arrangements at a later date would be more beneficial to us.90067.90067, USA. We also lease offices at 3rd Floor, Kilmore House, Park Lane, Spencer Dock,in Hong Kong and Dallas, Texas and own our office in Dublin, 1, Ireland. We do not own any real estate. We believe our current facilities are adequate for our current needs and for the foreseeable future.matters or material legal proceedings.matters. We maintain insurance3738Ourourthe Company’s stock. As of December 31, 2017,2022, there were 103,621,629110,892,097 shares of Class A common stock outstanding held by approximately 215 holders of record.21, 2018,15, 2023, shares of the closing price of ourCompany’s Class A common stock was $45.51 per share as reportedoutstanding were held by the NYSE. The table below sets forth for the indicated periods the high and low sales prices for our Class A common stock as reported on the NYSE.Dividends2017, 20162022, 2021 and 2015:2020:While theYear Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020Dividends declared per share $ 0.755 $ 0.665 $ 0.61 paidapproved quarterly cash dividends on the Company’s outstanding common stock in 2022 and expects to continue approving a comparable quarterly cash dividend in 2017 and currently expects to continue paying a quarterly cash dividend of $0.10 per shareon the Company’s outstanding common stock for the foreseeable future,future. However, the Company’s cash dividend policy can be changed at any time at the discretion of the Company’s Board of Directors. On February 20, 2018, our board14, 2023, the Company’s Board of directorsDirectors approved a quarterly cash dividend of $0.10$0.20 per share on ourthe Company’s outstanding Class A common stock. The dividend will be paid on April 6, 201812, 2023 to holders of record of ourClass A common stock as of March 20, 2018.16, 2023.39Stock Authorized for Issuance Under Equity Compensation PlansSet forth below is certain information about the Class A common stock authorized for issuance under the Company’s equity compensation plan.Russell 2000 IndexCompany’s 2021 custom benchmark group and the Company’s 2022 custom benchmark group. Due to the lack of other publicly traded, stand-alone aircraft leasing companies, the Company is utilizing the custom benchmarking group included in the Company’s annual proxy statements for its current and future performance graphs. This custom benchmarking group reflects companies with similar characteristics to the Company’s business, including exposure to real assets, dependence on a highly skilled management team, credit exposure/underwriting expertise, and significant capital investments. The Company’s 2022 custom benchmark group was updated to remove certain size outliers based on market capitalization and to maintain a balanced industry representation. The customized peer group. The peerbenchmarking group consists of three companies: Aircastle Limited (NYSE: AYR), AerCap Holdings NV (NYSE: AER) and FLY Leasing Limited (NYSE: FLY). The peer group investment isinvestments are weighted by market capitalization as of December 31, 2012,2017, and is adjusted monthly. The Company believes that the S&P Midcap 400 Index, as measured by market capitalization, is currently still the most similar index benchmark to the Company.in the peer2021 custom benchmarking group, the 2022 custom benchmarking group and in the S&P Midcap 400 Index and in the Russell 2000 Index on December 31, 2012,2017, and the relative performance of each is tracked through December 31, 2017.2022. The stock price performance shown in the graph is not necessarily indicative of future stock price performance.402017
The Company did not purchase any shares of its Class A common stock during 2017.On December 4, 2017, a holder of our 3.875% convertible senior notes due 2018 ("Convertible Notes") converted $2,000 in principal amount of our Convertible Notes and received 67 shares of Class A Common Stock at a per share conversion price of $29.48. The shares were issued in reliance on an exemption from registration under Section 3(a)(9) of the Securities Act of 1933 (the “1933 Act”).On March 9, 2017, a holder of warrants performed a cashless exercise of 268,125 warrants, resulting in the issuance of 131,001 shares of Class A common stock. The shares were issued in reliance on an exemption from registration under Section 3(a)(9) of the 1933 Act. As of December 31, 2017, we did not have any warrants outstanding.41
NoneITEM 6. SELECTED FINANCIAL DATAThe following selected consolidated financial data should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.42(1)Expenses for the year ended December 31, 2015 included settlement expense of $72.0 million. Other income for the years ended December 31, 2017, 2016 and 2015 included income recovery on a settlement of $1.0 million, $5.25 million and $4.5 million, respectively.(2)Adjusted net income before income taxes (defined as net income excluding the effects of certain non-cash items, one-time or non-recurring items, such as settlement expense, net of recoveries, that are not expected to continue in the future and certain other items), adjusted margin before income taxes (defined as adjusted net income before income taxes divided by total revenues, excluding insurance recoveries) and adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income, pre-tax profit margin, earnings per share, and diluted earnings per share, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted margin before income taxes and adjusted diluted earnings per share before income taxes, are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations.Management and our board of directors use adjusted net income before income taxes, adjusted margin before income taxes and adjusted diluted earnings per share before income taxes to assess our consolidated financial and operating performance. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash items, one-time or non-recurring items that are not expected to continue in the future and certain other items from our operating results. Adjusted net income before income taxes, adjusted margin before income taxes and adjusted diluted earnings per share before income taxes, however, should not be considered in isolation or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Adjusted net income before income taxes, adjusted margin before income taxes and adjusted diluted earnings per share before income taxes do not reflect our cash expenditures or changes in our cash requirements for our working capital needs. In addition, our calculation of adjusted net income before income taxes, adjusted margin before income taxes and adjusted diluted earnings per share before income taxes may differ from the adjusted net income before income taxes, adjusted margin before income taxes and adjusted diluted earnings per share before income taxes or analogous calculations of other companies in our industry, limiting their usefulness as a comparative measure.43The following tables show the reconciliation of net income to adjusted net income before income taxes and adjusted margin before income taxes (in thousands, except percentages):190,411 The following table shows the reconciliation of net income to adjusted diluted earnings per share before income taxes (in thousands, except share and per share data):44(3)On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax law by, among other things, lowering the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. Accounting Standards Codification (“ASC”) 740 requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Reform Act, we recorded an estimated tax benefit of $354.1 million due to the remeasurement of deferred tax assets and liabilities in the year ended December 31, 2017. transport aircraft directly from aircraft manufacturers, such as Boeing and Airbus, and leasing those aircraft to airlines throughout the world.world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease portfoliofleet to third parties,third-parties, including other leasing companies, financial services companies, airlines and airlines.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 the gains of ourfrom aircraft sales and trading activities and our management fees.2017,2022, we purchased and took delivery of 3060 new aircraft from our new order pipeline,Boeing and Airbus, purchased 10 incrementalone aircraft from the secondary market, sold 31six aircraft and received insurance proceeds relating towrote-off our interests in 21 aircraft in our owned fleet that were detained in Russia. However, in October 2022, we recovered one of these aircraft. See “Impact of Russia-Ukraine Conflict” below for further discussion. We ended the insured losses of two aircraft, ending the yearperiod with a total of 244417 aircraft in our owned aircraft with afleet. The net book value of $13.3 billion.our fleet grew by 7.2% to $24.5 billion as of December 31, 2022 compared to $22.9 billion as of December 31, 2021. The weighted average lease term remaining on our operating lease portfolio was 6.8 years and the weighted average age of our fleet was 3.84.5 years and the weighted average lease term remaining was 7.1 years as of December 31, 2017.2022. Our fleet grew by 10.3% based on net book value of $13.3 billion as of December 31, 2017 compared to $12.0 billion as of December 31, 2016. In addition, our managed fleet increased to 50was comprised of 85 aircraft as of December 31, 2017 from 302022 as compared to 92 aircraft as of December 31, 2016.2021. We have a globally diversified customer base comprised of 91117 airlines in 55 countries. As62 countries as of February 22, 2018, allDecember 31, 2022. We continue to have a strong lease utilization rate of our aircraft in our operating lease portfolio were subject to lease agreements.During 2017, we increased our total commitments with Airbus and Boeing by a net 35 aircraft. 99.6% for the year ended December 31, 2022.2017,2022, we had commitments to purchase 368398 aircraft from AirbusBoeing and BoeingAirbus for delivery through 2023,2029, with an estimated aggregate commitment of $27.0$25.5 billion. We have placed approximately 90% of our committed orderbook on long-term leases for aircraft delivering through the end of 2024, have placed 60% of our entire orderbook. We ended 2017the fourth quarter of 2022 with $23.4$31.4 billion in committed minimum future rental payments, and placed 79%consisting of our order book on long-term leases for aircraft delivering through 2020. This includes $10.1$15.6 billion in contracted minimum rental payments on the aircraft in our existing fleet and $13.3$15.8 billion in minimum future rental payments related to aircraft which will deliver between 2018 and 2022.and trading activities,preferred stock issuances, and debt financings. Our debt financing strategy is focused on raising unsecured debt inWe ended the global bank and debt capital markets, with a limited utilizationfourth quarter of export credit or other forms of secured financing. In 2017, we issued $2.2 billion senior unsecured notes2022 with an average interest rate of 3.16%, with maturities ranging from 2022 to 2027 and in January 2018, we issued (i) $550.0 million in aggregate principal amount of senior unsecured notes due 2021 that bear interest at a rate of 2.50% and (ii) $700.0 million in aggregate principal amount of senior unsecured notes due 2025 that bear interest at a rate of 3.25%. In 2017, we increasedborrowing capacity under our unsecured revolving credit facility capacity to approximately $3.8of $6.1 billion representing an 18.6% increase from 2016 and extended the final maturity to May 5, 2021. In February 2018,total liquidity of $6.9 billion. As of December 31, 2022, we further increased the capacity of our unsecured revolving credit facility by 4.7% to approximately $3.9 billion. Borrowings under our unsecured revolving credit facility will bear interest at LIBOR plus a margin of 1.05% per year. We ended 2017 withhad total debt outstanding of $9.7$18.8 billion, of which 85.4%91.3% was at a fixed rate and 94.6%99.3% of which was unsecured. OurAs of December 31, 2022, our composite cost of funds decreasedraised through debt financings was 3.07%.3.20%emerge from the COVID-19 pandemic, our customers’ financial strength is continuing to improve, as demonstrated by the continued decline of our outstanding deferred balance and our strong collection rates. As of December 31, 2022, we had $148.1 million in outstanding deferred rentals due to the impact of the COVID-19 pandemic as compared to $203.2 million as of December 31, 20172021. Our collection rate for the three months and year ended December 31, 2022 was 101% and 96%, respectively. Our collection rate is defined as the sum of cash collected from 3.42%lease rentals and maintenance reserves, including cash recovered from outstanding receivables from previous periods, as a percentage of the total contracted receivables due during the period and is calculated after giving effect to lease deferral arrangements made as of December 31, 2016.On December 22, 2017, the Tax Reform Act was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax law by, among other things, lowering the U.S. corporate tax2022. Our lease utilization rate from 35% to 21%,45effective January 1, 2018. As a result of the Tax Reform Act, we recorded an estimated tax benefit of $354.1 million or $3.16 per diluted share due to the remeasurement of deferred tax assets and liabilities for the quarterthree months and year ended December 31, 2017.In 2017, total revenues increased2022 was 99.7% and 99.6%, respectively. Lease utilization rate is calculated based on the number of days each aircraft was subject to a lease or letter of intent during the period, weighted by 6.9% to $1.5 billion, compared to 2016. The increase in our total revenues is primarily due to the $1.2 billion increase in the net book value of our operating lease portfolio. the aircraft.net incometotal revenues for the year ended December 31, 20172022 increased by 11.0% to $2.3 billion as compared to 2021. The increase in total revenues was $756.2primarily driven by the continued growth in our fleet and significantly lower COVID-19 related lease restructuring and cash basis losses.$6.82net loss of $1.24 per diluted share, as compared to $374.9net income attributable to shareholders of $408.2 million, or $3.44$3.57 per diluted share, for the year ended December 31, 2016. The increase in2021. Despite the growth of our fleet, the decrease was due to the net income and diluted earnings per shareimpact of the write-off of our Russian fleet, which totaled approximately $771.5 million for the year ended December 31, 2017 was due to the $1.2 billion increase in the net book value of our operating lease portfolio, and the re-measurement of our U.S. deferred tax liabilities associated with the enactment of the Tax Reform Act, resulting in a tax benefit of $354.1 million. Our pre-tax profit margin for the year ended December 31, 2017 was 40.2% as compared to 40.9% for the year ended December 31, 2016.such as settlement expense, net of recoveries, that are not expected to continue in the future and certain other items. Our adjusteditems, such as the net impact of the write-off of our Russian fleet. Adjusted net income before income taxes increased 11.9% to $659.9 million for the year ended December 31, 2017 was $657.8 million or $5.94 per diluted share,2022 compared to $622.9$589.7 million or $5.67for the year ended December 31, 2021. Adjusted net income before income taxes per adjusted diluted share for the year ended December 31, 2016. Our2022 increased 14.4% to $5.89 per diluted share compared to $5.15 per adjusted margin before income taxesdiluted share for the year ended December 31, 2017 was 43.4% compared to 44.1%2021. The increase for the year ended December 31, 2016. 2022 as compared to 2021, was primarily due to the continued growth of our fleet and the increase in revenues as discussed above. before income taxes, adjusted margin 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 Note 2 in “Item 6. Selected Financial Data”“Results of this Annual Report on Form 10-KOperations” 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.Our Fleetbuildfly most of these aircraft notwithstanding the termination of leasing activities and ongoing demands for the return of the assets.world’s youngest operating lease portfolios,fleets among aircraft lessors, including some of the most fuel-efficient commercial jet transport aircraft.aircraft available. Our fleet, based on net book value, increased by 10.3%7.2%, to $13.3$24.5 billion as of December 31, 20172022, compared to $12.0$22.9 billion as of December 31, 2016.2021. During the year ended December 31, 2017,2022, we took delivery of 30purchased 60 new aircraft from our new order pipeline,Boeing and Airbus, purchased 10 incrementalone aircraft from the secondary market, sold six aircraft and sold 31wrote-off our interests in 21 aircraft and received insurance proceeds relating tothat remained in Russia as of March 2022. However, in October 2022, we recovered one of the insured losses of two aircraft, endingaircraft. We ended the yearperiod with a total of 244 aircraft. Our417 aircraft in our owned fleet. As of December 31, 2022, the weighted average fleet age and weighted average remaining lease term as of December 31, 2017our fleet were 3.84.5 years and 6.87.1 years, respectively. We also managed 5085 aircraft as of December 31, 2017.20172022 and 20162021 are as follows:(1)Weighted‑average fleet age and remaining lease term calculated based on net book value.December 31, 2022 December 31, 2021 Net book value of flight equipment subject to operating lease $ 24.5 billion $ 22.9 billion 4.5 years 4.4 years 7.1 years 7.2 years Owned fleet 417 382 Managed fleet 85 92 Aircraft on order 398 431 Total 900 905 Current fleet contracted rentals $ 15.6 billion $ 14.8 billion Committed fleet rentals $ 15.8 billion $ 16.1 billion Total committed rentals $ 31.4 billion $ 30.9 billion (1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease. 46leaseleases in the indicated regions based on each airline's principal place of business as of December 31, 20172022 and 2016:3,547,294 29.5 2,739,554 2,779,546 935,968 7.8 937,287 7.8 647,743 5.4 454,533 3.8 13,280,250 12,041,925 December 31, 2022 December 31, 2021 Region Net Book
Value% of Total Net Book
Value% of Total (in thousands, except percentages) Europe $ 7,985,317 32.5 % $ 7,439,993 32.5 % Asia (excluding China) 7,144,188 29.1 % 5,952,981 26.0 % China 2,792,022 11.4 % 2,934,224 12.8 % The Middle East and Africa 2,253,342 9.3 % 2,447,919 10.7 % Central America, South America, and Mexico 1,924,216 7.8 % 1,566,133 6.8 % U.S. and Canada 1,557,260 6.3 % 1,638,450 7.2 % Pacific, Australia, and New Zealand 882,040 3.6 % 919,304 4.0 % Total $ 24,538,385 100.0 % $ 22,899,004 100.0 % we leasedin our owned fleet by aircraft type as of December 31, 20172022 and 2016:3 1.3 44 18.6 1 0.4 31 13.1 17 7.2 5 2.1 8 3.4 95 40.1 1 0.4 1 0.4 22 9.3 1.3 2.4 (1)We did not have any aircraft held for sale as of December 31, 2017. As of December 31, 2016, we had six aircraft held for sale.Year Ended
December 31, 2022Year Ended
December 31, 2021Aircraft type % of Total % of Total Airbus A220-300 4 1.0 % — — % Airbus A319-100 1 0.2 % 1 0.3 % Airbus A320-200 28 6.7 % 31 8.1 % Airbus A320-200neo 23 5.5 % 23 6.0 % Airbus A321-200 23 5.5 % 26 6.8 % Airbus A321-200neo 78 18.7 % 69 18.1 % Airbus A330-200 13 3.1 % 13 3.4 % Airbus A330-300 5 1.2 % 8 2.1 % Airbus A330-900neo 16 3.8 % 9 2.4 % Airbus A350-900 13 3.1 % 12 3.1 % Airbus A350-1000 6 1.4 % 5 1.3 % Boeing 737-700 4 1.0 % 4 1.0 % Boeing 737-800 82 19.7 % 88 23.0 % Boeing 737-8 MAX 47 11.3 % 28 7.3 % Boeing 737-9 MAX 15 3.7 % 7 1.8 % Boeing 777-200ER 1 0.2 % 1 0.3 % Boeing 777-300ER 24 5.8 % 24 6.3 % Boeing 787-9 27 6.5 % 26 6.8 % Boeing 787-10 6 1.4 % 6 1.6 % Embraer E190 1 0.2 % 1 0.3 % 417 100.0 % 382 100.0 % (1) As of December 31, 2022, we had four aircraft classified as flight equipment held for sale. As of December 31, 2021, we did not have any flight equipment classified as held for sale. 472017,2022, we had contractedcontractual commitments to buy 368purchase 398 new aircraft, for delivery through 2023, with an estimated aggregate purchase price (including adjustments for anticipated inflation) of $27.0$25.5 billion, for delivery through 2029 as follows:(1)Our Airbus A320/321neo aircraft orders include 55 long-range variants.(2)In addition to the aircraft from our orderbook, we have a commitment to purchase one used Boeing 737-800 aircraft from an airline, which is scheduled for delivery in 2018.has informed us toand Boeing delivery delays. As noted below, we expect several month delivery delays relatingfor all of the aircraft in our orderbook. We remain in discussions with Boeing and Airbus to determine the extent and duration of delivery delays; however, we are not yet able to determine the full impact of these delays.Estimated Delivery Years Aircraft Type 2023 2024 2025 2026 2027 Thereafter Total Airbus A220-100/300 14 26 20 12 — — 72 28 22 18 35 35 40 178 Airbus A330-900neo 7 6 — — — — 13 Airbus A350-900/1000 4 3 — — — — 7 Airbus A350F — — — 2 2 3 7 Boeing 737-7/8/9 MAX 30 37 19 16 — — 102 Boeing 787-9/10 5 4 10 — — — 19 88 98 67 65 37 43 398 (1) The Company's Airbus A320/321neo aircraft orders include 22 long-range variants and 49 extra long-range variants. (2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation. scheduled for delivery in 2018 and 2019. The delays have been reflectedthat typically parallel the cancellation rights in our commitment schedules above. Our leases contain lessee cancellation clauses related topurchase agreements.delays, typically for aircraft delays greater than one year. Our purchase agreements contain similar clauses. As of February 22, 2018, none of our lease contracts areschedule could continue to be subject to cancellation.Our lease placements are progressing in line with expectations. As of December 31, 2017, we have entered into contracts formaterial changes and delivery delays could extend beyond 2023.leasenumber of new aircraft scheduled to be delivered as follows:As of December 31, 2017,2022, along with the Company had a non-binding commitmentlease placements of such aircraft as of February 16, 2023. As noted above, we expect delivery delays for all aircraft deliveries in our orderbook. Boeing and Airbus have expressed their desire to acquire upincrease production rates on several aircraft types; however, they have yet to five A350-1000 aircraft. Deliveriesmeaningfully increase production. At their current production pace, we do not currently see this improving the delivery delay situation through at least 2023. We remain in discussions with Boeing and Airbus to determine the extent and duration of delivery delays, but we are not yet able to determine the full impact of these aircraft are scheduled to commence in 2023 and continue through 2024.Delivery Year Total number of lease placements Number of aircraft in our orderbook % Leased 2023 88 88 100.0 % 2024 79 98 80.6 % 2025 36 67 53.7 % 2026 21 65 32.3 % 2027 14 37 37.8 % Thereafter 1 43 2.3 % Total 239 398 scheduled and charter airlines. In eachairlines throughout the world. As of the last four calendar years,December 31, 2022, we derived more thanhad a globally diversified customer base of 117 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.Demand for air travel has consistently grown in terms of both passenger traffic and number of aircraft in service. The International Air Transport Association (“IATA”) reported passenger traffic up 7.6% year over year in 2017, exceeding the 10-year average annual growth rate. The number of aircraft in service has grown steadily and the number of leased aircraft in the global fleet has increased. The long-term outlook for aircraft demand remains robust due to increased passenger traffic and the need to replace aging aircraft.From time to time, our airline customers face financial difficulties. In May 2017, Alitalia, an Italian airline, began the process to file a petition to begin an Extraordinary Administration proceeding in the Italian Bankruptcy Court. Extraordinary Administrative proceedings are aimed at enabling a debtor in financial difficulty to restructure its48operations, including its debt, in order to continue its activities. While the Extraordinary Administrative proceeding is pending, the airline is permitted to operate and we understand that Alitalia intends to continue its normal operations. Alitalia operates four of our Airbus A330-200s. In October 2017, the Italian government granted an additional loan to Alitalia and extended the term for the sale of Alitalia and the repayment date of its loans to April 2018.In August 2017, Air Berlin filed to commence insolvency proceedings under self-administration, and at the time of the filing, two A321-200 aircraft and one A320-200 aircraft from our fleet were on lease with Air Berlin. In September 2017, we learned that VIM Airlines was unlikely to continue as a going concern, and at that time, one Boeing 777-300ER from our fleet was on lease with VIM Airlines. Finally, in October 2017, Monarch Airlines filed for bankruptcy, and at the time of the filing, two Boeing 737-800 aircraft from our fleet were on lease with Monarch Airlines. As of February 22, 2018, all of these aircraft are subject to new lease agreements.The successPerformance of the commercial airline industry is linked to the strength of global economic development,health and development. Passenger traffic has historically expanded at a faster rate than global GDP growth, in part due to the expansion of the middle class and the ease and affordability of air travel and we expect this trend to continue. Global air travel continues to recover following the impact of the COVID-19 pandemic. The IATA reported that passenger traffic was up 64% during 2022 relative to the prior year, due to a significant acceleration in international traffic and strong continued expansion of domestic traffic in most markets. International traffic in 2022 rose 153% relative to the prior year, benefiting from further relaxation of international travel restrictions in a number of countries. Global domestic traffic rose 11% during 2022 as compared to the prior year, with most major markets experiencing double-digit percentage increases except for China, which was constrained by temporary domestic travel restrictions. According to IATA, several international routes are now exceeding 2019 traffic levels or are expected to exceed those levels near term and several domestic markets are quickly approaching 2019 levels. In January 2023, international travel restrictions in China were lifted, which should further bolster global international traffic volumes this year and beyond. Additionally, IATA has previously reported that it expects global passenger departures to return to 2019 levels by 2024.negatively impactedinfluenced by macroeconomic conditions,several factors including impacts of changes in the competitive landscape of the aircraft leasing industry, supply chain disruptions, evolving international trade matters, epidemic diseases and geopolitical events and policy risks. Nevertheless,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.the leasing industry has remained resilient over time. Weand remain optimistic about the long-term growth prospectsfundamentals of our business. We believe leasing will continue to be an attractive form of aircraft financing for air transportation. We see a growing demandairlines because less cash and financing is required for aircraft leasing in the broader industryairlines, lessors maintain key delivery positions, and a roleit provides fleet flexibility while eliminating residual value risk for us in helping airlines modernize their fleets to support the growth of the airline industry. However, with the growth in aircraft leasing worldwide, we are witnessing an increase in competition among aircraft lessors resulting in more variation in lease rates.withoperations using available cash balances, internally generated funds, including through aircraft sales and trading activity, and debt financings.an array of financing products. We have structured ourselves with the goalaim to maintain investment gradeinvestment-grade credit metrics and focus our debt financing strategy has focused on funding our business primarily on an unsecured basis.basis with mostly fixed-rate debt from public bond offerings. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another. We may,also have the ability to seek debt financing secured by our assets, as well as financings supported through the Export-Import Bank of the United States and other export credit agencies for future aircraft deliveries. We have also issued preferred stock with a total aggregate stated value of $850.0 million. Our access to a limited extent, utilize export creditvariety of financing alternatives including unsecured public bonds, private capital, bank debt, secured financings and preferred stock issuances serves as a key advantage in supportmanaging our liquidity. Aircraft delivery delays as a product of manufacturer delays are expected to further reduce our new aircraft deliveries.During the year ended December 31, 2017, we incurred additionalinvestment and debt financing needs for the next six to twelve months and capacity aggregating $2.8 billion, which included $2.2 billionpotentially beyond.seniororder of importance: 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 notes, $587.7 milliondebt as our primary form of financing; and finally, in additional capacitylockstep with the aforementioned priorities, returning excess cash to shareholders through our unsecured revolving credit facility which now totals approximately $3.8 billion and $20.0 million in additional debt facilities. dividend policy as well as regular evaluation of share repurchases, as appropriate.20172022 with total debt outstanding net of discounts and issuance costs, of $9.7$18.8 billion compared to $8.7 billion in 2016. We ended 2017 with total unsecured debt outstanding of $9.3 billion compared to $8.1 billion in 2016, increasing our unsecured debt as a percentage of total debt to 94.6% as of December 31, 2017 compared to 92.4% as2022, of which 91.3% was at a fixed rate and 99.3% was unsecured. As of December 31, 2016. Our fixed rate2022, our composite cost of funds raised through debt as a percentage of total debt increased to 85.4% as of December 31, 2017financings was 3.07%.83.5% as of December 31, 2016. In January 2018, we issued $550.0 million in aggregate principal amount of senior unsecured notes due 2021 that bear interest at a rate of 2.50% and $700.0 million in aggregate principal amount of senior unsecured notes due 2025 that bear interest at a rate of 3.25%. Also, in February 2018, we further increased the capacity of our unsecured revolving credit facility by 4.7% to $3.9 billion.We increased ouravailable cash flowsbalances, cash generated from ongoing operations, by 3.9% or $39.6 million to $1.1 billion in 2017 as compared to $1.0 billion in 2016. Our cash flows from operations increased primarily because of the lease of additional aircraft in 2017. Our cash flow used in investing activities was $2.1 billion for the year ended December 31, 2017, which increased primarily from the purchase of aircraft, partially offset by proceeds on the sale of aircraft. Our cash flow provided by financing activities was $1.1 billion for the year ended December 31, 2017, which resulted primarily from the net proceeds received from the issuance of our unsecured notes in 2017, partially offset by the repayment of outstanding debt.We ended 2017 with available liquidity of $3.2 billion which is comprised of unrestricted cash of $292.2 million and undrawn balancesborrowings under our unsecured revolving credit facility of $2.9 billion. We believe that we have sufficient liquidityand general ability to access the capital markets for opportunistic public bond offerings to satisfy the operating requirements of our business through at least the next twelve12 months.49financing plan for 2018 is focused on funding the purchase of aircraft and our business with available cash balances, internally generated funds, including aircraft sales and trading activities, and debt financings. Ourlong-term debt financing plan will remainstrategy is focused on continuing to raise primarily unsecured debt in the global bank and investment grade capital markets. In addition, we may utilize,Our material cash sources include:limited extent, export credit financing in supportprimary driver of our new aircraft deliveries.Our liquidity plans are subjectshort and long-term operating cash flow. As of December 31, 2022, our minimum future rentals on non-cancellable operating leases for the next 12 months was $2.2 billion. For further detail on our minimum future rentals for 2023 and thereafter, see “Notes to a number of risksConsolidated Financial Statements” under “Item 8. Financial Statements and uncertainties, including those describedSupplementary Data” in “Item 1A. Risk Factors” of this Annual Report on Form 10-K.DebtOur debt financing was comprisedfollowing at December 31, 2017world, diversifying our reliance on any individual lending institution. The final maturity for the facility is May 2026. The facility contains standard investment grade covenants and 2016:6,953,343 766,000 211,346 199,995 8,130,684 619,767 (1)This rate does not include the effect of upfront fees, undrawn fees or issuance cost amortization.Senior unsecured notesWe issued $2.2 billion in aggregate principal amountdoes not condition our ability to borrow on the lack of senior unsecured notes during 2017, comprised of (i) $500.0 million in aggregate principal amount of 3.625% notes due 2027; (ii) $600.0 million in aggregate principal amount of 2.625% notes due 2022; (iii) $500.0 million in aggregate principal amount of 3.625% notes due 2027; and (iv) $600.0 million in aggregate principal amount of 2.750% notes due 2023.Furthermore, in January 2018 we issued (i) $550.0 million in aggregate principal amount of senior unsecured notes due 2021 that bear interest at a rate of 2.50% and (ii) $700.0 million in aggregate principal amount of senior unsecured notes due 2025 that bear interest at a rate of 3.25%.2017,2022, we had $8.0$1.0 billion in aggregate principal amount of senior unsecured notes outstanding with remaining terms ranging from 0.1 years to 9.9 years and bearing interest at fixed rates ranging from 2.125% to 7.375%. As of December 31, 2016, we had $7.0 billion in aggregate principal amount of senior unsecured notes outstanding bearing interest at fixed rates ranging from 2.125% to 7.375%.Registered notes. Of our $8.0 billion aggregate principal amount of senior unsecured notes as of December 31, 2017, approximately $7.8 billion of such notes have been registered with the SEC. All of our registered notes may be redeemed in part or in full at any time and from time to time prior to maturity at specified redemption prices. Our registered notes also require us to offer to purchase all of the notes at a purchase price equal to 101% of the principal50amount of the notes, plus accrued and unpaid interest if a change of control repurchase event (as defined in the applicable indenture or supplemental indenture) occurs.Of the $7.8 billion in aggregate principal amount of registered notes, we have approximately $7.4 billion in aggregate principal amount of registered notes that were issued during or after November 2013. Each of the indentures governing these registered notes requires us to comply with certain covenants, including restrictions on our ability to (i) incur liens on assets and (ii) merge, consolidate or transfer all or substantially all of our assets.For the approximately $400.0 million in aggregate principal amount of registered notes that were issued prior to November 2013, each of the indentures governing those registered notes contain financial maintenance covenants relating to our consolidated net worth, consolidated unencumbered assets and interest coverage, and other additional covenants that, among other things, (i) limit our ability and the ability of our subsidiaries to pay dividends on or purchase certain equity interests, prepay subordinated obligations, alter their lines of business, and engage in affiliate transactions; (ii) limit the ability of our subsidiaries to incur unsecured indebtedness; and (iii) limit our ability and the ability of each note guarantor subsidiary, if any, to consolidate, merge, or sell all or substantially all of its assets. The covenants contained in all of the indentures governing our registered notes are subject to a number of important exceptions and qualifications set forth in the applicable indenture, including, with respect to the indentures governing our registered notes issued before November 2013, the suspension of the financial maintenance covenant relating to interest coverage and the covenant that limits our payment of dividends on or purchases of certain equity interests and prepayments of subordinated indebtedness when such registered notes are rated investment grade (as defined in the applicable indenture). As of December 31, 2017, such registered notes were investment grade rated as defined in the applicable indenture. We believe that we were in compliance with all covenants contained in the indentures governing our registered notes as of December 31, 2017.The indentures governing our registered notes also provide for customary events of default. If any event of default occurs, any amount then outstanding under the relevant indentures may immediately become due and payable. These events of default are subject to a number of important exceptions and qualifications set forth in the indentures.Unregistered notes. Of our $8.0 billion aggregate principal amount of senior unsecured notes as of December 31, 2017, approximately $244.9 million of such notes have not been registered with the SEC and are governed by various purchase agreements. Our unregistered notes, like our registered notes, may be redeemed in part or in full at any time and from time to time prior to maturity at specified redemption prices. Our unregistered notes also require us to offer to purchase all of the notes at a purchase price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest if a change of control (as defined in the applicable purchase agreement) occurs.The purchase agreements governing our unregistered notes contain financial maintenance covenants relating to our consolidated net worth, consolidated unencumbered assets, interest coverage, and consolidated leverage ratio. In addition, the purchase agreements contain covenants that, among other things, (i) limit our ability and the ability of our subsidiaries to pay dividends on or purchase certain equity interests, prepay subordinated obligations, alter their lines of business, and engage in affiliate transactions; (ii) limit the ability of our subsidiaries to incur unsecured indebtedness; and (iii) limit our ability and the ability of each note guarantor subsidiary, if any, to consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications set forth in the applicable purchase agreement, including, with respect to the purchase agreement governing certain tranches of unregistered notes, the suspension of the financial maintenance covenant relating to interest coverage and the covenant that limits our ability to pay dividends on or purchase certain equity interests and prepay subordinated indebtedness when the unregistered notes governed by such purchase agreement are rated investment grade (as defined in the applicable purchase agreement). As of December 31, 2017, such unregistered notes were investment grade rated as defined in the applicable purchase agreement. We believe that we were in compliance with all covenants contained in the purchase agreements governing our unregistered notes as of December 31, 2017.The purchase agreements also provide for customary events of default. If any event of default occurs, any amount then outstanding under the relevant purchase agreement may immediately become due and payable. These events of default are subject to a number of important exceptions and qualifications set forth in the purchase agreements.51Unsecured revolving credit facilityWe have a senior unsecured revolving credit facility governed by a second amended and restated credit agreement, dated May 5, 2014 (as amended, modified and supplemented thereafter), with JP Morgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto. The unsecured revolving credit facility currently provides us with financing capacity of up to $3.8 billion subject to the terms and conditions set forth therein. Lenders hold revolving commitments totaling approximately $3.2 billion that mature on May 5, 2021, commitments totaling $217.7 million that mature on May 5, 2020, commitments totaling $290.0 million that mature on May 5, 2019, and commitments totaling $55.0 million that mature on May 5, 2018. The unsecured revolving credit facility contains an uncommitted accordion feature under which its aggregate principal amount can be increased to $4.0 billion under certain circumstances.As of December 31, 2017, borrowings under the unsecured revolving credit facility will generally bear interest at either (a) LIBOR plus a margin of 1.05% per year or (b) an alternative base rate plus a margin of 0.05% per year, subject, in each case, to increases or decreases based on declines in the credit ratings for our debt. We are required to pay a facility fee of 20 basis points per year (also subject to increases or decreases based on declines in the credit ratings for our debt) in respect of total commitments under the unsecured revolving credit facility. Borrowings under the unsecured revolving credit facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.The total amount outstanding under our unsecured revolving credit facility was $847.0 million and $766.0 million asfacility.revolving credit facility provides for certain covenants, including covenants that limit our subsidiaries’ ability to incur, create, or assume certain unsecured indebtedness, and our and our subsidiaries’ abilities to declare or make certain dividends and distributions and to engagebonds: We are a frequent issuer in certain mergers, consolidations, and asset sales. The unsecured revolving credit facility also requires us to comply with certain financial maintenance covenants (measured at the end of each fiscal quarter) including a maximum consolidated leverage ratio, minimum consolidated shareholders’ equity, and minimum consolidated unencumbered assets, as well as an interest coverage test that will be suspended when the unsecured revolving credit facility or certain of our other indebtedness is rated investment grade (as definedcapital markets, opportunistically issuing unsecured bonds, primarily through our Medium-Term Note Program at attractive cost of funds. In 2022, we issued $2.2 billion of Medium-Term Notes with a weighted average interest rate of 3.59% and we expect to have continued access to the investment grade bond market in the unsecured revolving credit facility). The covenant limiting our and our subsidiaries' abilities to declare or make certain dividends and distributions will also be suspended when the unsecured revolving credit facility or certain of our other indebtedness is rated investment grade (as definedfuture, although we anticipate that interest rates for issuances in the near term will continue to increase compared to those available in recent years.revolvingand secured bank term loans, export credit facility). and private placements), issuances of preferred stock and cash received from security deposits and maintenance reserves from our lease agreements.2017, such investment grade rating as defined in the unsecured revolving credit facility was achieved. We believe2022, we were in compliance within all covenants contained in our unsecured revolving credit facility as of December 31, 2017. In addition, the unsecured revolving credit facility contains customary events of default. In the case of an event of default, the lenders may terminate the commitments under the unsecured revolving credit facility and require immediate repayment of all outstanding borrowings and the cash collateralization of all outstanding letters of credit. Such termination and acceleration will occur automatically in the event of certain bankruptcy events. These provisions are subject to a number of important exceptions and qualifications set forth in the credit agreement governing the unsecured revolving credit facility.Unsecured term financingsFrom time to time, we enter into unsecured term facilities. During 2017, we entered into two additional unsecured term facilities aggregating $20.0 million, both with terms of five years and bearing interest at fixed rates of 2.75% per annum. The outstanding balance on our unsecured term facilities as of December 31, 2017 was $203.7 million, bearing interest at fixed rates ranging from 2.75% to 3.50% and one facility bearing interest at a floating rate of LIBOR plus 1.00%. As of December 31, 2017, the remaining maturities of all unsecured term facilities ranged from approximately 0.1 years to approximately 4.6 years. As of December 31, 2016, the outstanding balance on our unsecured term facilities was $211.3 million.52Convertible senior notesIn November 2011, we issued $200.0 million in aggregate principal amount of 3.875% convertible senior notes due 2018 in an offering exempt from registration under the Securities Act. The convertible notes are senior unsecured obligations of the Company and bear interest at a rate of 3.875% per annum, payable in arrears on June 1 and December 1 of each year. As of December 31, 2017, the convertible notes are convertible at the option of the holder into shares of our Class A common stock at a price of $29.42 per share.Secured term financingsWe fund some aircraft purchases through secured term financings. Our various consolidated entities will borrow through secured bank facilities to purchase an aircraft. The aircraft are then leased by our entities to airlines. We guarantee the obligations of the entities under certain of the loan agreements. The loans may be secured by a pledge of the shares of the entities, the aircraft, the lease receivables, security deposits, maintenance reserves or a combination thereof. Included in our secured term financings are two prior warehouse facilities that we refinanced into secured term loans in March 2014 and June 2016.The secured term facilities contain customary covenants for financings of these types, including covenants that limit the borrowers’ actions to those of special purpose entities engaged in the ownership and leasing of a particular aircraft and restrict their ability to incur, create, or assume certain indebtedness, to incur or assume certain liens, to purchase, hold or acquire certain investments, to declare or make certain dividends and distributions, and to engage in certain mergers, consolidations and asset sales. The secured term facilities also contain limitations on our ability to transfer the equity interests of such subsidiaries or to incur, create or assume liens on such equity interests or the collateral securing such secured term facilities. Certain of the facilities require us to comply with certain financial maintenance covenants. In addition, the secured term facilities contain customary events of default for such financings. In the case of an event of default, the lenders may require immediate repayment of all outstanding loans. Such termination and acceleration will occur automatically in the event of certain bankruptcy events. These provisions are subject to a number of important exceptions and qualifications set forth in the loan agreements governing the secured term facilities. We believe we were in compliancematerial respects with the covenants contained in our secured term facilities as of December 31, 2017.As of December 31, 2017, the outstanding balance on our secured term facilities was $484.0 million and we had pledged 19 aircraft as collateral with a net book value of $1.1 billion. The outstanding balance under our secured term facilities as of December 31, 2017 was comprised of $2.6 million fixed rate debt consisting of one facility with an interest rate of 4.58% and $481.5 million floating rate debt with interest rates ranging from LIBOR plus 1.15% to LIBOR plus 2.99%. As of December 31, 2017, the remaining maturities of all secured term facilities ranged from approximately 0.2 years to approximately 5.6 years.As of December 31, 2016, the outstanding balance on our secured term facilities was $619.8 million and we had pledged 23 aircraft as collateral with a net book value of $1.3 billion. The outstanding balance under our secured term facilities as of December 31, 2016 was comprised of $31.7 million fixed rate debt and $588.1 million floating rate debt, with interest rates ranging from 4.34% to 5.36% and LIBOR plus 1.15% to LIBOR plus 2.99%, respectively.Export credit financingsIn March 2013, we issued $76.5 million in secured notes due 2024 guaranteed by the Export-Import Bank of the United States. The notes mature on August 15, 2024 and bear interest at a rate of 1.617% per annum. We used the proceeds of the offering to refinance a portion of the purchase price of two Boeing aircraft, which serve as collateral for the notes, and the related premium charged by Export-Import Bank for its guarantee of the notes. As of December 31, 2017 and 2016, we had $44.9 million and $51.6 million in export credit financing outstanding, respectively.53Credit RatingsOur investment grade credit ratings help us to lower our cost of funds and broaden our access to attractively priced capital. Our long-term debt financing strategy is focused on continuing to raise unsecured debt in the global bank and investment grade capital markets.In 2017, Kroll Bond Rating Agency, Standard and Poor's, and Fitch Ratings reaffirmed their issuer and senior unsecured debt ratings and outlook. The following table summarizes our current credit ratings:Long-termCorporateDate of LastRating AgencyDebtRatingOutlookRatings ActionKroll Bond RatingsA−A−Stable OutlookDecember 15, 2017Standard and Poor'sBBBBBBStable OutlookNovember 12, 2017Fitch RatingsBBBBBBStable OutlookJuly 24, 2017costinterest rate applicable to certain of our financings.54
Our material cash requirements are primarily for the purchase of aircraft and debt service payments, along with our 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.2023 2024 2025 2026 2027 Thereafter Total (in thousands) Long-term debt obligations $ 2,623,262 $ 2,919,654 $ 2,377,168 $ 4,505,386 $ 2,737,328 $ 3,660,631 $ 18,823,429 544,002 463,879 388,985 299,621 214,423 282,474 2,193,384 6,224,490 6,273,338 4,104,896 3,892,013 2,479,676 2,563,355 25,537,768 Total $ 9,391,754 $ 9,656,871 $ 6,871,049 $ 8,697,020 $ 5,431,427 $ 6,506,460 $ 46,554,581 (1) Future interest payments on floating rate debt are estimated using floating rates in effect at December 31, 2022. (2) Purchase commitments reflect future Boeing and Airbus aircraft deliveries based on information currently available to us based on contractual documentation. December 31, 2022 December 31, 2021 (U.S. dollars in thousands, except percentages) Unsecured Senior notes $ 17,095,116 $ 16,892,058 Revolving credit facility 1,020,000 — Term financings 582,950 167,000 Total unsecured debt financing 18,698,066 17,059,058 Secured Term financings 113,717 126,660 Export credit financing 11,646 18,301 Total secured debt financing 125,363 144,961 Total debt financing 18,823,429 17,204,019 Less: Debt discounts and issuance costs (182,366) (181,539) Debt financing, net of discounts and issuance costs $ 18,641,063 $ 17,022,480 Selected interest rates and ratios: 3.07 % 2.79% 2.98 % 2.90% Percentage of total debt at a fixed-rate 91.34 % 94.80% (1) This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs. Shares Issued and Outstanding as of December 31, 2022 Liquidation Preference
as of December 31, 2022Issue Date Dividend Rate in Effect at December 31, 2022 Next dividend rate reset date Dividend rate after reset date Series A 10,000,000 $ 250,000 March 5, 2019 6.150 % March 15, 2024 3M LIBOR plus 3.65% Series B 300,000 300,000 March 2, 2021 4.650 % June 15, 2026 5 Yr U.S. Treasury plus 4.076% Series C 300,000 300,000 October 13, 2021 4.125 % December 15, 2026 5 Yr U.S. Treasury plus 3.149% Total 10,600,000 $ 850,000 Payment Dates Title of each class March 15, 2022 June 15, 2022 September 15, 2022 December 15, 2022 Series A Preferred Stock $3,844 $3,844 $3,843 $3,844 Series B Preferred Stock $3,487 $3,487 $3,488 $3,488 Series C Preferred Stock $3,094 $3,094 $3,094 $3,093 Rating Agency Long-term
DebtCorporate
RatingOutlook Date of Last
Ratings ActionKroll Bond Ratings A- A- Stable March 25, 2022 Standard and Poor's BBB BBB Stable April 21, 2022 Fitch Ratings BBB BBB Stable December 19, 2022 3.65 2.47 3.44 2.34 Year Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020(in thousands, except share and per share amounts and percentages) Revenues Rental of flight equipment $ 2,214,508 $ 2,003,337 $ 1,946,620 Aircraft sales, trading, and other 102,794 85,052 68,819 Total revenues 2,317,302 2,088,389 2,015,439 Expenses Interest 492,924 462,396 431,733 Amortization of debt discounts and issuance costs 53,254 50,620 43,025 Interest expense 546,178 513,016 474,758 Depreciation of flight equipment 965,955 882,562 780,691 Write-off of Russian fleet, net of recoveries 771,476 — — Selling, general, and administrative 156,855 125,279 95,684 Stock-based compensation expense 15,603 26,516 17,628 Total expenses 2,456,067 1,547,373 1,368,761 (Loss)/income before taxes (138,765) 541,016 646,678 Income tax expense 41,741 (104,384) (130,414) Net (loss)/income $ (97,024) $ 436,632 $ 516,264 Preferred stock dividends (41,700) (28,473) (15,375) Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Earnings per share of common stock Basic $ (1.24) $ 3.58 $ 4.41 Diluted $ (1.24) $ 3.57 $ 4.39 Weighted-average shares of common stock outstanding Basic 111,626,508 114,050,578 113,684,782 Diluted 111,626,508 114,446,093 114,014,021 Other financial data Pre-tax margin (6.0) % 25.9 % 32.1 % $ 659,868 $ 589,679 $ 691,956 28.5 % 28.2 % 34.3 % $ 5.89 $ 5.15 $ 6.07 Pre-tax return on common equity (3.0) % 8.6 % 11.3 % 11.0 % 9.8 % 12.4 %
(1)Adjusted net income before income taxes (defined as net income/(loss) attributable to common stockholders excluding the effects of certain non-cash items, one-time or non-recurring items, such as write-offs of our Russian fleet, that are not expected to continue in the future and certain other items), adjusted pre-tax margin (defined as adjusted net income before income taxes divided by total revenues), adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) and adjusted pre-tax return on common equity (defined as adjusted net income before income taxes divided by average common shareholders’ equity) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income/(loss) attributable to common stockholders, pre-tax margin, earnings/(loss) per share, diluted earnings/(loss) per share and pre-tax return on common equity, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted(1)Adjusted net income before income taxes (defined as net income excluding the effects of certain non-cash items, one-time or non-recurring items, such as settlement expense, net of recoveries, that are not expected to continue in the future and certain other items), adjusted margin before income taxes (defined as adjusted net income before income taxes divided by total revenues, excluding insurance recoveries), and adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income, pre-tax profit margin, earnings per share, and diluted earnings per share, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted margin before income taxes, and adjusted diluted earnings per share before income taxes, are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations. before income taxes and adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity to assess our consolidated financial and operating performance. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash items, one-time or non-recurring items that are not expected to continue in the future and certain other items55 before income taxes and adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity, however, should not be considered in isolation or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Adjusted net income before income taxes, adjusted pre-tax margin, before income taxes and adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity do not reflect our cash expenditures or changes in our cash requirements for our working capital needs. In addition, our calculation of adjusted net income before income taxes, adjusted pre-tax margin, before income taxes and adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity may differ from the adjusted net income before income taxes, adjusted pre-tax margin, before income taxes and adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity, or analogous calculations of other companies in our industry, limiting their usefulness as a comparative measure.The following tables show the reconciliation of net income to adjusted net income before income taxes and adjusted margin before income taxes (in thousands, except percentages):56net income tothe numerator for adjusted pre-tax margin (in thousands, except percentages):Year Ended
December 31,2022 2021 2020 (unaudited) Reconciliation of the numerator for adjusted pre-tax margin (net (loss)/income attributable to common stockholders to adjusted net income before income taxes): Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Amortization of debt discounts and issuance costs 53,254 50,620 43,025 Write-off of Russian fleet, net of recoveries 771,476 — — Stock-based compensation expense 15,603 26,516 17,628 Income tax (benefit)/expense (41,741) 104,384 130,414 Adjusted net income before income taxes $ 659,868 $ 589,679 $ 691,956 Denominator for adjusted pre-tax margin: Total revenues 2,317,302 2,088,389 2,015,439 28.5 % 28.2 % 34.3 % (a) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues 2017Year Ended
December 31,2022 2021 2020 Reconciliation of the numerator for adjusted diluted earnings per share (net (loss)/income attributable to common stockholders to adjusted net income before income taxes): Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Amortization of debt discounts and issuance costs 53,254 50,620 43,025 Write-off of Russian fleet, net of recoveries 771,476 — — Stock-based compensation expense 15,603 26,516 17,628 Income tax (benefit)/expense (41,741) 104,384 130,414 Adjusted net income before income taxes $ 659,868 $ 589,679 $ 691,956 Denominator for adjusted diluted earnings per share: Weighted-average diluted common shares outstanding 111,626,508 114,446,093 114,014,021 Potentially dilutive securities, whose effect would have been anti-dilutive 361,186 — — Adjusted weighted-average diluted common shares outstanding 111,987,694 114,446,093 114,014,021 $ 5.89 $ 5.15 $ 6.07 (b) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by adjusted weighted-average diluted common shares outstanding Year Ended
December 31,2022 2021 2020 (unaudited) Reconciliation of the numerator for adjusted pre-tax return on common equity (net (loss)/income attributable to common stockholders to adjusted net income before income taxes): Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Amortization of debt discounts and issuance costs 53,254 50,620 43,025 Write-off of Russian fleet, net of recoveries 771,476 — — Stock-based compensation expense 15,603 26,516 17,628 Income tax (benefit)/expense (41,741) 104,384 130,414 Adjusted net income before income taxes $ 659,868 $ 589,679 $ 691,956 Reconciliation of denominator for pre-tax return on common equity to adjusted pre-tax return on common equity: Common shareholders' equity as of beginning of the period $ 6,158,568 $ 5,822,341 $ 5,373,544 Common shareholders' equity as of end of the period $ 5,796,363 $ 6,158,568 $ 5,822,341 Average common shareholders' equity $ 5,977,466 $ 5,990,455 $ 5,597,943 11.0 % 9.8 % 12.4 % (c) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity 2016As of2017,2022, we owned 244recorded $2.2 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $29.2 million, as compared to $2.0 billion in rental revenue, which included amortization expense related to initial direct costs, net of overhaul revenue of $2.3 million, for the year ended December 31, 2021. Our flight equipment subject to operating leases increased to 407 aircraft with a net book value of $13.3$24.5 billion and recorded $1.5 billion in rental revenue for the year then ended, which included overhaul revenue, net of amortization of initial direct costs, of $21.6 million. In the prior year, as of December 31, 2016, we owned 2372022 from 381 aircraft with a net book value of $12.0$22.9 billion and recorded $1.3 billion in rental revenue for the year endedas of December 31, 2016, which included overhaul revenue, net of amortization of initial direct costs, of $11.3 million.2021. The increase in rental revenue was primarily due todriven by the increasecontinued growth in net book valueour fleet and significantly lower COVID-19 related lease restructuring and cash basis losses, partially offset by the loss of revenue from the termination of our operating lease portfolio to $13.3 billion as of December 31, 2017 from $12.0 billion as of December 31, 2016.$65.6$102.8 million for the year ended December 31, 20172022 compared to $80.1$85.1 million for the year ended December 31, 2016.2021. During the year ended December 31, 2017,2022, we sold 31 aircraft from our operating lease portfolio and received insurance proceeds relating to the losses of two insured aircraft, recording gains on aircraft sales and trading activity of $38.5 million. In addition, we received insurance proceeds of $1.0recorded $48.0 million in connection with a litigation settlement.gains from the sale of six aircraft and nine sales-type lease transactions and $17.9 million in forfeiture of security deposit income from the termination of our leasing activities in Russia in the current year period. During the year ended December 31, 2016,2021, we sold 46recorded a $34.0 million in revenue recognized from the sale to a third party of certain unsecured claims related to Aeromexico’s insolvency proceedings, and $24.0 million from the sale of three aircraft from our operatingand one sales-type lease portfolio recording gains on aircraft sales and trading activitytransaction.$287.4$546.2 million for the year ended December 31, 20172022 compared to $286.2$513.0 million for the year ended December 31, 2016.2021. Our interest expense increased due to an increase in our average debt balance and an increase in our composite cost of funds as compared to the prior year. Due to the rising interest rate environment, we expect our interest expense will continue to increase as our average debt balance outstanding and our composite cost of funds each increase in the future.changeincrease in depreciation expense for 2022 compared to 2021 was primarily attributable to the growth of our fleet during the last twelve months. We expect our depreciation expense to increase as we continue to add aircraft to our fleet.average outstandingaggregate debt balances,balance driven by the growth of our fleet and the increase in our liquidity position, partially offset by a decrease in our composite cost of funds.interest rate. We ended the year with $7.9 billion in available liquidity. We expect that our interest expense will increase as our average debt balance outstanding continues to increase. Interest expense willWe also be impacted by changesexpect that the rising interest rate environment could lead to an increase in our composite cost of funds.funds, which would increase our interest expense.57$508.4$882.6 million in depreciation expense of flight equipment for the year ended December 31, 20172021 compared to $452.7$780.7 million for the year ended December 31, 2016.2020. The increase in depreciation expense for 2017,2021 compared to 2016,2020 was primarily attributable to the increase in book valuegrowth of our operating lease portfolio netfleet during the last twelve months.$91.3$125.3 million for the year ended December 31, 20172021 compared to $83.0$95.7 million for the year ended December 31, 2016.2020. Selling, general, and administrative expense as a percentage of total revenue increased to 6.0% for the year ended December 31, 20172021 compared to 5.8%4.7% for the year ended December 31, 2016. However, as we continue to add new aircraft to our portfolio, we expect over the long-term,2020. The increase in selling, general and administrative expenseexpenses was primarily due to decrease as a percentagethe increase in business activity and increased expenses related to transition of our revenue.Stock-based compensation expenseStock-based compensation expense totaled $19.8 million foraircraft.yearyears ended December 31, 2017 compared to $16.9 million for the year ended2021 and December 31, 2016.TaxesFor the year ended December 31, 2017,2020, we reported an effective tax rate of -24.0%19.3% and 20.2%, as compared to 35.4% forrespectively. Changes in the year ended December 31, 2016. The change in effective tax rate iswere primarily duedriven by variances in permanent items.the impact of the Tax Reform Act. Our estimated impact of the Tax Reform Act resulted in an estimated net tax benefit of $354.1 million or $3.16 per diluted share for the quarter ended December 31, 2017. This resulted from the re-measurement of our U.S. deferred tax liabilities at the new statutory rate of 21%, partially offset by other impacts of the Tax Reform Act. In addition to the effects from the Tax Reform Act, we recorded a $10.9 million tax benefit from the utilization of foreign tax credits.The $354.1 million benefit resulting from the remeasurement of deferred tax assets and liabilities is a provisional amount and a reasonable estimate by our management of the impact of the Tax Reform Act. Based on our initial assessment of the Tax Reform Act, we believe that the most significant impact on our financial statements is the remeasurement of deferred taxes. We do not expect other provisions of the Tax Reform Act to have a material impact on our consolidated financial statements for the fiscal year ending December 31, 2018. Quantifying all of the impacts of the Tax Reform Act, however, requires significant judgment by our management, including the inherent complexities involved in determining the timing of reversals of our deferred tax assets and liabilities. Accordingly, we will continue to analyze the impacts of the Tax Reform Act and, if necessary, record any further adjustments to our deferred tax assets and liabilities in future periods.Net income2017,2021, we reported consolidated net income available to common stockholders of $756.2$408.2 million, or $6.82$3.57 per diluted share, compared to a consolidated net income available to common stockholders of $374.9$500.9 million, or $3.44$4.39 per diluted share, for the year ended December 31, 2016. Our2020. Despite the growth of our fleet, our net income available to common stockholders and diluted earnings per share for the year ended December 31, 2017 include our estimated tax benefit of $354.1 million associated with the enactment of the Tax Reform Act. The increase in net income for 2017, compared to 2016, was alsodecreased due to the increase in net book valueimpact of our operating lease portfolio.2017,2021, we recorded adjusted net income before income taxes of $657.8$589.7 million, or $5.94$5.15 per diluted share, compared to an adjusted net income before income taxes of $622.9$692.0 million, or $5.67$6.07 per diluted share, for the year ended December 31, 2016. The increase in2020. Our adjusted net income before income taxes for 2017, compared to 2016, was primarily attributable to the increase in net book value of our operating lease portfolio.58Adjusted net incomeand adjusted diluted earnings per share before income taxes is a measure of financial and operational performance that is not defined by GAAP. See Note 2 in “Item 6. Selected Financial Data” of this Annual Report on Form 10-K for a discussion of adjusted net income before income taxes as a non-GAAP measure and a reconciliation of this measure to net income.2016 Compared to 2015Rental revenueAs of December 31, 2016, we owned 237 aircraft, with a net book value of $12.0 billion, and recorded $1.3 billion in rental revenue for the year then ended, which included overhaul revenue, net of amortization of initial direct costs, of $11.3 million. In the prior year, as of December 31, 2015, we owned 240 aircraft with a net book value of $10.8 billion and recorded $1.2 billion in rental revenuedecreased for the year ended December 31, 2015, which included overhaul revenue, net of amortization of initial direct costs, of $24.9 million. The increase in rental revenue was2021 as compared to 2020, primarily due to the increase in net book valueimpact of our operating lease portfolio to $12.0 billion as of December 31, 2016 from $10.8 billion as of December 31, 2015.Aircraft sales, trading,restructurings and other revenueAircraft sales, trading, and other revenue totaled $80.1 million for the year ended December 31, 2016 compared to $48.3 million for the year ended December 31, 2015. During the year ended December 31, 2016, we sold 46 aircraft from our operating lease portfolio, recording gains on aircraft sales and trading activity of $61.5 million. In addition, we received insurance proceeds of $5.25 million in connection with a litigation settlement. During the year ended December 31, 2015, we sold 24 aircraft from our operating lease portfolio recording gains on aircraft sales and trading activity of $33.9 million and received $4.5 million of insurance proceeds in connection with a litigation settlement.Interest expenseInterest expense totaled $286.2 million for the year ended December 31, 2016 compared to $266.1 million for the year ended December 31, 2015. The change was primarily due to an increase in our average outstanding debt balances, partially offset by a decrease in our composite cost of funds, resulting in a $19.6 million increase in interest and a $0.4 million increase in amortization of our discounts and deferred debt issue costs. We expect that our interest expense will increase as our average debt balance outstanding continues to increase. Interest expense will also be impacted by changes in our composite cost of funds.Depreciation expenseWe recorded $452.7 million in depreciation expense of flight equipment for the year ended December 31, 2016 compared to $397.8 million for the year ended December 31, 2015. The increase in depreciation expense for 2016, compared to 2015, was primarily attributable to the increase in book value of our operating lease portfolio net of sales.Settlement expenseWe recorded settlement expense of $72.0 million for the year ended December 31, 2015 as a result of the Settlement Agreement entered into by and between the Company, certain executive officers and employees of the Company, AIG, ILFC, and AerCap Holdings N.V., to settle all ongoing litigation.Selling, general, and administrative expensesWe recorded selling, general, and administrative expenses of $83.0 million for the year ended December 31, 2016 compared to $77.0 million for the year ended December 31, 2015. Selling, general, and administrative expense as a percentage of total revenue decreased to 5.8% for the year ended December 31, 2016 compared to 6.3% for the year ended December 31, 2015. As we continue to add new aircraft to our portfolio, we expect over the long-term, selling, general, and administrative expense to decrease as a percentage of our revenue.59Stock based compensation expenseStock based compensation expense totaled $16.9 million for the year ended December 31, 2016 compared to $17.0 million for the year ended December 31, 2015.TaxesThe effective tax rate for the year ended December 31, 2016 was 35.4% compared to 35.5% for the year ended December 31, 2015. The change in effective tax rate for the respective periods is due to the effect of changes in permanent differences.Net incomeFor the year ended December 31, 2016, we reported consolidated net income of $374.9 million, or $3.44 per diluted share, compared to a consolidated net income of $253.4 million, or $2.34 per diluted share, for the year ended December 31, 2015. The increase in net income for 2016, compared to 2015, was primarily attributable to the increase in net book value of our operating lease portfolio and the settlement expense incurred in 2015 related to the AIG/ILFC litigation.Adjusted net income before income taxesFor the year ended December 31, 2016, we recorded adjusted net income before income taxes of $622.9 million, or $5.67 per diluted share, compared to an adjusted net income before income taxes of $508.0 million, or $4.64 per diluted share, for the year ended December 31, 2015. The increase in adjusted net income before income taxes for 2016, compared to 2015, was primarily attributable to the increase in net book value of our operating lease portfolio.Adjusted net income before income taxes is a measure of financial and operational performance that is not defined by GAAP. See Note 2 in “Item 6. Selected Financial Data” of this Annual Report on Form 10-K for a discussion of adjusted net income before income taxes as a non-GAAP measure and a reconciliation of this measure to net income.Contractual ObligationsOur contractual obligations as of December 31, 2017 are as follows:(1)Future interest payments on floating rate debt are estimated using floating rates in effect at December 31, 2017.60Off‑balance Sheet ArrangementsWe 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 and created partnership arrangements or trusts for the purpose of leasing aircraft or facilitating borrowing arrangements all of which are consolidated. We have investments in two joint ventures in which we own 9.5% of the equity of each joint venture. We account for our investment in these joint ventures using the equity method of accounting due to our level of influence and involvement in the joint ventures.Policiespoliciesestimates can have a significant impact on our results of operations, financial position, and financial statement disclosures, and may require subjective and complex estimates and judgments.Lease revenueWe lease flight equipment principally under operating leases and report rental income ratably over the life of each lease. Rentals received, but unearned, under the lease agreements are recorded in Rentals received in advance on our Consolidated Balance Sheets until earned. The difference between the rental income recorded and the cash received under the provisions of the lease is included in Lease receivables, as a component of Other assets on our Consolidated Balance Sheets. An allowance for doubtful accounts will be recognized for past-due rentals based on management’s assessment of collectability. Our management team monitors all lessees with past due lease payments (if any) and discusses relevant operational and financial issues facing those lessees with our marketing executives in order to determine an appropriate allowance for doubtful accounts. In addition, if collection is not reasonably assured, we will not recognize rental income for amounts due under our lease contracts and will recognize revenue for such lessees on a cash basis. Should a lessee’s credit quality deteriorate, we may be required to record an allowance for doubtful accounts and/or stop recognizing revenue until cash is received.Our aircraft lease agreements typically contain provisions which require the lessee to make additional contingent rental payments based on either the usage of the aircraft, measured on the basis of hours or cycles flown per month (a cycle is one take-off and landing), or calendar-based time (“Maintenance Reserves”). These payments represent contributions to the cost of major future maintenance events (“Qualifying Events”) associated with the aircraft and typically cover major airframe structural checks, engine overhauls, the replacement of life limited parts contained in each engine, landing gear overhauls and overhauls of the auxiliary power unit. These Maintenance Reserves are generally collected monthly based on reports of usage by the lessee or collected as fixed monthly rates.In accordance with our lease agreements, Maintenance Reserves are subject to reimbursement to the lessee upon the occurrence of a Qualifying Event. The reimbursable amount is capped by the amount of Maintenance Reserves payments received by the Company, net of previous reimbursements. The Company is only required to reimburse for Qualifying Events during the lease term. The Company is not required to reimburse for routine maintenance or additional maintenance costs incurred during a Qualifying Event. All amounts of Maintenance Reserves unclaimed by the lessee at the end of the lease term are retained by the Company.We record as rental revenue the portion of Maintenance Reserves that we are virtually certain we will not reimburse to the lessee as a component of “Rental of flight equipment” in our Consolidated Statements of Income. Maintenance Reserves which we may be required to reimburse to the lessee are reflected in our overhaul reserve liability, as a component of “Security deposits and maintenance reserves on flight equipment leases” in our Consolidated Balance Sheets.Estimating when we are virtually certain that Maintenance Reserves payments will not be reimbursed requires judgments to be made as to the timing and cost of future maintenance events. In order to determine virtual certainty with respect to this contingency, our Technical Asset Management department analyzes the terms of the lease, utilizes available cost estimates published by the equipment manufacturers, and thoroughly evaluates an airline’s Maintenance Planning Document (“MPD”). The MPD describes the required inspections and the frequency of those inspections. Our61Technical Asset Management department utilizes this information, combined with their cumulative industry experience, to determine when major Qualifying Events are expected to occur for each relevant component of the aircraft, and translates this information into a determination of how much we will ultimately be required to reimburse to the lessee. We record Maintenance Reserves revenue as the aircraft is operated when we determine that a Qualifying Event will occur outside the non-cancellable lease term or after we have collected Maintenance Reserves equal to the amount that we expect to reimburse to the lessee as the aircraft is operated.Should such estimates be inaccurate, we may be required to reverse revenue previously recognized. In addition, if we can no longer make accurate estimates with respect to a particular lease, we will stop recognizing any Maintenance Reserves revenue until the end of such lease.Any Maintenance Reserves or end of lease payments collected that were not reimbursed to the lessee during the term of the lease for a Qualifying Event are recognized as Rental revenues at the end of the lease. Leases that contain provisions which require us to pay a portion of a lessee's major maintenance based on the usage of the aircraft and major life-limited components that were incurred prior to the current lease are recorded as lease incentives based on estimated payments we expect to pay the lessee. These lease incentives are amortized as a reduction of Rental revenues over the term of the lease.All of our lease agreements are triple net leases whereby the lessee is responsible for all taxes, insurance, and aircraft maintenance. In the future, we may incur repair and maintenance expenses for off-lease aircraft. We recognize repair and maintenance in our Consolidated Statements of Income for all such expenditures.Lessee-specific modifications such as those related to modifications of the aircraft cabin are expected to be capitalized as initial direct costs and amortized over the term of the lease into rental revenue in our Consolidated Statements of Income.the Companyus for scheduled maintenance and overhauls are capitalized and depreciated over a period to the next scheduled maintenance or overhaul event. Miscellaneous repairs are expensed when incurred.62non observablenon-observable inputs.Maintenance RightsWe identify, measure, and account for maintenance right assets and liabilities associated with our acquisitions of aircraft with in-place leases. A maintenance right asset represents the fair value of our contractual right under a lease to receive an aircraft in an improved maintenance condition as compared to the maintenance condition on the acquisition date. A maintenance right liability represents our obligation to pay the lessee for the difference between the lease end contractual maintenance condition of the aircraft and the actual maintenance condition of the aircraft on the acquisition date.Our aircraft are typically subject to triple-net leases pursuant to which the lessee is responsible for maintenance, which is accomplished through one of two types of provisions in its leases: (i) end of lease return conditions (“EOL Leases”) or (ii) periodic maintenance payments (“MR Leases”).(i) EOL LeasesUnder EOL Leases, the lessee is obligated to comply with certain return conditions which require the lessee to perform maintenance on the aircraft or make cash compensation payments at the end of the lease to bring the aircraft into a specified maintenance condition.Maintenance right assets in EOL Leases represent the difference in value between the contractual right to receive an aircraft in an improved maintenance condition as compared to the maintenance condition on the acquisition date. Maintenance right liabilities exist in EOL Leases if, on the acquisition date, the maintenance condition of the aircraft is greater than the contractual return condition in the lease and we are required to pay the lessee in cash for the improved maintenance condition. Maintenance right assets, net will be recorded as a component of flight equipment subject to operating leases on our Consolidated Balance Sheets.When we record maintenance right assets with respect to EOL Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry in the contractually specified maintenance condition without any cash payment to us by the lessee, the maintenance right asset is relieved, and an aircraft improvement is recorded to the extent the improvement is substantiated and deemed to meet our capitalization policy; (ii) the lessee pays us cash compensation at lease expiry in excess of the value of the maintenance right asset, the maintenance right asset is relieved, and any excess is recognized as end of lease income; or (iii) the lessee pays us cash compensation at lease expiry that is less than the value of the maintenance right asset, the cash is applied to the maintenance right asset and the balance of such asset is relieved and recorded as an aircraft improvement to the extent the improvement is substantiated and meets our capitalization policy. Any aircraft improvement will be depreciated over a period to the next scheduled maintenance event in accordance with our policy with respect to major maintenance and included in depreciation of flight equipment on our Consolidated Statements of Income.When we record maintenance right liabilities with respect to EOL Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry in the contractually specified maintenance condition without any cash payment by us to the lessee, the maintenance right liability is relieved, and end of lease income is recognized; (ii) we pay the lessee cash compensation at lease expiry of less than the value of the maintenance right liability, the maintenance right liability is relieved and any difference is recognized as end of lease income; or (iii) we pay the lessee cash compensation at lease expiry in excess of the value of the maintenance right liability, the maintenance right liability is relieved, and the excess amount is recorded as an aircraft improvement asset to the extent that it meets our capitalization policy.63(ii) MR LeasesUnder MR Leases, the lessee is required to make periodic payments to the Company for maintenance based upon planned usage of the aircraft. When a Qualifying Event occurs during the lease term, we are required to reimburse the lessee for the costs associated with such maintenance. At the end of lease, we are entitled to retain any cash receipts in excess of the required reimbursements to the lessee.Maintenance right assets in MR Leases represent the right to receive an aircraft in an improved condition relative to the actual condition on the acquisition date. The aircraft is improved by the performance of a Qualifying Event paid for by the lessee who is reimbursed by us from the periodic maintenance payments that it receives. Maintenance right assets, net will be recorded as a component of flight equipment subject to operating leases on our Consolidated Balance Sheets.When we record maintenance right assets with respect to MR Leases, the following accounting scenarios exist: (i) the aircraft is returned at lease expiry and no Qualifying Event has been performed by the lessee since the acquisition date, the maintenance right asset is offset by the amount of the associated maintenance payment liability, and any excess is recorded as end of lease income; or (ii) we have reimbursed the lessee for the performance of a Qualifying Event, the maintenance right asset is relieved, and an aircraft improvement is recorded to the extent of that it meets our capitalization policy.When flight equipment is sold, maintenance rights are included in the calculation of the disposition gain or loss.Income taxesWe use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date. We record a valuation allowance for deferred tax assets when the probability of realization of the full value of the asset is less than 50%. Based on the timing of reversal of deferred tax liabilities, future anticipated taxable income based on lease and debt arrangements in place at the balance sheet date, and tax planning strategies available to us, our management considers the deferred tax asset recoverable. Should events occur in the future that make the likelihood of recovery of deferred tax assets less than 50%, a deferred tax valuation allowance will be required that could have a significant impact on our results of operations and financial condition.We recognize the impact of a tax position, if that position has a probability of greater than 50% that it would be sustained on audit, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that has a probability of more than 50% of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As our business develops, we may take tax positions that have a probability of less than 50% of being sustained on audit which will require us to reserve for such positions. If these tax positions are audited by a taxing authority, there can be no assurance that the ultimate resolution of such tax positions will not result in further losses. Such losses could have a significant impact on our results of operations and financial condition.64OurLease rates, and therefore our revenue from a lease, rental stream isare generally fixed over the life of our leases, whereasleases. While our floating-rate debt balances have fluctuated in recent years, we have used floating‑rate debtsome exposure to financechanging interest rates as a significant portionresult of our aircraft acquisitions.floating-rate debt, primarily from our revolving credit facility. As of December 31, 20172022 and 2016,2021, we had $1.4$1.6 billion and $1.5$0.9 billion, in floating‑floating-rate debt outstanding, respectively. Additionally, we have outstanding preferred stock with an aggregate stated amount of $850.0 million that currently pays dividends at a fixed rate, debt, respectively.but will alternate to paying dividends based on a floating rate or be reset to a new fixed rate based on the then-applicable floating rate, after five years from initial issuance. If interest rates continue to increase, as they did throughout 2022, we would be obligated to make higher interest payments to our lenders.lenders, and eventually, higher dividend payments to the holders of our preferred stock. If we incur significant fixed‑ratefixed-rate debt in the future, increased interest rates prevailing in the market at the time of the incurrence of such debt would also increase our interest expense. If the composite interest rate on our compositeoutstanding floating rate weredebt was to increase by 1.0%, we would expect to incur additional annual interest expense on our existing indebtedness of approximately $16.3 million and $9.0 million as of December 31, 20172022 and December 31, 2016 of approximately $14.3 million and $14.5 million, each on an annualized basis,2021, respectively, which would put downward pressure on our operating margins. The decrease in additional interest expenseAs noted above, we also have risk related to the Company would incur is primarily due to a decrease inimpact of the floating‑rate debt outstanding astransition from LIBOR. See the section titled “Management’s Discussion and Analysis of December 31, 2017 compared to December 31, 2016.WeTo partially mitigate the risk of an increasing interest rate environment between the lease signing date and the delivery date of the aircraft, by having interest rate adjusters in a majority of our forward lease contracts have manufacturer escalation protection and/or interest rate adjusters which would adjust the final lease rate upward ifor downward based on changes in the consumer price index or certain benchmark interest rates, are higherrespectively, at the time of delivery of the aircraft than atas compared to the lease signing date.The Company attemptsAs of December 31, 2017Approximately 0.2% and 2016, approximately 1.0%0.5% of our lease revenues were denominated in Euros.foreign currency as of December 31, 2022 and 2021, respectively. Approximately 1.6% and 1.8% of our debt obligations were denominated in foreign currency as of December 31, 2022 and December 31, 2021, respectively; however, the exposure of such debt has been effectively hedged as described below. As our principal currency is the U.S. dollar, fluctuations in the U.S. dollar as compared to other major currencies should not have a significant impact on our future operating results.65
However, many of our lessees are exposed to currency risk due to the fact that they earn revenues in their local currencies while a significant portion of their liabilities and expenses are denominated in U.S. dollars, including their lease payments to us, as well as fuel, debt service, and other expenses. For the year ended December 31, 2022, more than 95% of our revenues were derived from customers who have their principal place of business outside6769707172736620172022 and 2016,2021, the related consolidated statements of income,operations and other comprehensive income/(loss), shareholders’ equity, and cash flows for each of the years in the three‑yearthree-year period ended December 31, 2017,2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172022 and 2016,2021, and the results of its operations and its cash flows for each of the years in the three‑yearthree-year period ended December 31, 2017,2022, in conformity with U.S. generally accepted accounting principles.2017,2022, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 201816, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.Los Angeles,22, 201816, 202367subsidiaries’subsidiaries' (the Company) internal control over financial reporting as of December 31, 2017,2022, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2022, based on criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.20172022 and 2016,2021, the related consolidated statements of income,operations and other comprehensive income/(loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017,2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 22, 201816, 2023 expressed an unqualified opinion on those consolidated financial statements.Management’sManagement's Report on Internal Control Overover Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Los Angeles,22, 201816, 202368December 31, 2022 December 31, 2021 (in thousands, except share and par value amounts) Assets Cash and cash equivalents $ 766,418 $ 1,086,500 Restricted cash 13,599 21,792 Flight equipment subject to operating leases 29,466,888 27,101,808 Less accumulated depreciation (4,928,503) (4,202,804) 24,538,385 22,899,004 Deposits on flight equipment purchases 1,344,973 1,508,892 Other assets 1,733,330 1,452,534 Total assets $ 28,396,705 $ 26,968,722 Liabilities and Shareholders’ Equity Accrued interest and other payables $ 696,899 $ 611,757 Debt financing, net of discounts and issuance costs 18,641,063 17,022,480 Security deposits and maintenance reserves on flight equipment leases 1,293,929 1,173,831 Rentals received in advance 147,654 138,816 Deferred tax liability 970,797 1,013,270 Total liabilities $ 21,750,342 $ 19,960,154 Shareholders’ Equity Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,600,000 (aggregate liquidation preference of $850,000) shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 106 106 Class A common stock, $0.01 par value; 500,000,000 shares authorized; 110,892,097 and 113,987,154 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 1,109 1,140 Class B Non-Voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding — — Paid-in capital 3,255,973 3,399,245 Retained earnings 3,386,820 3,609,885 Accumulated other comprehensive income/(loss) 2,355 (1,808) Total shareholders’ equity $ 6,646,363 $ 7,008,568 Total liabilities and shareholders’ equity $ 28,396,705 $ 26,968,722 16,000 13,597,530 12,041,925 1,290,676 352,213 8,713,874 856,335 99,385 667,060 69Year Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020(in thousands, except share and per share amounts) Revenues Rental of flight equipment $ 2,214,508 $ 2,003,337 $ 1,946,620 Aircraft sales, trading, and other 102,794 85,052 68,819 Total revenues 2,317,302 2,088,389 2,015,439 Expenses Interest 492,924 462,396 431,733 Amortization of debt discounts and issuance costs 53,254 50,620 43,025 Interest expense 546,178 513,016 474,758 Depreciation of flight equipment 965,955 882,562 780,691 Write-off of Russian fleet, net of recoveries 771,476 — — Selling, general, and administrative 156,855 125,279 95,684 Stock-based compensation expense 15,603 26,516 17,628 Total expenses 2,456,067 1,547,373 1,368,761 (Loss)/income before taxes (138,765) 541,016 646,678 Income tax benefit/(expense) 41,741 (104,384) (130,414) Net (loss)/income $ (97,024) $ 436,632 $ 516,264 Preferred stock dividends (41,700) (28,473) (15,375) Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Other Comprehensive Income/(Loss): Foreign currency translation adjustment 21,943 (2,419) (6,828) Change in fair value of hedged transactions (16,647) (294) 8,992 Total tax (expense)/benefit on other comprehensive income/loss (1,133) 580 (442) Other comprehensive income/(loss), net of tax 4,163 (2,133) 1,722 Total comprehensive (loss)/income attributable for common stockholders $ (134,561) $ 406,026 $ 502,611 Earnings per share of common stock: Basic $ (1.24) $ 3.58 $ 4.41 Diluted $ (1.24) $ 3.57 $ 4.39 Weighted-average shares of common stock outstanding Basic 111,626,508 114,050,578 113,684,782 Diluted 111,626,508 114,446,093 114,014,021 Dividends declared per share of common stock $ 0.755 $ 0.665 $ 0.61 70
(See Notes to Consolidated Financial Statements)Preferred Stock Class A
Common StockClass B Non‑Voting
Common StockPaid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income Shares Amount Shares Amount Shares Amount Total (in thousands, except share and per share amounts) 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 exercise of options and vesting of restricted stock units — — 700,737 7 — — 6,564 — — 6,571 Stock-based compensation expense — — — — — — 17,628 — — 17,628 Cash dividends (declared $0.61 per share) — — — — — — — (69,396) — (69,396) Preferred dividends — — — — — — — (15,375) — (15,375) Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — 1,722 1,722 Tax withholdings on stock based compensation — — (198,108) (2) — — (8,615) — — (8,617) Net income — — — — — — — 516,264 — 516,264 Balance at December 31, 2020 10,000,000 $ 100 113,852,896 $ 1,139 — $ — $ 2,793,178 $ 3,277,599 $ 325 $ 6,072,341 Issuance of common stock upon vesting of restricted stock units — — 451,188 4 — — 1,437 — — 1,441 Issuance of preferred stock 600,000 6 591,336 — — 591,342 Stock-based compensation expense — — — — — — 26,516 — — 26,516 Common stock repurchased — — (153,949) (1) (5,780) — — (5,781) Cash dividends (declared $0.665 per share) — — — — — — — (75,873) — (75,873) Cash dividends (declared on preferred stock) — — — — — — — (28,473) — (28,473) Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — (2,133) (2,133) Tax withholdings on stock-based compensation — — (162,981) (2) — — (7,442) — — (7,444) Net income — — — — — — — 436,632 — 436,632 Balance at December 31, 2021 10,600,000 $ 106 113,987,154 $ 1,140 — $ — $ 3,399,245 $ 3,609,885 $ (1,808) $ 7,008,568 Issuance of common stock upon vesting of restricted stock units — — 537,259 5 — — (3) — — 2 Common stock repurchased — — (3,420,874) (34) — — (149,966) — — (150,000) Stock-based compensation expense — — — — 15,603 — — 15,603 Cash dividends (declared $0.755 per share) — — — — — — — (84,341) — (84,341) Cash dividends (declared on preferred stock) — — — — — — — (41,700) — (41,700) Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — 4,163 4,163 Tax withholdings on stock based-compensation — — (211,442) (2) — — (8,906) — — (8,908) Net loss — — — — — — — (97,024) — (97,024) Balance at December 31, 2022 10,600,000 $ 106 110,892,097 $ 1,109 — $ — $ 3,255,973 $ 3,386,820 $ 2,355 $ 6,646,363 71Year Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020(in thousands) Operating Activities Net (loss)/income $ (97,024) $ 436,632 $ 516,264 Adjustments to reconcile net (loss)/income to net cash provided by operating activities: Depreciation of flight equipment 965,955 882,562 780,691 Write-off of Russian fleet, net of recoveries 771,476 — — Stock-based compensation expense 15,603 26,516 17,628 Deferred taxes (43,492) 97,446 166,467 Amortization of prepaid lease costs 47,849 46,547 43,224 Amortization of discounts and debt issuance costs 53,254 50,620 43,025 Gain on aircraft sales, trading and other activity (113,103) (46,109) (34,654) Changes in operating assets and liabilities: Other assets (232,613) (176,391) (415,347) Accrued interest and other payables 255 63,112 (22,810) Rentals received in advance 13,990 (4,099) (4,302) Net cash provided by operating activities 1,382,150 1,376,836 1,090,186 Investing Activities Acquisition of flight equipment under operating lease (2,904,723) (2,506,175) (1,631,551) Payments for deposits on flight equipment purchases (518,270) (496,838) (885,679) Proceeds from aircraft sales, trading and other activity 235,424 137,887 151,132 Acquisition of aircraft furnishings, equipment and other assets (216,635) (229,654) (160,993) Net cash used in investing activities (3,404,204) (3,094,780) (2,527,091) Financing Activities Issuance of common stock upon exercise of options — 1,438 6,569 Net proceeds from preferred stock issuance — 591,340 — Cash dividends paid on Class A common stock (83,253) (73,001) (68,183) Common shares repurchased (150,000) (5,780) — Cash dividends paid on preferred stock (41,700) (28,473) (15,375) Tax withholdings on stock-based compensation (8,903) (7,441) (8,618) Net change in unsecured revolving facilities 1,020,000 — (20,000) Proceeds from debt financings 2,659,996 3,655,830 4,659,762 Payments in reduction of debt financings (2,085,898) (3,194,482) (1,728,029) Debt issuance costs (6,827) (10,245) (8,102) Security deposits and maintenance reserve receipts 417,224 174,521 114,596 Security deposits and maintenance reserve disbursements (26,860) (35,238) (76,009) Net cash provided by financing activities 1,693,779 1,068,469 2,856,611 Net decrease in cash (328,275) (649,475) 1,419,706 Cash, cash equivalents and restricted cash at beginning of period 1,108,292 1,757,767 338,061 Cash, cash equivalents and restricted cash at end of period $ 780,017 $ 1,108,292 $ 1,757,767 Supplemental Disclosure of Cash Flow Information Cash paid during the period for interest, including capitalized interest of $39,655, $49,070 and $53,163 at December 31, 2022, 2021 and 2020, respectively $ 533,897 $ 508,616 $ 449,662 Cash paid for income taxes $ 6,362 $ 5,734 $ 29,733 Supplemental Disclosure of Noncash Activities Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment $ 914,501 $ 1,009,554 $ 782,896 Cash dividends declared on common stock, not yet paid 22,178 21,088 18,216 72Udvar‑HáUdvar-Házy. We areThe Company is principally engaged in purchasing the most modern, fuel-efficient, new technology commercial jet transport aircraft directly from theaircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus. We leaseAirbus 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 December 31, 2017 we2022, the Company owned a fleet of 244417 aircraft, managed 85 aircraft and had 368398 aircraft on order with theaircraft manufacturers. In addition to ourits leasing activities, we sellthe Company sells aircraft from ourits fleet to third parties, including other leasing companies, financial services companies, airlines and airlines. Weother investors. The Company also provideprovides fleet management services to investors and owners of aircraft portfolios for a management fee.we havethe Company has a controlling financial interest, including the accountaccounts of any Variable Interest Entity in which we havethe Company has a controlling financial interest and for which we areit is the primary beneficiary. All material intercompany balances are eliminated in consolidation.Sheet.Sheets. An allowance for doubtful accounts will be recognized for past‑duepast-due rentals based on management’s assessment of collectability. Management monitors all lessees with past due lease payments and discuss relevant operational and financial issues facing those lessees in order to determine an appropriate allowance for doubtful accounts. In addition, if collection is not reasonably assured, the Company will not recognize rental income for amounts due under the Company’s lease contracts and will recognize revenue for such lessees on a cash basis. As of December 31, 2017 and 2016, the Company had no such allowance, and no leases were on a cash basis.off‑leaseoff-lease aircraft. We recognize repair and maintenance expense in our Consolidated Statements of IncomeOperations for all such expenditures. In many operating lease contracts, the lessee is obligated to make periodic payments, which are calculated with reference to the utilization of the airframe, engines, and other major life‑limitedlife-limited components during the lease. In these leases, we will make a payment to the lessee to compensate the lessee for the cost of the Qualifying Event incurred, up to the maximum of the amount of Maintenance Reserves payment made by the lessee during the lease term, net of previous reimbursements. These payments are made upon the lessee’s presentation of invoices evidencing the completion of such Qualifying Event. The Company records as “Rental of flight equipment” revenue, the portion of Maintenance Reserves that is virtually certain will not be reimbursed to the lessee.lessee as Rental of flight equipment revenue. Maintenance Reserves payments which we may be required to reimburse to the lessee are reflected in our overhaul reserve liability, as a component of “SecuritySecurity deposits and overhaul reserves on flight equipment leases”leases in our Consolidated Balance Sheets.Rentalrental revenues at the end of the lease. Leases that contain provisions which require us to pay a portion of a lessee's major maintenance based on the usage of the aircraft and major life-limited components that were incurred prior to the current lease are recorded as lease incentives based on estimated73Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Rentalrental revenues over the term of the lease.Lessee‑specificIncome.StatementStatements of Income. and cash equivalentsRestricted cashDecember 31, 2022 December 31, 2021 Cash and cash equivalents $ 766,418 $ 1,086,500 Restricted cash 13,599 21,792 Total cash, cash equivalents and restricted cash in the consolidated statements of cash flows $ 780,017 $ 1,108,292 straight‑linestraight-line basis over a 25‑year25-year life from the date of manufacture to a 15% residual value. Changes in the assumption of useful lives or residual values for aircraft could have a significant impact on the Company’s results of operations and financial condition.equipment.equipment or the aircraft improvement. In addition, costs paid by us for scheduledthird‑partythird-party industry sources. The factors considered in estimating the undiscounted cash flows are affected by changes in future periods due to changes in contracted lease rates, economic conditions, technology, and airline demand for a particular aircraft type. In the event that an aircraft does not meet the74Air Lease Corporation recoverability test and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)recoverability test,the aircraft's carrying amount falls below estimated values from third-party industry sources, the aircraft will be recorded at fair value in accordance with the Company’s Fair Value Policy, resulting in an impairment charge. Our Fair Value Policy is described below under “Fair Value Measurements”.rights, net of accumulated amortization,right assets are recorded as a component of flightFlight equipment subject to operating leases on the Consolidated Balance Sheets.depreciationDepreciation of flight equipment on the Company’s Consolidated Statements of Income.of that it meets our capitalization policy.75Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)rights, net of accumulated amortization,right assets are recorded as a component of flightFlight equipment subject to operating leases on the Consolidated Balance Sheets.of that it meets our capitalization policy.There are2017,2022, the Company did not purchase anypurchased one aircraft in the secondary market, which was not subject to an existing lease. For the year ended December 31, 2016,2021, the Company purchased onedid not purchase aircraft in the secondary market subject to an existing lease. The total cost for the aircraft was $33.7 million, which included maintenance rights assets of $3.2 million.market. As of December 31, 20172022 and 2016,2021, the Company had maintenance rightsright assets net of accumulated amortization of $44.6 million and $95.1 million, respectively.$16.5 million. Maintenance rightsright assets are included under flightFlight equipment subject to operating leases in our Consolidated Balance Sheets.76Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)non‑observablenon-observable inputs.The Company recognizes interest and penalties for uncertain tax positions in income tax expense.InvestmentsOurin thefunds and (iii) on behalf of a financial institution as of December 31, 2022.joint ventures, where we own(“Blackbird II”). The Company owns non-controlling interests in each fund representing 9.5% of the equity of each venture, isfund. These investments are accounted for using the equity method of accounting due to ourthe Company’s level of influence and involvement in the joint ventures.involvement. The investments are recorded at the amount invested plus or minus ournet of the Company’s 9.5% share of net income or loss, less any distributions or return of capital received from the entities.Stock‑basedStock‑basedEffective as of January 1, 2017, the Company adopted a change in accounting policy in accordance with Accounting Standards Update (“ASU”) 2016-09 (“ASU 2016-09”), “Compensation-Stock Compensation (Topic 718),” wherein all excess tax benefits and tax deficiencies related to employee stock compensation will be recognized within77Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)income tax expense on the Consolidated Statement of Income. Previously, only net tax deficiencies were recognized as tax expense. In connection with the adoption of ASU 2016-09, the Company recorded excess tax benefits relating to prior periods of $0.5 million on a modified retrospective basis through a cumulative effect adjustment to retained earnings.In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be classified as operating activities on the Statement of Cash Flow. Previously, these items were classified as financing activities. We have elected to present the cash flow statement on a prospective transition method and there were no adjustments to the Consolidated Statement of Cash Flows for the year ended December 31, 2017 as a result of this adoption.Finally, ASU 2016-09 provides an accounting policy election to account for forfeitures as they occur or to account for forfeitures on an estimated basis. We elected to change our policy from estimating forfeitures to accounting for forfeitures as they are incurred. This change in accounting policy was made on a prospective basis.ReclassificationsCertain reclassifications have been made in the 2015 and 2016 consolidated financial statements to conform to the classifications in 2017.May 2014,December 2022, the Financial Accounting Standards Board (“FASB"FASB”) issued Accounting StandardsStandard Update (“ASU”) No. 2014-092022-06 to defer the sunset date of Reference Rate Reform Topic 848 (“ASU 2014-09”ASC 848”), “Revenue from Contracts with Customers (Topic 606)”. The amendments inguidance extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2014-09 supersede most of the current revenue recognition requirements.2020-04 from December 31, 2022, to December 31, 2024. The guidance requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 for public entities, including interim periods within that reporting period, and is required to be applied using either a full retrospective approach or a modified retrospective approach. The standard will not have a material impact on our consolidated financial statements and will not have an impact on our historical consolidated financial statements. We plan to adopt the standard on a modified retrospective approach on its required effective date of January 1, 2018.In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842)”. The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018 for public entities and is required to be applied using the modified retrospective transition approach. Early adoption is permitted. Based on our initial evaluation of the guidance we noted that Lessor accounting is similar to the current model but the guidance will impact us in scenarios where we are the Lessee. We do notCompany doesn’t expect the impactapplication of this standardguidance to have a material impact on ourits consolidated financial statements. We will adopt the standard on January 1, 2019.In August 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”), “Statement of Cash Flows (Topic 230)”. The amendments in ASU 2016-15 addresses eight classification issues related to the statement of cash flows. ASU 2016-15 will be effective for interim and annual periods beginning after December 15, 2017 for public entitiesstatements and is requiredstill evaluating the election available to be adopted using a retrospective transition method to each period presented. Early adoption is permitted. 78Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)We have concluded our evaluation of this guidance and determined that the standard will not have a material impact on our financial statements.In October 2016, the FASB issued ASU No. 2016-16 (“ASU 2016-16”), “Income Taxes (Topic 740)”. The ASU 2016-16 requires entities to recognize the income tax consequences of many intercompany asset transfers at the transaction date. ASU 2016-16 will be effective for annual periods beginning after December 15, 2017 for public entities and is required to be adopted using a modified retrospective transition approach. Early adoption is only permitted as of the beginning of an annual reporting period. We have concluded our evaluation of this guidance and determined that the standard will not have a material impact on our financial statements.20172022 and 20162021 is summarized below:December 31, 2022 December 31, 2021 (in thousands) Unsecured Senior notes $ 17,095,116 $ 16,892,058 Revolving credit facility 1,020,000 — Term financings 582,950 167,000 Total unsecured debt financing 18,698,066 17,059,058 Secured Term financings 113,717 126,660 Export credit financing 11,646 18,301 Total secured debt financing 125,363 144,961 Total debt financing 18,823,429 17,204,019 Less: Debt discounts and issuance costs (182,366) (181,539) Debt financing, net of discounts and issuance costs $ 18,641,063 $ 17,022,480 2017,2022, management of the Company believes it is in compliance in all material respects with the covenants in its debt agreements, including its financial covenants concerning debt-to-equity, tangible netminimum consolidated shareholders’ equity, minimum consolidated unencumbered assets, and an interest coverage ratios.Theratio test.20172022 and 20162021 are summarized below:Senior unsecured notes2017,2022, and 2021, the Company had $8.0pledged three aircraft as collateral with a net book value of $212.1 million and $222.2 million, respectively.0.1 yearsless than one month to 9.99.04 years and bearing interest at fixed rates ranging79Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)2.125%0.70% to 7.375%5.850%. As of December 31, 2016,2021, the Company had $7.0$16.9 billion in aggregate principal amount of senior unsecured notes2.125%0.70% to 7.375%4.625%, with two notes bearing interest at a floating rate of three-month LIBOR plus 0.35% and a floating rate of LIBOR plus 1.125%.2017,2022, the Company issued $2.2 billion in aggregate principal amount of senior unsecured notes.In March 2017, the Company issued $500.0Medium-Term Notes comprised of (i) $750.0 million in aggregate principal amount of senior unsecured notes2.20% Medium-Term Notes due 2027, that bear interest at a rate of 3.625%. In June 2017, the Company issued $600.0(ii) $750.0 million in aggregate principal amount of senior unsecured notes2.875% Medium-Term Notes due 2022 that bear interest at a rate of 2.625%.In November 2017, the Company issued (i) $500.02032, and (iii) 700.0 million in aggregate principal amount of senior unsecured notes5.850% Medium-Term Notes due 2027 that bear interest at a rate of 3.625% and (ii) $600.0 million in aggregate principal amount of senior unsecured notes due2027. that bear interest at a rate of 2.750%.Furthermore, in January 2018 the Company issued (i) $550.0 million in aggregate principal amount of senior unsecured notes due 2021 that bear interest at a rate of 2.50% and (ii) $700.0 million in aggregate principal amount of senior unsecured notesMedium-Term Notes due 2025 that bear2028 bearing interest at a fixed rate of 3.25%5.30%.The total amountthe Company'sits unsecured revolving credit facility was $847.0 million and $766.0 million as(the “Revolving Credit Facility”). As of December 31, 20172021, the Company did not have any amounts outstanding under its 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 2016, respectively.During the first three months of 2017, we increased the aggregate capacity of our unsecured revolving credit facility by $300.0 million to $3.5 billion.May 2017,April 2022, the Company amended and extended its four-year unsecured revolving credit facility whereby,Revolving Credit Facility through an amendment that, among other things, the Company extended the final maturity date from May 5, 20202025 to May 5, 2021 and2026, increased the total revolving commitments to approximately $3.7$7.0 billion from approximately $3.5 billion at anas of May 5, 2022 and replaced LIBOR with Term SOFR as the benchmark interest rate and made certain conforming changes related thereto. As of LIBORDecember 31, 2022, borrowings under the Revolving Credit Facility accrued interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility) plus a margin of 1.05% withper 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 fee.fees are subject to increases or decreases based on declines or improvements in the credit ratings for the Company’s debt.holdheld revolving commitments totaling approximately $3.1$6.7 billion that mature on May 5, 2021,2026, commitments totaling $217.7$32.5 million that mature on May 5, 2020,2025 and commitments totaling $290.0$375.0 million that mature on May 5, 2019, and commitments totaling $55.0 million that mature on May 5, 2018.November 2017, we executedJanuary 2023, the Company entered into a commitment increase to our unsecured revolving credit facility. Thisnew lender supplement which increased the aggregate facility capacity by $50.0$250.0 million to $3.8approximately $7.4 billion. Furthermore,The additional $250.0 million in February 2018, we increased the capacity of our unsecured revolving credit facility by 4.7%commitments is set to $3.9 billion. Unsecured termmature on May 5, 2026.facilities. During 2017,financings and secured term financings, including export credit.twothree additional unsecured term facilities, aggregating $20.0with commitments totaling $500.0 million both with terms of five years and with one facility bearing interest at a fixed ratesrate of 2.75%2.72% per annum. The outstanding balance on our unsecured termannum and two facilities as of December 31, 2017 was $203.7 million, bearing interest at fixed rates ranging from 2.75% to 3.50% and one facility bearing interest at a floating rate of LIBORSOFR plus 1.00%1.40% to SOFR plus 1.45%.2017, the remaining maturities of all unsecured term facilities ranged from approximately 0.1 years to approximately 4.6 years. As of December 31, 2016,2022, the outstanding balance on our unsecured term facilitiesother debt financings was $211.3 million.80Air Lease Corporation$708.3 million and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Convertible senior notesIn November 2011, the Company issued $200.0 million in aggregate principal amount of 3.875% convertible senior notes due 2018 in an offering exempt from registration under the Securities Act. The convertible notes were sold to Qualified Institutional Buyers in reliance upon Rule 144A under the Securities Act. The convertible notes are senior unsecured obligations of the Company and bear interest at a rate of 3.875% per annum, payable semi‑annually in arrears on June 1 and December 1 of each year, commencing on June 1, 2012. As of December 31, 2017, the convertible notes are convertible at the option of the holder into shares of our Class A common stock at a price of $29.42 per share.Secured term financingWe fund some aircraft purchases through secured term financings. Our various consolidated entities will borrow through secured bank facilities to purchase an aircraft. The aircraft are then leased by our entities to airlines. We may guarantee the obligations of the entities under the loan agreements. The loans may be secured by a pledge of the shares of the entities, the aircraft, the lease receivables, security deposits, maintenance reserves, or a combination thereof.As of December 31, 2017, the outstanding balance on our secured term facilities was $484.0 million and we had pledged 19three aircraft as collateral with a net book value of $1.1 billion. The outstanding balance under our secured term facilities as of December 31, 2017 was comprised of $2.6 million fixed rate debt consisting of one facility with an interest rate of 4.58% and $481.5 million floating rate debt with interest rates ranging from LIBOR plus 1.15% to LIBOR plus 2.99%.$212.1 million. As of December 31, 2017, the remaining maturities of all secured term facilities ranged from approximately 0.2 years to approximately 5.6 years.As of December 31, 2016,2021, the outstanding balance on our secured term facilitiesother debt financings was $619.8$312.0 million and wethe Company had pledged 23three aircraft as collateral with a net book value of $1.3 billion. The outstanding balance under our secured term facilities as$222.2 million.20172022 are as follows:81(in thousands) Years ending December 31, 2023 $ 2,623,262 2024 2,919,654 2025 2,377,168 2026 4,505,386 2027 2,737,328 Thereafter 3,660,631 Total $ 18,823,429 Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)2017, 20162022, 2021 and 2015:2020:Year Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020(in thousands) Interest on borrowings $ 532,579 $ 511,466 $ 484,896 Less capitalized interest (39,655) (49,070) (53,163) Interest 492,924 462,396 431,733 Amortization of discounts and deferred debt issue costs 53,254 50,620 43,025 Interest expense $ 546,178 $ 513,016 $ 474,758 (in thousands) Net book value as of December 31, 2021 $ 22,899,004 Purchase of aircraft 3,827,407 Depreciation (965,955) Sale of aircraft and transfers to net investments in sales-type leases (461,931) Write-off of Russian fleet, net of recoveries (760,140) Net book value as of December 31, 2022 $ 24,538,385 Accumulated depreciation as of December 31, 2022 (4,928,503) 4.5. Shareholders’ EquityIn 2010, theper share,at December 31, 2022 and December 31, 2021. As of which 103,621,629December 31, 2022 and 102,844,477December 31, 2021, the Company had 110,892,097 and 113,987,154 Class A common shares were issued and outstanding, respectively. The Company was authorized to issue 10,000,000 shares of Class B common stock, $0.01 par value at December 31, 2022 and December 31, 2021. The Company did not have any shares of Class B non-voting common stock, $0.01 par value, issued or outstanding as of December 31, 2017 and 2016, respectively. As of2022 or December 31, 2017 and 2016,2021.had authorized 10,000,000repurchased 3,420,874 shares of Class B Non‑Voting common stock, $0.01 par value per share, of which no shares were outstanding as of December 31, 2017 and 2016.On June 4, 2010, the Company issued 482,625 warrants for the purchase of up to 482,625 shares ofits Class A common stock to two institutional investors (the “Committed Investors”). The warrants had a seven-year term andunder its previously announced stock repurchase program at an exerciseaverage purchase price of $20$43.85 per share. Such repurchases completed the repurchase of the entire $150.0 million of outstanding shares authorized under the Company’s stock repurchase program. The Company usedcompleted the BSM option pricing modelshare repurchase program in April 2022.determine the fair value of warrants. The fair value of warrants was calculated on the date of grant by an option‑pricing model using a number of complex and subjective variables. These variables include expected stock price volatility over the term of the warrant, projected exercise behavior, a risk‑free interest rate, and expected dividends. The warrants had a fair value at the grant date of $5.6 million. The warrants are classified as an equity instrument and the proceeds from the issuance of common stock to the Committed Investors was split between the warrants and the stock based on fair value of the warrants and recorded as an increase to Paid‑in capital on the Consolidated Balance Sheets. On March 9, 2017, a Committed Investor performed a cashless exercise of the remaining 268,125 warrants, resulting in the issuance of 131,001 shares of Class A common stock. As of December 31, 2017, the Company did not have any warrants outstanding.As of December 31, 2017 and 2016 the Company had authorizedissue 50,000,000 shares of preferred stock, $0.01 par value, at December 31, 2022 and December 31, 2021. As of December 31, 2022 and December 31, 2021, the Company had 10.0 million shares of 6.15% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $250.0 million ($25.00 per share), 300,000 shares of 4.65% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share) and 300,000 shares of 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share).which no3.65% per annum from March 15, 2024, reset quarterly and payable quarterly in arrears beginning on June 15, 2024.wereof the Series A Preferred Stock at its option, in whole or in part, from time to time, on any dividend payment date on or after March 15, 2024, for cash at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date, without accumulation of any undeclared dividends. The Company may also redeem shares of the Series A Preferred Stock at the Company’s option under certain other limited conditions. The Series A Preferred Stock ranks on a parity with the Series B Preferred Stock and the Series C Preferred Stock.or outstanding.82
300,000 shares of Series B Preferred Stock. The Company will pay dividends on the Series B Preferred Stock only when, as and if declared by the board of directors. Dividends will accrue, on a non-cumulative basis, on the stated amount of $1,000 per share at a rate per annum equal to: (i) 4.65% through June 15, 2026, and payable quarterly in arrears beginning on June 15, 2021, and (ii) the Five-year U.S. Treasury Rate as of the applicable reset dividend determination date plus a spread of 4.076% per reset period from June 15, 2026 and reset every five years and payable quarterly in arrears.Air Lease CorporationSubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Shares Issued and Outstanding as of December 31, 2022 Liquidation Preference
as of December 31, 2022Issue Date Dividend Rate in Effect at December 31, 2022 Next dividend rate reset date Dividend rate after reset date Series A 10,000,000 $ 250,000 March 5, 2019 6.150 % March 15, 2024 3M LIBOR plus 3.65% Series B 300,000 300,000 March 2, 2021 4.650 % June 15, 2026 5 Yr U.S. Treasury plus 4.076% Series C 300,000 300,000 October 13, 2021 4.125 % December 15, 2026 5 Yr U.S. Treasury plus 3.149% Total 10,600,000 $ 850,000 5.6. Rental Income2017,2022, minimum future rentals on non‑cancellablenon-cancellable operating leases of flight equipment in ourthe Company’s owned fleet, which have been delivered as of December 31, 2017,2022, are as follows:(in thousands) Years ending December 31, 2023 $ 2,246,625 2024 2,166,215 2025 2,016,061 2026 1,805,455 2027 1,580,714 Thereafter 5,783,490 Total $ 15,598,560 $40.9$96.6 million, $29.0$44.2 million, and $34.0$11.3 million in maintenance reserveoverhaul revenue based on ourits lessees’ usage of the aircraft for the years ended December 31, 2017, 2016,2022, 2021, and 2015,2020, respectively.non‑cancellablenon-cancellable period which does not include contracted unexercised lease extension options) of our operatingthe Company’s owned aircraft, excluding one aircraft that is currently not subject to a lease portfolioagreement, as of December 31, 2017,2022, updated through February 22, 2018:16, 2023:Aircraft Type 2023 2024 2025 2026 2027 Thereafter Total Airbus A220-300 — — — — — 4 4 Airbus A319-100 — — 1 — — — 1 Airbus A320-200 1 5 8 1 2 11 28 Airbus A320-200neo — — — — 4 19 23 Airbus A321-200 4 — 1 9 2 7 23 Airbus A321-200neo — 4 — 2 5 67 78 Airbus A330-200 3 3 1 — — 6 13 Airbus A330-300 — — 3 1 — 1 5 Airbus A330-900neo 1 — — — — 15 16 Airbus A350-900 — — — 1 1 11 13 Airbus A350-1000 — — — — — 6 6 Boeing 737-700 — 2 — — 2 — 4 Boeing 737-800 11 7 20 16 10 18 82 Boeing 737-8 MAX — 1 12 — 1 32 46 Boeing 737-9 MAX — — — — — 15 15 Boeing 777-200ER — — 1 — — — 1 Boeing 777-300ER — — 2 9 4 9 24 Boeing 787-9 — — — 1 2 24 27 Boeing 787-10 — — — — — 6 6 Embraer E190 — 1 — — — — 1 Total 20 23 49 40 33 251 416 6.7. Concentration of Risk2017,2022, all of the Company's rentalCompany’s Rental of flight equipment revenues were generated by leasing flight equipment to foreign and domestic airlines, and the Company leased and managed aircraft to 91117 customers whose principal places of business are located in 5562 countries as of December 31, 20172022 compared to 85118 lessees in 5160 countries as of December 31, 2016.2021.83Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)ourthe Company’s aircraft are operated internationally. The following table sets forth the regional concentration based on each airline's principal place of business of our aircraft portfoliothe Company’s flight equipment subject to operating leases based on net book value as of December 31, 20172022 and 2016:(1)We did not have any aircraft held for sale as of December 31, 2017. As of December 31, 2016, we had six aircraft held for sale.Year Ended
December 31, 2022Year Ended
December 31, 2021Region Net Book
Value% of Total Net Book
Value% of Total (in thousands, except percentages) Europe $ 7,985,317 32.5 % $ 7,439,993 32.5 % Asia (excluding China) 7,144,188 29.1 % 5,952,981 26.0 % China 2,792,022 11.4 % 2,934,224 12.8 % The Middle East and Africa 2,253,342 9.3 % 2,447,919 10.7 % Central America, South America, and Mexico 1,924,216 7.8 % 1,566,133 6.8 % U.S. and Canada 1,557,260 6.3 % 1,638,450 7.2 % Pacific, Australia, and New Zealand 882,040 3.6 % 919,304 4.0 % Total $ 24,538,385 100.0 % $ 22,899,004 100.0 % 2017, 20162022 and 2015, we2021, the Company owned and managed leased aircraft to customers in the following regions based on each airline's principal place of business:(1)A customer is an airline with its own operating certificate.Year Ended
December 31, 2022Year Ended
December 31, 2021Region % of Total Number of Customers(1) % of Total Europe 49 41.9 % 50 42.5 % Asia (excluding China) 23 19.7 % 22 18.6 % The Middle East and Africa 14 12.0 % 14 11.9 % U.S. and Canada 13 11.1 % 13 11.0 % China 8 6.8 % 9 7.6 % Central America, South America and Mexico 7 6.0 % 7 5.9 % Pacific, Australia, and New Zealand 3 2.5 % 3 2.5 % Total 117 100.0 % 118 100.0 % (1) A customer is an airline with its own operating certificate. 84Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)our rentalthe Company’s Rental of flight equipment revenues from its flight equipment subject to operating leases attributable to the indicated regions based on each airline’s principal place of business:Year Ended
December 31, 2022Year Ended
December 31, 2021Year Ended
December 31, 2020Region Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total (in thousands, except percentages) Asia (excluding China) Asia (excluding China) $ 625,355 28.2 % $ 558,020 27.9 % $ 573,722 29.5 % Europe 611,091 27.6 % 564,479 28.2 % 525,543 27.0 % China 359,976 16.3 % 352,375 17.6 % 341,121 17.5 % The Middle East and Africa 251,243 11.3 % 210,977 10.5 % 220,017 11.3 % U.S. and Canada 143,266 6.5 % 130,717 6.5 % 106,694 5.5 % Central America, South America and Mexico Central America, South America and Mexico 141,638 6.4 % 104,315 5.2 % 88,113 4.5 % Pacific, Australia, and New Zealand 81,939 3.7 % 82,454 4.1 % 91,410 4.7 % Total $ 2,214,508 100.0 % $ 2,003,337 100.0 % $ 1,946,620 100.0 % Based on our lease placements of future new aircraft deliveries, we anticipate that a growing percentage of our aircraft will be located in the Asia, the Central America, South America, and Mexico, and the Middle East and Africa regions.2017, 2016,2022, 2021, and 2015,2020, China was the only individual country that represented at least 10% of our rental revenue based on each airline's principal place of business. In 2017, 2016, and 2015,business; however, no individual airline represented at leastcontributed more than 10% of ourto the Company’s rental revenue.7.8. Income Taxes85Year Ended
December 31,2022 2021 2020 (in thousands) Current: Federal $ — $ — $ (38,520) State 113 184 (107) Foreign 1,750 6,754 2,574 Deferred: Federal (43,414) 94,050 163,002 State (190) 3,396 3,465 Foreign — — — Income tax expense $ (41,741) $ 104,384 $ 130,414 Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax law by, among other things, lowering the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018, repealing the Alternative Minimum Tax (“AMT”), changes to tax depreciation, limitations on interest expense deductions, and limitations on utilization of net operating losses. Accounting Standards Codification (“ASC”) 740 requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Reform Act, the Company recorded an estimated tax benefit of $354.1 million due to the remeasurement of deferred tax assets and liabilities in the year ended December 31, 2017.On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. In accordance with SAB 118, the Company has determined that the $354.1 million benefit resulting from the remeasurement of certain deferred tax assets and liabilities is a provisional amount and a reasonable estimate of the impact of the Tax Reform Act on the Consolidated Financial Statements as of December 31, 2017. The estimated adjustment of $354.1 million is based upon the current interpretation of the Tax Reform Act. We expect additional clarification and interpretation guidance that may refine our estimate of the expected reversal of deferred tax balances or could potentially give rise to new deferred tax accounts. Once the Company finalizes certain tax positions when it files its 2017 U.S. Federal Income Tax Return, it will be able to conclude whether any further adjustments are required to its net deferred tax liability as of December 31, 2017. Any subsequent adjustments to the $354.1 million benefit will be recorded as a component of tax expense or benefit in the reporting period in which any adjustments are determined, which will be no later than the fourth quarter of 2018. We expect to complete our analysis within the measurement period in accordance with SAB 118.The Company recorded a $10.9 million benefit related to foreign taxes expensed in the current year, as well as prior years, that may now be claimed as a Foreign Tax Credit (“FTC”). The Company has determined there will be sufficient foreign source income projected to utilize these credits.In the first quarter of 2017, the Company adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires all excess tax benefits and tax deficiencies to be recognized in the income statement when the awards vest or are settled. Upon adoption of ASU 2016-09, the Company recognized $0.5 million of previously unrecognized windfall tax benefits in retained earnings.Prior to the adoption of ASU 2016-09, the tax effect of deductions in excess compensation cost (“windfalls”) related to the exercise of nonqualified stock options and vesting of restricted stock unit awards were recorded in equity and any tax deficiencies (“shortfalls”) were recorded in equity to the extent of previously recognized windfalls. The exercise of nonqualified stock options and vesting of restricted stock unit awards resulted in an increase to additional paid-in capital in the amount of $8.5 million through December 31, 2016.86Year Ended
December 31,2022 2021 2020 Amount Percent Amount Percent Amount Percent (in thousands, except percentages) Income taxes at statutory federal rate $ (29,141) 21.0 % $ 113,613 21.0 % $ 135,802 21.0 % Effect of rates different than statutory (10,728) 7.7 (8,067) (1.5) (5,329) (0.8) Foreign tax credit (8,274) 6.0 (15,651) (2.9) (9,464) (1.5) Section 162(m) limitation 3,913 (2.8) 3,808 0.7 2,736 0.4 Foreign income taxes 1,750 (1.3) 6,754 1.3 2,575 0.4 State income taxes, net of federal income tax effect and other (61) 0.1 2,828 0.5 2,653 0.4 Other 800 (0.6) 1,099 0.2 1,441 0.2 Income tax (benefit)/expense $ (41,741) 30.1 % $ 104,384 19.3 % $ 130,414 20.1 % Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)20172022 and 2016,2021, the Company’s net deferred tax assets (liabilities) are as follows:December 31, 2022 December 31, 2021 (in thousands) Deferred tax assets Interest expense limitation $ 102,125 $ — Net operating losses 82,821 127,591 Foreign tax credit 77,273 78,286 Rents received in advance 28,909 26,702 Other 10,638 19,743 Accrued bonus 3,965 4,349 Equity compensation 3,444 4,462 Total deferred tax assets 309,175 261,133 Deferred tax liabilities Aircraft depreciation $ (1,222,772) $ (1,219,061) Straight-line rents (57,200) (55,342) Total deferred tax liabilities $ (1,279,972) $ (1,274,403) Net deferred tax assets/(liabilities) $ (970,797) $ (1,013,270) net operating loss carry forwards (“NOLs”)interest expense that was limited for federal income tax purposes of $102.1 million as of December 31, 2022, which are available indefinitely to offset taxable income in future periods. The Company has NOL for federal and state income tax purposes of $54.1$387.3 million and $150.9$22.8 million as of December 31, 2017 and 2016,2022, respectively, which are available to offset future taxable income in future periods. The Company has FTCsforeign tax credits for federal income tax purposes of $14.6$77.3 million as of December 31, 2017,2022 which are available to offset future taxable income in future periods. The Company generated $75.6 million of NOLs for federal income tax purposes for the year ended December 31, 2016. There were no NOLs generated for the year ended December 31, 2017. The Company's loss and tax credit carryforwards expire in the following periods:NOL Carryforwards Tax Credit Carryforwards (in thousands) 2023-2027 $ — $ 24,099 Thereafter 410,273 53,174 Total carryforwards $ 410,273 $ 77,273 valuation allowanceassets as ofDecember 31, 20172022 and 20162021 as realization of the deferred tax asset is considered more likely than not. In assessing the realizability of the deferred tax assets, management considered whether future taxableforecasted income, together with reversals of existing deferred tax liabilities, and tax planning strategies will be sufficient duringto recover the periods in which those temporary differences are deductible before NOLs and FTCs expire. Management considers the scheduled reversal of deferred tax liabilities, projected taxable income,assets and tax planning strategiescredits in making this assessment. Management anticipates the timing differences on aircraft depreciation will reverse and be available for offsetting the reversal of deferred tax assets. As ofDecember 31, 20172022 and 20162021, the Company has not recorded any liability for unrecognized tax benefits.20132018 tax year and forward. In the fourth quarter of 2022, the Company was notified by the Internal Revenue Service that tax years 2019 to 2020 were selected for examination.87Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)8.9. Commitments and Contingencies2017, we2022, the Company had commitments to acquire a total of 368398 new aircraft for delivery through 2023 as follows:(1)Our Airbus A320/321neo aircraft orders include 55 long-range variants.(2)In addition to the aircraft from our orderbook, we have a commitment to purchase one used Boeing 737-800 aircraft from an airline, which is scheduled for delivery in 2018.has informed us to expect several monthand Boeing delivery delays. As noted below, the Company expects delivery delays relatingfor some aircraft in its orderbook. The Company remains in discussions with Boeing and Airbus to determine the extent and duration of delivery delays; however, the Company is not yet able to determine the full impact of these delays.Estimated Delivery Years Aircraft Type 2023 2024 2025 2026 2027 Thereafter Total Airbus A220-100/300 14 26 20 12 — — 72 28 22 18 35 35 40 178 Airbus A330-900neo 7 6 — — — — 13 Airbus A350-900/1000 4 3 — — — — 7 Airbus A350F — — — 2 2 3 7 Boeing 737-7/8/9 MAX 30 37 19 16 — — 102 Boeing 787-9/10 5 4 10 — — — 19 88 98 67 65 37 43 398 (1) The Company's Airbus A320/321neo aircraft orders include 22 long-range variants and 49 extra long-range variants. (2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation. scheduled for delivery in 2018 and 2019. The delays have been reflected in our commitment schedules above. Our leases contain lessee cancellation clauses related to aircraft delivery delays that typically for aircraft delays greater than one year. Ourparallel the cancellation rights in the Company’s purchase agreements contain similar clauses. As of February 22, 2018, none of our lease contracts are subject to cancellation.and other equipmentcalculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $27.0$25.5 billion as of December 31, 20172022 are as follows:As of December 31, 2017, the(in thousands) Years ending December 31, 2023 $ 6,224,490 2024 6,273,338 2025 4,104,896 2026 3,892,013 2027 2,479,676 Thereafter 2,563,355 Total $ 25,537,768 had a non-binding commitment to acquire up to five A350-1000 aircraft. Deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.We havehas made non‑refundablenon-refundable deposits on the aircraft for which we have commitments to purchaseflight equipment purchases of $1.6$1.3 billion and $1.3$1.5 billion as of December 31, 20172022 and 2016,2021, respectively, which are subject to manufacturer performance commitments. If we arethe Company is unable to satisfy ourits purchase commitments, wethe Company may be forced to forfeit our deposits. Further, we wouldits deposits and may also be exposed to breach of contract claims by ourits lessees andas well as the manufacturers.88Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Office LeaseThe Company’s lease for office space provides for step rentals over the term of the lease. Those rentals are considered in the evaluation of recording rent expense on a straight‑line basis over the term of the lease. Tenant improvement allowances received from the lessor are deferred and amortized in selling, general and administrative expenses against rent expense. The Company recorded office lease expense (net of sublease income) of $2.3 million, $2.2 million, and $2.0 million for the years ended December 31, 2017, 2016, and 2015, respectively.Commitments for minimum rentals under the non‑cancellable lease term at December 31, 2017 are as follows:9. Net 10. (Loss)/Earnings Per Sharenet (loss)/earnings per share is computed by dividing net (loss)/income by the weighted averageweighted-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.anti-dilutive. The Company’s two classes of common stock, Class A and Class B Non‑Voting,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 December 31, 2017, we2022, the Company did not have any Class B Non-Voting common stock outstanding. net earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. ForSince the yearsCompany was in a loss position for the year ended December 31, 2017, 2016,2022, diluted net loss per share is the same as basic net loss per share for the period as the inclusion of all potential common shares outstanding would have been anti-dilutive. For the year ended December 31, 2022, the Company excluded 361,186 potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. For the year ended December 31, 2021 and 2015,2020, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. In addition, theThe Company excluded 1,085,049, 1,005,697,976,509, 1,083,174, and 993,0921,032,305 shares related to restricted stock units for which the performance metric had yet to be achieved as of December 31, 2017, 2016,2022, 2021, and 2015,2020, respectively.89Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)net income(loss)/earnings per share:Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020 (in thousands, except share and per share amounts) Basic (loss)/earnings per share: Numerator Net (loss)/income $ (97,024) $ 436,632 $ 516,264 Preferred stock dividends (41,700) (28,473) (15,375) Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Denominator Weighted-average common shares outstanding 111,626,508 114,050,578 113,684,782 Basic (loss)/earnings per share $ (1.24) $ 3.58 $ 4.41 Diluted earnings per share: Numerator Net (loss)/income $ (97,024) $ 436,632 $ 516,264 Preferred stock dividends (41,700) (28,473) (15,375) Net (loss)/income attributable to common stockholders $ (138,724) $ 408,159 $ 500,889 Denominator Number of shares used in basic computation 111,626,508 114,050,578 113,684,782 Weighted-average effect of dilutive securities — 395,515 329,239 Number of shares used in per share computation 111,626,508 114,446,093 114,014,021 Diluted (loss)/earnings per share $ (1.24) $ 3.57 $ 4.39 10.11. Fair Value MeasurementsNon‑recurringNon-recurring Basishad no assets or liabilitieshas a cross-currency swap related to its Canadian dollar Medium-Term Notes which were measured atissued in December 2019. The fair value of the swap as a foreign currency exchange derivative is categorized as a Level 2 measurement in the fair value hierarchy and is measured on a recurring or non‑recurring basis asbasis. As of December 31, 2017 or 2016.20172022 was $10.0$17.5 billion compared to a book value of $9.8$18.8 billion. The estimated fair value of debt financing as of December 31, 20162021 was $8.9$17.6 billion compared to a book value of $8.8$17.2 billion.consolidated balance sheetConsolidated Balance Sheets at December 31, 2017,2022, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at December 31, 20172022 and 20162021 approximates their carrying value as reported on the consolidated balance sheet.Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.11. Stock‑based12. Stock-based Compensation2017,2022, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 5,795,999, which includes 795,999 shares which were previously reserved for issuance under the 2010 Plan. Stock Options are generally90Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)granted for a term of 10 years and generally vest over a three year period.4,221,026. The Company has issued RSUs with four different vesting criteria: those RSUs that vest based on the attainment of book‑valuebook-value goals, those RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals, and 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. BookThe Company has two types of book value RSUs generallyRSUs; those that vest ratably over three years,a three-year period if the performance condition has been met, and those that cliff-vest at the end of a three-year period if the performance condition has been met. For the book value RSUs that vest at the end of a three-year period, the number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the percentage change in the Company's book value per share at the end of the vesting period. At each reporting period, the Company reassesses the probability of the performance condition being achieved and a stock-based compensation expense is recognized based upon management's assessment. Book value RSUs for which the performance metric has not been met are forfeited. The TSR RSUs vest at the end of a three yearthree-year period. The number of TSR RSUs that will ultimately vest is based upon the percentile ranking of the Company’s TSR among a peer group. The number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the extent to which the TSR metric is achieved. For disclosure purposes, we have assumed the TSR RSUs will ultimately vest at 100%. As of December 31, 2017,2022, the Company had 1,163,7001,514,875 unvested RSUs outstanding of which 640,886340,134 are TSR RSUs and 636,375 are book value RSUs.$19.8$15.6 million, $16.9$26.5 million, and $17.0$17.6 million of stock‑basedstock-based compensation expense for the years ended December 31, 2017, 2016,2022, 2021, and 2015,2020, respectively.Stock OptionsThe Company uses the BSM option pricing model to determine the fair value of stock options. The fair value of stock‑based payment awards on the date of grant is determined by an option‑pricing model using a number of complex and subjective variables. These variables include expected stock price volatility over the term of the awards, a risk‑free interest rate, and expected dividends.Estimated volatility of the Company’s common stock for new grants is determined by using historical volatility of the Company’s peer group. Due to our limited operating history at the time of grant, there was no historical exercise data to provide a reasonable basis which the Company could use to estimate expected terms. Accordingly, the Company used the “simplified method” as permitted under Staff Accounting Bulletin No. 110. The risk‑free interest rate used in the option valuation model was derived from U.S. Treasury zero‑coupon issues with remaining terms similar to the expected term on the options. In accordance with ASC Topic 718, Compensation—Stock Compensation, the Company estimated forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. During the years ended December 31, 2017, 2016, and 2015, the Company did not grant any Stock Options.91Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)A summary of stock option activity in accordance with the Company’s stock option plan for the year ended December 31, 2017 follows:(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of our Class A common stock as of the respective date.As of December 31, 2017, 2016, and 2015, all of the Company’s outstanding employee stock options had fully vested and there were no unrecognized compensation costs related to outstanding employee stock options. As a result, there was no stock-based compensation expense related to Stock Options for the year ended December 31, 2017, 2016, and 2015.The following table summarizes additional information regarding outstanding, exercisable and vested stock options at December 31, 2017:stock awardsRSUs is measured at the grant date based on fair value and recognized over the vesting period. The fair value of book value and time based RSUs is determined based on the closing market price of the Company’s Class A common stock on the date of grant, while the fair value of TSR RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals is determined at the grant date using a Monte Carlo simulation model. Included in the Monte Carlo simulation model were certain assumptions regarding a number of highly complex and subjective variables, such as expected volatility, risk‑freerisk-free interest rate and expected dividends. To appropriately value the award, the risk‑freerisk-free interest rate is estimated for the time period from the92Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)2017,2022, the Company granted 505,545652,016 RSUs of which 228,938110,237 are TSR RSUs and 220,437 are book value RSUs. The following table summarizes the activities for ourthe Company’s unvested RSUs for the year ended December 31, 2017:2022:1,129,045 505,545 Unvested Restricted Stock Units Number of Shares Weighted‑
Average
Grant‑Date
Fair ValueUnvested at December 31, 2021 1,571,415 $ 43.88 Granted 652,016 $ 47.24 Vested (542,060) $ 42.50 Forfeited/canceled (166,496) $ 40.48 Unvested at December 31, 2022 1,514,875 $ 45.90 Expected to vest after December 31, 2022 1,193,219 $ 46.98 2017,2022, the outstanding RSUs are expected to vest as follows: 2018—452,169; 2019—406,764;2023—230,470; 2024—533,179; and 2020—304,767. The Company recorded $19.8 million, $16.9 million, and $17.02025—429,569.stock‑basedunrecognized compensation expense related to RSUs for the years ended December 31, 2017, 2016, and 2015, respectively.As of December 31, 2017 there was $46.8 million of unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock‑basedstock-based payments granted to employees. Total unrecognized compensation costexpense will be adjusted for future changes in estimated forfeitures and is expected to be recognized over a weighted averageweighted-average remaining period of 1.741.71 years.12. InvestmentsOn November 4, 2014, a wholly owned subsidiary13. Aircraft Under Managemententered into an agreement withmanaged 85 aircraft across three aircraft management platforms. The Company managed 46 aircraft through its Thunderbolt platform, 34 aircraft through the Blackbird investment funds and five on behalf of a co-investment vehicle arranged by Napier Park to participate in a joint venturefinancial institution.formed Blackbird Capital I, LLC (“Blackbird I”) for the purpose of investingII. These funds invest in commercial jet aircraft and leasinglease them to airlines aroundthroughout the globe. We will also provideworld. The Company provides management services to the joint venturethese funds for a fee based upon aircraft assets under management. Thefee. As of December 31, 2022, the Company's non-controlling interestinterests in Blackbird I iseach fund was 9.5% and it is accounted for as an investment under the equity method of accounting. The Company's investment in Blackbird I was $32.3these funds aggregated $64.7 million and $25.1$73.2 million as of December 31, 20172022 and 2016,2021, respectively, and are included in Other assets on the Consolidated Balance Sheets.otherOther assets on the Consolidated Balance Sheets.On August 1, 2017, a wholly owned subsidiaryentered into an agreement with a co-investment vehicle arranged by Napier Parkrecognized asset write-offs of $11.4 million related to participateits investments in a joint venture and formed Blackbird Capital II, LLC (''Blackbird II'')the managed platforms that own such aircraft. The Company did not recognize any asset write-offs related to its investments in the managed platforms for the purposeremainder of investing2022. The six aircraft detained in commercial aircraft and leasing them to airlines aroundRussia were removed from the globe. We provide management services to the joint venture for a fee based upon aircraft assets under management. The Company’s non-controlling interest in Blackbird II is 9.5% and will be accounted for as an investment under the equity method of accounting. The Company's investment in Blackbird II was $3.3 millionmanaged fleet count as of DecemberMarch 31, 2017. 2022.2017, the Company's total unfunded commitment to Blackbird II was $19.0 million.Note 13. LitigationOn April 24, 2012,2022, the Company was namedhad 10 A320-200 aircraft on lease to an airline with terms that meet the criteria of being classified as a defendantsales-type lease.a complaint filedsales-type leases was included in Other assets in the Superior CourtCompany’s Consolidated Balance Sheets based on the present value of fixed payments under the contract and the residual value of the State of California forunderlying asset, discounted at the County of Los Angeles by AIG and ILFC (the “AIG/ILFC Complaint”).rate implicit in the lease. The complaint also named as defendants certain executive officers and employeesCompany’s investment in sales-type leases consisted of the Company.following (in thousands):93December 31, 2022 Future minimum lease payments to be received $ 236,775 Estimated residual values of leased flight equipment $ 91,688 Less: Unearned income $ (45,786) Net Investment in Sales-type Lease $ 282,677 Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)Among other things, the complaint,As of December 31, 2022, future minimum lease payments to be received on sales-type leases were as amended, alleges breachfollows:(in thousands) Years ending December 31, 2023 24,600 2024 24,600 2025 24,600 2026 24,600 2027 24,600 Thereafter 113,775 Total $ 236,775 fiduciary duty, misappropriation of trade secrets, the wrongful recruitment of ILFC employees, and the wrongful diversion of potential ILFC leasing opportunities.On August 15, 2013,December 31, 2022, the Company filedhad four aircraft, with a cross‑complaint against ILFCcarrying value of $153.5 million, which were held for sale and AIG. The cross‑complaint, as amended, alleges breach of contract for the sale of goodsincluded in connection with an agreement entered into by AIG, acting on behalf of ILFC, in January 2010Flight equipment subject to sell 25 aircraft to the entity that became Air Lease Corporation.The matters set forth in the AIG/ILFC Complaint are collectively referred to as the "litigation."On April 22, 2015, the Company and certain executive officers and employees of the Company entered into a settlement agreement and release ("the Settlement Agreement") with AIG, ILFC, and ILFC’s parent, AerCap Holdings N.V., to settle all ongoing litigation. Pursuant to the terms of the Settlement Agreement, (i) all claims and counterclaims asserted in the litigation were dismissed with prejudice, (ii) each of the parties to the litigation received full releases of all claims and counterclaims asserted in the litigation, and (iii) the Company agreed to pay AIG the sum of $72.0 million. The Company recorded settlement expense of $72.0 millionoperating leases on the Consolidated Statement of Income forBalance Sheets. During the year ended December 31, 2015.2022, the Company completed the sale of six aircraft from its held for sale portfolio. The partiesCompany expects the sale of all four aircraft to be completed by the Settlement Agreement agreed thatend of the settlement was intended solelyfirst half of 2023. The Company ceases recognition of depreciation expense once an aircraft is classified as a compromiseheld for sale. As of disputed claims, and that no party admits any wrongdoing or liability with respect to any matter alleged in the litigation. On April 24, 2015, the parties filed a request for dismissal which was entered on April 29, 2015. For the years ended December 2017, 2016, and 2015, we received $1.0 million, $5.25 million, and $4.5 million in insurance recoveries related to this matter, respectively, which are included in aircraft sales, trading and other revenue in our Consolidated Statements of Income.Note 14. Quarterly Financial Data (unaudited)The following table presents our unaudited quarterly results of operations for the two‑year period ended December 31, 2017.The sum of quarterly earnings per share amounts may2021, the Company did not equal the annual amount reported since per share amounts are computed independentlyhave any flight equipment classified as held for each period presented.15.16. Subsequent Events20, 2018, our14, 2023, the Company’s board of directors approved a quarterly cash dividend of $0.10 per share on our outstandingdividends for the Company’s Class A common stock and Series A, Series B and Series C preferred stock. The dividend will be paid on April 6, 2018 to holdersfollowing table summarizes the details of record of our common stock as of March 20, 2018.the dividends that were declared:94Title of each class Cash dividend per share Record Date Payment Date Class A Common Stock $ 0.20 March 16, 2023 April 12, 2023 Series A Preferred Stock $ 0.384375 February 28, 2023 March 15, 2023 Series B Preferred Stock $ 11.625 February 28, 2023 March 15, 2023 Series C Preferred Stock $ 10.3125 February 28, 2023 March 15, 2023 Air Lease Corporation and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)In January 2018, we issued (i) $550.0 million in aggregate principal amount of senior unsecured notes due 2021 that bear interest at a rate of 2.50% and (ii) $700.0 million in aggregate principal amount of senior unsecured notes due 2025 that bear interest at a rate of 3.25%.95theour Chief Executive Officer and principal executive officer and our Chief Financial Officer and principal financial officer (collectively, the “Certifying Officers”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as the Company’s controls are designed to do, and management necessarily was required to apply its judgment in evaluating the risk related to controls and procedures.13a‑15(e)13a-15(e) and 15d‑15(e)15d-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2017.2022. Based on that evaluation, our Certifying Officers have concluded that our disclosure controls and procedures were effective atas of December 31, 2017.2017.2022. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based upon its assessment, our management believes that, as of December 31, 2017,2022, the Company’s internal control over financial reporting is effective based on these criteria.10‑K,10-K, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017,2022, which is included herein.20172022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.96
On February 14, 2023, the Board of Directors of the Company approved a dual employment assignment with each of Mr. Steven Udvar-Házy, Executive Chairman of the Board of Directors of the Company, and Mr. John Plueger, Chief Executive Officer and President of the Company (each an “Executive Officer” and collectively, the “Executive Officers”) to formalize their activities with the Company’s Irish leasing platform. Pursuant to their dual employment assignments, each of the Executive Officers will continue in their roles as employees of the Company but will also be employees of ALC Aircraft Limited, a wholly-owned Irish subsidiary of the Company (“ALC Ireland”), each with the title of Executive Officer of Marketing. In connection with the Executive Officers’ dual employment assignments with ALC Ireland, ALC Ireland entered into employment agreements, each dated as of February 14, 2023 and effective as of March 1, 2023, with each of Mr. Udvar-Házy, (the “Udvar-Házy Ireland Employment“Executive Officers of the Company”“Information about our Executive Officers”, the other information required by this item is incorporated by reference to the “Corporate Governance and Board Matters”, the “Proposal 1: Election of Directors” and “Other Matters” sections ofwill be included in our Proxy Statement for the 20182023 Annual Meeting of Stockholders (the “2018“2023 Proxy Statement”), which will be filed with the Securities and Exchange Commission no later than April 30, 2018.TheOur Code of Business Conduct and Ethics is available on our website at http://www.airleasecorp.com under the Investors“Investors” tab.Investors“Investors” tab any amendment to our Code of Business Conduct and Ethics.Investors“Investors” tab.reference to the “Corporate Governance and Board Matters” and the “Executive Compensation” sections of the 2018 Proxy Statement.reference. is incorporated by reference to the “Other Matters” section of the 2018 Proxy Statement, except for the information required by Item 201(d) of Regulation S‑K, whichS-K below, will be included in our 2023 Proxy Statement and is provided in Item 5incorporated herein by reference.Plan Category Number of securities to be
issued upon exercise of
outstanding options, warrants and rightsWeighted-average exercise
price of outstanding
options, warrants and rightsNumber of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))(a) (b) (c) — $ — 4,221,026 — — — Total — $ — 4,221,026 reference to the “Corporate Governance and Board Matters” and the “Proposal 1: Election of Directors” sections of our 2018 Proxy Statement.reference.reference to the “Independent Auditor Fees and Services” section of our 2018 Proxy Statement.reference.9710‑K:67697071727398Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 3.1 S-1 333-171734 3.1 January 14, 2011 3.2 8-K 001-35121 3.1 March 27, 2018 3.3 8-A 001-35121 3.2 March 4, 2019 3.4 8-K 001-35121 3.1 March 2, 2021 99Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 3.5 8-K 001-35121 3.1 October 13, 2021 4.1 10-Q 001-35121 4.1 November 4, 2021 4.2 S-1 333-171734 4.1 March 25, 2011 4.3 S-1 333-171734 4.2 January 14, 2011 4.4 8-A 001-35121 4.2 March 4, 2019 4.5 8-K 001-35121 4.1 March 2, 2021 4.6 8-K 001-35121 4.1 October 13, 2021 4.7 S-3 333-184382 4.4 October 12, 2012 4.8 8-K 001-35121 4.3 September 16, 2014 4.9 8-K 001-35121 4.2 August 15, 2016 4.10 8-K 001-35121 4.2 March 8, 2017 100Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 4.11 8-K 001-35121 4.3 November 20, 2017 4.12 8-K 001-35121 4.3 January 16, 2018 4.13 8-K 001-35121 4.2 June 18, 2018 4.14 8-K 001-35121 4.3 September 17, 2018 4.15 S-3/A 333-224828 4.4 November 20, 2018 4.16 8-K 001-35121 4.2 November 20, 2018 4.17 8-K 001-35121 4.3 November 20, 2018 4.18 8-K 001-35121 4.4 November 20, 2018 4.19 8-K 001-35121 4.3 May 7, 2021 4.20 8-K 001-35121 4.4 May 7, 2021 Certain instruments defining the rights of holders of long-term debt of Air Lease Corporation and all of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed are being omitted pursuant to paragraph (b)(4)(iii)(A) of Item 601 of Regulation S-K. Air Lease Corporation agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. 101Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.1 10-Q 001-35121 10.5 May 8, 2014 10.2 8-K 001-35121 10.1 June 2, 2015 10.3 8-K 001-35121 10.2 June 2, 2015 10.4 10-K 001-35121 10.7 February 25, 2016 10.5 10-K 001-35121 10.8 February 25, 2016 10.6 8-K 001-35121 10.1 June 1, 2016 10.7 8-K 001-35121 10.2 June 1, 2016 102Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.8 10-K 001-35121 10.10 February 23, 2017 10.9 10-K 001-35121 10.11 February 23, 2017 10.10 10-K 001-35121 10.12 February 23, 2017 10.11 10-Q 001-35121 10.3 May 4, 2017 10.12 10-Q 001-35121 10.4 May 4, 2017 10.13 10-Q 001-35121 10.5 May 4, 2017 10.14 10-Q 001-35121 10.8 November 9, 2017 103Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.15 8-K 001-35121 10.1 May 3, 2018 10.16 10-K 001-35121 10.11 February 22, 2018 10.17 10-K 001-35121 10.12 February 22, 2018 10.18 10-Q 001-35121 10.10 May 10, 2018 10.19 10-Q 001-35121 10.5 November 8, 2018 10.20 10-K 001-35121 10.22 February 21, 2019 10.21 10-K 001-35121 10.23 February 21, 2019 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.22 10-K 001-35121 10.24 February 21, 2019 10.23 8-K 001-35121 10.1 May 9, 2019 10.24 10-Q 001-35121 10.5 May 9, 2019 10.25 10-Q 001-35121 10.3 August 8, 2019 10.26 10-K 001-35121 10.28 February 14, 2020 10.27 10-Q 001-35121 10.1 May 7, 2020 10.28 10-K 001-35121 10.31 February 22, 2021 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.29 8-K 001-35121 10.1 April 30, 2021 10.30 10-Q 001-35121 10.1 November 4, 2021 10.31 10-K 001-35121 10.31 February 17, 2022 10.32 10-K 001-35121 10.32 February 17, 2022 10.33 10-K 001-35121 10.33 February 17, 2022 10.34 10-Q 001-35121 10.11 May 5, 2022 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.35 10-Q 001-35121 10.2 August 4, 2022 10.36 10-Q 001-35121 10.3 August 4, 2022 10.37 Filed herewith 10.38† 10-Q 001-35121 10.3 November 7, 2013 10.39† 10-Q 001-35121 10.2 November 6, 2014 10.40† 10-Q 001-35121 10.19 August 4, 2016 10.41† 10-Q 001-35121 10.20 August 4, 2016 10.42† 10-Q 001-35121 10.21 August 4, 2016 10.43† 10-Q 001-35121 10.22 August 4, 2016 10.44† 10-K 001-35121 10.21 February 23, 2017 Form FormExhibit Exhibit10.27†10-Q 10-Q10.6 001-3512110.610.28†10-Q 10-Q10.7 001-3512110.710.29†001-35121 10.1 November 8, 2018 10.48† 10-Q 001-35121 10.2 November 8, 2018 10.49† 10-Q 001-35121 10.7 August 9, 2019 10.50† 10-Q 001-35121 10.8 August 9, 2019 10.51† 10-K 001-35121 10.43 February 14, 2020 10.52† 10-Q 001-35121 10.3 May 7, 2020 10.53† 10-Q 001-35121 10.8 May 5, 2022 10.54† 10‑Q 10‑Q10.2 001‑3512110.210.30†10-Q 10-Q10.2 001-3512110.210.31†10-Q 10-Q10.3 001-3512110.310.32†Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.57† 10-Q 10‑Q10.1 001‑3512110.110.33†10-Q 10‑Q10.15 001‑3512110.1510.34†10-Q 10‑Q10.16 001‑3512110.1610.35†10-K 10-K10.28 001-3512110.2810.36†10-Q 10‑Q10.1 001‑3512110.110.37†10-K 001-35121 10.37 Filed herewith10.38†001-35121 10.2 August 9, 2018 10.64† 10-K 001-35121 10.47 February 21, 2019 10.65† 10-Q 001-35121 10.4 August 8, 2019 10.66† 10-K 001-35121 10.56 February 14, 2020 10.67† 10-Q 001-35121 10.4 May 7, 2020 10.68† 10-Q 001-35121 10.2 August 6, 2020 10.69† 10-Q 001-35121 10.1 November 9, 2020 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.70† 10-K 001-35121 10.65 February 17, 2022 10.71† 10-K 001-35121 10.66 February 17, 2022 10.72† 10-Q 001-35121 10.5 May 5, 2022 10.72† 10-Q 001-35121 10.5 August 8, 2019 10.73† 10-Q 001-35121 10.2 November 4, 2021 10.74† 10-Q 10‑Q10.1 001‑3512110.110.39†10-Q 10‑Q10.12 001‑3512110.12104ExhibitIncorporated by ReferenceNumberExhibit DescriptionFormFile No.ExhibitFiling Date10.40†10-Q 10‑Q10.2 001‑3512110.210.41†10-Q 10-Q10.1 001-3512110.110.42†10-Q 10‑Q10.13 001‑3512110.1310.43†10-Q 10-Q10.18 001-3512110.1810.44†Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.80† 10-K 10-K10.35 001-3512110.3510.45†10-K 10-K10.36 001-3512110.3610.46†10-Q 10‑Q10.14 001‑3512110.1410.47†10-Q 10‑Q10.15 001‑3512110.1510.48†10-Q 10‑Q10.7 001‑3512110.710.49†10-Q 10‑Q10.8 001‑3512110.810.50†10-Q 10‑Q10.9 001‑3512110.910.51†10-Q 10‑Q10.10 001‑3512110.1010.52†10-Q 10‑Q10.4 001‑3512110.4105ExhibitIncorporated by ReferenceNumberExhibit DescriptionFormFile No.ExhibitFiling Date10.53†10-Q 10‑Q10.5 001‑3512110.510.54†001-35121 10.3 November 8, 2018 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.91† 10-Q 001-35121 10.7 May 10, 2018 10.92† 10-Q 001-35121 10.4 November 8, 2018 10.93† 10-K 001-35121 10.67 February 21, 2019 10.94† 10-K 001-35121 10.68 February 21, 2019 10.95† 10-Q 001-35121 10.7 May 9, 2019 10.96† 10-Q 001-35121 10.8 May 9, 2019 10.97† 10-Q 001-35121 10.6 August 9, 2019 10.98† 10-K 001-35121 10.82 February 14, 2020 10.99† 10-Q 001-35121 10.2 May 7, 2020 10.100† 10-K 001-35121 10.91 February 22, 2021 10.101† 10-Q 001-35121 10.7 August 5, 2021 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.102† 10-Q 001-35121 10.6 November 4, 2021 10.103† 10-K 001-35121 10.98 February 17, 2022 10.104† 10-Q 001-35121 10.9 May 5, 2022 10.105† 10-Q 001-35121 10.10 May 5, 2022 10.106† Filed herewith 10.107† Filed herewith 10.108† 10-K 001-35121 10.92 February 22, 2021 10.109† 10-K 001-35121 10.93 February 22, 2021 10.110† 10-Q 10-Q10.2 001-3512110.210.55†10-Q 10-Q10.7 001-3512110.710.56†10-Q 10-Q10.4 001-3512110.410.57†10-Q 10-Q10.5 001-3512110.510.58†10-Q 10-Q10.8 001-3512110.810.59†Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.115† 10-Q/A 10-Q/A10.4 001-3512110.410.60†10-Q 10-Q10.9 001-3512110.910.61†10-Q 10-Q10.10 001-3512110.1010.62†10-Q 10-Q10.11 001-3512110.1110.63†10-Q 10-Q10.12 001-3512110.1210.64†10-Q 10-Q10.13 001-3512110.1310.65†10-Q 10-Q10.14 001-3512110.14106ExhibitIncorporated by ReferenceNumberExhibit DescriptionFormFile No.ExhibitFiling Date10.66†10-Q 10-Q10.9 001-3512110.910.67†10-Q 10-Q10.10 001-3512110.1010.68†10-Q 10-Q10.11 001-3512110.1110.69†10-Q 10-Q10.3 001-3512110.310.70†10-Q 10-Q10.4 001-3512110.410.71†10-Q 10-Q10.5 001-3512110.510.72†10-Q 10-Q10.6 001-3512110.610.73†Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.129† 10-Q 10-Q10.2 001-3512110.210.74†10-Q 10-Q10.3 001-3512110.310.75†10-K 001-35121 10.75 Filed herewith10.76†001-35121 10.6 May 10, 2018 10.133† 10-K 001-35121 10.92 February 21, 2019 10.134† 10-K 001-35121 10.107 February 14, 2020 10.135† 10-K 001-35121 10.108 February 14, 2020 10.136† 10-Q 001-35121 10.5 August 6, 2020 10.137† 10-Q 001-35121 10.4 November 9, 2020 10.138† 10-K 001-35121 10.122 February 22, 2021 10.139† 10-K 001-35121 10.123 February 22, 2021 10.140† 10-Q 001-35121 10.4 August 5, 2021 10.141† 10-Q 001-35121 10.5 August 5, 2021 10.142† 10-Q 001-35121 10.5 November 4, 2021 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.143† 10-K 001-35121 10.134 February 17, 2022 10.144† 10-K 001-35121 10.135 February 17, 2022 10.145† 10-Q 001-35121 10.6 May 5, 2022 10.146† 10-Q 001-35121 10.7 May 5, 2022 10.147† 10-Q 001-35121 10.4 August 4, 2022 10.148† Filed herewith 10.149† 10-Q/A 10-Q/A10.1 001-3512110.110.77†10-Q 10-Q10.17 001-3512110.1710.78†10-Q 10-Q10.2 001-3512110.2107ExhibitIncorporated by ReferenceNumberExhibit DescriptionFormFile No.ExhibitFiling Date10.79†10-K 001-35121 10.79 Filed herewith10.80†10-K 001-35121 10.80 Filed herewith10.81§001-35121 10.98 February 21, 2019 10.155† 10-Q 001-35121 10.6 May 9, 2019 10.156† 10-Q 001-35121 10.2 November 7, 2019 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.157† 10-K 001-35121 10.117 February 14, 2020 10.158† 10-K 001-35121 10.118 February 14, 2020 10.159† 10-Q 001-35121 10.4 August 6, 2020 10.160† 10-Q 001-35121 10.3 November 9, 2020 10.161† 10-K 001-35121 10.136 February 22, 2021 10.162† 10-K 001-35121 10.137 February 22, 2021 10.163† 10-K 001-35121 10.150 February 17, 2022 10.164† 10-K 001-35121 10.151 February 17, 2022 10.165† 10-K 001-35121 10.99 February 21, 2019 10.166† 10-K 001-35121 10.120 February 14, 2020 10.167† 10-K 001-35121 10.121 February 14, 2020 10.168† 10-Q 001-35121 10.2 November 9, 2020 10.169† 10-K 001-35121 10.142 February 22, 2021 10.170† 10-K 001-35121 10.157 February 17, 2022 10.171† 10-Q 001-35121 10.3 May 5, 2022 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.172† 10-K 001-35121 10.122 February 14, 2020 10.173† 10-Q 001-35121 10.3 August 6, 2020 10.174† 10-K 001-35121 10.145 February 22, 2021 10.175† 10-Q 001-35121 10.6 August 5, 2021 10.176† 10-Q 001-35121 10.3 November 4, 2021 10.177† 10-Q 001-35121 10.4 November 4, 2021 10.178† 10-Q 001-35121 10.4 May 5, 2022 10.179† 10-K 001-35121 10.123 February 14, 2020 10.180† 10-K 001-35121 10.165 February 17, 2022 10.181† 10-Q 001-35121 10.1 May 5, 2022 10.182† 10-K 001-35121 10.124 February 14, 2020 10.183† 10-Q 001-35121 10.5 November 9, 2020 10.184† 10-Q 001-35121 10.2 August 5, 2021 10.185† 10-Q 001-35121 10.3 August 5, 2021 10.186† 10-K 001-35121 10.170 February 17, 2022 10.187† 10-Q 001-35121 10.2 May 5, 2022 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.188† 10-Q 001-35121 10.1 November 3, 2022 10.189† 10-Q 001-35121 10.2 November 3, 2022 10.190† Filed herewith 10.191† 10-K 001-35121 10.171 February 17, 2022 10.192§ 8-K 001-35121 10.3 June 7, 2019 10.193§ 10-Q 10‑Q10.3 001‑3512110.310.82§S-1/A S‑1/A10.5 333‑17173410.510.83§8-K 10‑Q10.1 001‑3512110.4May 9, 201310.84§Air Lease Corporation Amended and Restated Deferred Bonus PlanS‑1333‑17173410.17February 22, 201110.85§10-Q001-3512110.1May 8, 201410.86§10-Q 10-Q10.2 001-3512110.210.87§S-8333-1957554.5May 7, 201410.88§S-8333-1957554.6May 7, 201410.89§10-K001-3512110.4February 26, 201510.90§10-K 10-K10.41 001-3512110.4110.91§001-35121 10.4 August 9, 2018 10.199§ 10-Q 001-35121 10.3 August 9, 2018 10.200§ 10-Q 001-35121 10.3 May 10, 2018 Exhibit Incorporated by Reference Number Exhibit Description Form File No. Exhibit Filing Date 10.201§ 10-Q 10-Q10.1 001-3512110.15, 201610.92§001-35121 10.118 February 21, 2019 10.203§ 10-Q 001-35121 10.2 May 10, 2018 10.204§ 10-Q 10-Q10.4 001-3512110.205§ 10.1001-35121 August 4, 2016 10.206§ 10-Q 001-35121 10.3 August 4, 2016 10.207§ 10-Q 001-35121 10.1 May 4, 2017 10.208§ S-1 333-171734 10.12 February 22, 2011 10.209§ 10-Q 001-35121 10.5 May 7, 2020 10.210§ 10-K 001-35121 10.148 February 14, 2020 10.211§ 10-Q 001-35121 10.5 August 4, 2022 109Form FormExhibit Exhibit32.1Filed herewith 10.213§ Filed herewith 10.214§ Filed herewith 10.215§ Filed herewith 21.1 Filed herewith 23.1 Filed herewith 31.1 Filed herewith 31.2 Filed herewith 32.1 101Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) The following materials from Air Lease Corporation’s Annual Report on Form 10‑K for the year ended December 31, 2017, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.DEF XBRL Taxonomy Extension Definition Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) 1933.110
None22, 2018.16, 2023.Air Lease CorporationAIR LEASE CORPORATION By:By: /s/ Gregory B. Willis Officer)Officer)SignatureTitleDateSignature Title Date Udvar‑HáUdvar-Házy22, 2018Udvar‑HáUdvar-Házy22, 2018Director Director22, 2018Director February 16, 2023 Yvette Hollingsworth Clark /s/ Cheryl Gordon Krongard Director Director22, 2018DirectorFebruary 22, 2018Director February 16, 2023 Marshall O. Larsen /s/ Susan R. McCaw Director February 16, 2023 Susan R. McCaw /s/ Robert A. Milton Director Director22, 2018Director Director22, 2018/s/ Dr. Ronald D. SugarDirectorFebruary 22, 2018Dr. Ronald D. Sugar