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

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

At ~~November 3, 2021,~~May 4, 2022, there were ~~113,987,154~~110,858,351 shares of Air Lease Corporation’s Class A common stock outstanding.

Note About Forward-Looking Statements

Air Lease Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended ~~September 30, 2021~~March 31, 2022

TABLE OF CONTENTS

Page

PART I—FINANCIAL INFORMATION

Item 1

Financial Statements

Consolidated Balance Sheets—~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (unaudited)

Consolidated Statements of ~~Income~~Operations and Comprehensive ~~Income—~~Income/(Loss)—Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (unaudited)

Consolidated Statement of Shareholders’ Equity—Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (unaudited)

Consolidated Statements of Cash Flows—~~Nine~~Three Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ (unaudited)

Notes to Consolidated Financial Statements (unaudited)

109

Item 2

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

1918

Item 3

Quantitative and Qualitative Disclosures About Market Risk

3734

Item 4

Controls and Procedures

3735

PART II—OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

3837

Item 3

Defaults Upon Senior Securities

3937

Item 4

Mine Safety Disclosures

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ~~contains~~and other publicly available documents may contain or incorporate statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this Form 10-Q and include statements regarding, among other matters, the state of the airline industry, including the impact of Russia’s invasion of Ukraine and the ~~coronavirus (“COVID-19”) pandemic~~impact of sanctions imposed on ~~us, our lessees and aircraft manufacturers, our anticipated capital expenditures and aircraft sales,~~Russia, our access to the capital markets, the impact of lease deferrals and other accommodations, aircraft delivery delays and other factors affecting our financial condition or results of operations. Words such as “can,” “could,” “may,” “predicts,” “potential,” “will,” “projects,” “continuing,” “ongoing,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and “should,” and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements, or industry results to vary materially from our future results, performance or achievements, or those of our industry, expressed or implied in such forward-looking statements. Such factors include, among others:

• ~~the extent to which the COVID-19 pandemic and measures taken to contain its spread ultimately impact our business, results of operation and financial condition;~~

• our inability to obtain additional capital on favorable terms, or at all, to acquire aircraft, service our debt obligations and refinance maturing debt obligations;

• increases in our cost of borrowing or changes in interest rates;

• our inability to generate sufficient returns on our aircraft investments through strategic acquisition and profitable leasing;

• the failure of an aircraft or engine manufacturers to meet its delivery obligations to us, including or as a result of technical or other difficulties with aircraft before or after delivery;

• the extent to which the Russian invasion of Ukraine and the impact of sanctions imposed by the United States, European Union, United Kingdom and other countries affect our business, including our efforts to pursue insurance claims to recover losses related to aircraft that remain in Russia;

• the extent to which the COVID-19 pandemic impacts our business;

• obsolescence of, or changes in overall demand for, our aircraft;

• changes in the value of, and lease rates for, our aircraft, including as a result of aircraft oversupply, manufacturer production levels, our lessees’ failure to maintain our aircraft, and other factors outside of our control;

• impaired financial condition and liquidity of our lessees, including due to lessee defaults and reorganizations, bankruptcies or similar proceedings;

• increased competition from other aircraft lessors;

• the failure by our lessees to adequately insure our aircraft or fulfill their contractual indemnity obligations to us;

• increased tariffs and other restrictions on trade;

• changes in the regulatory environment, including changes in tax laws and environmental regulations;

• other events affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, such as the threat or realization of epidemic diseases, ~~in addition to COVID-19,~~ natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors; and

• any additional factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021, “Part II — Item 1A. Risk Factors,” in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and other SEC filings, including future SEC filings.

The factors noted above and the risks included in our other SEC filings may be increased or intensified as a result of the COVID-19 pandemic, including as a result of ongoing resurgences of the COVID-19 virus and its variants. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations. You are therefore cautioned not to place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not intend and undertake no obligation to update any forward-looking ~~statement~~information to reflect actual results or events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(unaudited)					(unaudited)
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,873,844	$	1,734,155	Cash and cash equivalents	$	1,490,765	$	1,086,500
Restricted cash	Restricted cash	19,824		23,612		Restricted cash	21,291		21,792
Flight equipment subject to operating leases	Flight equipment subject to operating leases	26,111,027		23,729,742		Flight equipment subject to operating leases	26,552,246		27,101,808
Less accumulated depreciation	Less accumulated depreciation	(4,000,330)		(3,349,392)		Less accumulated depreciation	(4,267,934)		(4,202,804)
		22,110,697		20,380,350			22,284,312		22,899,004
Deposits on flight equipment purchases	Deposits on flight equipment purchases	1,597,597		1,800,119		Deposits on flight equipment purchases	1,626,874		1,508,892
Other assets	Other assets	1,412,599		1,276,939		Other assets	1,451,607		1,452,534
Total assets	Total assets	$	27,014,561	$	25,215,175	Total assets	$	26,874,849	$	26,968,722
Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity					Liabilities and Shareholders’ Equity
Accrued interest and other payables	Accrued interest and other payables	$	542,531	$	492,473	Accrued interest and other payables	$	544,280	$	611,757
Debt financing, net of discounts and issuance costs	Debt financing, net of discounts and issuance costs	17,616,880		16,518,338		Debt financing, net of discounts and issuance costs	17,824,725		17,022,480
Security deposits and maintenance reserves on flight equipment leases	Security deposits and maintenance reserves on flight equipment leases	1,151,876		1,072,704		Security deposits and maintenance reserves on flight equipment leases	1,120,234		1,173,831
Rentals received in advance	Rentals received in advance	138,716		142,915		Rentals received in advance	135,642		138,816
Deferred tax liability	Deferred tax liability	980,775		916,404		Deferred tax liability	880,383		1,013,270
Total liabilities	Total liabilities	$	20,430,778	$	19,142,834	Total liabilities	$	20,505,264	$	19,960,154
Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,300,000 (aggregate liquidation preference of $550,000) and 10,000,000 (aggregate liquidation preference of $250,000) shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		$	103	$	100
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 113,987,154 and 113,852,896 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		1,140		1,139
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,600,000 (aggregate liquidation preference of $850,000) shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively						Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,600,000 (aggregate liquidation preference of $850,000) shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	$	106	$	106
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,317,259 and 113,987,154 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively						Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,317,259 and 113,987,154 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,113		1,140
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding	Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding	—		—		Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding	—		—
Paid-in capital	Paid-in capital	3,095,620		2,793,178		Paid-in capital	3,259,105		3,399,245
Retained earnings	Retained earnings	3,488,655		3,277,599		Retained earnings	3,109,331		3,609,885
Accumulated other comprehensive (loss) / income		(1,735)		325
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(70)		(1,808)
Total shareholders’ equity	Total shareholders’ equity	$	6,583,783	$	6,072,341	Total shareholders’ equity	$	6,369,585	$	7,008,568
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	27,014,561	$	25,215,175	Total liabilities and shareholders’ equity	$	26,874,849	$	26,968,722

(See Notes to Consolidated Financial Statements)

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF ~~INCOME~~OPERATIONS AND COMPREHENSIVE ~~INCOME~~INCOME/(LOSS)

(In thousands, except share and per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(unaudited)									(unaudited)
Revenues	Revenues									Revenues
Rental of flight equipment	Rental of flight equipment	$	519,535	$	468,443	$	1,439,674	$	1,462,999	Rental of flight equipment	$	566,554	$	468,095
Aircraft sales, trading and other	Aircraft sales, trading and other	4,974		25,158		51,539		63,338		Aircraft sales, trading and other	30,107		6,732
Total revenues	Total revenues	524,509		493,601		1,491,213		1,526,337		Total revenues	596,661		474,827

Expenses	Expenses									Expenses
Interest	Interest	114,659		107,519		346,244		317,753		Interest	117,277		117,986
Amortization of debt discounts and issuance costs	Amortization of debt discounts and issuance costs	12,571		10,899		37,109		31,660		Amortization of debt discounts and issuance costs	13,198		12,025
Interest expense	Interest expense	127,230		118,418		383,353		349,413		Interest expense	130,475		130,011
Depreciation of flight equipment	Depreciation of flight equipment	224,960		195,054		651,742		577,969		Depreciation of flight equipment	235,308		208,965
Write-off of Russian fleet										Write-off of Russian fleet	802,352		—
Selling, general and administrative	Selling, general and administrative	31,082		20,239		84,682		75,142		Selling, general and administrative	32,762		26,914
Stock-based compensation	Stock-based compensation	6,692		6,635		18,800		14,956		Stock-based compensation	(2,523)		5,408
Total expenses	Total expenses	389,964		340,346		1,138,577		1,017,480		Total expenses	1,198,374		371,298
Income before taxes		134,545		153,255		352,636		508,857
Income tax expense		(27,208)		(32,860)		(67,785)		(103,686)
Net income		$	107,337	$	120,395	$	284,851	$	405,171
(Loss)/income before taxes										(Loss)/income before taxes	(601,713)		103,529
Income tax benefit/(expense)										Income tax benefit/(expense)	132,720		(19,437)
Net (loss)/income										Net (loss)/income	$	(468,993)	$	84,092
Preferred stock dividends	Preferred stock dividends	(7,331)		(3,843)		(19,010)		(11,531)		Preferred stock dividends	(10,425)		(3,844)
Net income available to common stockholders		$	100,006	$	116,552	$	265,841	$	393,640
Net (loss)/income attributable to common stockholders										Net (loss)/income attributable to common stockholders	$	(479,418)	$	80,248

Other comprehensive income/(loss):	Other comprehensive income/(loss):									Other comprehensive income/(loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	7,129		(5,637)		(943)		7,601		Foreign currency translation adjustment	(3,019)		(3,807)
Change in fair value of hedged transactions	Change in fair value of hedged transactions	(7,874)		7,395		(1,677)		(7,086)		Change in fair value of hedged transactions	5,230		2,221
Total tax benefit/(expense) on other comprehensive income/loss		159		(378)		560		(89)
Total tax (expense)/benefit on other comprehensive income/loss										Total tax (expense)/benefit on other comprehensive income/loss	(473)		339
Other comprehensive income/(loss), net of tax	Other comprehensive income/(loss), net of tax	(586)		1,380		(2,060)		426		Other comprehensive income/(loss), net of tax	1,738		(1,247)
Total comprehensive income available for common stockholders		$	99,420	$	117,932	$	263,781	$	394,066
Total comprehensive (loss)/income attributable for common stockholders										Total comprehensive (loss)/income attributable for common stockholders	$	(477,680)	$	79,001

Earnings per share of common stock:
(Loss)/Earnings per share of common stock:										(Loss)/Earnings per share of common stock:
Basic	Basic	$	0.88	$	1.02	$	2.33	$	3.46	Basic	$	(4.21)	$	0.70
Diluted	Diluted	$	0.87	$	1.02	$	2.32	$	3.46	Diluted	$	(4.21)	$	0.70
Weighted-average shares outstanding	Weighted-average shares outstanding									Weighted-average shares outstanding
Basic	Basic	114,122,512		113,778,533		114,071,951		113,647,585		Basic	113,894,867		113,958,403
Diluted	Diluted	114,381,621		113,951,102		114,415,169		113,928,775		Diluted	113,894,867		114,237,109

Dividends declared per share of common stock	Dividends declared per share of common stock	$	0.16	$	0.15	$	0.48	$	0.45	Dividends declared per share of common stock	$	0.185	$	0.16

(See Notes to Consolidated Financial Statements)

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

Preferred Stock Class A
Common Stock Class B Non-Voting
Common Stock Accumulated
Other
Comprehensive
Income/(Loss)
(unaudited) Shares Amount Shares Amount Shares Amount Paid-in
Capital Retained
Earnings Total
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 preferred stock 300,000 3 — — — — 295,446 — — 295,449
Issuance of common stock upon exercise of options and vesting of restricted stock units — — 425,232 4 — — 1,437 — — 1,441
Stock-based compensation expense — — — — — — 5,408 — — 5,408
Cash dividends (declared $0.16 per share of Class A common stock) — — — — — — — (18,259) — (18,259)
Preferred dividends (declared on Series A preferred stock) — — — — — — — (3,844) — (3,844)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — (1,247) (1,247)
Tax withholdings on stock based compensation — — (157,266) (2) — — (7,167) — — (7,169)
Net income — — — — — — — 84,092 — 84,092
Balance at March 31, 2021 10,300,000 $ 103 114,120,862 $ 1,141 — $ — $ 3,088,302 $ 3,339,588 $ (922) $ 6,428,212
Issuance of preferred stock — — — — — — (19) — — (19)
Issuance of common stock upon vesting of restricted stock units — — 25,956 — — — — — — —
Stock-based compensation expense — — — — — — 6,700 — — 6,700
Cash dividends (declared 0.16 per share of Class A common stock) — — — — — — — (18,263) — (18,263)
Preferred dividends (declared on Series A and Series B preferred stock) — — — — — — — (7,835) — (7,835)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — (227) (227)
Tax withholdings on stock based compensation — — (5,715) — — — (275) — — (275)
Net income — — — — — — — 93,422 — 93,422
Balance at June 30, 2021 10,300,000 $ 103 114,141,103 $ 1,141 — $ — $ 3,094,708 $ 3,406,912 $ (1,149) $ 6,501,715
Issuance of common stock upon vesting of restricted stock units — — — — — — — — — —
Stock-based compensation expense — — — — — 6,692 — — 6,692
Common stock repurchased — — (153,949) (1) — — (5,780) — — (5,781)
Cash dividends (declared $0.16 per share per share of Class A common stock) — — — — — — — (18,263) — (18,263)
Preferred dividends (declared on Series A and Series B preferred stock) — — — — — — — (7,331) — (7,331)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — (586) (586)
Tax withholdings on stock based compensation — — — — — — — — — —
Net income — — — — — — — 107,337 — 107,337
Balance at September 30, 2021 10,300,000 $ 103 113,987,154 $ 1,140 — $ — $ 3,095,620 $ 3,488,655 $ (1,735) $ 6,583,783


	Preferred Stock		Class A Common Stock			Class B Non-Voting Common Stock							Accumulated Other Comprehensive Income/(Loss)
(unaudited)		Shares	Amount		Shares	Amount		Shares	Amount		Paid-in Capital				Retained Earnings			Total
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		—	—		477,656	5		—	—		(3)		—			—		2
Common stock repurchased		—	—		(2,959,458)	(30)		—	—		(129,519)		—			—		(129,549)
Stock-based compensation		—	—		—	—		—	—		(2,523)		—			—		(2,523)
Cash dividends (declared $0.185 per share of Class A common stock)		—	—		—	—		—	—		—		(21,136)			—		(21,136)
Cash dividends (declared on preferred stock)		—	—		—	—		—	—		—		(10,425)			—		(10,425)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax		—	—		—	—		—	—		—		—			1,738		1,738
Tax withholdings on stock based compensation		—	—		(188,093)	(2)		—	—		(8,095)		—			—		(8,097)
Net loss		—	—		—	—		—	—		—		(468,993)			—		(468,993)
Balance at March 31, 2022		10,600,000	$	106	111,317,259	$	1,113	—	$	—	$	3,259,105	$	3,109,331		$	(70)	$	6,369,585

~~Air Lease Corporation and Subsidiaries~~

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

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

Preferred Stock Class A
Common Stock Class B Non-Voting
Common Stock Accumulated
Other
Comprehensive
Income/(Loss)
(unaudited) Shares Amount Shares Amount Shares Amount Paid-in
Capital Retained
Earnings Total
Balance at December 31, 2019 10,000,000 $ 100 113,350,267 $ 1,134 — $ — $ 2,777,601 $ 2,846,106 $ (1,397) $ 5,623,544
Issuance of common stock upon vesting of restricted stock units and upon exercise of options — — 480,978 4 — — 2,021 — — 2,025
Stock-based compensation — — — — — — 4,429 — — 4,429
Cash dividends (declared 0.15 per share of Class A common stock) — — — — — — — (17,045) — (17,045)
Preferred dividends (declared on Series A preferred stock) — — — — — — — (3,844) — (3,844)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax — — — — — — — — (1,478) (1,478)
Tax withholding related to vesting of restricted stock units and exercise of stock options — — (191,334) (2) — — (8,411) — — (8,413)
Net income — — — — — — — 137,151 — 137,151
Balance at March 31, 2020 10,000,000 $ 100 113,639,911 $ 1,136 — $ — $ 2,775,640 $ 2,962,368 $ (2,875) $ 5,736,369
Issuance of common stock upon vesting of restricted stock units and upon exercise of options — — 144,417 2 — — 2,500 — — 2,502
Stock-based compensation — — — — — — 3,892 — — 3,892
Cash dividends (declared 0.15 per share of Class A common stock) — — — — — — — (17,067) — (17,067)
Preferred dividends (declared on Series A preferred stock) — — — — — — — (3,844) — (3,844)
Change in foreign currency translation adjustment and from current period hedged transaction — — — — — — — — 524 524
Tax withholding related to vesting of restricted stock units and exercise of stock options — — (6,605) — — — (200) — — (200)
Net income — — — — — — — 147,625 — 147,625
Balance at June 30, 2020 10,000,000 $ 100 113,777,723 $ 1,138 — $ — $ 2,781,832 $ 3,089,082 $ (2,351) $ 5,869,801
Issuance of common stock upon vesting of restricted stock units and upon exercise of options — — 1,352 1 — — 27 — — 28
Stock-based compensation — — — — — 6,635 — — 6,635
Cash dividends (declared 0.15 per share of Class A common stock) — — — — — — (17,068) — (17,068)
Preferred dividends (declared on Series A preferred stock) — — — — — — — (3,843) — (3,843)
Change in foreign currency translation adjustment and from current period hedged transaction — — — — — — — — 1,380 1,380
Tax withholding related to vesting of restricted stock units and exercise of stock options — — (169) (1) — — (4) — — (5)
Net income — — — — — — — 120,395 — 120,395
Balance at September 30, 2020 10,000,000 $ 100 113,778,906 $ 1,138 — $ — $ 2,788,490 $ 3,188,566 $ (971) $ 5,977,323


	Preferred Stock		Class A Common Stock			Class B Non-Voting Common Stock							Accumulated Other Comprehensive Income/(Loss)
(unaudited)		Shares	Amount		Shares	Amount		Shares	Amount		Paid-in Capital				Retained Earnings			Total
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 preferred stock		300,000	3		—	—		—	—		295,446		—			—		295,449
Issuance of common stock upon exercise of options and vesting of restricted stock units		—	—		425,232	4		—	—		1,437		—			—		1,441
Stock-based compensation		—	—		—	—		—	—		5,408		—			—		5,408
Cash dividends (declared $0.16 per share of Class A common stock)		—	—		—	—		—	—		—		(18,259)			—		(18,259)
Cash dividends (declared on preferred stock)		—	—		—	—		—	—		—		(3,844)			—		(3,844)
Change in foreign currency translation adjustment and in fair value of hedged transactions, net of tax		—	—		—	—		—	—		—		—			(1,247)		(1,247)
Tax withholdings on stock based compensation		—	—		(157,266)	(2)		—	—		(7,167)		—			—		(7,169)
Net income		—	—		—	—		—	—		—		84,092			—		84,092
Balance at March 31, 2021		10,300,000	$	103	114,120,862	$	1,141	—	$	—	$	3,088,302	$	3,339,588		$	(922)	$	6,428,212

(See Notes to Consolidated Financial Statements)

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
		(unaudited)					(unaudited)
Operating Activities	Operating Activities					Operating Activities
Net income		$	284,851	$	405,171
Net (loss)/income						Net (loss)/income	$	(468,993)	$	84,092
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment	Depreciation of flight equipment	651,742		577,969		Depreciation of flight equipment	235,308		208,965
Write-off of Russian fleet						Write-off of Russian fleet	802,352		—
Stock-based compensation	Stock-based compensation	18,800		14,956		Stock-based compensation	(2,523)		5,408
Deferred taxes	Deferred taxes	64,931		101,285		Deferred taxes	(133,360)		18,577
Amortization of debt discounts and issuance costs	Amortization of debt discounts and issuance costs	37,109		31,660		Amortization of debt discounts and issuance costs	13,198		12,025
Amortization of prepaid lease costs	Amortization of prepaid lease costs	33,603		32,142		Amortization of prepaid lease costs	13,193		10,790
Gain on aircraft sales, trading and other activity	Gain on aircraft sales, trading and other activity	(1,184)		(34,161)		Gain on aircraft sales, trading and other activity	(66,791)		(99)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Other assets	Other assets	(148,982)		(323,924)		Other assets	(74,560)		(35,323)
Accrued interest and other payables	Accrued interest and other payables	(7,283)		(84,045)		Accrued interest and other payables	(64,068)		(59,914)
Rentals received in advance	Rentals received in advance	(4,199)		(3,464)		Rentals received in advance	938		(10,231)
Net cash provided by operating activities	Net cash provided by operating activities	929,388		717,589		Net cash provided by operating activities	254,694		234,290
Investing Activities	Investing Activities					Investing Activities
Acquisition of flight equipment under operating lease	Acquisition of flight equipment under operating lease	(1,670,203)		(777,410)		Acquisition of flight equipment under operating lease	(395,402)		(404,379)
Payments for deposits on flight equipment purchases	Payments for deposits on flight equipment purchases	(303,856)		(581,054)		Payments for deposits on flight equipment purchases	(172,943)		(103,382)
Proceeds from aircraft sales, trading and other activity	Proceeds from aircraft sales, trading and other activity	2,042		151,131		Proceeds from aircraft sales, trading and other activity	750		—
Acquisition of aircraft furnishings, equipment and other assets	Acquisition of aircraft furnishings, equipment and other assets	(178,359)		(142,866)		Acquisition of aircraft furnishings, equipment and other assets	(52,974)		(41,923)
Net cash used in investing activities	Net cash used in investing activities	(2,150,376)		(1,350,199)		Net cash used in investing activities	(620,569)		(549,684)
Financing Activities	Financing Activities					Financing Activities
Issuance of common stock upon exercise of options	Issuance of common stock upon exercise of options	1,438		4,556		Issuance of common stock upon exercise of options	—		1,441
Cash dividends paid on Class A common stock	Cash dividends paid on Class A common stock	(54,737)		(51,116)		Cash dividends paid on Class A common stock	(21,088)		(18,216)
Common shares repurchased	Common shares repurchased	(5,780)		—		Common shares repurchased	(97,644)		—
Net proceeds from preferred stock issuance	Net proceeds from preferred stock issuance	295,428		—		Net proceeds from preferred stock issuance	—		295,449
Preferred dividends paid		(19,010)		(11,531)
Cash dividends paid on preferred stock						Cash dividends paid on preferred stock	(10,425)		(3,844)
Tax withholdings on stock-based compensation	Tax withholdings on stock-based compensation	(7,441)		(8,618)		Tax withholdings on stock-based compensation	(8,095)		(7,169)
Net change in unsecured revolving facility		—		(20,000)

Proceeds from debt financings	Proceeds from debt financings	3,655,830		3,074,665		Proceeds from debt financings	1,497,615		791,645
Payments in reduction of debt financings	Payments in reduction of debt financings	(2,585,652)		(1,457,740)		Payments in reduction of debt financings	(708,847)		(1,157,577)
Debt issuance costs	Debt issuance costs	(9,688)		(5,692)		Debt issuance costs	(2,740)		(1,335)
Security deposits and maintenance reserve receipts	Security deposits and maintenance reserve receipts	112,155		91,337		Security deposits and maintenance reserve receipts	125,727		21,278
Security deposits and maintenance reserve disbursements	Security deposits and maintenance reserve disbursements	(25,654)		(59,175)		Security deposits and maintenance reserve disbursements	(4,864)		(11,852)
Net cash provided by financing activities		1,356,889		1,556,686
Net increase in cash		135,901		924,076
Net cash provided / (used) by financing activities						Net cash provided / (used) by financing activities	769,639		(90,180)
Net increase / (decrease) in cash						Net increase / (decrease) in cash	403,764		(405,574)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	1,757,767		338,061		Cash, cash equivalents and restricted cash at beginning of period	1,108,292		1,757,767
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	1,893,668	$	1,262,137	Cash, cash equivalents and restricted cash at end of period	$	1,512,056	$	1,352,193
Supplemental Disclosure of Cash Flow Information	Supplemental Disclosure of Cash Flow Information					Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $38,265 and $39,960 at September 30, 2021 and 2020, respectively		$	428,349	$	371,947
Cash paid during the period for interest, including capitalized interest of $9,365 and $13,543 at March 31, 2022 and 2021, respectively						Cash paid during the period for interest, including capitalized interest of $9,365 and $13,543 at March 31, 2022 and 2021, respectively	$	179,026	$	177,685
Cash paid for income taxes	Cash paid for income taxes	$	2,739	$	29,696	Cash paid for income taxes	$	3,446	$	1,101
Supplemental Disclosure of Noncash Activities	Supplemental Disclosure of Noncash Activities					Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	$	663,072	$	575,958	Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	$	85,791	$	176,618
Cash dividends declared on Class A common stock, not yet paid	Cash dividends declared on Class A common stock, not yet paid	$	18,263	$	17,068	Cash dividends declared on Class A common stock, not yet paid	$	21,136	$	18,259

(See Notes to Consolidated Financial Statements)

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Company Background and Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company is principally engaged in purchasing the most modern, fuel-efficient, new technology commercial jet aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”). The Company leases these aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of ~~September 30, 2021,~~March 31, 2022, the Company owned ~~a fleet of~~ 370 aircraft, ~~in its operating lease portfolio,~~ managed 8987 aircraft and had ~~320~~451 aircraft on order with aircraft ~~manufacturers and 24 aircraft purchase options.~~manufacturers. In addition to its leasing activities, the Company sells aircraft from its ~~operating lease portfolio~~fleet to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee.

Note 2. Basis of Preparation and Critical Accounting Policies

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

The accompanying unaudited Consolidated Financial Statements include all adjustments, consisting only of normal, recurring adjustments, which are in the opinion of management necessary to present fairly the Company’s financial position, results of operations and cash flows at ~~September 30, 2021,~~March 31, 2022, and for all periods presented. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the operating results expected for the year ending December 31, ~~2021.~~2022. These financial statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Reclassifications

Certain reclassifications have been made in the prior year’s consolidated financial statements to conform to the classifications in ~~2021.~~2022.

Note 3. Debt Financing

The Company’s consolidated debt as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 is summarized ~~below (in thousands):~~below:


	March 31, 2022		December 31, 2021
	(in thousands)
Unsecured
Senior notes	$	17,695,077	$	16,892,058
Term financings	195,275		167,000

Total unsecured debt financing	17,890,352		17,059,058
Secured
Term financings	123,452		126,660
Export credit financing	16,637		18,301
Total secured debt financing	140,089		144,961

Total debt financing	18,030,441		17,204,019
Less: Debt discounts and issuance costs	(205,716)		(181,539)
Debt financing, net of discounts and issuance costs	$	17,824,725	$	17,022,480

109

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Senior unsecured notes (including Medium-Term Note Program)

As of ~~September 30, 2021,~~March 31, 2022, the Company had ~~$17.5~~$17.7 billion in senior unsecured notes outstanding. As of December 31, ~~2020,~~2021, the Company had ~~$15.6~~$16.9 billion in senior unsecured notes outstanding.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company issued ~~approximately $3.7~~$1.5 billion in aggregate principal amount of ~~Medium-Term Notes~~senior unsecured notes comprised of (i) $750.0 million in aggregate principal amount of ~~0.70%~~2.20% Medium-Term Notes due ~~2024,~~2027, and (ii) ~~$1.2 billion in aggregate principal amount of 1.875% Medium-Term Notes due 2026, (iii) $600.0~~$750.0 million in aggregate principal amount of 2.875% Medium-Term Notes due 2022 bearing interest at a floating rate of three-month LIBOR plus 0.35%, (iv) $600.0 million in aggregate principal amount of 0.800% Medium-Term Notes due 2024, and (v) $500.0 million in aggregate principal amount of 2.100% Medium-Term Notes due 2028.2032.

Unsecured revolving credit ~~facilities~~facility

~~The~~As of March 31, 2022 and December 31, 2021, the Company ~~has an~~did not have any amounts outstanding under its unsecured revolving credit facility (the “Revolving Credit Facility”). ~~As of September 30, 2021 and December 31, 2020, the Company did not have any amounts outstanding under the Revolving Credit Facility.~~

Borrowings under the Revolving Credit Facility accrue 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 or improvements in the credit ratings for the Company’s debt. The Company is required to pay a facility fee of 0.20% per year (also subject to increases or decreases based on declines or improvements in the credit ratings for the Company’s debt) in respect of total commitments under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are used to finance the Company’s working capital needs in the ordinary course of business and for other general corporate purposes.

As of March 31, 2022, borrowings under the Revolving Credit Facility accrued interest at LIBOR plus a margin of 1.05% per year. The Company is required to pay a facility fee of 0.20% per year in respect of total commitments under the Revolving Credit Facility. Interest rate and facility fees are subject to increases or decreases based on declines or improvements in the credit ratings for the Company’s debt.

In April ~~2021,~~2022, the Company amended and extended its Revolving Credit Facility through an amendment that, among other things, extended the final maturity date from May 5, ~~2023~~2025 to May 5, ~~2025~~2026 and, after giving effect to $65.0 million in commitments that matured on May 5, ~~2021,~~2022, increased the total revolving commitments to approximately ~~$6.4~~$7.0 billion ~~representing an increase~~as of 6.7% from December 31, 2020. In September 2021, the Company executed a new lender supplement to the Revolving Credit Facility, which increased the aggregate facility capacity by an additional $50.0 million and increased total revolving commitments to $6.5 billion.May 5, 2022. As of ~~November 4, 2021,~~May 5, 2022, lenders held revolving commitments totaling approximately ~~$5.8~~$6.5 billion that mature on May 5, ~~2025,~~2026, commitments totaling ~~$575.0~~$132.5 million that mature on May 5, ~~2023~~2025 and commitments totaling ~~$105.0~~$400.0 million that mature on May 5, ~~2022.~~2023. The amended Revolving Credit Facility also ~~added~~replaced LIBOR with Term SOFR as the benchmark ~~replacement language with respect~~interest rate and made certain conforming changes related thereto. As a result of the amendment, borrowings under the amended Revolving Credit Facility accrue interest at the Adjusted Term SOFR (as defined in the Revolving Credit Facility), plus a margin of 1.05% per year subject to ~~LIBOR largely~~increases or decreases based on ~~Alternative Reference Rates Committee LIBOR fallback language and amended certain financial maintenance covenants, including removing~~declines or improvements in the ~~maximum consolidated leverage ratio covenant, increasing~~credit ratings for the ~~required level for minimum consolidated shareholders’ equity and removing the mechanism for suspending the minimum interest coverage ratio if certain debt ratings are met.~~Company’s debt.

In September 2021, the Company entered into an uncommitted unsecured revolving credit facility with a total borrowing capacity of $75.0 million and a maturity date of June 22, 2022, bearing interest at a rate of LIBOR plus 0.90%. As of September 30, 2021, the Company did not have any amounts outstanding under this facility.Other debt financings

~~Secured~~From time to time, the Company enters into other debt ~~financing~~

financings such as unsecured term financings and secured term financings, including export credit. As of ~~September 30, 2021,~~March 31, 2022, the outstanding balance on ~~the Company’s secured~~other debt financings ~~including its export credit financing,~~ was ~~$149.8~~$335.4 million and itthe Company had pledged 3 aircraft as collateral with a net book value of ~~$224.7~~$219.7 million. As of December 31, ~~2020,~~2021, the outstanding balance on ~~the Company’s secured~~other debt financings ~~including its secured warehouse facility and its export credit financing,~~ was ~~$301.0~~$312.0 million and itthe Company had pledged 123 aircraft as collateral with a net book value of ~~$628.7~~$222.2 million. As

Maturities

Maturities of ~~September 30, 2021 and December~~debt outstanding as of March 31, ~~2020, all of the Company’s secured obligations~~2022 are ~~recourse in nature.~~as follows:


	(in thousands)
Years ending December 31,
2022	$	1,376,451
2023	2,538,951
2024	2,894,628
2025	2,327,389
2026	3,472,845
Thereafter	5,420,177
Total	$	18,030,441

1110

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Maturities~~Note 4. Flight equipment subject to operating lease

~~Maturities of debt outstanding as of September 30, 2021 are as follows (in thousands):~~

Years ending December 31,
2021 $ 8,829
2022 2,733,882
2023 2,490,951
2024 2,890,800
2025 2,313,889
Thereafter 7,373,021
Total $ 17,811,372
The following table summarizes the activities for the Company’s flight equipment subject to operating lease for the three months ended March 31, 2022:


	(in thousands)
Net book value as of December 31, 2021	$	22,899,004
Additions	490,888
Depreciation	(235,308)
Transfers to net investments in sales-type leases	(79,255)
Write-off of Russian fleet	(791,017)
Net book value as of March 31, 2022	$	22,284,312

Accumulated depreciation as of March 31, 2022	$	(4,267,934)

Write-off of Russian fleet

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

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 4.5. Commitments and Contingencies

Aircraft Acquisition

During the quarter ended March 31, 2022, the Company increased its committed orderbook by entering into agreements with Boeing to purchase 50 aircraft, which includes the conversion of 3 787-9 aircraft to 18 737 MAX aircraft. In addition, the Company canceled 5 aircraft in its orderbook that were slated for delivery in Russia. As of ~~September 30, 2021,~~March 31, 2022, the Company had ~~contractual~~ commitments to ~~acquire a total of 320 new~~purchase 451 aircraft from Boeing and Airbus for delivery through ~~2027 as follows:~~2028, with an estimated aggregate commitment of $28.8 billion.

Estimated Delivery Years
Aircraft Type 2021 2022 2023 2024 2025 Thereafter Total
Airbus A220-300(1)
— 3 9 16 12 11 51
Airbus A320/321neo(2)
12 24 22 26 19 21 124
Airbus A330-900neo 1 8 4 — — — 13
Airbus A350-900/1000 3 3 4 5 1 — 16
Boeing 737-7/8/9 MAX 8 29 16 28 7 — 88
Boeing 787-9/10 1 10 4 10 3 — 28
Total 25 77 59 85 42 32 320
(1) In addition to the Company’s commitments, as of September 30, 2021, the Company had options to acquire up to 24 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2026 and continue through 2028.
(2) The Company’s Airbus A320/321neo aircraft orders include 31 long-range variants and 29 extra long-range variants.

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


	Estimated Delivery Years
Aircraft Type	2022	2023	2024	2025	2026	Thereafter	Total
Airbus A220-100/300	4	17	23	20	12	—	76
Airbus A320/321neo(1)	24	24	26	23	32	64	193
Airbus A330-900neo	7	6	4	—	—	—	17
Airbus A350-900/1000	3	3	3	—	—	—	9
Airbus A350F	—	—	—	—	2	5	7
Boeing 737-8/9 MAX	25	31	35	18	16	—	125
Boeing 787-9/10	3	7	8	6	—	—	24
Total(2)	66	88	99	67	62	69	451


(1) The Company’s Airbus A320/321neo aircraft orders include 27 long-range variants and 49 extra long-range variants.
(2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation.

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

~~The Company has experienced delivery delays~~aircraft orders for ~~certain of its Airbus orderbook aircraft, including the A320neo family aircraft and the A330neo~~Boeing 787 aircraft. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) beginning in March 2019 has also resulted in material delivery delays of those aircraft from the Company’s orderbook. The Federal Aviation Administration (“FAA”) and the European Union Aviation Safety Agency (“EASA”) lifted their grounding order on November 18, 2020 and January 27, 2021, respectively. Although many additional countries and regulatory entities have approved return to service of the aircraft, the 737 MAX still remains grounded in several jurisdictions. While deliveries of the 737 MAX have resumed, Boeing continues to have a significant number of 737 MAX aircraft completed and stored in its inventory and delays are likely to continue as the aircraft are prepared for delivery.

During ~~the fourth quarter of~~ 2020, Boeing ~~identified~~began to experience manufacturing ~~related~~ issues on its 787 ~~aircraft. As a result,~~aircraft, which resulted in significant aircraft delivery delays. Boeing ~~suspended~~has halted 787 deliveries and has not indicated when they will resume. Accordingly, we have not taken delivery of ~~787 aircraft between October 2020 and March 2021. Boeing temporarily resumed 787 aircraft~~any 787s since the halting of the deliveries, in March 2021; however, in May 2021, deliveries were once again halted while the FAA completes its evaluation of Boeing’s inspection process. Manufacturing related issues in some 787 aircraft will require further modifications in order to resume deliveries. Boeing expects to maintain 787 production at a reduced rate of less than five per month until deliveries resume, and the timing ~~for resumption~~ of deliveries of the aircraft for the remainder of this year and potentially beyond remains uncertain.

Table of ~~November 4, 2021, the Company has canceled its orders for 23 737 MAX aircraft~~Contents

~~Air Lease Corporation and Subsidiaries~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~As discussed in further detail in Note 11, “Update on COVID-19 Pandemic Impact,” the ongoing COVID-19 pandemic has continued to cause delivery delays of aircraft in the Company’s orderbook.~~

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

Air Lease Corporation and ~~3 787 aircraft with Boeing.~~Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~The Company had contractual commitments~~

Commitments for the acquisition of ~~320~~these aircraft, ~~for delivery through 2027,~~ calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately ~~$21.2~~$28.8 billion at ~~September 30, 2021, which~~March 31, 2022, are ~~due~~ as ~~follows (in thousands):~~follows:


					(in thousands)
Years ending December 31,	Years ending December 31,			Years ending December 31,
2021		$	1,960,449
2022	2022	5,896,528		2022	$	4,446,438
2023	2023	4,345,644		2023	6,049,551
2024	2024	5,291,881		2024	6,400,067
2025	2025	2,232,608		2025	4,006,352
2026				2026	3,491,754
Thereafter	Thereafter	1,432,269		Thereafter	4,450,903
Total	Total	$	21,159,379	Total	$	28,845,065

The Company has made non-refundable deposits on the aircraft for which the Company has commitments to purchase of ~~approximately~~ $1.6 billion and ~~$1.8~~$1.5 billion as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits. Further, the Company would be exposed to breach of contract claims by its lessees and manufacturers.

Note 5.6. Rental Income

At ~~September 30, 2021,~~March 31, 2022, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s owned fleet, which have been delivered as of March 31, 2022 are as ~~follows (in thousands):~~follows:


					(in thousands)
Years ending December 31,	Years ending December 31,			Years ending December 31,
2021 (excluding the nine months ended September 30, 2021)		$	529,211
2022		2,096,619
2022 (excluding the three months ended March 31, 2022)				2022 (excluding the three months ended March 31, 2022)	$	1,547,862
2023	2023	1,974,424		2023	1,952,007
2024	2024	1,847,564		2024	1,826,854
2025	2025	1,693,853		2025	1,678,155
2026				2026	1,485,049
Thereafter	Thereafter	6,469,511		Thereafter	5,605,989
Total	Total	$	14,611,182	Total	$	14,095,916

Note 6. 7. (Loss)/Earnings Per Share

Basic (loss)/earnings per share is computed by dividing net (loss) income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s 2 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 ~~September 30, 2021,~~March 31, 2022, the Company did not have any Class B ~~Non-Voting~~non-voting common stock outstanding.

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

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Diluted earnings per share takes into account the potential conversion of stock options and restricted stock units using the treasury stock method and convertible notes using the if-converted method. For the three and nine months ended September 30, 2021, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. The Company excluded 1,083,635 and 1,032,305 shares related to restricted stock units for which the performance metric had yet to be achieved as of ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

The following table sets forth the reconciliation of basic and diluted (loss)/earnings per ~~share (in thousands, except share and per share amounts):~~share:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Basic earnings per share:
											(in thousands, except share and per share)
Basic (loss)/earnings per share:										Basic (loss)/earnings per share:
Numerator	Numerator									Numerator
Net income		$	107,337	$	120,395	$	284,851	$	405,171
Net (loss)/income										Net (loss)/income	$	(468,993)	$	84,092
Preferred stock dividends	Preferred stock dividends	(7,331)		(3,843)		(19,010)		(11,531)		Preferred stock dividends	(10,425)		(3,844)
Net income available to common stockholders		$	100,006	$	116,552	$	265,841	$	393,640
Net (loss)/income attributable to common stockholders										Net (loss)/income attributable to common stockholders	$	(479,418)	$	80,248
Denominator	Denominator									Denominator
Weighted-average common shares outstanding	Weighted-average common shares outstanding	114,122,512		113,778,533		114,071,951		113,647,585		Weighted-average common shares outstanding	113,894,867		113,958,403
Basic earnings per share		$	0.88	$	1.02	$	2.33	$	3.46
Diluted earnings per share:
Basic (loss)/earnings per share										Basic (loss)/earnings per share	$	(4.21)	$	0.70
Diluted (loss)/earnings per share:										Diluted (loss)/earnings per share:
Numerator	Numerator									Numerator
Net income		$	107,337	$	120,395	$	284,851	$	405,171
Net (loss)/income										Net (loss)/income	$	(468,993)	$	84,092
Preferred stock dividends	Preferred stock dividends	(7,331)		(3,843)		(19,010)		(11,531)		Preferred stock dividends	(10,425)		(3,844)
Net income available to common stockholders		$	100,006	$	116,552	$	265,841	$	393,640
Net (loss)/income attributable to common stockholders										Net (loss)/income attributable to common stockholders	$	(479,418)	$	80,248
Denominator	Denominator									Denominator
Number of shares used in basic computation	Number of shares used in basic computation	114,122,512		113,778,533		114,071,951		113,647,585		Number of shares used in basic computation	113,894,867		113,958,403
Weighted-average effect of dilutive securities	Weighted-average effect of dilutive securities	259,109		172,569		343,218		281,190		Weighted-average effect of dilutive securities	—		278,706
Number of shares used in per share computation	Number of shares used in per share computation	114,381,621		113,951,102		114,415,169		113,928,775		Number of shares used in per share computation	113,894,867		114,237,109
Diluted earnings per share		$	0.87	$	1.02	$	2.32	$	3.46
Diluted (loss)/earnings per share										Diluted (loss)/earnings per share	$	(4.21)	$	0.70

Note 7.8. Fair Value Measurements

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

The Company has a cross-currency swap related to its Canadian dollar Medium-Term Notes which were issued in December 2019. The fair value of the swap as a foreign currency exchange derivative is categorized as a Level 2 measurement in the fair value hierarchy and is measured on a recurring basis. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the estimated fair value of the foreign currency exchange derivative asset was ~~$12.8~~$19.4 million and ~~$14.4~~$14.1 million, respectively.

Financial Instruments Not Measured at Fair Values

The fair value of debt financing is estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities, which would be categorized as a Level 2 measurement in the fair value hierarchy. The estimated fair value of debt financing as of ~~September 30, 2021~~March 31, 2022 was ~~approximately $18.4~~$17.5 billion compared to a book value of ~~$17.8~~$18.0 billion. The estimated fair value of debt financing as of December 31, ~~2020~~2021 was $17.6 billion compared to a book value of ~~$16.7~~$17.2 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at ~~September 30, 2021,~~March 31, 2022, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value

~~Air Lease Corporation and Subsidiaries~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

of such instruments at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 8.9. Shareholders’ Equity

The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company had ~~113,987,154~~111,317,259 and ~~113,852,896~~113,987,154 Class A common shares issued and outstanding, respectively. The Company was authorized to issue 10,000,000 shares of Class B common stock, $0.01 par value at March 31, 2022 and December 31, 2021. The Company did not have any shares of Class B non-voting common stock, $0.01 par value, issued or outstanding as of ~~September 30, 2021~~March 31, 2022 or December 31, ~~2020.~~2021.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. As of ~~September 30,~~March 31, 2022 and December 31, 2021, the Company had ~~10,000,000~~10.0 million shares of 6.15% Fixed-to-Floating ~~Rate~~ 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) ~~and~~, 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)~~. As of December 31, 2020, the Company had 10,000,000~~ and 300,000 shares of ~~Series A~~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 ~~$250.0 million.~~

~~On March 2, 2021, the Company issued 300,000 shares of Series B Preferred Stock, $0.01 par value, with a liquidation preference of $1,000~~$300.0 million ($1,000 per share. 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.

The Company may redeem shares of the Series B Preferred Stock at its option, in whole or in part, from time to time, on any dividend payment date on or after June 15, 2026, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Company may also redeem shares of the Series B Preferred Stock at the Company’s option under certain other limited conditions. The Series B Preferred Stock ranks on a parity with the Series A Preferred Stock.share).

The following table summarizes the Company’s preferred stock issued and outstanding as of ~~September 30, 2021~~March 31, 2022 (in thousands, except for share ~~and per share~~ amounts and percentages):


		Shares Issued and Outstanding as of September 30, 2021	Liquidation Preference as of September 30, 2021		Issue Date	Dividend Rate in Effect at September 30, 2021		Next dividend rate reset date	Dividend rate after reset date		Shares Issued and Outstanding as of March 31, 2022	Carrying Value as of March 31, 2022		Issue Date	Dividend Rate in Effect at March 31, 2022		Next dividend rate reset date	Dividend rate after reset date
Fixed-to-floating-rate:

Series A	Series A	10,000,000	$	250,000	March 5, 2019	6.150	%	March 15, 2024	3M LIBOR plus 3.65%	Series A	10,000,000	$	250,000	March 5, 2019	6.150	%	March 15, 2024	3M LIBOR plus 3.65%
Fixed-rate reset:

Series B	Series B	300,000	300,000		March 2, 2021	4.650	%	June 15, 2026	5 Yr U.S. Treasury + 4.076%	Series B	300,000	300,000		March 2, 2021	4.650	%	June 15, 2026	5 Yr U.S. Treasury plus 4.076%

Series C										Series C	300,000	300,000		October 13, 2021	4.125	%	December 15, 2026	5 Yr U.S. Treasury plus 3.149%
Total Preferred Stock	Total Preferred Stock	10,300,000	$	550,000						Total Preferred Stock	10,600,000	$	850,000

During the three months ended ~~September 30, 2021,~~March 31, 2022, the Company repurchased ~~153,949~~2,959,458 shares of its Class A common stock under its ~~previously announced~~ stock repurchase program at an average purchase price of ~~$37.55~~$43.77 per share.

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

Note 9.10. Stock-based Compensation

On May 7, 2014, the stockholders of the Company approved the Air Lease Corporation 2014 Equity Incentive Plan (the “2014 Plan”). Upon approval of the 2014 Plan, no new awards may be granted under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). As of ~~September 30, 2021,~~March 31, 2022, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately ~~4,494,268.~~4,199,596. The Company has issued RSUs with 4 different vesting criteria: those RSUs that vest based on the attainment of book-value goals, those RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals, time based RSUs that vest ratably over a time period of three years and RSUs that cliff vest at the end of a one or two year period.

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

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company recorded $6.7 million and $6.6 million of stock-based compensation expense for the three months ended September 30, 2021 and 2020, respectively. The Company recorded $18.8 million and $15.0 million of stock-based compensation expense for the nine months ended September 30, 2021 and 2020, respectively.

~~Stock Options~~

~~A summary of stock option activity for the nine months ended September 30, 2021 follows:~~
Shares Exercise
Price Remaining
Contractual Term
(in years)
Aggregate
Intrinsic Value
(in thousands)(1)
Balance at December 31, 2020 50,000 $ 28.80 0.32 $ 781
Granted — $ — — $ —
Exercised (50,000) $ 28.80 — $ 993
Forfeited/canceled — $ — — $ —
Balance at September 30, 2021 — $ — 0.00 $ —
(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of the Company’s Class A common stock as of the respective date.

As of September 30, 2021, there were no unrecognized compensation costs related to outstanding stock options. For the three and nine months ended September 30, 2021 and 2020, there were no stock-based compensation expenses related to Stock Options.

Restricted Stock Units

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

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the Company granted ~~597,728~~629,903 RSUs of which ~~116,599~~137,729 are TSR RSUs and 220,437 are book value RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022:


		Unvested Restricted Stock Units				Unvested Restricted Stock Units
		Number of Shares	Weighted-Average Grant-Date Fair Value			Number of Shares	Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2020		1,466,060	$	42.03
Unvested at December 31, 2021					Unvested at December 31, 2021	1,571,415	$	43.88
Granted	Granted	597,728	$	47.64	Granted	629,903	$	48.06
Vested	Vested	(423,402)	$	41.91	Vested	(471,867)	$	42.23
Forfeited/canceled	Forfeited/canceled	(68,142)	$	49.36	Forfeited/canceled	(146,306)	$	40.03
Unvested at September 30, 2021		1,572,244	$	43.88
Expected to vest after September 30, 2021		1,442,144	$	44.20
Unvested at March 31, 2022					Unvested at March 31, 2022	1,583,145	$	46.11
Expected to vest after March 31, 2022					Expected to vest after March 31, 2022	1,399,784	$	46.74

As of ~~September 30, 2021,~~March 31, 2022, there was ~~$29.7~~$47.5 million of unrecognized compensation cost related to unvested stock-based payments granted to employees. Total unrecognized compensation cost will be recognized over a weighted-average remaining period of ~~1.86~~2.34 years.

~~Air Lease Corporation and Subsidiaries~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Note ~~10.~~11. Aircraft Under Management

As of ~~September 30, 2021,~~March 31, 2022, the Company managed 8987 aircraft across 3 aircraft management platforms. The Company managed 5148 aircraft through ~~3 separate entities under~~ its Thunderbolt platform, 34 aircraft through the Blackbird investment funds and 45 on behalf of ~~two~~ financial institutions.

The Company managed 34 aircraft on behalf of third-party investors, through 2 investment funds, Blackbird ~~Capital~~ I ~~LLC~~ and Blackbird ~~Capital II, LLC (“Blackbird II”).~~II. These funds invest in commercial jet aircraft and lease them to airlines throughout the world. The Company provides management services to these funds for a fee. As of ~~September 30, 2021,~~March 31, 2022, the Company's non-controlling interests in each fund ~~are~~were 9.5% and are accounted for under the equity method of accounting. The Company’s ~~investment~~investments in these funds aggregated ~~$72.9~~$62.4 million and ~~$52.6~~$73.2 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and isare included in Other assets on the Consolidated Balance Sheets. The Company continues to source aircraft investment opportunities for Blackbird II. As of November 4, 2021, Blackbird II has remaining equity capital commitments to acquire up to approximately $363.1 million in aircraft assets, for which the Company has committed to fund up to $10.3 million related to these potential investments.

Additionally, the Company continues to manage aircraft that it sells through its Thunderbolt platform. The Thunderbolt platform facilitates the sale of mid-life aircraft to investors while allowing the Company to continue the management of these aircraft for a fee. As of ~~September 30, 2021,~~March 31, 2022, the Company managed 5148 aircraft ~~through its Thunderbolt platform~~ across 3 separate transactions. The Company has non-controlling interests in 2 of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. The Company’s total investment in aircraft sold through its Thunderbolt platform was $8.8 million and $9.3 million as of ~~each of September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021, respectively and is included in Other assets on the Consolidated Balance Sheets.

~~Note 11. Update on COVID-19 Pandemic Impact~~

In response to the ~~COVID-19 pandemic, governments around~~sanctions against certain industry sectors and parties in Russia, in March 2022 the ~~world have implemented numerous measures~~Company terminated all of its leasing activities in Russia, including 8 aircraft from its managed fleet. As of May 5, 2022, 6 aircraft in the Company’s managed fleet remain in Russia. While the Company maintains title to ~~try to contain~~ the virus, including travel restrictions. These measures, coupled with a significant decrease in spending on travel as a result of COVID-19, have materially impacted airline traffic and operations throughout the world, including the Company's airline customers.

While domestic and regional airline traffic have improved since the industry low in April 2020, passenger traffic remains challenged, especially with respect to international and business air travel demand, due to ongoing cases of the virus, the emergence of new variants of the virus, vaccine availability and acceptance, and continuing travel restrictions.

~~On a case-by-case basis,~~aircraft, the Company has ~~agreed to accommodations, such as deferrals~~determined that it is unlikely it will regain possession of ~~lease payments or other lease concessions, with approximately 64% of its lessees since~~ the ~~pandemic began~~aircraft that have not been returned and that remain in the first quarter of 2020. The majority of these accommodations have been in the form of partial lease deferrals which, in many cases, include lease extensions. The Company has also entered into some lease restructurings. The impact of these restructurings decreased the Company’s total revenues by $26.6 million for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. The Company remains in active discussions with its airline customers and may continue to provide accommodations onRussia. As a ~~case-by-case basis.~~

While lease deferrals may delay the Company's receipt of cash, the Company generally recognizes lease revenue during the period even if a deferral is provided to the lessee, unless it determines collection is not reasonably assured. The Company monitors all lessees with past due lease payments and discusses relevant operational and financial issues facing those lessees in order to determine an appropriate course of action. 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. For a lessee whose revenue the Company recognizes on a cash basis, the Company will not recognize revenue from the lessee if the lease receivables from such lessee exceed the lease security package held by the Company. For those lessees whose revenue the Company recognizes on a cash basis, the Company ~~recorded $5.4 million in incremental revenue~~result, during the three months ended ~~September 30, 2021, primarily due to cash payments received from Vietnam Airlines. During the three months ended September 30, 2020,~~March 31, 2022, the Company ~~was not able~~recognized asset write-offs of $11.4 million related to ~~recognize $25.3 million~~its investments in ~~rental revenue from lessees on a cash basis of accounting because collection was not reasonably assured.~~

the managed platforms that own such aircraft.

1716

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 12. Net Investment in Sales-type Leases

As of March 31, 2022, the Company had 4 A320-200 aircraft on lease to an airline with terms that meet the criteria of being classified as a sales-type lease.

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


	March 31, 2022
Future minimum lease payments to be received	$	98,810
Estimated residual values of leased flight equipment	36,675
Less: Unearned income	(22,782)
Net Investment in Sales-type Leases	$	112,703

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


	(in thousands)
Years ending December 31,
2022 (excluding the three months ended March 31, 2022)	$	6,970
2023	9,840
2024	9,840
2025	9,840
2026	9,840
Thereafter	52,480
Total	$	98,810

Note ~~12.~~13. Subsequent Events

In October 2021, the Company issued 300,000 shares of 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), with an aggregate liquidation preference of $300.0 million ($1,000 per share). The Company will pay dividends on the Series C 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) 4.125% through December 15, 2026, and payable quarterly in arrears beginning on December 15, 2021, and (ii) the Five-year U.S. Treasury Rate as of the applicable reset dividend determination date plus a spread of 3.149% per reset period from December 15, 2026 and reset every five years and payable quarterly in arrears.

The Company may redeem shares of the Series C Preferred Stock at its option, in whole or in part, from time to time, on any dividend payment date on or after December 15, 2026, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Company may also redeem shares of the Series C Preferred Stock at the Company’s option under certain other limited conditions. The Series C Preferred Stock ranks on a parity with the Series A and Series B Preferred Stock.

On ~~November 3, 2021,~~May 4, 2022, the Company’s board of directors approved quarterly dividends for the Company’s Class A common stock and Series A, ~~Series~~ B and ~~Series~~ C Preferred Stock. The following table summarizes the details of the dividends that were declared:

Title of each class

Cash dividend per share

Record Date

Payment Date

Class A Common Stock

0.185

~~December 17, 2021~~June 7, 2022

~~January 5,~~July 8, 2022

Series A Preferred Stock

0.384375

~~November 30, 2021~~May 31, 2022

~~December~~June 15, ~~2021~~2022

Series B Preferred Stock

11.625

~~November 30, 2021~~May 31, 2022

~~December~~June 15, ~~2021~~2022

Series C Preferred Stock

~~7.104167~~10.3125

~~November 30, 2021~~May 31, 2022

~~December~~June 15, ~~2021~~2022

1817

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

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

Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing the most modern, fuel-efficient new technology commercial jet aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our ~~operating lease portfolio~~fleet to third-parties, including other leasing companies, financial services companies, airlines and other investors. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by ~~the~~ gains from aircraft sales and our management fees.

~~Third~~First Quarter Overview

As of March 31, 2022, the net book value of our fleet was $22.3 billion, compared to $22.9 billion as of December 31, 2021. During the three months ended ~~September 30, 2021,~~March 31, 2022, we purchased and took delivery of 16eight aircraft from our new order pipeline, one aircraft from the secondary market and wrote-off the net book value of 21 aircraft that remain in Russia, ending the period with a total of 370 aircraft in our ~~operating lease portfolio with a net book value of $22.1 billion.~~owned aircraft portfolio. The ~~weighted average lease term remaining on our operating lease portfolio was 7.0 years and the~~ weighted average age of our fleet was ~~4.4~~4.5 years and the weighted average lease term remaining was 7.0 years as of ~~September 30, 2021.~~March 31, 2022. Our ~~fleet grew by 8.5% based on net book value of $22.1 billion as of September 30, 2021, compared to $20.4 billion as of December 31, 2020. In addition, we had a~~ managed fleet ~~of 89~~was 87 aircraft as of ~~September 30, 2021,~~March 31, 2022 as compared to a managed fleet of 8192 aircraft as of December 31, ~~2020.~~2021. We have a globally diversified customer base comprised of ~~115~~114 airlines in 5960 countries as of ~~September 30, 2021.~~March 31, 2022. As of ~~November 4, 2021,~~May 5, 2022, all aircraft in our ~~operating lease portfolio,~~fleet, except for ~~one~~three aircraft, were subject to lease agreements or letters of ~~intent or lease agreements.~~intent.

During the quarter ended March 31, 2022, we increased our committed orderbook by entering into agreements with Boeing to purchase 50 aircraft, which includes the conversion of three 787-9 aircraft to 18 737 MAX aircraft. In addition, we canceled five aircraft in our orderbook that were slated for delivery in Russia. As of ~~September 30, 2021,~~March 31, 2022, we had ~~contractual~~ commitments to purchase ~~320~~451 aircraft from ~~Airbus~~Boeing and ~~Boeing~~Airbus for delivery through ~~2027,~~2028, with an estimated aggregate commitment of ~~$21.2~~$28.8 billion.

We ~~ended the third quarter of 2021 with $29.1 billion in committed minimum future rental payments and~~have placed approximately ~~96%~~97% of our committed orderbook on long-term leases for aircraft delivering through the end of 2023 and have placed ~~67%~~52% of our entire orderbook. ~~This includes $14.6~~We ended the first quarter of 2022 with $29.5 billion in committed minimum future rental payments, consisting of $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and ~~$14.5~~$15.4 billion in minimum future rental payments related to aircraft which will ~~be delivered during the remainder of 2021~~deliver between 2022 through ~~2025.~~2026.

We typically finance the purchase of aircraft and our business with available cash balances, internally generated funds, including through aircraft sales, preferred stock issuances, and debt financings. During the three months ended ~~September 30, 2021,~~March 31, 2022, we issued ~~$600.0~~$750.0 million in aggregate principal amount of ~~0.80%~~2.20% Medium-Term Notes due ~~2024,~~2027, and ~~$500.0~~$750.0 million in aggregate principal amount of ~~2.10%~~2.875% Medium-Term Notes due ~~2028.~~2032. In addition, we ended the ~~third~~first quarter of ~~2021~~2022 with an aggregate borrowing capacity under our ~~Revolving Credit Facility~~revolving credit facility of ~~$6.5~~$6.8 billion and total liquidity of ~~$8.4~~$8.3 billion. WeAs of March 31, 2022, we had total debt outstanding of ~~$17.8~~$18.0 billion, ~~at the end of the third quarter of 2021,~~ of which ~~95.0%~~95.1% was at a fixed rate and 99.2% was unsecured. ~~Our~~As of March 31, 2022, our composite cost of funds ~~decreased to 2.82% as of September 30, 2021 compared to 3.13% as of December 31, 2020.~~raised through debt financings was 2.77%.

Our total revenues for the quarter ended ~~September 30, 2021~~March 31, 2022 increased by ~~6.3%~~25.7% to ~~$524.5~~$596.7 million, compared to the quarter ended ~~September 30, 2020.~~ March 31, 2021. The increase in total revenues was primarily driven by the continued growth in our fleet, significantly lower cash basis and ~~an increase~~lease restructuring losses and the recognition of approximately $59.6 million in security deposits and maintenance reserve income resulting from the termination of our leasing activities in Russia as required by government sanctions.

During the first quarter of 2022, the industry continued to recover from the impact of COVID-19. As of March 31, 2022, we had $190.4 million in outstanding deferred rentals due to the impact of the COVID-19 pandemic as compared to $203.2 million as of December 31, 2021. Our collection rate and our lease utilization rate for the three months ended March 31, 2022 were 96.9% and

99.5%, respectively. Our collection rate is defined as the sum of cash collected from lease rentals and maintenance reserves, including cash recovered from outstanding receivables from previous periods, as a percentage of the total contracted receivables due during the period and is calculated after giving effect to lease deferral arrangements made as of March 31, 2022. The calculation of our collection rate includes cash received and due from lease rentals and maintenance reserves for the 21 aircraft previously included in our ~~cash collections.~~ owned fleet that remain in Russia through the date we terminated leasing activities. Lease utilization rate is calculated based on the number of days each aircraft, including the 21 aircraft previously included in our owned fleet that remain in Russia as of March 31, 2022, was subject to a lease or letter of intent during the period, weighted by the net book value of the aircraft.

During the three months ended ~~September 30, 2021, w~~eMarch 31, 2022, we recorded ~~$5.4~~a net loss attributable to shareholders of $479.4 million, in incremental revenue from our lessees on cash basis accounting, primarily due to cash payments received from Vietnam Airlines. During the three months ended September 30, 2020, we were not able to recognize $25.3 million in rental revenue from lessees on a cash basis of accounting because the ~~collection was not reasonably assured. In~~ ~~addition, the impact of lease restructurings decreased total revenues by approximately~~ ~~$26.6 million~~ ~~during the three months ended September 30, 2021~~ or $4.21 per diluted share, as compared to ~~the three months ended September 30, 2020~~. ~~Our~~ net income ~~available~~attributable to ~~common stockholders for~~shareholders of $80.2 million, or $0.70 per diluted share, in the ~~quarter ended September 30, 2021 was $100.0 million compared~~prior period. Despite the continued growth of our fleet, our net income attributable to ~~$116.6~~shareholders decreased due to the write-off of our interests in our owned and managed fleet that remain in Russia, totaling approximately $802.4 million for the quarter ended September 30, 2020. Our diluted earnings per share for the quarter ended September 30, 2021 was $0.87 compared to $1.02 for the quarter ended September 30, 2020. Despite the growth in our fleet and the increase in our collections across our fleet, our net income available to common stockholders and diluted earnings per share decreased due to lower aircraft sales, trading and other revenue during the period.March 31, 2022.

~~Our adjusted net income before income taxes excludes~~After excluding the effects of ~~certain non-cash items, one-time or non-recurring items, that are not expected to continue in~~ the ~~future~~write-off and certain other ~~items. Our~~adjustments described below, we recorded adjusted net income before income taxes for the three months ended ~~September 30, 2021 was $146.5~~March 31, 2022 of $200.9 million or ~~$1.28~~$1.76 per diluted ~~share, compared to $166.9~~share. This increased by approximately 71.6% over the prior period results of $117.1 million or ~~$1.47~~$1.03 per diluted share for the three months ended ~~September 30, 2020. Despite~~March 31, 2021. This was due to the continued growth inof our fleet and the increase in our collections, our adjusted net income before income taxes and adjusted diluted earnings per share before income taxes decreased due to lower aircraft sales, trading and other revenue during the period.revenues as discussed above. Adjusted net income before income taxes ~~adjusted pre-tax profit margin~~ 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 1 under the~~ “Results of Operations” ~~table~~below for a discussion of adjusted net income before income taxes ~~adjusted pre-tax profit margin~~ and adjusted diluted earnings per share before income taxes as non-GAAP measures and a reconciliation of these measures to net income ~~available~~attributable to common stockholders.

~~Update on COVID-19 Pandemic~~ Impact of Russia-Ukraine Conflict

~~While air travel has begun to recover~~In connection with the ongoing conflict between Russia and ~~travel restrictions are easing in certain locations where vaccination rates are rising, passenger traffic remains challenged, especially with respect to international~~Ukraine, the United States, European Union, United Kingdom and business air travel demand, due to ongoing cases of the virus, the emergence of new variants of the virus, vaccine availability and acceptance, and continuing travel restrictions. It is unclear how long and to what extent travel restrictions will remain in place and they may remain in place in some form for an extended period of time. As a result of these challenges and impacts, weothers have experienced weakened lease rates. However, we are beginning to witness increased lease rates and demand for our narrowbody and widebody aircraft. We anticipate that the long-term recovery of domestic and international air travel will occur in phases and vary by region and be driven by rising vaccination rates, and the efforts of countries working independently and collectively to develop new ways to reduce travel restrictions.

During the three months ended September 30, 2021, we continued to receive requests from our customers for accommodations such as deferrals of lease payments or other lease concessions. On a case-by-case basis, we have agreed to accommodations, such as deferrals of lease payments or other lease concessions, with approximately 64% of our lessees since the pandemic began in the first quarter of 2020. The majority of these accommodations have been in the form of partial lease deferrals which, in many cases, include lease extensions. As of November 4, 2021, $138.0 million or 54% of the total deferral amount has been repaid. As a result, as of November 4, 2021, our total deferrals, net of repayments, was $117.5 million. By the end of 2022, we expect approximately 77% of our total deferrals granted to date, including those that have already been repaid, will be repaid. Our net deferrals represented approximately 1.4% of our total available liquidity as of September 30, 2021. We have also entered into some lease restructurings. The impact of these restructurings decreased the Company’s total revenues by $26.6 million for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. We remain in active discussions with our airline customersimposed, and may continue to ~~provide accommodations~~impose, economic sanctions and export controls against certain industry sectors and parties in Russia. These sanctions include closures of airspace for aircraft operated by Russian controlled entities, bans on ~~a case-by-case basis.~~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.

O~~ur collection rate for~~In response to the ~~three~~sanctions, in March 2022 we terminated all of our leasing activities in Russia, consisting of 24 aircraft in our owned fleet, eight aircraft in our managed fleet and ~~nine months ended~~ ~~September 30, 2021~~ ~~was 94% and 89%, respectively. Our collection rate was higher for~~ the ~~three months ended September 30, 2021 because of cash payments received from Vietnam Airlines.~~ ~~Although our collection rate continues~~leasing activity relating to ~~improve, ongoing resurgences of the COVID-19 virus and its variants may continue to~~29 aircraft that have an impact on our collection rate. Collection rate is defined as the sum of cash collected from lease rentals and maintenance reserves, and includes cash recovered from outstanding receivables from previous periods, as a percentage of the total contracted receivables due for the period. The collection rate is calculated after giving effect to lease deferral arrangements made as of September 30, 2021. If collection from a lessee is not reasonably assured, we will not recognize rental income for the amounts due under our lease contracts and will recognize revenue for such lessees on a cash basis. During the three months September 30, 2021, we ~~recorded $5.4 million in incremental revenue~~yet delivered from our ~~lessees on cash basis accounting, primarily due~~orderbook, for which many have been subsequently placed. We also canceled five aircraft in our orderbook that were slated for delivery in Russia. Prior to ~~cash payments received from Vietnam Airlines. During~~ the ~~three months ended September 30, 2020,~~Russia-Ukraine conflict, we ~~were~~did not ~~able to recognize $25.3 million in rental revenue from lessees on a cash basis of accounting because collection was not reasonably assured. In the aggregate,~~have any aircraft on lease ~~that~~in Belarus and had one aircraft on lease in Ukraine, which is currently located outside of Ukraine. During the quarter, we ~~accounted~~recognized approximately $59.6 million in security deposits and maintenance reserve income resulting from the termination of our leasing activities in Russia. As of May 5, 2022, 21 aircraft previously included in our owned fleet and six aircraft previously included in our managed fleet were not returned and remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the termination of leasing activities and our repeated demands for ~~on a cash basis~~the return of our assets. The 21 aircraft previously included in our owned fleet represented ~~approximately 10.6%~~3.4% of our fleet by net book value as of ~~September 30, 2021.~~ ~~Depending on~~March 31, 2022 and provided approximately $18.0 million per quarter in rental revenue. In addition, our future revenues and cash flows have been impacted by the ~~future impact~~termination of our leasing activities of the ~~COVID-19 pandemic,~~aircraft in Russia, which we ~~could experience increased requests for lease deferrals or restructurings, declines~~have reflected in the table presented in Note 6 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

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

~~Our lease utilization rate for each of~~For more information regarding the ~~quarters ended September 30, 2021 and June 30, 2021 was 99.7%. The lease utilization rate is calculated based~~risks we face relating to the Russia-Ukraine conflict, see “Part II — Item 1A. Risk Factors,” in this Quarterly Report on the number of days each aircraft was subject to a lease or letter of intent during the period, weighted by the net book value of the aircraft. The severity and longevity of the COVID-19 pandemic on our airline customers could result in a decline in our lease utilization rate if our lessees return aircraft to us before the return date in their lease agreement or experience insolvency or initiate bankruptcy or similar proceedings that result in aircraft being returned to us. If this occurs, we may not be able to repositionForm 10-Q.

2019

the aircraft with other airlines as quickly as we have historically been able to do and we may incur increased costs in repositioning such aircraft. A decline in our lease utilization rate would adversely impact our financial results, including our revenue and profitability.

Although the pace of aircraft deliveries has improved during 2021 as compared to 2020, we continue to experience aircraft delivery delays related to supply chain disruptions resulting from COVID-19. While the commitment table in Note 4, “Commitments and Contingencies” above and the discussion of “Our Fleet” below reflect our contractual commitments, we are in ongoing discussions with Boeing and Airbus to determine the extent and duration of delivery delays. The delays could result in a cancellation of leases for those aircraft. While we have planned our capital expenditures for the remainder of 2021 and beyond based on currently expected delivery schedules, given the current industry circumstances, our aircraft delivery schedule could continue to be subject to material changes. In any case, our capital expenditures will be less than what we planned prior to the pandemic, which will slow our revenue growth, but will further improve our strong liquidity position. Accordingly, we had scaled back our aircraft sales activity during the first nine months of 2021, however, assuming aircraft deliveries continue to improve, we expect to resume selling aircraft in the fourth quarter.

The COVID-19 pandemic, including its impact on our industry, our customers and suppliers and our company, remains dynamic. Our business, results of operations and financial condition may continue to be negatively impacted by the COVID-19 pandemic and no assurance can be made regarding the ultimate impact of the COVID-19 pandemic.

We believe, however, that the airline industry will eventually recover and aircraft travel will return to historical levels over the long term. See “Aircraft Industry and Sources of Revenues” below. Further, we believe we are well positioned to offer solutions for airlines, because we can offer the ability to lease younger, more fuel-efficient aircraft at a time when airlines will be focused on reducing capital requirements and managing costs.

Our Fleet

References throughout this Quarterly Report on Form 10-Q to “our fleet” refer to the aircraft included in flight equipment subject to operating leases and do not include aircraft in our managed fleet or aircraft classified as net investments in sales-type leases unless the context indicates otherwise. Portfolio metrics of our fleet as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows:

September 30, 2021 December 31, 2020
Aggregate fleet net book value $ 22.1 billion $ 20.4 billion
Weighted-average fleet age(1)
4.4 years 4.1 years
Weighted-average remaining lease term(1)
7.0 years 6.9 years
Owned fleet 370 332
Managed fleet 89 81
Aircraft on order 320 361
Aircraft purchase options(2)
24 25
Total 803 799
Current fleet contracted rentals $ 14.6 billion $ 13.6 billion
Committed fleet rentals $ 14.5 billion $ 13.2 billion
Total committed rentals $ 29.1 billion $ 26.8 billion
(1) Weighted-average fleet age and remaining lease term calculated based on net book value of our operating lease portfolio.
(2) As of September 30, 2021 and December 31, 2020, we had options to acquire up to 24 and 25 Airbus A220 aircraft, respectively.


	March 31, 2022			December 31, 2021
Net book value of flight equipment subject to operating lease	$	22.3	billion	$	22.9	billion
Weighted-average fleet age(1)	4.5 years			4.4 years
Weighted-average remaining lease term(1)	7.0 years			7.2 years

Owned fleet	370			382
Managed fleet	87			92
Aircraft on order	451			431

Total	908			905

Current fleet contracted rentals	$	14.1	billion	$	14.8	billion
Committed fleet rentals	$	15.4	billion	$	16.1	billion
Total committed rentals	$	29.5	billion	$	30.9	billion


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

The following table sets forth the net book value and percentage of the net book value of our flight equipment subject to operating ~~lease~~leases in the indicated regions based on each airline’s principal place of business as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~
September 30, 2021 December 31, 2020
Region Net Book
Value % of Total Net Book
Value % of Total
(in thousands, except percentages)
Europe $ 7,126,653 32.2 % $ 6,413,557 31.4 %
Asia (excluding China) 5,750,040 26.0 % 5,513,498 27.1 %
China 2,984,951 13.5 % 2,766,543 13.5 %
The Middle East and Africa 2,425,414 11.0 % 2,356,418 11.6 %
U.S. and Canada 1,487,460 6.7 % 1,298,974 6.4 %
Central America, South America, and Mexico 1,407,559 6.4 % 1,074,792 5.3 %
Pacific, Australia, and New Zealand 928,620 4.2 % 956,568 4.7 %
Total $ 22,110,697 100.0 % $ 20,380,350 100.0 %
2021:


	March 31, 2022				December 31, 2021
Region	Net Book Value		% of Total		Net Book Value		% of Total
	(in thousands, except percentages)
Europe	$	6,746,925	30.2	%	$	7,439,993	32.5	%
Asia (excluding China)	6,109,545		27.4	%	5,952,981		26.0	%
China	2,902,867		13.0	%	2,934,224		12.8	%
The Middle East and Africa	2,422,660		10.9	%	2,447,919		10.7	%
U.S. and Canada	1,596,215		7.2	%	1,638,450		7.2	%
Central America, South America, and Mexico	1,596,112		7.2	%	1,566,133		6.8	%
Pacific, Australia, and New Zealand	909,988		4.1	%	919,304		4.0	%
Total	$	22,284,312	100.0	%	$	22,899,004	100.0	%

The following table sets forth the number of aircraft wein our owned fleet by aircraft type as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


		September 30, 2021			December 31, 2020				March 31, 2022			December 31, 2021
Aircraft type	Aircraft type	Number of Aircraft	% of Total		Number of Aircraft	% of Total		Aircraft type	Number of Aircraft	% of Total		Number of Aircraft	% of Total
Airbus A319-100	Airbus A319-100	1	0.3	%	1	0.3	%	Airbus A319-100	1	0.3	%	1	0.3	%
Airbus A320-200	Airbus A320-200	31	8.4	%	31	9.4	%	Airbus A320-200	28	7.5	%	31	8.1	%
Airbus A320-200neo	Airbus A320-200neo	23	6.2	%	19	5.7	%	Airbus A320-200neo	24	6.5	%	23	6.0	%
Airbus A321-200	Airbus A321-200	28	7.6	%	28	8.4	%	Airbus A321-200	24	6.5	%	26	6.8	%
Airbus A321-200neo	Airbus A321-200neo	62	16.7	%	49	14.8	%	Airbus A321-200neo	64	17.3	%	69	18.1	%
Airbus A330-200	Airbus A330-200	13	3.5	%	13	3.9	%	Airbus A330-200	13	3.4	%	13	3.4	%
Airbus A330-300	Airbus A330-300	8	2.2	%	8	2.4	%	Airbus A330-300	5	1.4	%	8	2.1	%
Airbus A330-900neo	Airbus A330-900neo	9	2.4	%	8	2.4	%	Airbus A330-900neo	10	2.7	%	9	2.4	%
Airbus A350-900	Airbus A350-900	12	3.2	%	11	3.3	%	Airbus A350-900	12	3.2	%	12	3.1	%
Airbus A350-1000	Airbus A350-1000	2	0.5	%	2	0.6	%	Airbus A350-1000	5	1.4	%	5	1.3	%
Boeing 737-700	Boeing 737-700	4	1.1	%	4	1.2	%	Boeing 737-700	4	1.1	%	4	1.0	%
Boeing 737-800	Boeing 737-800	88	23.8	%	88	26.5	%	Boeing 737-800	84	22.7	%	88	23.0	%
Boeing 737-8 MAX	Boeing 737-8 MAX	28	7.6	%	15	4.5	%	Boeing 737-8 MAX	30	8.1	%	28	7.3	%
Boeing 737-9 MAX	Boeing 737-9 MAX	3	0.8	%	—	—	%	Boeing 737-9 MAX	8	2.2	%	7	1.8	%
Boeing 777-200ER	Boeing 777-200ER	1	0.3	%	1	0.3	%	Boeing 777-200ER	1	0.3	%	1	0.3	%
Boeing 777-300ER	Boeing 777-300ER	24	6.5	%	24	7.2	%	Boeing 777-300ER	24	6.5	%	24	6.3	%
Boeing 787-9	Boeing 787-9	26	7.0	%	23	7.0	%	Boeing 787-9	26	7.0	%	26	6.8	%
Boeing 787-10	Boeing 787-10	6	1.6	%	6	1.8	%	Boeing 787-10	6	1.6	%	6	1.6	%
Embraer E190	Embraer E190	1	0.3	%	1	0.3	%	Embraer E190	1	0.3	%	1	0.3	%
Total	Total	370	100.0	%	332	100.0	%	Total	370	100.0	%	382	100.0	%

As of ~~September 30, 2021,~~March 31, 2022, we had contractual commitments to acquire a total of ~~320~~451 new aircraft, with an estimated aggregate purchase price (including adjustments for anticipated inflation) of $28.8 billion, for delivery through ~~2027~~2028 as follows:


		Estimated Delivery Years								Estimated Delivery Years
Aircraft Type	Aircraft Type	2021	2022	2023	2024	2025	Thereafter	Total	Aircraft Type	2022	2023	2024	2025	2026	Thereafter	Total
Airbus A220-300(1)		—	3	9	16	12	11	51
Airbus A220-100/300									Airbus A220-100/300	4	17	23	20	12	—	76
Airbus A320/321neo~~(2)~~(1)	Airbus A320/321neo~~(2)~~(1)	12	24	22	26	19	21	124	Airbus A320/321neo~~(2)~~(1)	24	24	26	23	32	64	193
Airbus A330-900neo	Airbus A330-900neo	1	8	4	—	—	—	13	Airbus A330-900neo	7	6	4	—	—	—	17
Airbus A350-900/1000	Airbus A350-900/1000	3	3	4	5	1	—	16	Airbus A350-900/1000	3	3	3	—	—	—	9
Boeing 737-7/8/9 MAX		8	29	16	28	7	—	88
Airbus A350F									Airbus A350F	—	—	—	—	2	5	7
Boeing 737-8/9 MAX									Boeing 737-8/9 MAX	25	31	35	18	16	—	125
Boeing 787-9/10	Boeing 787-9/10	1	10	4	10	3	—	28	Boeing 787-9/10	3	7	8	6	—	—	24
Total		25	77	59	85	42	32	320
Total(2)									Total(2)	66	88	99	67	62	69	451

(1) In addition to our commitments, as of September 30, 2021, we had options to acquire up to 24 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2026 and continue through 2028.
(2) Our Airbus A320/321neo aircraft orders include 31 long-range variants and 29 extra long-range variants.
(1) Our Airbus A320/321neo aircraft orders include 27 long-range variants and 49 extra long-range variants.									(1) Our Airbus A320/321neo aircraft orders include 27 long-range variants and 49 extra long-range variants.
(2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation.									(2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation.

Aircraft Delivery Delays

Pursuant to our purchase agreements with Boeing and Airbus, ~~for new aircraft,~~ we ~~and each manufacturer~~ agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, ~~and in~~however for the last several years, manufacturing delays have significantly ~~impacted~~delayed the planned purchases of our ~~actual delivery dates.~~

~~The worldwide grounding of the 737 MAX beginning in March 2019 has resulted in material~~aircraft on order with Boeing and Airbus. We are currently experiencing delivery delays ~~of those aircraft from our orderbook. The FAA~~with both Boeing and ~~EASA lifted their grounding order on November 18, 2020 and January 27, 2021, respectively. While~~Airbus aircraft. However, the majority of the 737 MAX in our owned fleet have resumed service, the 737 MAX still remains grounded in several jurisdictions. The grounding of the aircraft has caused airlines to adjust flight schedules, cancel flights, or keep older aircraft in service longer. We are unable to speculate as to when the grounding of the 737 MAX in the remaining countries and jurisdictions will be lifted.

~~Boeing continues to have a~~most significant ~~number of 737 MAX aircraft completed and stored in its inventory and~~delivery delays are ~~likely to continue as the~~with our aircraft ~~are prepared~~orders for ~~delivery.~~

As of September 30, 2021, we owned and leased 31 737 MAX aircraft and we had 88 737 MAX aircraft on order. With respect to the 737 MAX aircraft we own and lease, our airline customers are obligated to continue to make payments under the lease, irrespective of any difficulties the lessees may encounter, including an aircraft fleet grounding. However, the lease payments for some of our 737 MAX airline customers are in arrears.Boeing 787 aircraft.

During ~~the fourth quarter of~~ 2020, Boeing ~~identified~~began to experience manufacturing ~~related~~ issues on its 787 ~~aircraft. As a result,~~aircraft, which resulted in significant aircraft delivery delays. Boeing ~~suspended~~has halted 787 deliveries and has not indicated when they will resume. Accordingly, we have not taken delivery of ~~787 aircraft between October 2020 and March 2021. Boeing temporarily resumed 787 aircraft~~any 787s since the halting of the deliveries, in March 2021; however, in May 2021, deliveries were once again halted while the FAA completes its evaluation of Boeing’s inspection process. Manufacturing related issues in some 787 aircraft will require further modifications in order to resume deliveries. Boeing expects to maintain 787 production at a reduced rate of less than five per month until deliveries resume, and the timing of ~~resumption of~~ deliveries ~~remains uncertain. As such, we are not yet able to determine the impact of delivery delays.~~

~~As a result~~ of the ~~aforementioned items occurring with both the 737 MAX and 787~~ aircraft as of November 4, 2021, we anticipate that Boeing may continue to experience challenges in delivering these aircraft resulting in delivery delays on both the 737 MAX and 787 throughout the remainder of 2021 and delivery delays could potentially extend well into 2022 and beyond.

We have also experienced delivery delays for certain of our Airbus orderbook aircraft, including the A320neo family aircraft and, to a lesser extent, the A330neo aircraft. Airbus has advised us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2022. These delays have also impacted airline operations and the profitability of certain airlines.

~~We are also continuing to experience aircraft delivery delays as a result of supply chain disruption from the COVID-19 pandemic. While we have planned our capital expenditures~~ for the remainder of ~~2021~~this year and potentially beyond ~~based on currently expected delivery schedules, given the current industry circumstances, our aircraft delivery schedule could continue to be subject to material changes.~~remains uncertain.

Our leases typically provide that we and our airline customer each have a cancellation right related to certain aircraft delivery delays. Our purchase agreements with Boeing and Airbus also generally provide that we and the manufacturer each have cancellation rights that typically parallel our cancellation rights in our leases. Our leases and our purchase agreements with Boeing and Airbus generally provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause.

We expect that if the grounding of the 737 MAX continues in certain countries and jurisdictions for an extended time, or if there are significant 737 MAX delivery delays in countries and jurisdictions where the grounding has been lifted, more of our customers may seek to cancel their lease contracts for the 737 MAX with us. We believe that the majority ~~of our 737 MAX aircraft and some~~ of our 787 aircraft deliveries in our orderbook will be delayed more than 12 months, which would give us, our airline customers and Boeing the right to cancel these aircraft commitments. As of November 4, 2021, we have canceled our orders for 23 737 MAX aircraft and three 787 aircraft with Boeing. It is unclear at this point if we will cancel more of our 737 MAX or 787 delivery positionsWe are working with Boeing ~~or attempt~~and the respective airlines to find ~~replacement lessees. We are currently~~commercial solutions to prevent cancellation rights from being exercised and ultimately, to take delivery of these aircraft. However, as noted above, during the quarter ended March 31, 2022, we elected to cancel five aircraft in ~~discussions with Boeing regarding the mitigation of damages resulting from the~~our orderbook that were slated for delivery ~~delays associated with the 737 MAX and 787 aircraft that we own and have on order.~~in Russia.

The following table, which is subject to change based on Airbus and Boeing delivery delays, shows the number of new aircraft scheduled to be delivered as of ~~September 30, 2021,~~March 31, 2022, along with the lease placements of such aircraft as of ~~November 4, 2021.~~May 5, 2022. As noted above, we expect delivery delays for all aircraft deliveries in our orderbook. 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 the delivery delays.


Delivery Year	Delivery Year	Number of Aircraft	Number Leased	% Leased		Delivery Year	Number Leased	Number of Aircraft	% Leased
2021		25	25	100.0	%
2022	2022	77	77	100.0	%	2022	65	66	98.5	%
2023	2023	59	53	89.8	%	2023	85	88	96.6	%
2024	2024	85	47	55.3	%	2024	59	99	59.6	%
2025	2025	42	13	31.0	%	2025	25	67	37.3	%
2026						2026	2	62	3.2	%
Thereafter	Thereafter	32	—	—	%	Thereafter	—	69	—	%
Total	Total	320	215			Total	236	451

Aircraft Industry and Sources of Revenues

Our revenues are principally derived from operating leases with ~~scheduled and charter~~ airlines throughout the world. As of ~~September 30, 2021,~~March 31, 2022, we had a globally diversified customer base ~~comprised~~ of ~~115~~114 airlines in 5960 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.

Performance of the commercial airline industry is linked to global economic health and ~~development, which may be negatively impacted by economic~~development. Despite the disruption ~~macroeconomic conditions and geopolitical and policy risks, among other factors. COVID-19 continues to cause significant disruption~~caused to the commercial airline industry ~~resulting~~by the COVID-19 pandemic since early 2020, global air travel continues to recover and has accelerated in a ~~significant decline in air travel, negatively impacting airlines, aircraft manufacturers, and other related businesses. While the~~number of markets. The International Air Transport Association (“IATA”) ~~has~~ reported that passenger traffic has increased 67% year-over-year for the first nine months of 2021, air travel has still not recovered to 2019 levels primarily due to the ongoing impact of COVID-19. IATA reported that passenger traffic for the first nine months of 2021 is 62% below the comparable period during 2019, and air traffic forwas up 76% in the month of ~~September 2021 declined 53% from~~March 2022 relative to the ~~comparable 2019 level. While~~same month in the prior year, as domestic traffic continued to improve in most markets and ~~regional airline~~the international traffic recovery accelerated in markets where travel restrictions were relaxed. Domestic markets have ~~improved since the industry low in April 2020,~~experienced faster recovery than international markets given generally more relaxed travel restrictions. Global domestic passenger traffic in March 2022 improved 12% relative to the prior year, and was 23% lower than the same month in 2019. International traffic in March of 2022 rose 285% relative to the prior year, though it remains ~~challenged, especially with respect to international and to a somewhat lesser degree business air travel demand, due to ongoing cases of~~52% lower than the ~~virus, the emergence of new variants of the virus, vaccine availability and acceptance, and continuing travel restrictions. Air travel is recovering and travel restrictions are easing~~same month in ~~certain locations where vaccination rates are rising.~~2019. We believe widespread vaccination can reduce the impact of COVID-19 on the commercial airline industry; however, we cannot predict the pace of vaccinations or how long it will take the industry to recover. In addition, many countries are working on ways to further enable air travel despite the virus, including the use of digital certifications for COVID-19 vaccination ~~or negative test results for purposes of~~

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~~travel. We anticipate that~~progress, therapeutic treatments and the ~~long-term~~easing of travel restrictions will continue to support the recovery of ~~domestic~~air passenger traffic and ~~international air travel will occur in phases and vary by region and be driven by rising vaccination rates, easing travel restrictions and by~~ the ~~efforts of countries working independently and collectively to develop new ways to reduce travel restrictions.~~

~~We expect our~~commercial airline customers to continue to experience financial difficulties into early 2022 and potentially longer, which could result in additional requests for lease accommodations, requests to return aircraft early and lease defaults. We also continue to expect more airline reorganizations, liquidations, or other forms of bankruptcies, which may include our aircraft customers and result in the early return of aircraft or changes in our lease terms. As of the date of this filing, we had 15 aircraft across five airlines which were subject to various forms of insolvency proceedings.industry.

As of ~~September 30, 2021,~~March 31, 2022, approximately 74% of the net book value of our fleet are leased to flag carriers or airlines that have some form of governmental ownership; however, this does not guarantee our ability to collect contractual rent payments. We believe that having a large portion of the net book value of our fleet on lease with flag carriers or airlines with some form of governmental ownership, coupled with the overall quality of our aircraft and security deposits and maintenance reserves under our leases will help mitigate our customer default risk.

~~We expect the aviation industry to recover over time~~Impacts from the ~~impact of~~ COVID-19 pandemic, including border restrictions and other travel limitations, initially reduced demand for certain aircraft in our fleet resulting in weakened lease rates, most particularly on widebody aircraft. However, starting in the ~~long-term~~second half of 2021, we ~~remain optimistic. While~~experienced increased demand for our aircraft. The overall increased demand, coupled with rising interest rates and inflation, are providing catalysts for a rising lease rate environment and we ~~believe some~~continue to see this in marketplace. Lease rates can be influenced by several factors including impacts of epidemic diseases, changes in the competitive landscape of the aircraft ~~lessors may consolidate~~leasing industry, evolving international trade matters, geopolitical events, and aircraft delivery delays and therefore, are difficult to project or ~~cease operations as~~forecast.

As a result of continued manufacturing delays as discussed above in “Our Fleet,” our aircraft delivery schedule could continue to be subject to material changes and delivery delays could extend beyond 2022.

Global economic conditions are also impacting the aircraft leasing industry. Fuel costs have increased significantly in 2022 compared to pandemic welows and interest rates are also increasing. Our airline customers are also currently experiencing wage negotiations and/or pilot shortages, which may increase their operating costs. Also, as noted above, the Russia-Ukraine conflict has impacted global macroeconomic conditions. While these events have not impacted our lessees’ ability to make lease payments to date, if our lessees are not able to effectively manage increased operating costs, it could impact our financial results and cash flows.

We believe the aircraft leasing industry has remained resilient over time across a variety of global economic conditions and remain optimistic about the long-term fundamentals of our business. We expect the aviation industry to continue to recover from the impact of COVID-19. As a result of the COVID-19 pandemic, some airlines have accelerated their plans to retire older, less fuel-efficient aircraft that have higher operating and maintenance costs in the current ~~environment, and we~~environment. We anticipate that airlines will continue to accelerate the retirement of these types of aircraft, particularly if fuel prices remain elevated, ultimately increasing demand for newer aircraft over time. We also anticipate that when airlines need to add new aircraft to their fleet, they will increasingly elect to lease aircraft instead of purchasing aircraft to reduce capital requirements and manage other operating expenses, and that we will benefit from that trend. We expect a number of these trends to continue ~~for the remainder of 2021 and beyond.~~

~~We and airlines around the world have continued to experience delivery delays from Boeing and Airbus and have been impacted by the 737 MAX grounding, as discussed above~~ in “Our Fleet.” Aircraft manufacturer delays and the 737 MAX grounding have impacted the growth of our company as well as the growth of our airline customers, passenger growth and airline profitability and we expect this to continue. As a result of continued manufacturing delays and the impact of COVID-19, our aircraft delivery schedule could continue to be subject to material changes and delivery delays could potentially extend well into 2022 and beyond.

As a result of various impacts of COVID-19 including border restrictions and other travel limitations, we have seen reduced demand for certain aircraft in our fleet, which has resulted in weakened lease rates for these aircraft. This includes demand for and lease rates on widebody aircraft which have, in particular, been impacted by travel restrictions curtailing long-haul international travel. However, we are beginning to witness increased lease rates and demand for our narrowbody and widebody aircraft. Due to the grounding of the 737 MAX and other narrow body delivery delays, our fleet currently has a greater concentration of widebody aircraft than we typically target. It is unclear at this time what further impact on lease rates will ultimately result from the impact of COVID-19 on the airline industry, changes in the competitive landscape of the aircraft leasing industry, evolving international trade matters, and ongoing aircraft delays from Airbus and Boeing, among other items.

In October 2019, the U.S. government imposed a 10% tariff on new aircraft imported from Europe, including Airbus aircraft. In March 2020, the tariff was raised to 15%. In November 2020, the European Union (“E.U.”) imposed a 15% tariff on new aircraft imported into the E.U. from the U.S., including Boeing aircraft. In June 2021, the U.S. and the E.U. agreed to temporarily suspend all retaliatory tariffs related to new aircraft imports for five years. If tariffs are reinstated or other actions are taken with respect to trade relations between the U.S. and U.S. trading partners, it may impact our business, including by delaying deliveries of aircraft to our lessees and decreasing future demand for our orderbook aircraft.

Liquidity and Capital Resources

Overview

We ended the first quarter of 2022 with available liquidity of $8.3 billion which is comprised of unrestricted cash of $1.5 billion and undrawn balances under our unsecured revolving credit facility of $6.8 billion. We finance the purchase of aircraft and our business ~~with~~operations using available cash balances, internally generated funds, including through aircraft sales and trading activity, and an array of financing products. We ~~have structured ourselves with the goal~~aim to maintain investment-grade credit metrics and focus our debt financing strategy ~~has focused~~ on funding our business on an unsecured basis with primarily fixed-rate ~~debt.~~debt from public bond offerings. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to ~~another and also reduces structural subordination in our capital structure.~~another. We 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 variety of financing alternatives including unsecured public bonds, private capital, bank debt, secured financings and preferred stock ~~and secured markets provides us with~~issuances serves as a key advantage in managing our ~~liquidity and we have continued to access a number of these markets during the COVID-19 pandemic.~~liquidity. Aircraft delivery delays as a product of ~~the COVID-19 pandemic, the 737 MAX grounding and other~~ manufacturer delays are expected to further reduce our ~~capital requirements~~aircraft investment and debt financing needs for the next ~~nine~~six to twelve months and potentially beyond.

We had total debt outstanding of approximately $17.8 billion as of September 30, 2021 and $16.7 billion as of December 31, 2020. Our unsecured debt increased to $17.7 billion as of September 30, 2021 from $16.4 billion as of December 31, 2020. Our unsecured debt as a percentage of total debt increased to 99.2% as of September 30, 2021 from 98.2% as of December 31, 2020.

Our cash flows provided by operating activities increased by 29.5% or $211.8 million, to $929.4 million for the nine months ended September 30, 2021 as compared to $717.6 million for the nine months ended September 30, 2020. Despite the decrease in our net income, our cash flow provided by operating activities during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020 was higher primarily due to the growth of our fleet and an increase in our cash collections. Our cash flow used in investing activities was $2.2 billion for the nine months ended September 30, 2021, which resulted primarily from the purchase of aircraft. Our cash flow used in investing activities was $1.4 billion for the nine months ended September 30, 2020, which resulted primarily from the purchase of aircraft, partially offset by proceeds from our sales and trading activity. Our cash flow provided by financing activities was $1.4 billion for the nine months ended September 30, 2021, which resulted primarily from the issuance of unsecured notes and the issuance of our Series B preferred stock partially offset by the repayment of outstanding debt. Our cash flow provided by financing activities was $1.6 billion for the nine months ended September 30, 2020, which resulted primarily from the issuance of unsecured notes partially offset by the repayment of outstanding debt. The continued impact of COVID-19, including as a result of rent deferrals and other lease concessions made or that we may make in the future to our customers, may negatively affect our cash flow from operating activities in the future.

~~We ended the third quarter of 2021 with available liquidity of $8.4 billion, which is comprised of unrestricted cash of $1.9 billion and an available borrowing capacity under our~~ ~~Revolving Credit Facility~~ ~~of $6.5 billion. Our~~ ~~Revolving Credit Facility~~ ~~does not condition our ability to borrow on the lack of a material adverse effect to us or the general economy. A key component of the ongoing liquidity available to us is our~~ ~~Revolving Credit Facility, for which the substantial majority of the commitments mature in 2025. As of November 4, 2021, our~~ ~~Revolving Credit Facility~~ ~~is syndicated across 50 financial institutions from around various regions of the world, diversifying our reliance on any individual lending institution. We continue to utilize our~~ ~~Revolving Credit Facility~~ ~~in the normal course of business.~~

We have a balanced approach to capital allocation based on the following priorities, ranked in order 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 debt as our primary form of financing; and finally, in lockstep with the aforementioned priorities, returning excess cash to shareholders through our dividend policy as well as regular evaluation of share repurchases, as appropriate.

We ~~currently~~ended the first quarter of 2022 with total debt outstanding of $18.0 billion compared to $17.2 billion as of December 31, 2021. Our unsecured debt outstanding increased to $17.9 billion as of March 31, 2022 from $17.1 billion as of December 31, 2021. Our unsecured debt as a percentage of total debt was 99.2% as of March 31, 2022 and December 31, 2021, respectively.

Material Cash Sources and Requirements

We believe that we have sufficient liquidity from available cash balances, cash generated from ongoing operations, available borrowings under our ~~cash on hand, current debt arrangements~~unsecured revolving credit facility and 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 12 months. Our long-term debt financing strategy is focused on continuing to raise unsecured debt in the global bank and investment grade capital markets. Our material cash sources include:

•Unrestricted cash: We ended the first quarter of 2022 with$1.5 billion in unrestricted cash.

•Lease cash flows: We ended the first quarter of 2022 with $29.5 billion in committed minimum future rental payments comprised of $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and $15.4 billion in minimum future rental payments related to aircraft which will ~~be sufficient~~deliver between 2022 through 2026. These rental payments are a primary driver of our short and long-term operating-cash-flow. As of March 31, 2022, our minimum future rentals on non-cancellable operating leases for the remainder of 2022 was $1.5 billion. For further detail on our minimum future rentals for the remainder of 2022 and thereafter, see “Notes to ~~finance~~Consolidated Financial Statements” under “Item 1. Financial Statements” in this Quarterly Report on Form 10-Q.

•Unsecured revolving credit facility: As of May 5, 2022, our ~~operations~~$7.0 billion revolving credit facility is syndicated across 52 financial institutions from various regions of the world, diversifying our reliance on any individual lending institution. The final maturity for the facility is May 2026, although we expect to refinance this facility in advance of this date. The facility contains standard investment grade covenants and ~~fund~~does not condition our ability to borrow on the lack of a material adverse effect to us or the general economy.

•Senior unsecured bonds: We are a frequent issuer in the investment grade capital markets, opportunistically issuing unsecured bonds, primarily through our Medium-Term Note Program at attractive cost of funds. In 2022, we have issued $1.5 billion of Medium-Term Notes with a weighted average interest rate of 2.54% and we expect to have continued access to the investment grade bond market in the future.

•Aircraft sales: Proceeds from the sale of aircraft help supplement our liquidity position. Although we have scaled back our aircraft sales activity in recent years, assuming aircraft deliveries continue to improve, we are targeting to sell approximately $750.0 million in aircraft for 2022. We did not sell any aircraft in the first quarter of 2022.

•Other sources: In addition to the above, we generate liquidity through other sources of debt financing (including unsecured and secured bank term loans), issuances of preferred stock and cash received from security deposits and maintenance reserves.

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 ~~requirements~~obligations, potential acquisitions, and ~~capital expenditures, including aircraft acquisition over~~ the ~~next 12 months.~~

general economic environment in which we operate.

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Our material cash requirements as of March 31, 2022, are as follows:


	2022		2023		2024		2025		2026		Thereafter		Total
Long-term debt obligations	$	1,376,451	$	2,538,951	$	2,894,628	$	2,327,389	$	3,472,845	$	5,420,177	$	18,030,441
Interest payments on debt outstanding(1)	330,037		469,760		394,183		322,512		225,599		432,631		2,174,722
Purchase commitments(2)(3)	4,446,438		6,049,551		6,400,067		4,006,352		3,491,754		4,450,903		28,845,065
Total	$	6,152,926	$	9,058,262	$	9,688,878	$	6,656,253	$	7,190,198	$	10,303,711	$	49,050,228


(1) Future interest payments on floating rate debt are estimated using floating rates in effect at March 31, 2022.
(2) Purchase commitments reflect future Boeing and Airbus aircraft deliveries based on information currently available to us based on contractual documentation. Purchase commitments include only the costs of aircraft in our committed orderbook and do not include costs of aircraft that we have the right to purchase through memorandums of understanding or letters of intent.
(3) Due to the expected aircraft delivery delays, we expect approximately $1.1 billion of our purchase commitments will be subject to cancellation, at our option, by the time of delivery.

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. Based on our expected cash sources and requirements for the remainder of 2022, we expect that we will continue to access the capital markets for public bond offerings in 2022 to meet our cash requirements for aircraft deliveries and debt service obligations.

While we have planned our aircraft investments for the remainder of 2022 and beyond based on currently expected delivery schedules, given the current industry circumstances, our aircraft delivery schedule could continue to be subject to material changes. In any case, our aircraft investments will be less than what we planned prior to the pandemic, which will slow our revenue growth, but will further improve our strong liquidity position.

The actual delivery dates of the aircraft in our commitments table and expected time for payment of such aircraft may differ from our estimates and could be further impacted by the pace at which Boeing and Airbus can deliver aircraft, among other factors. We expect to make approximately $3.5 billion to $4.5 billion in aircraft investments in 2022, which reflects a high degree of uncertainty around the Boeing 787 program as well as other potential production delays.

As of ~~September 30, 2021,~~March 31, 2022, we were in compliance in all material respects with the covenants contained in our debt agreements. While a ratings downgrade would not result in a default under any of our debt agreements, it could adversely affect our ability to issue debt and obtain new financings, or renew existing financings, and it would increase the costs of certain financings. Our liquidity plans are subject to a number of risks and uncertainties, including those described in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021 and in this Quarterly Report.

Cash Flows

Our cash flows provided by operating activities increased by 8.7% or $20.4 million, to $254.7 million for the three months ended March 31, 2022 as compared to $234.3 million for the three months ended March 31, 2021. Our cash flow provided by operating activities during the three months ended March 31, 2022 increased due to the continued growth of our fleet and an increase in our cash collections as compared to the three months ended March 31, 2021. Our cash flow used in investing activities was $620.6 million for the three months ended March 31, 2022 and $549.7 million for the three months ended March 31, 2021, which resulted primarily from the purchase of aircraft. Our cash flow provided by financing activities was $769.6 million for the three months ended March 31, 2022, which resulted primarily from the issuance of senior unsecured notes, which were used in part to acquire aircraft investments. Our cash flow used in financing activities was $90.2 million for the three months ended March 31, 2021, which resulted primarily from the repayment of outstanding debt partially offset by the issuance of unsecured notes and the issuance of our Series B preferred stock in connection with acquiring aircraft investments.

Debt

Our debt financing was comprised of the following at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020 (in thousands, except percentages):~~2021:

September 30, 2021 December 31, 2020
Unsecured
Senior notes $ 17,490,582 $ 15,583,544
Term financings 170,975 811,550
Total unsecured debt financing 17,661,557 16,395,094
Secured
Term financings 129,851 276,032
Export credit financing 19,964 24,955
Total secured debt financing 149,815 300,987
Total debt financing 17,811,372 16,696,081
Less: Debt discounts and issuance costs (194,492) (177,743)
Debt financing, net of discounts and issuance costs $ 17,616,880 $ 16,518,338
Selected interest rates and ratios:
Composite interest rate(1)
2.82 % 3.13 %
Composite interest rate on fixed-rate debt(1)
2.93 % 3.26 %
Percentage of total debt at a fixed-rate 94.96 % 93.02 %
(1) This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs.


	March 31, 2022			December 31, 2021
	( in thousands, except percentages)
Unsecured
Senior notes	$	17,695,077		$	16,892,058
Term financings	195,275			167,000

Total unsecured debt financing	17,890,352			17,059,058
Secured
Term financings	123,452			126,660
Export credit financing	16,637			18,301
Total secured debt financing	140,089			144,961

Total debt financing	18,030,441			17,204,019
Less: Debt discounts and issuance costs	(205,716)			(181,539)
Debt financing, net of discounts and issuance costs	$	17,824,725		$	17,022,480
Selected interest rates and ratios:
Composite interest rate(1)	2.77		%	2.79		%
Composite interest rate on fixed-rate debt(1)	2.85		%	2.90		%
Percentage of total debt at a fixed-rate	95.1		%	94.8		%


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

Senior unsecured notes (including Medium-Term Note Program)

As of ~~September 30, 2021,~~March 31, 2022, we had ~~$17.5~~$17.7 billion in senior unsecured notes outstanding. As of December 31, ~~2020,~~2021, we had ~~$15.6~~$16.9 billion in senior unsecured notes outstanding.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, we issued approximately ~~$3.7~~$1.5 billion in aggregate principal amount of ~~Medium-Term Notes~~senior unsecured notes comprised of (i) $750.0 million in aggregate principal amount of ~~0.70%~~2.20% Medium-Term Notes due ~~2024,~~2027, and (ii) ~~$1.2 billion in aggregate principal amount of 1.875% Medium-Term Notes due 2026, (iii) $600.0~~$750.0 million in aggregate principal amount of 2.875% Medium-Term Notes due ~~2022 bearing interest at a floating rate~~2032.

For more information regarding our senior unsecured notes outstanding, see Note 2 of ~~three-month LIBOR plus 0.35%, (iv) $600.0 million~~Notes to Consolidated Financial Statements included in ~~aggregate principal amount~~Part III, Item 15 of ~~0.800% Medium-Term Notes due 2024, and (v) $500.0 million in aggregate principal amount of 2.100% Medium-Term Notes due 2028.~~our Annual Report on Form 10-K for the year ended December 31, 2021.

Unsecured revolving credit ~~facilities~~facility

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we did not have any amounts outstanding under our unsecured revolving credit facility (the “Revolving Credit Facility”).

~~Borrowings~~As of March 31, 2022, borrowings under ~~our~~the Revolving Credit Facility ~~accrue~~accrued interest at ~~either (a)~~ LIBOR plus a margin of 1.05% per ~~year or (b) an alternative base rate plus~~year. We are required to pay a ~~margin~~facility fee of ~~0.05%~~0.20% per year ~~subject,~~ in ~~each case,~~respect of total commitments under the Revolving Credit Facility. Interest rate and facility fees are subject to increases or decreases based on declines or improvements in the credit ratings for ~~our~~the Company’s debt. ~~We are required to pay a facility fee of 0.20% per year (also subject to increases or~~

~~decreases based on declines or improvements in the credit ratings for our debt) in respect of total commitments under our Revolving Credit Facility.~~ Borrowings under ~~our~~the Revolving Credit Facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.

In April ~~2021,~~2022, we amended and extended our Revolving Credit Facility through an amendment that, among other things, extended the final maturity date from May 5, ~~2023~~2025 to May 5, ~~2025~~2026 and, after giving effect to $65.0 million in commitments that

matured on May 5, ~~2021,~~2022, increased the total revolving commitments to approximately ~~$6.4~~$7.0 billion ~~representing an increase~~as of 6.7% from December 31, 2020. On September 10, 2021, we executed a new lender supplement to the Revolving Credit Facility, which increased the aggregate facility capacity by an additional $50.0 million increasing our total revolving commitments to $6.5 billion.May 5, 2022. As of ~~November 4, 2021,~~May 5, 2022, lenders held revolving commitments totaling approximately ~~$5.8~~$6.5 billion that mature on May 5, ~~2025,~~2026, commitments totaling ~~$575.0~~$132.5 million that mature on May 5, ~~2023~~2025 and commitments totaling ~~$105.0~~$400.0 million that mature on May 5, ~~2022.~~2023. The amended Revolving Credit Facility also ~~added~~replaced LIBOR with Term SOFR as the benchmark ~~replacement language with respect~~interest rate and made certain conforming changes related thereto. As a result of the amendment, borrowings under the amended Revolving Credit Facility accrue interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility) , plus a margin of 1.05% per year subject to ~~LIBOR largely~~increases or decreases based on ~~Alternative Reference Rates Committee LIBOR fallback language~~declines or improvements in the credit ratings for the Company’s debt.

The Revolving Credit Facility provides for certain covenants, including covenants that limit our subsidiaries’ ability to incur, create, or assume certain unsecured indebtedness in an aggregate amount over $100.0 million, and ~~amended~~our subsidiaries’ abilities to engage in certain mergers, consolidations, and asset sales. The Revolving Credit Facility also requires us to comply with certain financial maintenance covenants including ~~removing the maximum consolidated leverage ratio covenant, increasing the required level for~~ minimum consolidated ~~shareholders~~shareholders’ equity, minimum consolidated unencumbered assets, and ~~removing the mechanism for suspending the minimum~~an interest coverage ~~ratio if certain debt ratings are met.~~test. In addition, the Revolving Credit Facility contains customary events of default. In the case of an event of default, the lenders may terminate the commitments under the Revolving Credit Facility and require immediate repayment of all outstanding borrowings.

In September 2021, we entered into an uncommitted unsecured revolving credit facility with a total borrowing capacity of $75.0 million and a maturity date of June 22, 2022, bearing interest at a rate of LIBOR plus 0.90%. As of September 30, 2021, we did not have any amounts outstanding under this facility.Other Debt Financings

~~Secured~~From time to time, we enter into other debt ~~financing~~

financings such as unsecured term financings and secured term financings, including export credit. As of ~~September 30, 2021,~~March 31, 2022, the outstanding balance on ~~our secured~~other debt financings ~~including our export credit financing,~~ was ~~$149.8~~$335.4 million and we had pledged three aircraft as collateral with a net book value of ~~$224.7~~$219.7 million. As of December 31, ~~2020,~~2021, the outstanding balance on ~~our secured~~other debt financings ~~including our secured warehouse facility and our export credit financing,~~ was ~~$301.0~~$312.0 million and we had pledged 12three aircraft as collateral with a net book value of ~~$628.7~~$222.2 million.

Preferred equity

OnThe following table summarizes our preferred stock issued and outstanding as of March ~~5, 2019, we~~31, 2022 (in thousands, except for share amounts and percentages):


	Shares Issued and Outstanding as of March 31, 2022	Carrying Value as of March 31, 2022		Issue Date	Dividend Rate in Effect at March 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 Preferred Stock	10,600,000	$	850,000

For more information regarding our preferred stock issued ~~10,000,000 shares~~and outstanding, see Note 4 of ~~6.15% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”), $0.01 par value, with a liquidation preference of $25.00 per share. See “Item 1.~~Notes to Consolidated Financial Statements ~~– Note 8, Shareholders’ Equity,”~~included in ~~this Quarterly~~Part III, Item 15 of our Annual Report on Form ~~10-Q~~10-K for the ~~quarter~~year ended ~~September 30, 2021 for a discussion of the Series A Preferred Stock dividend rate.~~December 31, 2021.

OnThe following table summarizes the cash dividends that we paid during the three months ended March 2, 2021, we issued 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, with a liquidation preference of $1,000 per share. We will pay dividends on the preferred stock only when, as and if declared by our 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.

We may redeem shares of the Series B Preferred Stock at our option, in whole or in part, from time to time, on any dividend payment date on or after June 15, 2026, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. We may also redeem shares of the Series B Preferred Stock at our option under certain other limited conditions. The Series B Preferred Stock ranks on a parity with the Series A Preferred Stock and Series C Preferred Stock.

In October 2021, we issued 300,000 shares of 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), with an aggregate liquidation preference of $300.0 million ($1,000 per share). We will pay dividends on the Series C Preferred Stock only when, as and if declared by our 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) 4.125% through December 15, 2026, and payable quarterly in arrears beginning on December 15, 2021, and (ii) the Five-year U.S. Treasury Rate as of the applicable reset dividend determination date plus a spread of 3.149% per reset period from December 15, 2026 and reset every five years and payable quarterly in arrears.

We may redeem shares of the Series C Preferred Stock at our option, in whole or in part, from time to time, on any dividend payment date on or after December 15, 2026, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends. We may also redeem shares of the Series C Preferred Stock at our option under certain other limited conditions. The Series C Preferred Stock ranks on a parity with the Series A Preferred Stock and Series B Preferred Stock.

~~A cash dividend of $0.384375 per share~~31, 2022 on our outstanding Series A, ~~Preferred Stock was paid on each of March 15, 2021, June 15, 2021 and September 15, 2021. Additionally, a cash dividend of $13.304167 and $11.625 per share on our outstanding~~ Series B and Series C Preferred ~~Stock was paid on June 15, 2021 and September 15, 2021, respectively.~~Stock:

~~Potential Impact of LIBOR Transition~~

~~As of~~ ~~September 30, 2021~~, we had approximately $0.9 billion of floating rate debt outstanding that used LIBOR as the applicable reference rate to calculate the interest on such debt. Additionally, our Series A Preferred Stock will in the future accrue dividends at a floating rate determined by reference to LIBOR, if available. The Chief Executive of the U.K. Financial Conduct Authority (the “FCA”), which regulates LIBOR, has announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. However, for U.S. dollar LIBOR, it appears that the relevant date may be deferred to June 30, 2023 for certain tenors (including overnight and one, three, six, nine and 12 months), at which time the LIBOR administrator has indicated that it intends to cease publication of U.S. dollar LIBOR. Despite this potential deferral, the LIBOR administrator has advised that no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. These actions indicate that the continuation of U.S. dollar LIBOR on the current basis cannot and will not be guaranteed after June 30, 2023. Moreover, it is possible that U.S. dollar LIBOR will be discontinued or modified prior to June 30, 2023. The U.S. Federal Reserve and the Bank of England have begun publishing a Secured Overnight Funding Rate and a reformed Sterling Overnight Index Average, respectively, which are intended to serve as alternative reference rates to LIBOR. At this time, however, it is not possible to predict the establishment of any market-accepted alternative reference rates or any other reforms to LIBOR and the effect of any such changes.

Furthermore, while fallback provisions governing the calculation of floating rate interest and dividends in the event LIBOR is unavailable have recently been established by the Alternative Reference Rate Committee, these provisions are not reflected in many agreements. The lack of a market practice and inconsistency in fallback provisions is reflected across our floating rate debt and Series A Preferred Stock and the discontinuation of LIBOR could lead to unexpected outcomes that may vary between our various debt and equity securities that reference LIBOR to determine the rate in which interest or dividends, as applicable, accrue. For example, if LIBOR is discontinued, the fallback provisions contained in our credit facility, outstanding floating rate notes and the certificate of designations applicable to our Series A Preferred Stock are not the same among the various instruments and could lead to such debt or preferred stock bearing interest or paying dividends, as applicable, at, among other things, a rate of interest equal to the interest rate last in effect for which LIBOR was determinable, a floating rate determined in reference to a predetermined fallback reference rate or an alternative reference rate to be agreed upon by the parties to such agreement or that has been selected by the central bank, reserve bank, monetary authority or any similar institution, and a rate of interest representative of the cost to applicable lenders of funding their participation in the debt.

If the rate used to calculate interest on our outstanding floating rate debt that currently uses LIBOR and our Series A Preferred Stock were to increase by 1.0% either as a result of an increase in LIBOR or the result of the use of an alternative reference rate determined under the fallback provisions in the applicable debt if LIBOR is discontinued, we would expect to incur additional interest expense on such indebtedness as of ~~September 30, 2021~~ of approximately $9.0 million on an annualized basis. Further, if LIBOR is discontinued and there is no acceptable alternative reference rate, some of our floating rate debt, including certain senior unsecured notes issued under our Medium-Term Note Program, and our Series A Preferred Stock may effectively become fixed rate debt. As a result, the cost of this debt and equity would increase to us if and as interest rates decreased.

While we do not expect the potential impact of any LIBOR transition to have a material effect on our financial results based on our currently outstanding floating rate debt and equity, uncertainty as to the nature of potential changes to LIBOR, fallback provisions, alternative reference rates or other reforms could adversely impact our interest expense on our floating rate debt that currently uses LIBOR as the applicable reference rate and our Series A Preferred Stock. In addition, any alternative reference rates to LIBOR may result in interest or dividend payments that do not correlate over time with the payments that would have been made on our indebtedness or Series A Preferred Stock, respectively, if LIBOR was available in its current form. Further, the discontinuance or modification of LIBOR and uncertainty of an alternative reference rate may result in the increase in the cost of future indebtedness, which could have a material adverse effect on our financial condition, cash flow and results of operations. We intend to closely

~~monitor the financial markets and the use of fallback provisions and alternative reference rates in anticipation of the discontinuance or modification of LIBOR by June 30, 2023.~~

~~Credit Ratings~~

~~In July 2021, Fitch Ratings reaffirmed our long-term debt and corporate rating and upgraded our outlook to Stable. The following table summarizes our current credit ratings:~~

~~Rating Agency~~Payment Date

Title of each class

~~Long-term Debt~~

~~Corporate Rating~~

~~Outlook~~

~~Date of Last Ratings Action~~

~~Kroll Bond Ratings~~

A-

~~Negative~~

March ~~25, 2021~~

~~Standard and Poor's~~

~~BBB~~15, 2022

~~BBB~~(in thousands)

~~Stable~~Series A Preferred Stock

~~April 7, 2021~~

~~Fitch Ratings~~

~~BBB~~$3,844

~~BBB~~Series B Preferred Stock

~~Stable~~$3,487

~~July 1, 2021~~Series C Preferred Stock

$3,094

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 cost of our financings.

3027

~~Results of Operations~~

~~The following table presents our historical operating results for the three and nine month periods ended September 30, 2021 and 2020 (in thousands, except per share amounts and percentages):~~
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(unaudited)
Revenues
Rental of flight equipment $ 519,535 $ 468,443 $ 1,439,674 $ 1,462,999
Aircraft sales, trading and other 4,974 25,158 51,539 63,338
Total revenues 524,509 493,601 1,491,213 1,526,337
Expenses
Interest 114,659 107,519 346,244 317,753
Amortization of debt discounts and issuance costs 12,571 10,899 37,109 31,660
Interest expense 127,230 118,418 383,353 349,413
Depreciation of flight equipment 224,960 195,054 651,742 577,969
Selling, general and administrative 31,082 20,239 84,682 75,142
Stock-based compensation 6,692 6,635 18,800 14,956
Total expenses 389,964 340,346 1,138,577 1,017,480
Income before taxes 134,545 153,255 352,636 508,857
Income tax expense (27,208) (32,860) (67,785) (103,686)
Net income $ 107,337 $ 120,395 $ 284,851 $ 405,171
Preferred stock dividends (7,331) (3,843) (19,010) (11,531)
Net income available to common stockholders $ 100,006 $ 116,552 $ 265,841 $ 393,640
Earnings per share of common stock
Basic $ 0.88 $ 1.02 $ 2.33 $ 3.46
Diluted $ 0.87 $ 1.02 $ 2.32 $ 3.46
Other financial data
Pre-tax profit margin 25.7 % 31.0 % 23.6 % 33.3 %
Adjusted net income before income taxes(1)
$ 146,477 $ 166,946 $ 389,535 $ 543,942
Adjusted pre-tax profit margin(1)
27.9 % 33.8 % 26.1 % 35.6 %
Adjusted diluted earnings per share before income taxes(1)
$ 1.28 $ 1.47 $ 3.40 $ 4.77
Pre-tax return on common equity (trailing twelve months) 8.0 % 12.8 % 8.0 % 12.8 %
Adjusted pre-tax return on common equity (trailing twelve months)(1)
9.1 % 13.9 % 9.1 % 13.9 %

~~(1)~~Adjusted net income before income taxes (defined as net income available to common stockholders excluding the effects of certain non-cash items, one-time or non-recurring items, that are not expected to continue in the future and certain other items), adjusted pre-tax profit 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 available to common stockholders, pre-tax profit margin, earnings per share, diluted earnings per share and pre-tax return on common equity, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted pre-tax profit margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations.

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

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

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(unaudited)
Reconciliation of the numerator for adjusted pre-tax profit margin (net income available to common stockholders to adjusted net income before income taxes):
Net income available to common stockholders $ 100,006 $ 116,552 $ 265,841 $ 393,640
Amortization of debt discounts and issuance costs 12,571 10,899 37,109 31,660
Stock-based compensation 6,692 6,635 18,800 14,956
Provision for income taxes 27,208 32,860 67,785 103,686
Adjusted net income before income taxes $ 146,477 $ 166,946 $ 389,535 $ 543,942
Denominator for adjusted pre-tax profit margin:
Total revenues $ 524,509 $ 493,601 $ 1,491,213 $ 1,526,337
Adjusted pre-tax profit margin(a)
27.9 % 33.8 % 26.1 % 35.6 %
(a) Adjusted pre-tax profit margin is adjusted net income before income taxes divided by total revenues

~~The following table shows the reconciliation of the numerator for adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts):~~
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(unaudited)
Reconciliation of the numerator for adjusted diluted earnings per share (net income available to common stockholders to adjusted net income before income taxes):
Net income available to common stockholders $ 100,006 $ 116,552 $ 265,841 $ 393,640
Amortization of debt discounts and issuance costs 12,571 10,899 37,109 31,660
Stock-based compensation 6,692 6,635 18,800 14,956
Provision for income taxes 27,208 32,860 67,785 103,686
Adjusted net income before income taxes $ 146,477 $ 166,946 $ 389,535 $ 543,942
Denominator for adjusted diluted earnings per share:
Weighted-average diluted common shares outstanding 114,381,621 113,951,102 114,415,169 113,928,775
Adjusted diluted earnings per share before income taxes(b)
$ 1.28 $ 1.47 $ 3.40 $ 4.77
(b) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by weighted-average diluted common shares outstanding

~~The following table shows the reconciliation of pre-tax return on common equity to adjusted pre-tax return on common equity (in thousands, except percentages):~~
Trailing Twelve Months
September 30,
2021 2020
(unaudited)
Reconciliation of numerator for pre-tax return on common equity to adjusted pre-tax return on common equity:
Net income available to common stockholders $ 373,090 $ 554,732
Amortization of debt discounts and issuance costs 48,474 42,021
Stock-based compensation 21,472 20,767
Provision for income taxes 94,513 145,169
Adjusted net income before income taxes $ 537,549 $ 762,689
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 $ 5,727,323 $ 5,212,173
Common shareholders’ equity as of end of the period $ 6,033,783 $ 5,727,323
Average common shareholders’ equity $ 5,880,553 $ 5,469,748
Adjusted pre-tax return on common equity(c)
9.1 % 13.9 %
(c) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity

~~Three months ended September 30, 2021, compared to the three months ended September 30, 2020~~

~~Rental revenue~~

During the three months ended September 30, 2021, we recorded $519.5 million in rental revenue, an increase of $51.1 million or 10.9% as compared to $468.4 million for the three months ended September 30, 2020. The increase in total revenues is primarily driven by the continued growth of our fleet to 370 aircraft with a net book value of $22.1 billion as of September 30, 2021 from 308 aircraft with a net book value of $19.5 billion as of September 30, 2020. During the quarter, we recorded $5.4 million in incremental revenue from lessees on cash basis accounting primarily due to cash payments received from Vietnam Airlines. During the three months ended September 30, 2020, we were not able to recognize $25.3 million in rental revenue from lessees on a cash basis of accounting. ~~In addition, the impact of lease restructurings decreased total revenues by approximately~~ ~~$26.6 million~~ ~~during the three months ended~~ ~~September 30, 2021as compared to the three months ended September 30, 2020~~.

~~Aircraft sales, trading and other revenue~~

Aircraft sales, trading and other revenue totaled $5.0 million for the three months ended September 30, 2021 compared to $25.2 million for the three months ended September 30, 2020. For the three months ended September 30, 2021, we did not have any aircraft sales. The decrease in aircraft sales, trading and other revenue is primarily due to approximately $17.3 million in revenue recorded during the three months ended September 30, 2020, related to lease termination fees and revenue from the sale of one aircraft.

~~Interest expense~~

Interest expense totaled $127.2 million for the three months ended September 30, 2021 compared to $118.4 million for the three months ended September 30, 2020. The increase was primarily due to an increase in our aggregate debt Off‑balance driven by the growth of our fleet and the increase in our liquidity position, partially offset by a decrease in our composite interest rate. We ended the quarter with $8.4 billion in available liquidity. 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 expense~~

We recorded $225.0 million in depreciation expense of flight equipment for the three months ended September 30, 2021 compared to $195.1 million for the three months ended September 30, 2020. The increase in depreciation expense for the three months ended September 30, 2021, compared to the three months ended September 30, 2020, is primarily attributable to the acquisition of additional aircraft in our operating fleet during the last twelve months.

~~Selling, general and administrative expenses~~

We recorded selling, general and administrative expenses of $31.1 million for the three months ended September 30, 2021 compared to $20.2 million for the three months ended September 30, 2020. Selling, general and administrative expense as a percentage of total revenue increased to 5.9% for the three months ended September 30, 2021 compared to 4.1% for the three months ended September 30, 2020. The increase in selling, general and administrative expenses is primarily due to the increase in business activity. 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.

~~Net income available to common stockholders~~

For the three months ended September 30, 2021, we reported consolidated net income available to common stockholders of $100.0 million, or $0.87 per diluted share, compared to a consolidated net income available to common stockholders of $116.6 million, or $1.02 per diluted share, for the three months ended September 30, 2020. Despite the growth in our fleet and the increase in our cash collections, our net income available to common stockholders and diluted earnings per share decreased due to lower aircraft sales, trading and other revenue during the period.

~~Adjusted net income before income taxes~~

For the three months ended September 30, 2021, we recorded adjusted net income before income taxes of $146.5 million, or $1.28 per diluted share, compared to an adjusted net income before income taxes of $166.9 million, or $1.47 per diluted share, for the three months ended September 30, 2020. Despite the growth in our fleet and the increase in our cash collections, our adjusted net income before income taxes and adjusted diluted earnings per share before income taxes decreased due to lower aircraft sales, trading and other revenue during the period.

~~Nine months ended September 30, 2021, compared to the nine months ended September 30, 2020~~

~~Rental revenue~~

During the nine months ended September 30, 2021, we recorded $1.44 billion in rental revenue, a decrease of $23.3 million or by 1.6% as compared to $1.46 billion for the nine months ended September 30, 2020. Our fleet continued to grow, increasing to 370 aircraft with a net book value of $22.1 billion as of September 30, 2021 from 308 aircraft with a net book value of $19.5 billion as of September 30, 2020. Despite the growth in our fleet and the increase in our cash collections across our fleet, our revenues for the nine months ended September 30, 2021 decreased due to the impact of lease restructurings totaling $108.7 million and $84.9 million in rental revenue not recognized because lease receivables from lessees on a cash basis of accounting exceeded the lease security package held by us.

~~Aircraft sales, trading and other revenue~~

Aircraft sales, trading and other revenue totaled $51.5 million for the nine months ended September 30, 2021 compared to $63.3 million for the nine months ended September 30, 2020. During the nine months ended September 30, 2021, we recorded approximately $34.0 million related to the sale to a third party of certain unsecured claims related to Aeromexico’s insolvency proceedings and did not have any aircraft sales. During the nine months ended September 30, 2020, we recorded approximately $31.1 million related to lease termination fees and the sale of eight aircraft and also recorded $14.0 million in other revenue related to the repurchase of $206.1 million in aggregate principal amount of our Floating Rate Medium-Term Notes due 2021.

~~Interest expense~~

Interest expense totaled $383.4 million for the nine months ended September 30, 2021 compared to $349.4 million for the nine months ended September 30, 2020. The increase was primarily due to an increase in our aggregate debt balance driven by the growth of our fleet and the increase in our liquidity position, partially offset by a decrease in our composite interest rate. We ended the quarter with $8.4 billion in available liquidity. 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 expense~~

We recorded $651.7 million in depreciation expense of flight equipment for the nine months ended September 30, 2021 compared to $578.0 million for the nine months ended September 30, 2020. The increase in depreciation expense for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020, is primarily attributable to the acquisition of additional aircraft during the last twelve months.

~~Selling, general and administrative expenses~~

We recorded selling, general and administrative expenses of $84.7 million for the nine months ended September 30, 2021 compared to $75.1 million for the nine months ended September 30, 2020. Selling, general and administrative expense as a percentage of total revenue increased to 5.7% for the nine months ended September 30, 2021 compared to 4.9% for the nine months ended September 30, 2020. The increase in selling, general and administrative expenses is primarily due to the increase in business activity. 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.

~~Net income available to common stockholders~~

For the nine months ended September 30, 2021, we reported consolidated net income available to common stockholders of $265.8 million, or $2.32 diluted share, compared to a consolidated net income available to common stockholders of $393.6 million, or $3.46 diluted share, for the nine months ended September 30, 2020. The decrease in net income available to common stockholders and diluted earnings per share was primarily due to a decrease in total revenues and an increase in depreciation and interest expense from the growth of our fleet.

~~Adjusted net income before income taxes~~

For the nine months ended September 30, 2021, we recorded adjusted net income before income taxes of $389.5 million, or $3.40 per diluted share, compared to an adjusted net income before income taxes of $543.9 million, or $4.77 per diluted share, for the nine months ended September 30, 2020. Our adjusted net income before income taxes and adjusted diluted earnings per share before income taxes decreased for the nine months ended September 30, 2021 as compared to 2020, primarily due to the decrease in our revenues as described above and an increase in depreciation and interest expense.

Adjusted net income before income taxes and adjusted diluted earnings per share before income taxes are measures of financial and operational performance that are not defined by GAAP. See Note 1 under the “Results of Operations” table above for a discussion of adjusted net income before income taxes and adjusted diluted earnings per share before income taxes as non-GAAP measures and reconciliation of these measures to net income available to common stockholders.

~~Contractual Obligations~~

~~Our contractual obligations as of September 30, 2021, are as follows (in thousands):~~
2021 2022 2023 2024 2025 Thereafter Total
Long-term debt obligations $ 8,829 $ 2,733,882 $ 2,490,951 $ 2,890,800 $ 2,313,889 $ 7,373,021 $ 17,811,372
Interest payments on debt outstanding(1)
72,844 495,640 429,892 354,439 282,918 492,938 2,128,671
Purchase commitments(2)(3)
1,960,449 5,896,528 4,345,644 5,291,881 2,232,608 1,432,269 21,159,379
Operating leases 1,697 6,602 7,071 5,477 7,692 25,072 53,611
Total $ 2,043,819 $ 9,132,652 $ 7,273,558 $ 8,542,597 $ 4,837,107 $ 9,323,300 $ 41,153,033
(1) Future interest payments on floating rate debt are estimated using floating rates in effect at September 30, 2021.
(2) Purchase commitments reflect our estimate of future Boeing and Airbus aircraft deliveries based on information currently available to us. The actual delivery dates of such aircraft and expected time for payment of such aircraft may differ from our estimates and could be further impacted by the COVID-19 pandemic and the pace at which Boeing can deliver 737 MAX and 787 aircraft, among other factors. Purchase commitments include only the costs of aircraft in our committed orderbook and do not include costs of aircraft that we have the option to purchase or have the right to purchase through memorandums of understanding or letters of intent.
(3) Due to the expected aircraft delivery delays, we expect approximately $2.4 billion of our purchase commitments will be subject to cancellation, at our option, by the time of delivery.

~~The above table does not include any dividends we may pay on our preferred stock or common stock.~~

~~Off-Balance~~ Sheet Arrangements

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

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

Impact of LIBOR Transition

On March 5, 2021, the Chief Executive of the U.K. Financial Conduct Authority, which regulates LIBOR, publicly announced that no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021, and that publication of certain tenors of U.S. dollar LIBOR (including overnight and one, three, six and 12 months) will permanently cease after June 30, 2023. In the United States, efforts to identify a set of alternative U.S. dollar reference interest rates are ongoing, and the Alternative Reference Rate Committee (“ARRC”) has recommended the use of a Secured Overnight Funding Rate (“SOFR”). SOFR is different from LIBOR in that it is a backward-looking secured rate rather than a forward-looking unsecured rate. For cash products and loans, the ARRC has also recommended Term SOFR, which is a forward-looking SOFR based on SOFR futures and may in part reduce differences between SOFR and LIBOR.

As of March 31, 2022, we had approximately $0.9 billion of floating rate debt outstanding that used either one or three-month LIBOR as the applicable reference rate to calculate the interest on such debt, of which $80.5 million is set to mature after June 30, 2023. Additionally, our perpetual Series A Preferred Stock is set to accrue dividends at a floating rate determined by reference to three-month LIBOR, if available, beginning March 15, 2024. While all of our agreements governing LIBOR-linked debt obligations and Series A Preferred Stock obligations that are set to mature after June 30, 2023 contain LIBOR transition fallback provisions, the lack of a standard market practice and inconsistency in fallback provisions in recent years is reflected across the agreements governing our floating rate debt and Series A Preferred Stock. For our Series A Preferred Stock, if we determine there is no such alternative reference rate, then we must select an independent financial advisor to determine a substitute rate for LIBOR, and if an independent financial advisor cannot determine an alternative reference rate, the dividend rate, business day convention and manner of calculating dividends applicable during the fixed-rate period of the Series A Preferred Stock will be in effect.

In April 2022, we amended and extended our Revolving Credit Facility through an amendment that, among other things, replaced LIBOR with Term SOFR as the benchmark interest rate. After that amendment, borrowings under the amended Revolving Credit Facility accrue interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility), plus a margin of 1.05% per year subject to increases or decreases based on declines or improvements in the credit ratings for our debt.

The implementation of a substitute reference rate for the calculation of interest rates under our LIBOR linked debt and Series A Preferred Stock obligations may cause us to incur expenses in effecting the transition and may result in disputes with our lenders or holders of Series A Preferred Stock over the appropriateness or comparability to LIBOR of the substitute reference rate selected. However, we do not expect the LIBOR transition impact will have a material effect on our financial results based on our anticipated LIBOR linked outstanding debt and Series A Preferred Stock at June 30, 2023.

If the rate used to calculate interest on our outstanding floating rate debt that as of March 31, 2022, used LIBOR and our Series A Preferred Stock were to increase by 1.0% either as a result of an increase in LIBOR or the result of the use of an alternative reference rate determined under the fallback provisions in the applicable debt agreement when LIBOR is discontinued, we would expect to incur additional interest expense and preferred dividends of $8.9 million and $2.5 million, respectively on such indebtedness and our Series A Preferred Stock as of March 31, 2022 on an annualized basis.

Credit Ratings

In March 2022, Kroll Bond Ratings reaffirmed our issuer and long term debt ratings and upgraded our outlook from negative to stable. In April 2022, Standard and Poor’s reaffirmed our issuer and long term debt ratings and outlook. Our investment-grade corporate and long-term debt credit ratings help us to lower our cost of funds and broaden our access to attractively priced capital. The following table summarizes our current credit ratings:

Rating Agency

Long-term Debt

Corporate Rating

Outlook

Date of Last Ratings Action

Kroll Bond Ratings

A-

Stable

March 25, 2022

Standard and Poor's

BBB

Stable

April 21, 2022

Fitch Ratings

BBB

Stable

July 1, 2021

Results of Operations

The following table presents our historical operating results for the three months ended March 31, 2022 and 2021 (in thousands, except per share amounts and percentages):


	Three Months Ended March 31,
	2022			2021
	(unaudited)
Revenues
Rental of flight equipment	$	566,554		$	468,095
Aircraft sales, trading and other	30,107			6,732
Total revenues	596,661			474,827
Expenses
Interest	117,277			117,986
Amortization of debt discounts and issuance costs	13,198			12,025
Interest expense	130,475			130,011
Depreciation of flight equipment	235,308			208,965
Write-off of Russian fleet	802,352			—
Selling, general and administrative	32,762			26,914
Stock-based compensation	(2,523)			5,408
Total expenses	1,198,374			371,298
(Loss)/income before taxes	(601,713)			103,529
Income tax benefit/(expense)	132,720			(19,437)
Net (loss)/income	$	(468,993)		$	84,092
Preferred stock dividends	(10,425)			(3,844)
Net (loss)/income attributable to common stockholders	$	(479,418)		$	80,248

(Loss)/earnings per share of common stock
Basic	$	(4.21)		$	0.70
Diluted	$	(4.21)		$	0.70

Other financial data
Pre-tax margin	(100.8)		%	21.8		%
Pre-tax return on common equity (trailing twelve months)	(3.5)		%	9.9		%
Adjusted net income before income taxes(1)	$	200,889		$	117,118
Adjusted diluted earnings per share before income taxes(1)	$	1.76		$	1.03
Adjusted pre-tax margin(1)	33.7		%	24.7		%
Adjusted pre-tax return on common equity (trailing twelve months)(1)	11.8		%	11.0		%

(1)Adjusted net income before income taxes (defined as net income available 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 available to common stockholders, pre-tax margin, earnings per share, diluted earnings per share and pre-tax return on common equity, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common

equity are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations.

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

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


	Three Months Ended March 31,
	2022			2021
	(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	$	(479,418)		$	80,248
Amortization of debt discounts and issuance costs	13,198			12,025
Write-off of Russian fleet	802,352			—
Stock-based compensation	(2,523)			5,408
Provision for income taxes	(132,720)			19,437
Adjusted net income before income taxes	$	200,889		$	117,118

Denominator for adjusted pre-tax margin:
Total revenues	$	596,661		$	474,827
Adjusted pre-tax margin(a)	33.7		%	24.7		%


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

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


	Three Months Ended March 31,
	2022		2021
	(unaudited)
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	$	(479,418)	$	80,248
Amortization of debt discounts and issuance costs	13,198		12,025
Write-off of Russian fleet	802,352		—
Stock-based compensation	(2,523)		5,408


Provision for income taxes	(132,720)		19,437
Adjusted net income before income taxes	$	200,889	$	117,118



Denominator for adjusted diluted earnings per share:
Weighted-average diluted common shares outstanding	113,894,867		114,237,109
Potentially dilutive securities, whose effect would have been anti-dilutive	249,781		—
Adjusted weighted-average diluted common shares outstanding	114,144,648		114,237,109
Adjusted diluted earnings per share before income taxes(b)	$	1.76	$	1.03


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

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


	Trailing Twelve Months March 31,
	2022			2021
	(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	$	(151,507)		$	447,830
Amortization of debt discounts and issuance costs	51,793			44,522
Write-off of Russian fleet	802,352			—
Stock-based compensation	18,585			18,607

Provision for income taxes	(47,773)			115,330
Adjusted net income before income taxes	$	673,450		$	626,289

Denominator for adjusted pre-tax return on common equity:
Common shareholders’ equity as of beginning of the period	$	5,878,212		$	5,486,369
Common shareholders’ equity as of end of the period	$	5,519,585		$	5,878,212
Average common shareholders’ equity	$	5,698,899		$	5,682,291

Adjusted pre-tax return on common equity(c)	11.8		%	11.0		%


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

Three months ended March 31, 2022, compared to the three months ended March 31, 2021

Rental revenue

During the three months ended March 31, 2022, we recorded $566.6 million in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $39.7 million, as compared to $468.1 million, which included amortization expense related to initial direct costs, net of overhaul revenue of $2.4 million for the three months ended March 31, 2021. Our owned fleet increased to 370 aircraft with a net book value of $22.3 billion as of March 31, 2022 from 342 aircraft with a net book value of $20.8 billion as of March 31, 2021. The increase in total revenues was primarily driven by the growth in our fleet, significantly lower cash basis and lease restructuring losses, and the recognition of approximately $41.7 million in end of lease revenue resulting from the termination of our leasing activities in Russia. Finally, during the three months ended March 31, 2022, our cash basis and lease restructuring losses were $10.6 million in the aggregate, as compared to $85.7 million in the aggregate for the three months ended March 31, 2021.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $30.1 million for the three months ended March 31, 2022 compared to $6.7 million for the three months ended March 31, 2021. For the three months ended March 31, 2022, we recorded $17.9 million in forfeiture of security deposit income from the termination of our leasing activities in Russia. In addition, we recorded $4.4 million in gains from three sales-type lease transactions during the first quarter of 2022. For the three months ended March 31, 2021, we did not have any forfeiture of security deposit income.

Interest expense

Interest expense totaled $130.5 million for the three months ended March 31, 2022 compared to $130.0 million for the three months ended March 31, 2021. Our interest expense remained flat despite the increase in our average debt balance, which was offset by a decline in our composite cost of funds. As we expect to enter into a rising interest rate environment, accordingly, we expect our interest expense will increase as our average debt balance outstanding and our composite cost of funds increases in the future.

Depreciation expense

We recorded $235.3 million in depreciation expense of flight equipment for the three months ended March 31, 2022 compared to $209.0 million for the three months ended March 31, 2021. The increase in depreciation expense for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, is 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.

Write-off of Russian fleet

As further described above under “Impact of Russia-Ukraine Conflict”, in response to the sanctions against certain industry sectors and parties in Russia, in March 2022 we terminated all of our leasing activities in Russia, including 24 aircraft in our owned fleet and eight aircraft in our managed fleet. As of May 5, 2022, 21 aircraft in our owned fleet and six aircraft in our managed fleet remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the termination of leasing activities and our repeated demands for the return of our assets. While we maintain title to the 21 aircraft, we determined that it is unlikely we will regain possession of the aircraft that have not been returned and that remain in Russia. As such, during the three months ended March 31, 2022, we recorded a write-off of our interests in our owned and managed fleet that remain in Russia, totaling approximately $802.4 million. We are vigorously pursuing insurance claims to recover losses related to these aircraft. Collection, timing and amounts of any insurance recoveries is currently uncertain; however, once we determine that collectability is probable, we will record insurance recoveries at that time. We did not record any asset write-offs during the three months ended March 31, 2021.

Stock-based compensation

We recorded a net reversal of stock-based compensation expense of $2.5 million for the three months ended March 31, 2022 compared to stock-based compensation expense of $5.4 million for the three months ended March 31, 2021. The decrease in stock-based compensation relates to reductions in the underlying vesting estimates of certain book value RSUs as the performance criteria is no longer being considered probable of being achieved.

Selling, general and administrative expenses

We recorded selling, general and administrative expenses of $32.8 million for the three months ended March 31, 2022 compared to $26.9 million for the three months ended March 31, 2021. The increase in selling, general and administrative expenses was primarily due to the increase in business activity and increased expenses related to transition of aircraft. Selling, general and administrative expense as a percentage of total revenue decreased to 5.5% for the three months ended March 31, 2022 compared to 5.7% for the three months ended March 31, 2021.

Taxes

For the three months ended March 31, 2022 and March 31, 2021, we reported an effective tax rate exclusive of any discrete items of 19.3% and 18.8%, respectively. Due primarily to discrete items related to the write-off of our Russian fleet, we reported an overall effective tax rate of 22.1% for the three months ended March 31, 2022.

Net (loss)/income attributable to common stockholders

For the three months ended March 31, 2022, we reported consolidated net loss attributable to common stockholders of $479.4 million, or loss of $4.21 per diluted share, compared to a consolidated net income attributable to common stockholders of $80.2 million, or $0.70 per diluted share, for the three months ended March 31, 2021. Despite the growth of our fleet, our net income attributable to common stockholders and diluted earnings per share decreased due to the impact of the write-off of our Russian fleet.

Adjusted net income before income taxes

For the three months ended March 31, 2022, we recorded adjusted net income before income taxes of $200.9 million, or $1.76 per diluted share, compared to an adjusted net income before income taxes of $117.1 million, or $1.03 per diluted share, for the three months ended March 31, 2021. Our adjusted net income before income taxes and adjusted diluted earnings per share before income taxes increased for the three months ended March 31, 2022 as compared to 2021, primarily due to the continued growth of our fleet and the increase in revenues as discussed above.

Critical Accounting ~~Policies~~Estimates

Our critical accounting ~~policies~~estimates reflecting management’s estimates and judgments are described in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. We have reviewed recently adopted accounting pronouncements and determined that the adoption of such pronouncements is not expected to have a material impact, if any, on our Consolidated Financial Statements. Accordingly, there have been no material changes to critical accounting ~~policies~~estimates in the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in value of a financial instrument, caused by fluctuations in interest rates and foreign exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. We are exposed to the market risks described below.

Interest Rate Risk

The nature of our business exposes us to market risk arising from changes in interest rates. Changes, both increases and decreases, in our cost of borrowing, as reflected in our composite interest rate, directly impact our net income. Our lease rental stream is generally fixed over the life of our leases, whereas we have used floating-rate debt to finance a significant portion of our aircraft acquisitions. While our floating-rate debt balances have continued to decrease in recent years, we do have some exposure to changing interest rates as a result of our floating-rate debt. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had ~~$0.9 billion~~$892.9 million and ~~$1.2 billion~~$895.4 million in 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, 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 increase, 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-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 our composite interest ~~rates were~~rate was to increase by 1.0%, we would expect to incur additional interest expense on our existing indebtedness of approximately ~~$9.0~~$8.9 million and ~~$11.7~~$9.0 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, each on an annualized basis, which would put downward pressure on our operating margins. ~~Further, as of September 30, 2021, 95.0% of our total debt incurred interest at a fixed rate.~~

We also have interest rate risk on our forward lease placements. This is caused by us setting a fixed lease rate in advance of the delivery date of an aircraft. The delivery date is when a majority of the financing for an aircraft is arranged. We 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 which would adjust the final lease rate upward if certain benchmark interest rates are higher at the time of delivery of the aircraft than at the lease signing date.

Foreign Exchange Rate Risk

We attempt to minimize currency and exchange risks by entering into aircraft purchase agreements and a majority of lease agreements and debt agreements with U.S. dollars as the designated payment currency. Thus, most of our revenue and expenses are denominated in U.S. dollars. Approximately ~~0.4%~~0.3% and ~~0.6%~~0.5% of our lease revenues were denominated in foreign currency as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. 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.

In December 2019, we issued C$400.0 million in aggregate principal amount of 2.625% notes due 2024. We effectively hedged our foreign currency exposure on this transaction through a cross-currency swap that converts the borrowing rate to a fixed 2.535% U.S. dollar denominated rate. See Note 78 of Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details on the fair value of the swap.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”), and such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief 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 recognizes 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.

We have evaluated, under the supervision and with the participation of management, including the Certifying Officers, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of ~~September 30, 2021.~~March 31, 2022. Based on that evaluation, our Certifying Officers have concluded that our disclosure controls and procedures were effective at ~~September 30, 2021.~~March 31, 2022.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended ~~September 30, 2021~~March 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in litigation and claims incidental to the conduct of our business in the ordinary course. Our industry is also subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters. We are not presently a party to any enforcement proceedings or litigation related to regulatory compliance matters or material legal proceedings. We maintain insurance 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.

ITEM 1A. RISK FACTORS

~~There~~Other than stated below, there have been no material changes in our risk factors from those discussed under “Part I—Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The Russian invasion of Ukraine and the impact of sanctions imposed by the United States, European Union, United Kingdom and others has adversely affected our business and financial condition, results and cash flows through our termination of our leasing activities in Russia and our inability to repossess and therefore re-lease aircraft and may continue to have an impact on our business, including through increased fuel costs that may impact our lessee’s financial condition.

In connection with the ongoing conflict between Russia and Ukraine, the United States, European Union, United Kingdom and others have imposed, and may continue to impose, economic sanctions and export controls against certain industry sectors and parties in Russia. These sanctions include closures of airspace for aircraft operated by Russian 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 the sanctions, in March 2022 we terminated all of our leasing activities in Russia, consisting of 24 aircraft in our owned fleet, eight aircraft in our managed fleet and the leasing activity relating to 29 aircraft that have not yet delivered from our orderbook for which many have been subsequently placed. We also canceled five aircraft in our orderbook that were slated for delivery in Russia. As of May 5, 2022, 21 aircraft previously included in our owned fleet and six aircraft previously included in our managed fleet were not returned and remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the termination of leasing activities and our repeated demands for the return of our assets. The 21 aircraft previously included in our owned fleet represented 3.4% of our fleet by net book value as of March 31, 2022. In addition, our future revenues and cash flows have been impacted by the termination of our leasing activities of the aircraft in Russia, which we have reflected in the table presented in Note 6 to our consolidated financial statements included in this Quarterly Report on Form 10-Q. Our future revenues and cash flows may also be negatively impacted to the extent we cannot successfully re-lease the aircraft in our orderbook that were slated for placement with Russian airlines prior to their anticipated delivery dates on similar terms. It is also possible that overall lease rates could be temporarily reduced as a result of increased aircraft supply as lessors attempt to re-lease aircraft previously scheduled for delivery to Russia.

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

Prior to the Russia-Ukraine conflict, we did not have any aircraft on lease in Belarus and had one aircraft on lease in Ukraine, which is currently located outside of Ukraine. The Russia-Ukraine conflict has also impacted global macroeconomic conditions, including causing increases in fuel prices which may continue. Similarly, the Russia-Ukraine conflict has additionally created extreme volatility in the global capital markets and is expected to have further global economic consequences, including disruptions of the global supply chain. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate as a result of the conflict, it may make any debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. We cannot predict any future impacts that may occur as a result of the Russia-Ukraine conflict, including further sanctions, embargoes, regional instability, geopolitical shifts, the inability to obtain insurance coverage consistent with historical policies, or changes in fuel costs, interest rates, foreign currency, inflation, or other operating costs, such as increased insurance costs, manufacturing costs and raw materials costs. These factors could cause our lessees

to incur higher costs and to 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.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

On ~~May 5, 2021,~~February 15, 2022, our Board of Directors authorized us to repurchase up to ~~$100.0~~$150.0 million of outstanding shares of our Class A common stock (the ~~“Repurchase~~“2022 Repurchase Program”). Repurchases under the 2022 Repurchase Program, which ~~expires on December 31, 2021, may~~expired in April 2022 upon the repurchase of shares up to the authorized amount, could be made through open market purchases, privately negotiated transactions, tender offers, block purchases, structured or derivative transactions such as puts, calls, options, forwards, collars, accelerated share repurchase transactions (with or without collars), other equity contracts, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the 2022 Repurchase Program ~~may~~could also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act. The 2022 Repurchase Program ~~may~~could be modified, discontinued or suspended at any time.

The following table provides information about our purchases of our Class A common stock during the three months ended ~~September 30, 2021:~~March 31, 2022:

Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs (in thousands)
July 1-31, 2021 — $ — — $100,000
August 1-31, 2021 — — — $100,000
September 1-30, 2021 153,949 37.55 153,949 $94,219
Total July 1, 2021 - September 30, 2021 153,949 $ 37.55 153,949


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs (in thousands)
January 1-31, 2022	—	$	—	—	$	150,000
February 1-28, 2022	27,618	44.71		27,618	$	148,765
March 1-31, 2022	2,931,840	43.76		2,931,840	$	20,454
Total January 1, 2022 - March 31, 2022	2,959,458	$	43.77	2,959,458

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

Restated Certificate of Incorporation of Air Lease Corporation

ITEM 6. EXHIBITS
Incorporated by Reference
Exhibit 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
Fourth Amended and Restated Bylaws of Air Lease Corporation
8-K 001-35121 3.1 March 27, 2018
3.3
Certificate of Designations with respect to the 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, of Air Lease Corporation, dated March 4, 2019, filed with the Secretary of State of Delaware and effective on March 4, 2019.
8-A 001-35121 3.2 March 4, 2019
3.4
Certificate of Designations with respect to the 4.650% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, dated February 26, 2021, filed with the Secretary of State of Delaware and effective on February 26, 2021.
8-K 001-35121 3.1 March 2, 2021
3.5
Certificate of Designations with respect to the 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C, dated October 11, 2021, filed with the Secretary of State of Delaware and effective on October 11, 2021.
8-K 001-35121 3.1 October 13, 2021
4.1
Description of Capital Stock
Filed herewith
10.1
New Lender Supplement, dated September 10, 2021, to the Second Amended and Restated Credit Agreement, dated as of May 5, 2014, among Air Lease Corporation, as Borrower, the several lenders from time to time parties thereto, and JP Morgan Chase Bank, N.A., as Administrative Agent.
Filed herewith
10.2†
Amendment and Restatement Agreement of Letter Agreement No. 2 to Amendment No. 10 to the A330-900neo PA, dated July 7, 2021, for Model A330-900 Aircraft.
Filed herewith
10.3†
Amendment No. 4 to Agreement, dated July 7, 2021, between Air Lease Corporation and Airbus S.A.S.
Filed herewith
10.4†
Amendment No. 5 to the Agreement, dated July 31, 2021, between Air Lease Corporation and Airbus S.A.S..
Filed herewith
10.5†
Amendment No. 32 to A320 NEO Family Purchase Agreement, dated July 31, 2021, by and between Air Lease Corporation and Airbus S.A.S.
Filed herewith
10.6†
Supplemental Agreement No. 28 to Purchase Agreement No. PA-03791, dated July 22, 2021, by and between Air Lease Corporation and The Boeing Company
Filed herewith

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

3.1

S-1

333-171734

3.1

January 14, 2011

3.2

Fourth Amended and Restated Bylaws of Air Lease Corporation

8-K

001-35121

3.1

March 27, 2018

3.3

Certificate of Designations with respect to the 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, of Air Lease Corporation, dated March 4, 2019, filed with the Secretary of State of Delaware and effective on March 4, 2019.

8-A

001-35121

3.2

March 4, 2019

3.4

Certificate of Designations with respect to the 4.650% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, dated February 26, 2021, filed with the Secretary of State of Delaware and effective on February 26, 2021.

8-K

001-35121

3.1

March 2, 2021

3.5

Certificate of Designations with respect to the 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C, dated October 11, 2021, filed with the Secretary of State of Delaware and effective on October 11, 2021.

8-K

001-35121

3.1

October 13, 2021

4.1

Description of Capital Stock

10-Q

001-35121

4.1

November 4, 2021

10.1†

Amendment No. 2 to Agreement, dated January 11, 2022, between Airbus S.A.S. and Air Lease Corporation

Filed herewith

10.2†

Amendment No. 5 to the A220 Purchase Agreement, dated March 25, 2022, by and between Air Lease Corporation and Airbus Canada Limited Partnership.

Filed herewith

10.3†

Amendment No. 6 to Agreement, dated January 31, 2022, between Airbus S.A.S. and Air Lease Corporation

Filed herewith

10.4†

Amendment No. 6 to the Agreement, dated March 25, 2022 , between Air Lease Corporation and Airbus S.A.S.

Filed herewith

10.5†

Amendment No. 18 to the A350XWB Family Purchase Agreement, dated January 11, 2022, by and between Air Lease Corporation and Airbus S.A.S.

Filed herewith

10.6†

Amendment No. 3 5 to A320 NEO Family Purchase Agreement, dated February 3, 2022 , by and between Air Lease Corporation and Airbus S.A.S.

Filed herewith

10.7†

Amendment No. 3 6 to A320 NEO Family Purchase Agreement, dated March 25 , 2022, by and between Air Lease Corporation and Airbus S.A.S.

Filed herewith

10.8†

Supplemental Agreement No. 16 to Purchase Agreement No. PA-03659, dated February 16, 2022, by and between Air Lease Corporation and The Boeing Company

Filed herewith

10.9†

Supplemental Agreement No. 30 to Purchase Agreement No. PA-03791, dated February 16, 2022, by and between Air Lease Corporation and The Boeing Company

Filed herewith

10.10

Supplemental Agreement No. 3 1 to Purchase Agreement No. PA-03791, dated March 31, 2022 , by and between Air Lease Corporation and The Boeing Company

Filed herewith

3938

~~Certification of the Chief Executive Officer and President Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~Incorporated by Reference~~

~~Exhibit Number~~

~~Exhibit Description~~

~~Form~~

~~File No.~~

~~Exhibit~~

~~Filing Date~~

~~31.1~~

~~Filed herewith~~

~~31.2~~

~~Certification of the Executive Vice President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~Filed herewith~~

~~32.1~~

~~Certification of the Chief Executive Officer and President Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).~~

~~Furnished herewith~~

~~32.2~~

Certification of the Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

~~Furnished herewith~~

~~101.INS~~

~~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)~~

~~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~~

~~The cover page from Air Lease Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL and contained in Exhibit 101~~

†

The Company has omitted portions of the referenced exhibit pursuant to Item 601(b) of Regulation S-K because it (a) is not material and (b) is the type of information that the Company both customarily and actually treats as private and confidential.

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

10.11

Seventh Amendment and Extension Agreement, dated April 26, 2022, to the Second Amended and Restated Credit Agreement, dated as of May 5, 2014 among Air Lease Corporation, as Borrower, the several lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

8-K

001-35121

10.1

April 27, 2022

31.1

Certification of the Principal Exec utive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

31.2

Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

32.1

Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Furnished herewith

32.2

Certification of the Chief Financial Officer P ursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

Furnished herewith

101.INS

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)

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

The cover page from Air Lease Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL and contained in Exhibit 101

†

4039