Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-35121 | |
Entity Registrant Name | AIR LEASE CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-1840403 | |
Entity Address, Address Line One | 2000 Avenue of the Stars, Suite 1000N | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90067 | |
City Area Code | 310 | |
Local Phone Number | 553-0555 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 113,778,906 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001487712 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | AL | |
Security Exchange Name | NYSE | |
Series A Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A | |
Trading Symbol | AL PRA | |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 1,238,569 | $ 317,488 |
Restricted cash | 23,568 | 20,573 |
Flight equipment subject to operating leases | 22,671,435 | 21,286,154 |
Less accumulated depreciation | (3,154,939) | (2,581,817) |
Flight equipment subject to operating leases, net | 19,516,496 | 18,704,337 |
Deposits on flight equipment purchases | 1,634,152 | 1,564,188 |
Other assets | 1,191,980 | 1,102,569 |
Total assets | 23,604,765 | 21,709,155 |
Liabilities and Shareholders' Equity | ||
Accrued interest and other payables | 401,443 | 516,497 |
Debt financing, net of discounts and issuance costs | 15,180,145 | 13,578,866 |
Security deposits and maintenance reserves on flight equipment leases | 1,054,757 | 1,097,061 |
Rentals received in advance | 140,228 | 143,692 |
Deferred tax liability | 850,869 | 749,495 |
Total liabilities | 17,627,442 | 16,085,611 |
Shareholders' Equity | ||
Paid-in capital | 2,788,490 | 2,777,601 |
Retained earnings | 3,188,566 | 2,846,106 |
Accumulated other comprehensive loss | (971) | (1,397) |
Total shareholders' equity | 5,977,323 | 5,623,544 |
Total liabilities and shareholders' equity | 23,604,765 | 21,709,155 |
Series A Preferred Stock | ||
Shareholders' Equity | ||
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,000,000 shares of 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (aggregate liquidation preference of $250,000) issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 100 | 100 |
Class A Common Stock | ||
Shareholders' Equity | ||
Common Stock | 1,138 | 1,134 |
Class B Non-Voting Common Stock | ||
Shareholders' Equity | ||
Common Stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 10,000,000 | 10,000,000 |
Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 |
Series A liquidation preference | $ 250,000 | $ 250,000 |
Series A Preferred Stock | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 10,000,000 | 10,000,000 |
Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 |
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock | 6.15% | 6.15% |
Series A liquidation preference | $ 250,000 | $ 250,000 |
Class A Common Stock | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized shares | 500,000,000 | 500,000,000 |
Common Stock, issued shares | 113,778,906 | 113,350,267 |
Common Stock, outstanding shares | 113,778,906 | 113,350,267 |
Class B Non-Voting Common Stock | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized shares | 10,000,000 | 10,000,000 |
Common Stock, issued shares | 0 | 0 |
Common Stock, outstanding shares | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | ||||
Rental of flight equipment | $ 468,443 | $ 492,869 | $ 1,462,999 | $ 1,412,478 |
Aircraft sales, trading and other | 25,158 | 38,033 | 63,338 | 55,870 |
Total revenues | 493,601 | 530,902 | 1,526,337 | 1,468,348 |
Expenses | ||||
Interest | 107,519 | 104,637 | 317,753 | 290,681 |
Amortization of debt discounts and issuance costs | 10,899 | 9,078 | 31,660 | 26,330 |
Interest expense | 118,418 | 113,715 | 349,413 | 317,011 |
Depreciation of flight equipment | 195,054 | 183,788 | 577,969 | 514,948 |
Selling, general and administrative | 20,239 | 34,715 | 75,142 | 92,188 |
Stock-based compensation | 6,635 | 4,897 | 14,956 | 14,934 |
Total expenses | 340,346 | 337,115 | 1,017,480 | 939,081 |
Income before taxes | 153,255 | 193,787 | 508,857 | 529,267 |
Income tax expense | (32,860) | (38,000) | (103,686) | (107,081) |
Net income | 120,395 | 155,787 | 405,171 | 422,186 |
Preferred stock dividends | (3,843) | (3,844) | (11,531) | (8,115) |
Net income available to common stockholders | 116,552 | 151,943 | 393,640 | 414,071 |
Other Comprehensive Income/(Loss): | ||||
Change in foreign currency translation adjustment | (5,637) | 7,601 | ||
Change from current period hedged transaction | 7,395 | (7,086) | ||
Total tax expense on other comprehensive income/loss | (378) | (89) | ||
Other Comprehensive income available for common stockholders, net of tax | 1,380 | 426 | ||
Total comprehensive income available for common stockholders | $ 117,932 | $ 151,943 | $ 394,066 | $ 414,071 |
Earnings per share of common stock: | ||||
Basic (in dollars per share) | $ 1.02 | $ 1.36 | $ 3.46 | $ 3.71 |
Diluted (in dollars per share) | $ 1.02 | $ 1.34 | $ 3.46 | $ 3.67 |
Weighted-average shares outstanding | ||||
Basic (in shares) | 113,778,533 | 112,133,556 | 113,647,585 | 111,511,960 |
Diluted (in shares) | 113,951,102 | 113,263,396 | 113,928,775 | 112,837,526 |
Dividends declared per share of common stock | $ 0.15 | $ 0.13 | $ 0.45 | $ 0.39 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Class A Common StockCommon Stock | Preferred Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Total |
Balance at Dec. 31, 2018 | $ 1,110 | $ 2,474,238 | $ 2,331,552 | $ 4,806,900 | ||
Balance (in shares) at Dec. 31, 2018 | 110,949,850 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon vesting of restricted stock units and upon exercise of options | $ 2 | 439 | 441 | |||
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares) | 263,218 | |||||
Issuance of preferred stock | $ 100 | 242,141 | 242,241 | |||
Issuance of preferred stock (in shares) | 10,000,000 | |||||
Stock-based compensation | 4,174 | 4,174 | ||||
Cash dividends | (14,445) | (14,445) | ||||
Tax withholding related to vesting of restricted stock units and exercise of stock options | $ (1) | (3,587) | (3,588) | |||
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares) | (94,899) | |||||
Net income | 138,094 | 138,094 | ||||
Balance at Mar. 31, 2019 | $ 1,111 | $ 100 | 2,717,405 | 2,455,201 | 5,173,817 | |
Balance (in shares) at Mar. 31, 2019 | 111,118,169 | 10,000,000 | ||||
Balance at Dec. 31, 2018 | $ 1,110 | 2,474,238 | 2,331,552 | 4,806,900 | ||
Balance (in shares) at Dec. 31, 2018 | 110,949,850 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Net income | $ 422,186 | |||||
Balance at Sep. 30, 2019 | $ 1,127 | $ 100 | 2,758,928 | 2,702,018 | 5,462,173 | |
Balance (in shares) at Sep. 30, 2019 | 112,701,349 | 10,000,000 | ||||
Balance at Mar. 31, 2019 | $ 1,111 | $ 100 | 2,717,405 | 2,455,201 | 5,173,817 | |
Balance (in shares) at Mar. 31, 2019 | 111,118,169 | 10,000,000 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon vesting of restricted stock units and upon exercise of options | $ 6 | 10,791 | 10,797 | |||
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares) | 547,957 | |||||
Issuance of preferred stock | (111) | (111) | ||||
Dividends declared on preferred stock | (4,271) | (4,271) | ||||
Stock-based compensation | 5,863 | 5,863 | ||||
Cash dividends | (14,516) | (14,516) | ||||
Net income | 128,305 | 128,305 | ||||
Balance at Jun. 30, 2019 | $ 1,117 | $ 100 | 2,733,948 | 2,564,719 | 5,299,884 | |
Balance (in shares) at Jun. 30, 2019 | 111,666,126 | 10,000,000 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon vesting of restricted stock units and upon exercise of options | $ 11 | 20,584 | 20,595 | |||
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares) | 1,047,695 | |||||
Dividends declared on preferred stock | (3,844) | (3,844) | ||||
Stock-based compensation | 4,897 | 4,897 | ||||
Cash dividends | (14,644) | (14,644) | ||||
Tax withholding related to vesting of restricted stock units and exercise of stock options | $ (1) | (501) | (502) | |||
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares) | (12,472) | |||||
Net income | 155,787 | 155,787 | 155,787 | |||
Balance at Sep. 30, 2019 | $ 1,127 | $ 100 | 2,758,928 | 2,702,018 | 5,462,173 | |
Balance (in shares) at Sep. 30, 2019 | 112,701,349 | 10,000,000 | ||||
Balance at Dec. 31, 2019 | $ 1,134 | $ 100 | 2,777,601 | 2,846,106 | (1,397) | 5,623,544 |
Balance (in shares) at Dec. 31, 2019 | 113,350,267 | 10,000,000 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon vesting of restricted stock units and upon exercise of options | $ 4 | 2,021 | 2,025 | |||
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares) | 480,978 | |||||
Dividends declared on preferred stock | (3,844) | (3,844) | ||||
Stock-based compensation | 4,429 | 4,429 | ||||
Cash dividends | (17,045) | (17,045) | ||||
Change in foreign currency translation adjustment and from current period hedged transactions | (1,478) | (1,478) | ||||
Tax withholding related to vesting of restricted stock units and exercise of stock options | $ (2) | (8,411) | (8,413) | |||
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares) | (191,334) | |||||
Net income | 137,151 | 137,151 | ||||
Balance at Mar. 31, 2020 | $ 1,136 | $ 100 | 2,775,640 | 2,962,368 | (2,875) | 5,736,369 |
Balance (in shares) at Mar. 31, 2020 | 113,639,911 | 10,000,000 | ||||
Balance at Dec. 31, 2019 | $ 1,134 | $ 100 | 2,777,601 | 2,846,106 | (1,397) | 5,623,544 |
Balance (in shares) at Dec. 31, 2019 | 113,350,267 | 10,000,000 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Change in foreign currency translation adjustment and from current period hedged transactions | 426 | |||||
Net income | 405,171 | |||||
Balance at Sep. 30, 2020 | $ 1,138 | $ 100 | 2,788,490 | 3,188,566 | (971) | 5,977,323 |
Balance (in shares) at Sep. 30, 2020 | 113,778,906 | 10,000,000 | ||||
Balance at Mar. 31, 2020 | $ 1,136 | $ 100 | 2,775,640 | 2,962,368 | (2,875) | 5,736,369 |
Balance (in shares) at Mar. 31, 2020 | 113,639,911 | 10,000,000 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon vesting of restricted stock units and upon exercise of options | $ 2 | 2,500 | 2,502 | |||
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares) | 144,417 | |||||
Dividends declared on preferred stock | (3,844) | (3,844) | ||||
Stock-based compensation | 3,892 | 3,892 | ||||
Cash dividends | (17,067) | (17,067) | ||||
Change in foreign currency translation adjustment and from current period hedged transactions | 524 | 524 | ||||
Tax withholding related to vesting of restricted stock units and exercise of stock options | (200) | (200) | ||||
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares) | (6,605) | |||||
Net income | 147,625 | 147,625 | ||||
Balance at Jun. 30, 2020 | $ 1,138 | $ 100 | 2,781,832 | 3,089,082 | (2,351) | 5,869,801 |
Balance (in shares) at Jun. 30, 2020 | 113,777,723 | 10,000,000 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock upon vesting of restricted stock units and upon exercise of options | $ 1 | 27 | 28 | |||
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares) | 1,352 | |||||
Dividends declared on preferred stock | (3,843) | (3,843) | ||||
Stock-based compensation | 6,635 | 6,635 | ||||
Cash dividends | (17,068) | (17,068) | ||||
Change in foreign currency translation adjustment and from current period hedged transactions | 1,380 | 1,380 | ||||
Tax withholding related to vesting of restricted stock units and exercise of stock options | $ (1) | (4) | (5) | |||
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares) | (169) | |||||
Net income | 120,395 | 120,395 | ||||
Balance at Sep. 30, 2020 | $ 1,138 | $ 100 | $ 2,788,490 | $ 3,188,566 | $ (971) | $ 5,977,323 |
Balance (in shares) at Sep. 30, 2020 | 113,778,906 | 10,000,000 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.13 | $ 0.13 | $ 0.13 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities | ||
Net income | $ 405,171 | $ 422,186 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of flight equipment | 577,969 | 514,948 |
Stock-based compensation | 14,956 | 14,934 |
Deferred taxes | 101,285 | 97,566 |
Amortization of debt discounts and issuance costs | 31,660 | 26,330 |
Amortization of prepaid lease costs | 32,142 | 24,190 |
Gain on aircraft sales, trading and other activity | (27,281) | (45,123) |
Changes in operating assets and liabilities: | ||
Other assets | (330,804) | (149,740) |
Accrued interest and other payables | (84,045) | 51,156 |
Rentals received in advance | (3,464) | 15,109 |
Net cash provided by operating activities | 717,589 | 971,556 |
Investing Activities | ||
Acquisition of flight equipment under operating lease | (777,410) | (3,021,758) |
Payments for deposits on flight equipment purchases | (581,054) | (727,982) |
Proceeds from aircraft sales, trading and other activity | 151,131 | 426,382 |
Acquisition of aircraft furnishings, equipment and other assets | (142,866) | (236,847) |
Net cash used in investing activities | (1,350,199) | (3,560,205) |
Financing Activities | ||
Issuance of common stock upon exercise of options | 4,556 | 31,823 |
Cash dividends paid on Class A common stock | (51,116) | (43,383) |
Preferred dividends paid | (11,531) | (8,115) |
Tax withholdings on stock-based compensation | (8,618) | (4,089) |
Net change in unsecured revolving facility | (20,000) | 8,000 |
Proceeds from debt financings | 3,074,665 | 3,135,918 |
Payments in reduction of debt financings | (1,457,740) | (947,837) |
Net proceeds from preferred stock issuance | 242,139 | |
Debt issuance costs | (5,692) | (9,443) |
Security deposits and maintenance reserve receipts | 91,337 | 230,966 |
Security deposits and maintenance reserve disbursements | (59,175) | (33,905) |
Net cash provided by financing activities | 1,556,686 | 2,602,074 |
Net increase in cash | 924,076 | 13,425 |
Cash, cash equivalents and restricted cash at beginning of period | 338,061 | 322,998 |
Cash, cash equivalents and restricted cash at end of period | 1,262,137 | 336,423 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period for interest, including capitalized interest of $39,960 and $46,314 at September 30, 2020 and 2019, respectively | 371,947 | 358,237 |
Cash paid for income taxes | 29,696 | 9,515 |
Supplemental Disclosure of Noncash Activities | ||
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment | 575,958 | 1,161,573 |
Cash dividends declared on common stock, not yet paid | $ 17,068 | $ 14,644 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest, capitalized interest | $ 39,960 | $ 46,314 |
Company Background and Overview
Company Background and Overview | 9 Months Ended |
Sep. 30, 2020 | |
Company Background and Overview | |
Company Background and Overview | Note 1. Company Background and Overview Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S (“Airbus”). The Company leases these aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of September 30, 2020, the Company owned a fleet of 308 aircraft in its operating lease portfolio, managed 81 aircraft and had 372 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee. |
Basis of Preparation and Critic
Basis of Preparation and Critical Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Preparation and Critical Accounting Policies | |
Basis of Preparation and Critical Accounting Policies | 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, 2020, and for all periods presented. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020. These financial statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Debt Financing
Debt Financing | 9 Months Ended |
Sep. 30, 2020 | |
Debt Financing | |
Debt Financing | Note 3. Debt Financing The Company’s consolidated debt as of September 30, 2020 and December 31, 2019 (dollars in thousands): September 30, December 31, 2020 2019 Unsecured Senior notes $ 14,069,115 $ 12,357,811 Term financings 967,000 883,050 Revolving credit facility — 20,000 Total unsecured debt financing 15,036,115 13,260,861 Secured Term financings 289,207 428,824 Export credit financing 26,619 31,610 Total secured debt financing 315,826 460,434 Total debt financing 15,351,941 13,721,295 Less: Debt discounts and issuance costs (171,796) (142,429) Debt financing, net of discounts and issuance costs $ 15,180,145 $ 13,578,866 The Company’s secured obligations as of September 30, 2020 and December 31, 2019 are summarized below (dollars in thousands): September 30, December 31, 2020 2019 Nonrecourse $ — $ 128,460 Recourse 315,826 331,974 Total secured debt financing $ 315,826 $ 460,434 Number of aircraft pledged as collateral 12 15 Net book value of aircraft pledged as collateral $ 636,566 $ 890,693 Senior unsecured notes (including Medium-Term Note Program) As of September 30, 2020, the Company had $14.1 billion in senior unsecured notes outstanding. As of December 31, 2019, the Company had $12.4 billion in senior unsecured notes outstanding. During the nine months ended September 30, 2020, the Company issued approximately $3.0 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $750.0 million due 2025 at a fixed rate of 2.30%, (ii) $650.0 million due 2030 at a fixed rate of 3.00%, (iii) $850.0 million due 2025 at a fixed rate of 3.375% and (iv) $700.0 million due 2026 at a fixed rate of 2.875%. During the nine months ended September 30, 2020, the Company repurchased $206.1 million in aggregate principal amount of Floating Rate Medium-Term Notes due 2021. The debt repurchases resulted in a gain of $14.0 million and is included in Aircraft sales, trading and other revenue in the Company’s Consolidated Statements of Income and Comprehensive Income. Unsecured revolving credit facility As of September 30, 2020, the Company did not have any amounts outstanding under its unsecured revolving credit facility. The total amount outstanding under the Company’s unsecured revolving credit facility was $20.0 million as of December 31, 2019. The Company has an unsecured revolving credit facility with JPMorgan Chase Bank, N.A. as agent (the “Revolving Credit Facility”). During the nine months ended September 30, 2020, the Company increased the aggregate capacity of the Revolving Credit Facility by $250.0 million. On May 5, 2020, commitments totaling $92.7 million of the Revolving Credit Facility matured. Lenders hold revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on May 5, 2022 and commitments totaling $5.0 million that mature on May 5, 2021. As of September 30, 2020, the aggregate capacity of the Revolving Credit Facility was approximately $6.0 billion. As of September 30, 2020, borrowings under the Revolving Credit Facility will generally bear interest at either (a) LIBOR plus a margin of 1.05% per year or (b) an alternative base rate plus a margin of 0.05% per year, subject, in each case, to increases or decreases based on declines in the credit ratings for 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 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. Secured debt financing In June 2020, the Company entered into an amendment to its secured warehouse facility to extend the final maturity to June 2021. The facility will continue to bear a floating interest rate of LIBOR plus 2.00%. As part of the amendment, the credit facility was converted to full recourse against the Company and excess cash collateral was released. The outstanding balance on the Company’s secured warehouse facility was $100.4 million and $128.5 million as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the outstanding balance on the Company’s secured debt financings, including its secured warehouse facility and its export credit financing, was $315.8 million and it had pledged 12 aircraft as collateral with a net book value of $636.6 million. As of December 31, 2019, the outstanding balance on the Company’s secured debt financings, including its secured warehouse facility and its export credit financing, was $460.4 million and it had pledged 15 aircraft as collateral with a net book value of $890.7 million. Maturities Maturities of debt outstanding as of September 30, 2020 are as follows (in thousands): Years ending December 31, 2020 $ 172,778 2021 1,934,141 2022 2,730,561 2023 2,502,123 2024 1,525,428 Thereafter 6,486,910 Total $ 15,351,941 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 4. Commitments and Contingencies As of September 30, 2020, the Company had commitments to acquire a total of 372 new aircraft for delivery through 2026 as follows: Estimated Delivery Years Aircraft Type 2020 2021 2022 2023 2024 Thereafter Total Airbus A220-300 (1) — — 3 14 12 21 50 Airbus A320/321neo (2) 7 32 22 23 27 37 148 Airbus A330-900neo 1 3 7 4 — — 15 Airbus A350-900/1000 1 4 3 4 5 1 18 Boeing 737-7/8/9 MAX — 15 20 42 30 — 107 Boeing 787-9/10 5 9 8 10 2 — 34 Total 14 63 63 97 76 59 372 (1) In addition to the Company’s commitments, as of September 30, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028. (2) The Company’s Airbus A320/321neo aircraft orders include 45 long-range variants and 29 extra long-range variants. Pursuant to the Company's purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, and in the last several years manufacturing delays have significantly impacted the Company’s actual delivery dates. For several years, the Company has also experienced delivery delays for certain of its Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) began on March 10, 2019, and remains in effect. As a result, Boeing temporarily halted production and delivery of all 737 MAX aircraft. While production of the 737 MAX has now resumed, deliveries remain on hold. The Federal Aviation Administration (“FAA”) and the European Union Aviation Safety Agency (“EASA”) have both completed flight testing for recertification of the 737 MAX, though a number of key milestones remain before the aircraft can return to service. Lifting of the grounding is subject to the approval of the FAA, EASA and other global regulatory authorities, and the Company is unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic. The Company is currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of, and the delivery delays associated with the 737 MAX aircraft that the Company owns or has on order, which could result in changes to the commitment table. The ongoing COVID-19 pandemic has caused delivery delays of aircraft in the Company’s orderbook and is expected to continue to cause delays of aircraft delivery. As discussed in further detail in Note 12, “Impact of COVID-19 Pandemic,” the COVID-19 pandemic has resulted in numerous travel restrictions and business shutdowns or other operating limitations, including the temporary closure of final aircraft assembly facilities for each of Boeing and Airbus. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output. As a result of the temporary closures of the Boeing and Airbus facilities and the subsequently reduced production by these manufacturers, most of our expected aircraft deliveries were delayed during the second and third quarter. Given the dynamic nature of the ongoing COVID-19 pandemic, the Company is in ongoing discussions with Boeing and Airbus to determine the impact and duration of delivery delays. However, the Company is not yet able to determine the impact of the delivery delays, and as such, the delivery dates listed could materially change. The aircraft purchase commitments discussed above also could be impacted by lease cancellation. 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 are parallel with the Company’s cancellation rights in its leases. The Company’s leases and its purchase agreements with Boeing and Airbus typically provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause. As of September 30, 2020, the Company has canceled its orders for 19 737 MAX aircraft with Boeing. The Company has commitments for the acquisition of 372 aircraft for delivery through 2026, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $24.8 billion at September 30, 2020, which are due as follows (in thousands): Years ending December 31, 2020 $ 1,213,581 2021 4,841,564 2022 5,604,050 2023 6,153,520 2024 4,211,633 Thereafter 2,789,136 Total $ 24,813,484 The Company has made non-refundable deposits on the aircraft for which the Company has commitments to purchase of approximately $1.6 billion as of September 30, 2020 and December 31, 2019, 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. |
Rental Income
Rental Income | 9 Months Ended |
Sep. 30, 2020 | |
Rental Income | |
Rental Income | Note 5. Rental Income At September 30, 2020, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s fleet are as follows (in thousands): Years ending December 31, 2020 (excluding the nine months ended September 30, 2020) $ 495,367 2021 1,942,269 2022 1,833,191 2023 1,636,744 2024 1,502,227 Thereafter 5,977,449 Total $ 13,387,247 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share | |
Earnings Per Share | Note 6. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s two classes of common stock, Class A and Class B Non-Voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of September 30, 2020, the Company did not have any Class B Non-Voting common stock outstanding. Diluted earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. For the three and nine months ended September 30, 2020, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. The Company excluded 1,032,305 and 946,406 shares related to restricted stock units for which the performance metric had yet to be achieved as of September 30, 2020 and 2019, respectively. The following table sets forth the reconciliation of basic and diluted earnings per share (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic earnings per share: Numerator Net income $ 120,395 $ 155,787 $ 405,171 $ 422,186 Preferred stock dividends (3,843) (3,844) (11,531) (8,115) Net income available to common stockholders $ 116,552 $ 151,943 $ 393,640 $ 414,071 Denominator Weighted-average common shares outstanding 113,778,533 112,133,556 113,647,585 111,511,960 Basic earnings per share $ 1.02 $ 1.36 $ 3.46 $ 3.71 Diluted earnings per share: Numerator Net income $ 120,395 $ 155,787 $ 405,171 $ 422,186 Preferred stock dividends (3,843) (3,844) (11,531) (8,115) Net income available to common stockholders $ 116,552 $ 151,943 $ 393,640 $ 414,071 Denominator Number of shares used in basic computation 113,778,533 112,133,556 113,647,585 111,511,960 Weighted-average effect of dilutive securities 172,569 1,129,840 281,190 1,325,566 Number of shares used in per share computation 113,951,102 113,263,396 113,928,775 112,837,526 Diluted earnings per share $ 1.02 $ 1.34 $ 3.46 $ 3.67 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 7. 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 was 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, 2020, the estimated fair value of the foreign currency exchange derivative liability was $1.6 million. As of December 31, 2019, the estimated fair value of the foreign currency exchange derivative asset was $5.4 million. 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, 2020 was approximately $15.5 billion compared to a book value of $15.4 billion. The estimated fair value of debt financing as of December 31, 2019 was $14.1 billion compared to a book value of $13.7 billion. The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at September 30, 2020, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at September 30, 2020 and December 31, 2019 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. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Shareholders' Equity | |
Shareholders' Equity | Note 8. Shareholders’ Equity The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had 113,778,906 and 113,350,267 Class A common shares issued outstanding , respectively. The Company did not have any shares of Class B non-voting common stock, $0.01 par value, issued or outstanding as of The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock-based Compensation | |
Stock-based Compensation | Note 9. 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, 2020, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 4,860,870. The Company recorded $6.6 million and $4.9 million of stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively. The Company recorded $15.0 million and $14.9 million of stock-based compensation expense for the nine months ended September 30, 2020 and 2019, respectively. Stock Options A summary of stock option activity for the nine months ended September 30, 2020 follows: Remaining Aggregate Exercise Contractual Term Intrinsic Value Shares Price (in years) (in thousands) (1) Balance at December 31, 2019 364,153 $ 22.90 0.75 $ 8,965 Granted — $ — — $ — Exercised (244,153) $ 20.00 — $ 3,078 Forfeited/canceled — $ — — $ — Balance at September 30, 2020 120,000 $ 28.80 0.57 $ 74 Vested and exercisable as of September 30, 2020 120,000 $ 28.80 0.57 $ 74 (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. All of the Company’s outstanding employee stock options had fully vested as of June 30, 2013. As of September 30, 2020 there were no unrecognized compensation costs related to outstanding stock options. For the three and nine months ended September 30, 2020 and 2019 there were no stock-based compensation expenses related to Stock Options. Restricted Stock Units Compensation cost for stock awards 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 months ended September 30, 2020, the Company granted 670,621 RSUs of which 133,699 are TSR RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the nine months ended September 30, 2020: Unvested Restricted Stock Units Weighted-Average Number of Grant-Date Shares Fair Value Unvested at December 31, 2019 1,254,904 $ 43.62 Granted 670,621 $ 42.20 Vested (406,067) $ 46.96 Forfeited/canceled (49,407) $ 43.97 Unvested at September 30, 2020 1,470,051 $ 42.04 Expected to vest after September 30, 2020 1,470,051 $ 42.04 As of September 30, 2020, there was $29.1 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 1.79 years. |
Aircraft under management
Aircraft under management | 9 Months Ended |
Sep. 30, 2020 | |
Aircraft under management | |
Aircraft under management | Note 10. Aircraft Under Management As of September 30, 2020, the Company managed 81 aircraft across three aircraft management platforms. The Company managed 51 aircraft through its Thunderbolt platform, 26 aircraft through the Blackbird investment funds and four on behalf of a financial institution. The Company managed 26 aircraft on behalf of third-party investors, through two investment funds, Blackbird Capital I, LLC and Blackbird Capital II, LLC (“Blackbird II”). These funds invest in commercial aircraft and lease them to airlines throughout the world. The Company provides management services to these funds for a fee. As of September 30, 2020, the Company's non-controlling interests in each fund are 9.5% and are accounted for under the equity method of accounting. The Company’s investment in these funds aggregated $52.2 million and $46.5 million as of September 30, 2020 and December 31, 2019, respectively, and is included in Other assets on the Consolidated Balance Sheets. The Company continues to source aircraft investment opportunities for Blackbird II. As of September 30, 2020, Blackbird II has remaining equity capital commitments to acquire up to approximately $1.0 billion in aircraft assets, for which the Company has committed to fund up to $29.1 million related to these potential investments. Additionally, the Company continues to manage aircraft that it sells through its Thunderbolt platform. As of September 30, 2020, the Company managed 51 aircraft through its Thunderbolt platform sold across three separate transactions. The Company has non-controlling interests in two of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. During the three months ended September 30, 2020, the Company completed the sale of one aircraft from its held for sale portfolio through its Thunderbolt platform. The Company’s total investment in aircraft sold through its Thunderbolt platform was $9.3 million and $9.9 million as of September 30, 2020 and December 31, 2019, respectively and is included in Other assets on the Consolidated Balance Sheets. |
Flight Equipment Held for Sale
Flight Equipment Held for Sale | 9 Months Ended |
Sep. 30, 2020 | |
Flight Equipment held for sale | |
Flight Equipment Held for Sale | Note 11. Flight Equipment Held for Sale As of September 30, 2020, the Company did not have any flight equipment classified as held for sale. As of December 31, 2019, the Company had eight aircraft, with a carrying value of $249.6 million, which were classified as held for sale and included in Other assets on the Consolidated Balance Sheets. |
Impact of COVID-19 Pandemic
Impact of COVID-19 Pandemic | 9 Months Ended |
Sep. 30, 2020 | |
COVID 19 | |
Unusual or Infrequent Item, or Both [Line Items] | |
Impact of COVID-19 Pandemic | Note 12. Impact of COVID-19 Pandemic On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization (the “WHO”). On March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic. In response to the COVID-19 pandemic, governments around the world have implemented numerous measures to try to contain the virus, including travel restrictions. Although some of these measures have been lifted or scaled back, a recent resurgence of COVID-19 in certain parts of the world, including the United States and parts of Europe, has resulted in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. These measures, coupled with a decrease in consumer 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. It is unclear how long and to what extent these measures will remain in place and they may remain in place in some form for an extended period of time. Aircraft manufacturers and suppliers also have been impacted, including causing the temporary closure of Boeing and Airbus’ final assembly facilities and also closures of various facilities across their supply chain. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output. As the virus spread globally, its impact on the global economy increased significantly, resulting in a rapid decline in global air travel. While domestic and regional airline traffic improved over the last several months, demand for international and business air travel remains challenged. Since the pandemic began in the first quarter of 2020, the Company has received requests from most of its customers for accommodations such as deferrals of lease payments or other lease concessions. On a case-by-case basis, the Company has agreed to accommodations with approximately 58% of its lessees. Generally, these accommodations have been in the form of partial lease deferrals for payments due during the first three quarters of 2020, typically with a short repayment period. The majority of these deferrals are to be repaid within 12 months from the date the deferrals were granted, and in many cases, include lease extensions. The Company remains in active discussions with its airline customers and may continue to provide accommodations on a case-by-case basis. While lease deferrals may delay the Company’s receipt of cash, the Company generally recognizes the 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 the quarter ended September 30, 2020, the Company did not recognize rental revenue of $25.3 million because collection was not reasonably assured for certain lessees. Aircraft on lease with these lessees represented approximately 6.6% of our fleet by net book value. Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on its business, results of operations and financial condition for the foreseeable future. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | Note 13. Subsequent Events On November 5, 2020, the Company’s board of directors approved an increase in the Company’s quarterly cash dividend from $0.15 per share to $0.16 per share on its outstanding Class A common stock. The dividend will be paid on January 6, 2021 to holders of record of the Company’s Class A common stock as of December 18, 2020. The Company’s board of directors also approved a cash dividend of $0.384375 per share on its outstanding Series A Preferred Stock, which will be paid on December 15, 2020 to holders of record of the Company’s Series A Preferred Stock as of November 30, 2020. In addition, on November 5, 2020, the Company’s board of directors authorized a share repurchase program of up to $100.0 million of Class A common stock that expires on June 15, 2021. |
Debt Financing (Tables)
Debt Financing (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Financing | |
Summary of consolidated debt | The Company’s consolidated debt as of September 30, 2020 and December 31, 2019 (dollars in thousands): September 30, December 31, 2020 2019 Unsecured Senior notes $ 14,069,115 $ 12,357,811 Term financings 967,000 883,050 Revolving credit facility — 20,000 Total unsecured debt financing 15,036,115 13,260,861 Secured Term financings 289,207 428,824 Export credit financing 26,619 31,610 Total secured debt financing 315,826 460,434 Total debt financing 15,351,941 13,721,295 Less: Debt discounts and issuance costs (171,796) (142,429) Debt financing, net of discounts and issuance costs $ 15,180,145 $ 13,578,866 |
Schedule of secured obligations | The Company’s secured obligations as of September 30, 2020 and December 31, 2019 are summarized below (dollars in thousands): September 30, December 31, 2020 2019 Nonrecourse $ — $ 128,460 Recourse 315,826 331,974 Total secured debt financing $ 315,826 $ 460,434 Number of aircraft pledged as collateral 12 15 Net book value of aircraft pledged as collateral $ 636,566 $ 890,693 |
Schedule of maturities of debt outstanding | Maturities of debt outstanding as of September 30, 2020 are as follows (in thousands): Years ending December 31, 2020 $ 172,778 2021 1,934,141 2022 2,730,561 2023 2,502,123 2024 1,525,428 Thereafter 6,486,910 Total $ 15,351,941 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Schedule of commitments to acquire aircraft | Estimated Delivery Years Aircraft Type 2020 2021 2022 2023 2024 Thereafter Total Airbus A220-300 (1) — — 3 14 12 21 50 Airbus A320/321neo (2) 7 32 22 23 27 37 148 Airbus A330-900neo 1 3 7 4 — — 15 Airbus A350-900/1000 1 4 3 4 5 1 18 Boeing 737-7/8/9 MAX — 15 20 42 30 — 107 Boeing 787-9/10 5 9 8 10 2 — 34 Total 14 63 63 97 76 59 372 (1) In addition to the Company’s commitments, as of September 30, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028. (2) The Company’s Airbus A320/321neo aircraft orders include 45 long-range variants and 29 extra long-range variants. |
Schedule of commitments for the acquisition of aircraft and other equipment at an estimated aggregate purchase price | The Company has commitments for the acquisition of 372 aircraft for delivery through 2026, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $24.8 billion at September 30, 2020, which are due as follows (in thousands): Years ending December 31, 2020 $ 1,213,581 2021 4,841,564 2022 5,604,050 2023 6,153,520 2024 4,211,633 Thereafter 2,789,136 Total $ 24,813,484 |
Rental Income (Tables)
Rental Income (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Rental Income | |
Schedule of minimum future rentals on non-cancellable operating leases of flight equipment | At September 30, 2020, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s fleet are as follows (in thousands): Years ending December 31, 2020 (excluding the nine months ended September 30, 2020) $ 495,367 2021 1,942,269 2022 1,833,191 2023 1,636,744 2024 1,502,227 Thereafter 5,977,449 Total $ 13,387,247 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share | |
Schedule of reconciliation of basic and diluted net income per share | The following table sets forth the reconciliation of basic and diluted earnings per share (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Basic earnings per share: Numerator Net income $ 120,395 $ 155,787 $ 405,171 $ 422,186 Preferred stock dividends (3,843) (3,844) (11,531) (8,115) Net income available to common stockholders $ 116,552 $ 151,943 $ 393,640 $ 414,071 Denominator Weighted-average common shares outstanding 113,778,533 112,133,556 113,647,585 111,511,960 Basic earnings per share $ 1.02 $ 1.36 $ 3.46 $ 3.71 Diluted earnings per share: Numerator Net income $ 120,395 $ 155,787 $ 405,171 $ 422,186 Preferred stock dividends (3,843) (3,844) (11,531) (8,115) Net income available to common stockholders $ 116,552 $ 151,943 $ 393,640 $ 414,071 Denominator Number of shares used in basic computation 113,778,533 112,133,556 113,647,585 111,511,960 Weighted-average effect of dilutive securities 172,569 1,129,840 281,190 1,325,566 Number of shares used in per share computation 113,951,102 113,263,396 113,928,775 112,837,526 Diluted earnings per share $ 1.02 $ 1.34 $ 3.46 $ 3.67 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stock-based Compensation | |
Summary of stock option activity | Remaining Aggregate Exercise Contractual Term Intrinsic Value Shares Price (in years) (in thousands) (1) Balance at December 31, 2019 364,153 $ 22.90 0.75 $ 8,965 Granted — $ — — $ — Exercised (244,153) $ 20.00 — $ 3,078 Forfeited/canceled — $ — — $ — Balance at September 30, 2020 120,000 $ 28.80 0.57 $ 74 Vested and exercisable as of September 30, 2020 120,000 $ 28.80 0.57 $ 74 (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. |
Summary of activities for unvested RSUs | Unvested Restricted Stock Units Weighted-Average Number of Grant-Date Shares Fair Value Unvested at December 31, 2019 1,254,904 $ 43.62 Granted 670,621 $ 42.20 Vested (406,067) $ 46.96 Forfeited/canceled (49,407) $ 43.97 Unvested at September 30, 2020 1,470,051 $ 42.04 Expected to vest after September 30, 2020 1,470,051 $ 42.04 |
Company Background and Overvi_2
Company Background and Overview (Details) | 9 Months Ended |
Sep. 30, 2020aircraft | |
Organization | |
Number of aircraft owned | 308 |
Number of aircraft managed | 81 |
Number of aircraft on order with manufacturers | 372 |
Debt Financing (Details)
Debt Financing (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020USD ($)aircraft | May 05, 2020USD ($) | Dec. 31, 2019USD ($)aircraft | |
Debt financing | |||
Total debt financing | $ 15,351,941 | $ 13,721,295 | |
Less: Debt discounts and issuance costs | (171,796) | (142,429) | |
Debt financing, net of discounts and issuance costs | 15,180,145 | 13,578,866 | |
Unsecured Debt | |||
Debt financing | |||
Total debt financing | 15,036,115 | 13,260,861 | |
Senior Notes | |||
Debt financing | |||
Total debt financing | 14,069,115 | 12,357,811 | |
Medium Term Note Program | |||
Secured Obligations | |||
Principal amount issued | 3,000,000 | ||
Medium Term Note Program Due 2021 [Member] | |||
Secured Obligations | |||
Debt Instrument, Repurchase Amount | 206,100 | ||
Gain (Loss) on Repurchase of Debt Instrument | 14,000 | ||
Medium Term Note Program 2.30% Due 2025 | |||
Secured Obligations | |||
Principal amount issued | $ 750,000 | ||
Interest rate (as a percent) | 2.30% | ||
Medium Term Note Program 3.00% Due 2030 | |||
Secured Obligations | |||
Principal amount issued | $ 650,000 | ||
Interest rate (as a percent) | 3.00% | ||
Medium Term Note Program 3.375 Percent Due 2025 [Member] | |||
Secured Obligations | |||
Principal amount issued | $ 850,000 | ||
Interest rate (as a percent) | 3.375% | ||
Medium Term Note Program 2.875 Percent Due 2026 [Member] | |||
Secured Obligations | |||
Principal amount issued | $ 700,000 | ||
Interest rate (as a percent) | 2.875% | ||
Unsecured Term financings | |||
Debt financing | |||
Total debt financing | $ 967,000 | 883,050 | |
Unsecured Revolving Credit Facility | |||
Debt financing | |||
Total debt financing | 20,000 | ||
Revolving Credit Facility | |||
Debt financing | |||
Total debt financing | 245,000 | 20,000 | |
Secured Obligations | |||
Increase in maximum borrowing capacity | 250,000 | ||
Available borrowing capacity | $ 6,000,000 | ||
Facility fee (as a percent) | 0.20% | ||
Revolving Credit Facility | LIBOR | |||
Secured Obligations | |||
Interest margin (as a percent) | 1.05% | ||
Revolving Credit Facility | ABR | |||
Secured Obligations | |||
Interest margin (as a percent) | 0.05% | ||
Unsecured Revolving Credit Facility Maturing on May 5, 2020 | |||
Secured Obligations | |||
Line of credit maturity amount | $ 92,700 | ||
Unsecured Revolving Credit Facility Mature On 5 May 2021 | |||
Secured Obligations | |||
Revolving commitments held by lenders | $ 5,000 | ||
Unsecured Revolving Credit Facility Mature On 5 May 2022 | |||
Secured Obligations | |||
Revolving commitments held by lenders | 245,000 | ||
Unsecured Revolving Credit Facility Mature On 5 May 2023 | |||
Secured Obligations | |||
Revolving commitments held by lenders | 5,500,000 | ||
Secured Debt | |||
Debt financing | |||
Total debt financing | 315,826 | 460,434 | |
Secured Obligations | |||
Nonrecourse | 128,460 | ||
Recourse | 315,826 | 331,974 | |
Total secured debt financing | $ 315,826 | $ 460,434 | |
Number of aircraft pledged as collateral | aircraft | 12 | 15 | |
Net book value of aircraft pledged as collateral | $ 636,566 | $ 890,693 | |
Secured Debt | LIBOR | |||
Secured Obligations | |||
Interest margin (as a percent) | 2.00% | ||
Term Financings | |||
Debt financing | |||
Total debt financing | $ 289,207 | 428,824 | |
Warehouse Facility | |||
Secured Obligations | |||
Total secured debt financing | 100,400 | 128,500 | |
Export Credit Financing | |||
Debt financing | |||
Total debt financing | $ 26,619 | $ 31,610 |
Debt Financing - Maturities of
Debt Financing - Maturities of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Maturities | ||
2020 | $ 172,778 | |
2021 | 1,934,141 | |
2022 | 2,730,561 | |
2023 | 2,502,123 | |
2024 | 1,525,428 | |
Thereafter | 6,486,910 | |
Total | $ 15,351,941 | $ 13,721,295 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)aircraftitem | Dec. 31, 2019USD ($) | |
Commitments to acquire aircraft | ||
Minimum aircraft delivery delays that could trigger lessee cancellation clauses (in years) | 1 year | |
Commitments for the acquisition of the aircraft and other equipment | ||
2020 | $ | $ 1,213,581 | |
2021 | $ | 4,841,564 | |
2022 | $ | 5,604,050 | |
2023 | $ | 6,153,520 | |
2024 | $ | 4,211,633 | |
Thereafter | $ | 2,789,136 | |
Total | $ | $ 24,813,484 | |
Aircrafts | ||
Commitments to acquire aircraft | ||
2020 | 14 | |
2021 | 63 | |
2022 | 63 | |
2023 | 97 | |
2024 | 76 | |
Thereafter | 59 | |
Total | 372 | |
Commitments for the acquisition of the aircraft and other equipment | ||
Deposit Assets | $ | $ 1,600,000 | $ 1,600,000 |
Airbus A220-300 | ||
Commitments to acquire aircraft | ||
2022 | 3 | |
2023 | 14 | |
2024 | 12 | |
Thereafter | 21 | |
Total | 50 | |
Number of purchase agreement options | item | 25 | |
Airbus A320/321neo | ||
Commitments to acquire aircraft | ||
2020 | 7 | |
2021 | 32 | |
2022 | 22 | |
2023 | 23 | |
2024 | 27 | |
Thereafter | 37 | |
Total | 148 | |
Number of long-range variants | item | 45 | |
Number of extra long-range variants | item | 29 | |
Airbus A330-900neo | ||
Commitments to acquire aircraft | ||
2020 | 1 | |
2021 | 3 | |
2022 | 7 | |
2023 | 4 | |
Total | 15 | |
Airbus A350-900/1000 | ||
Commitments to acquire aircraft | ||
2020 | 1 | |
2021 | 4 | |
2022 | 3 | |
2023 | 4 | |
2024 | 5 | |
Thereafter | 1 | |
Total | 18 | |
Boeing 737-7/8/9 MAX | ||
Commitments to acquire aircraft | ||
2021 | 15 | |
2022 | 20 | |
2023 | 42 | |
2024 | 30 | |
Total | 107 | |
Boeing 787-9/10 | ||
Commitments to acquire aircraft | ||
2020 | 5 | |
2021 | 9 | |
2022 | 8 | |
2023 | 10 | |
2024 | 2 | |
Total | 34 | |
Boeing 737-8/9 MAX | ||
Commitments to acquire aircraft | ||
Long Term Purchase Commitment Quantity Required Aircraft Canceled | 19 |
Rental Income (Details)
Rental Income (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Minimum future rentals on non-cancelable operating leases of flight equipment | |
2020 (excluding the nine months ended September 30, 2020) | $ 495,367 |
2021 | 1,942,269 |
2022 | 1,833,191 |
2023 | 1,636,744 |
2024 | 1,502,227 |
Thereafter | 5,977,449 |
Total | $ 13,387,247 |
Earnings Per Share (Details)
Earnings Per Share (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2020USD ($)item$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | |
Anti-dilutive securities | ||||||
Number of classes of common stock | item | 2 | |||||
Numerator | ||||||
Net income available to common stockholders | $ | $ 116,552 | $ 151,943 | $ 393,640 | $ 414,071 | ||
Denominator | ||||||
Weighted-average common shares outstanding | 113,778,533 | 112,133,556 | 113,647,585 | 111,511,960 | ||
Basic earnings per share (in dollars per share) | $ / shares | $ 1.02 | $ 1.36 | $ 3.46 | $ 3.71 | ||
Numerator | ||||||
Net income | $ | $ 120,395 | $ 147,625 | $ 137,151 | $ 155,787 | $ 405,171 | $ 422,186 |
Preferred stock dividends | $ | (3,843) | (3,844) | (11,531) | (8,115) | ||
Net income available to common stockholders | $ | $ 116,552 | $ 151,943 | $ 393,640 | $ 414,071 | ||
Denominator | ||||||
Number of shares used in basic computation | 113,778,533 | 112,133,556 | 113,647,585 | 111,511,960 | ||
Weighted-average effect of dilutive securities (in shares) | 172,569 | 1,129,840 | 281,190 | 1,325,566 | ||
Number of shares used in per share computation | 113,951,102 | 113,263,396 | 113,928,775 | 112,837,526 | ||
Diluted net income per share (in dollars per share) | $ / shares | $ 1.02 | $ 1.34 | $ 3.46 | $ 3.67 | ||
Restricted Stock Units | ||||||
Anti-dilutive securities | ||||||
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares) | 1,032,305 | 946,406 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Recurring and Non-recurring (Details) - Recurring basis - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Measurements | ||
Assets | $ 5.4 | |
Liabilities | $ 1.6 |
Fair Value Measurements - Debt
Fair Value Measurements - Debt Financing (Details) - USD ($) $ in Billions | Sep. 30, 2020 | Dec. 31, 2019 |
Book Value | ||
Financial Instruments Not Measured at Fair Value | ||
Debt financing | $ 15.4 | $ 13.7 |
Level 2 | ||
Financial Instruments Not Measured at Fair Value | ||
Debt financing | $ 15.5 | $ 14.1 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares issued | 10,000,000 | 10,000,000 |
Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 |
Preferred Stock, Liquidation Preference, Value | $ 250,000 | $ 250,000 |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common Stock, authorized shares | 500,000,000 | 500,000,000 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 113,778,906 | 113,350,267 |
Common stock, shares outstanding | 113,778,906 | 113,350,267 |
Class B Non-Voting Common Stock | ||
Class of Stock [Line Items] | ||
Common Stock, authorized shares | 10,000,000 | 10,000,000 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Series A Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares issued | 10,000,000 | 10,000,000 |
Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 |
Preferred Stock, Liquidation Preference, Value | $ 250,000 | $ 250,000 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | May 07, 2014 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Stock-based Compensation | ||||||
Unrecognized compensation cost | $ 29,100 | $ 29,100 | ||||
Equity Incentive Plan 2010 | ||||||
Shares | ||||||
Granted (in shares) | 0 | |||||
Equity Incentive Plan 2014 | ||||||
Stock-based Compensation | ||||||
Number of shares authorized | 4,860,870 | 4,860,870 | ||||
Employee and Directors Stock Options | ||||||
Stock-based Compensation | ||||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | $ 0 | ||
Unrecognized compensation cost | $ 0 | $ 0 | ||||
Shares | ||||||
Balance at the beginning of the period (in shares) | 364,153 | |||||
Exercised (in shares) | (244,153) | |||||
Balance at the end of the period (in shares) | 120,000 | 120,000 | 364,153 | |||
Vested and exercisable at the end of the period (in shares) | 120,000 | 120,000 | ||||
Exercise Price | ||||||
Balance at the beginning of the period (in dollars per share) | $ 22.90 | |||||
Exercised (in dollars per share) | 20 | |||||
Balance at the end of the period (in dollars per share) | $ 28.80 | 28.80 | $ 22.90 | |||
Vested and exercisable at the end of the period (in dollars per share) | $ 28.80 | $ 28.80 | ||||
Remaining Contractual Term | ||||||
Remaining Contractual Term (in years) | 6 months 25 days | 9 months | ||||
Vested and exercisable | 6 months 25 days | |||||
Aggregate Intrinsic Value | ||||||
Balance at the beginning of the period | $ 8,965 | |||||
Exercised | 3,078 | |||||
Balance at the end of the period | $ 74 | 74 | $ 8,965 | |||
Vested and exercisable at the end of the period | 74 | 74 | ||||
Restricted Stock Units | ||||||
Stock-based Compensation | ||||||
Stock-based compensation | $ 6,600 | $ 4,900 | $ 15,000 | $ 14,900 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Stock-based compensation expense | |
Unrecognized compensation cost | $ | $ 29.1 |
Weighted-average period of recognition of unrecognized stock-based compensation cost | 1 year 9 months 14 days |
Restricted Stock Units | |
Unvested Restricted Stock Units, Number of Shares | |
Unvested at the beginning of the period (in shares) | 1,254,904 |
Granted (in shares) | 670,621 |
Vested (in shares) | (406,067) |
Forfeited/canceled (in shares) | (49,407) |
Unvested at the end of the period (in shares) | 1,470,051 |
Expected to vest after the end of the period (in shares) | 1,470,051 |
Unvested Restricted Stock Units, Weighted-Average Grant-Date Fair Value | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 43.62 |
Granted (in dollars per share) | $ / shares | 42.20 |
Vested (in dollars per share) | $ / shares | 46.96 |
Forfeited/canceled (in dollars per share) | $ / shares | 43.97 |
Unvested at the end of the period (in dollars per share) | $ / shares | 42.04 |
Expected to vest after the end of the period (in dollars per share) | $ / shares | $ 42.04 |
Restricted Stock With Total Shareholder Return Conditions | |
Unvested Restricted Stock Units, Number of Shares | |
Granted (in shares) | 133,699 |
Aircraft under management (Deta
Aircraft under management (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($)aircraft | Sep. 30, 2020USD ($)itemaircraft | Dec. 31, 2019USD ($) | |
Investments | |||
Number of aircraft managed | 81 | ||
Number of platforms | 3 | ||
Total unfunded commitment | $ | $ 29.1 | $ 29.1 | |
Financial Institution | |||
Investments | |||
Number of aircraft managed | 4 | ||
Third-Party Investors | |||
Investments | |||
Number of aircraft managed | 26 | ||
Thunderbolt | |||
Investments | |||
Number of aircraft managed | 51 | ||
Number of investing funds | item | 2 | ||
Equity method investment | $ | $ 9.3 | $ 9.3 | $ 9.9 |
Number of aircraft sale transactions | item | 3 | ||
Non-controlling interest (as a percent) | 5.00% | 5.00% | |
Number of aircraft sold or agreed to be sold | 1 | ||
Blackbird | |||
Investments | |||
Number of aircraft managed | 26 | ||
Number of investing funds | item | 2 | ||
Percentage of equity ownership | 9.50% | 9.50% | |
Equity method investment | $ | $ 52.2 | $ 52.2 | $ 46.5 |
Blackbird II | |||
Investments | |||
Total unfunded commitment | $ | $ 1,000 | $ 1,000 |
Flight Equipment held for sale
Flight Equipment held for sale (Details) - Aircraft Held For Sale $ in Millions | Sep. 30, 2020aircraft | Dec. 31, 2019USD ($)aircraft |
Flight Equipment Held for Sale | ||
Number of aircraft held for sale | aircraft | 0 | 8 |
Assets held for sale | $ | $ 249.6 |
Impact of COVID-19 Pandemic (De
Impact of COVID-19 Pandemic (Details) - COVID 19 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | ||
Accommodation arrangement percentage of lessees | 58.00% | |
Unrecognized rental revenue | $ 25.3 | |
Percentage of lessees in fleet | 6.60% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 05, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2020 |
Subsequent Events | |||||||||
Quarterly cash dividends on common stock | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.13 | $ 0.13 | $ 0.13 | |||
Class A Common Stock | |||||||||
Subsequent Events | |||||||||
Quarterly cash dividends on common stock | $ 0.15 | ||||||||
Subsequent Event | Class A Common Stock | |||||||||
Subsequent Events | |||||||||
Quarterly cash dividends on common stock | $ 0.16 | ||||||||
Amount of common stock repurchase authorized | $ 100 | ||||||||
Subsequent Event | Series A Preferred Stock | |||||||||
Subsequent Events | |||||||||
Dividend declared per share of Series A preferred stock | $ 0.384375 |