10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to        

Commission file number 001-35121

AIR LEASE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	27-1840403
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2000 Avenue of the Stars, Suite 1000N Los Angeles, California	90067
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 553-0555

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	AL	New York Stock Exchange
6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A	AL PRA	New York Stock Exchange

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

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

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

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

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

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

At November 6, 2019, there were 112,704,349 shares of Air Lease Corporation’s Class A common stock outstanding.

Air Lease Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended September 30, 2019

TABLE OF CONTENTS

		Page
Note About Forward-Looking Statements		3
PART I—FINANCIAL INFORMATION
Item 1	Financial Statements	4
	Consolidated Balance Sheets—September 30, 2019 and December 31, 2018 (unaudited)	4
	Consolidated Statements of Income—Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	5
	Consolidated Statement of Shareholders’ Equity—Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	6
	Consolidated Statements of Cash Flows—Nine Months Ended September 30, 2019 and 2018 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4	Controls and Procedures	33
PART II—OTHER INFORMATION
Item 1	Legal Proceedings	33
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3	Defaults Upon Senior Securities	34
Item 4	Mine Safety Disclosures	34
Item 5	Other Information	34
Item 6	Exhibits	35
	Signatures	37

2

NOTE ABOUT FORWARD-LOOKING STATEMENTS

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

● our inability to obtain additional financing on favorable terms, if required, to complete the acquisition of sufficient aircraft as currently contemplated or to fund the operations and growth of our business;

● our inability to obtain refinancing prior to the time our debt matures;

● our inability to make acquisitions of, or lease, aircraft on favorable terms;

● our inability to sell aircraft on favorable terms or to predict the timing of such sales;

● impaired financial condition and liquidity of our lessees;

● changes in overall demand for commercial aircraft leasing and aircraft management services;

● deterioration of economic conditions in the commercial aviation industry generally;

● potential natural disasters and terrorist attacks and the amount of our insurance coverage, if any, relating thereto;

● increased maintenance, operating or other expenses or changes in the timing thereof;

● changes in the regulatory environment, including tariffs and other restrictions on trade;

● our inability to effectively oversee our managed fleet;

● the failure of any manufacturer to meet its contractual aircraft delivery obligations to us, including or as a result of technical or other difficulties with aircraft before or after delivery, resulting in our inability to deliver the aircraft to our lessees; and

● the factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2018, “Part II — Item 1A. Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 and other SEC filings, including future SEC filings.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations. You are therefore cautioned not to place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

3

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)

	September 30, 2019		December 31, 2018
	(unaudited)
Assets
Cash and cash equivalents	$	291,772	$	300,127
Restricted cash		44,651		22,871
Flight equipment subject to operating leases		21,601,147		17,985,324
Less accumulated depreciation		(2,689,880)		(2,278,214)
		18,911,267		15,707,110
Deposits on flight equipment purchases		1,600,959		1,809,260
Other assets		761,052		642,440
Total assets	$	21,609,701	$	18,481,808
Liabilities and Shareholders’ Equity
Accrued interest and other payables	$	420,444	$	382,132
Debt financing, net of discounts and issuance costs		13,751,872		11,538,905
Security deposits and maintenance reserves on flight equipment leases		1,091,073		990,578
Rentals received in advance		134,635		119,526
Deferred tax liability		749,504		643,767
Total liabilities	$	16,147,528	$	13,674,908
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, 2019 and no shares issued or outstanding at December 31, 2018		100		—
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 112,701,349 and 110,949,850 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		1,127		1,110
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding		—		—
Paid-in capital		2,758,928		2,474,238
Retained earnings		2,702,018		2,331,552
Total shareholders’ equity	$	5,462,173	$	4,806,900
Total liabilities and shareholders’ equity	$	21,609,701	$	18,481,808

(See Notes to Consolidated Financial Statements)

4

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
	(unaudited)
Revenues
Rental of flight equipment	$	492,869	$	422,763	$	1,412,478	$	1,194,104
Aircraft sales, trading and other		38,033		27,935		55,870		35,617
Total revenues		530,902		450,698		1,468,348		1,229,721
Expenses
Interest		104,637		82,189		290,681		224,584
Amortization of debt discounts and issuance costs		9,078		8,199		26,330		24,231
Interest expense		113,715		90,388		317,011		248,815
Depreciation of flight equipment		183,788		149,703		514,948		428,437
Selling, general and administrative		34,715		26,377		92,188		71,194
Stock-based compensation		4,897		4,848		14,934		13,165
Total expenses		337,115		271,316		939,081		761,611
Income before taxes		193,787		179,382		529,267		468,110
Income tax expense		(38,000)		(32,808)		(107,081)		(95,674)
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Net income available to common stockholders	$	151,943	$	146,574	$	414,071	$	372,436
Earnings per share of Class A and Class B common stock:
Basic	$	1.36	$	1.41	$	3.71	$	3.58
Diluted	$	1.34	$	1.32	$	3.67	$	3.36
Weighted-average shares outstanding
Basic		112,133,556		104,066,785		111,511,960		103,940,723
Diluted		113,263,396		112,509,612		112,837,526		112,377,870
Dividends declared per share of Class A common stock	$	0.13	$	0.10	$	0.39	$	0.30

(See Notes to Consolidated Financial Statements)

5

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

							Class B Non-
				Class A			Voting
	Preferred Stock			Common Stock			Common Stock			Paid-in		Retained
(unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Total
Balance at December 31, 2018	—	$	—	110,949,850	$	1,110	—	$	—	$	2,474,238	$	2,331,552	$	4,806,900
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	—		—	263,218		2	—		—		439		—		441
Issuance of preferred stock	10,000,000		100	—		—	—		—		242,141		—		242,241
Stock-based compensation	—		—	—		—	—		—		4,174		—		4,174
Cash dividends (declared $0.13 per share of Class A common stock)	—		—	—		—	—		—		—		(14,445)		(14,445)
Tax withholding related to vesting of restricted stock units and exercise of stock options	—		—	(94,899)		(1)	—		—		(3,587)		—		(3,588)
Net income	—		—	—		—	—		—		—		138,094		138,094
Balance at March 31, 2019	10,000,000	$	100	111,118,169	$	1,111	—	$	—	$	2,717,405	$	2,455,201	$	5,173,817
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	—		—	547,957		6	—		—		10,791		—		10,797
Issuance of preferred stock	—		—	—		—	—		—		(111)		—		(111)
Dividends declared on preferred stock	—		—	—		—	—		—		—		(4,271)		(4,271)
Stock-based compensation	—		—	—		—	—		—		5,863		—		5,863
Cash dividends (declared $0.13 per share of Class A common stock)	—		—	—		—	—		—		—		(14,516)		(14,516)
Net income	—		—	—		—	—		—		—		128,305		128,305
Balance at June 30, 2019	10,000,000	$	100	111,666,126	$	1,117	—	$	—	$	2,733,948	$	2,564,719	$	5,299,884
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	—		—	1,047,695		11	—		—		20,584		—		20,595
Dividends declared on preferred stock	—		—	—		—	—		—		—		(3,844)		(3,844)
Stock-based compensation	—		—	—		—	—		—		4,897		—		4,897
Cash dividends (declared $0.13 per share of Class A common stock)	—		—	—		—	—		—		—		(14,644)		(14,644)
Tax withholding related to vesting of restricted stock units and exercise of stock options	—		—	(12,472)		(1)	—		—		(501)		—		(502)
Net income	—		—	—		—	—		—		—		155,787		155,787
Balance at September 30, 2019	10,000,000	$	100	112,701,349	$	1,127	—	$	—	$	2,758,928	$	2,702,018	$	5,462,173

(See Notes to Consolidated Financial Statements)

6

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

							Class B Non-
				Class A			Voting
	Preferred Stock			Common Stock			Common Stock			Paid-in		Retained
(unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Total
Balance at December 31, 2017	—	$	—	103,621,629	$	1,036	—	$	—	$	2,260,064	$	1,866,342	$	4,127,442
Issuance of common stock upon vesting of restricted stock units and upon exercise of options and convertible debt conversion	—		—	514,773		4	—		—		2,632		—		2,636
Stock-based compensation	—		—	—		—	—		—		3,432		—		3,432
Cash dividends (declared $0.10 per share of Class A common stock)	—		—	—		—	—		—		—		(10,397)		(10,397)
Tax withholding related to vesting of restricted stock units and exercise of stock options	—		—	(156,568)		—	—		—		(7,141)		—		(7,141)
Net income	—		—	—		—	—		—		—		110,651		110,651
Balance at March 31, 2018	—	$	—	103,979,834	$	1,040	—	$	—	$	2,258,987	$	1,966,596	$	4,226,623
Issuance of common stock upon vesting of restricted stock units and upon exercise of options and convertible debt conversion	—		—	85,211		1	—		—		1,521		—		1,522
Stock-based compensation	—		—	—		—	—		—		4,885		—		4,885
Cash dividends (declared $0.10 per share of Class A common stock)	—		—	—		—	—		—		—		(10,399)		(10,399)
Net income	—		—	—		—	—		—		—		115,211		115,211
Balance at June 30, 2018	—	$	—	104,065,045	$	1,041	—	$	—	$	2,265,393	$	2,071,408	$	4,337,842
Issuance of common stock upon vesting of restricted stock units and upon exercise of options and convertible debt conversion	—		—	3,034		—	—		—		61		—		61
Stock-based compensation	—		—	—		—	—		—		4,848		—		4,848
Cash dividends (declared $0.10 per share of Class A common stock)	—		—	—		—	—		—		—		(10,407)		(10,407)
Net income	—		—	—		—	—		—		—		146,574		146,574
Balance at September 30, 2018	—	$	—	104,068,079	$	1,041	—	$	—	$	2,270,302	$	2,207,575	$	4,478,918

(See Notes to Consolidated Financial Statements)

7

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Nine Months Ended
	September 30,
	2019		2018
	(unaudited)
Operating Activities
Net income	$	422,186	$	372,436
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment		514,948		428,437
Stock-based compensation		14,934		13,165
Deferred taxes		97,566		95,674
Amortization of debt discounts and issuance costs		26,330		24,231
Amortization of prepaid lease costs		24,190		18,713
Gain on aircraft sales, trading and other activity		(45,123)		(24,469)
Changes in operating assets and liabilities:
Other assets		(149,740)		(62,528)
Accrued interest and other payables		51,156		110
Rentals received in advance		15,109		4,335
Net cash provided by operating activities		971,556		870,104
Investing Activities
Acquisition of flight equipment under operating lease		(3,021,758)		(1,874,094)
Payments for deposits on flight equipment purchases		(727,982)		(548,225)
Proceeds from aircraft sales, trading and other activity		426,382		239,067
Acquisition of aircraft furnishings, equipment and other assets		(236,847)		(204,449)
Net cash used in investing activities		(3,560,205)		(2,387,701)
Financing Activities
Issuance of common stock upon exercise of options		31,823		4,188
Cash dividends paid on Class A common stock		(43,383)		(31,155)
Preferred dividends paid		(8,115)		—
Tax withholdings on stock-based compensation		(4,089)		(7,141)
Net change in unsecured revolving facility		8,000		(847,000)
Proceeds from debt financings		3,135,918		3,358,885
Payments in reduction of debt financings		(947,837)		(1,131,206)
Net proceeds from preferred stock issuance		242,139		—
Debt issuance costs		(9,443)		(9,327)
Security deposits and maintenance reserve receipts		230,966		173,754
Security deposits and maintenance reserve disbursements		(33,905)		(52,764)
Net cash provided by financing activities		2,602,074		1,458,234
Net increase/(decrease) in cash		13,425		(59,363)
Cash, cash equivalents and restricted cash at beginning of period		322,998		308,282
Cash, cash equivalents and restricted cash at end of period	$	336,423	$	248,919
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $46,314 and $38,947 at September 30, 2019 and 2018, respectively	$	358,237	$	278,297
Cash paid for income taxes	$	9,515	$	2,506
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	$	1,161,573	$	663,223
Cash dividends declared on Class A common stock, not yet paid	$	14,644	$	10,407

(See Notes to Consolidated Financial Statements)

8

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.   Company Background and Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and through our asset-backed securities platform. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. As of September 30, 2019, we owned a fleet of 307 aircraft, managed 64 aircraft and had 316 aircraft on order with aircraft manufacturers.

Note 2.  Basis of Preparation and Critical Accounting Policies

The Company consolidates financial statements of all entities in which we have a controlling financial interest, including the accounts of any Variable Interest Entity in which we have a controlling financial interest and for which we are 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, 2019, and for all periods presented. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results expected for the year ending December 31, 2019. These financial statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recently adopted accounting standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842).” The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Subsequently, the FASB issued additional ASUs that further clarified ASU 2016-02. The Company adopted the amendments to Accounting Standards Codification (“ASC”) 842 on January 1, 2019 using the Effective Date Method. As a result, the Company continues to disclose comparative reporting periods under the previous accounting guidance, ASC 840. Based on our evaluation of the guidance, the Company noted that lessor accounting is similar to the current model, but the guidance impacted us in scenarios where we are the lessee.

For scenarios where we are the lessee, the Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets under Other assets, and long-term lease obligations under Accrued interest & other payables on the Company’s Consolidated Balance Sheets. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected to exclude recognition of leases with a term of 12 months or less (short-term leases) from the Consolidated Balance Sheets.

9

As of January 1, 2019, the Company recognized operating ROU lease assets and obligations in the amounts of $44.6 million and $51.2 million, respectively, on its Consolidated Balance Sheets. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Note 3.Recently Issued Accounting Standards

In July 2019, the FASB issued ASU No. 2019-07 ("ASU 2019-07"), Codification Updates to SEC Sections. This ASU amends various Securities and Exchange Commission ("SEC") paragraphs pursuant to the issuance of SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification. One of the changes in the ASU requires a presentation of changes in stockholders' equity in the form of a reconciliation, either as a separate financial statement or in the notes to the financial statements, for the current and comparative year-to-date interim periods. The Company presented changes in stockholders' equity as separate financial statements for the current and comparative year-to-date interim periods beginning on January 1, 2019. The additional elements of the ASU did not have a material impact on the Company's Consolidated Financial Statements. This guidance was effective immediately upon issuance.

Note 4.  Debt Financing

The Company’s debt financing was comprised of the following at September 30, 2019 and December 31, 2018 (dollars in thousands):

	September 30,		December 31,
	2019		2018
Unsecured
Senior notes	$	12,050,000	$	10,043,445
Term financings		813,150		607,340
Revolving credit facilities		610,000		602,000
Total unsecured debt financing		13,473,150		11,252,785
Secured
Term financings		392,593		371,203
Export credit financing		33,274		38,265
Total secured debt financing		425,867		409,468
Total debt financing		13,899,017		11,662,253
Less: Debt discounts and issuance costs		(147,145)		(123,348)
Debt financing, net of discounts and issuance costs	$	13,751,872	$	11,538,905

The Company’s secured obligations as of September 30, 2019 and December 31, 2018 are summarized below (dollars in thousands):

	September 30,		December 31,
	2019		2018
Nonrecourse	$	138,797	$	167,245
Recourse		287,070		242,223
Total secured debt financing	$	425,867	$	409,468
Number of aircraft pledged as collateral		17		20
Net book value of aircraft pledged as collateral	$	915,211	$	1,132,111

Senior unsecured notes (including Medium-Term Note Program)

As of September 30, 2019, the Company had $12.1 billion in senior unsecured notes outstanding. As of December 31, 2018, the Company had $10.0 billion in senior unsecured notes outstanding.

During the nine months ended September 30, 2019, the Company issued $2.85 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $700.0 million due 2024 at a fixed rate of 4.25%, (ii) $750.0 million due 2026 at a fixed rate of 3.75%, (iii) $300.0 million due 2021 that bear interest at a floating rate of three-month LIBOR plus 0.67%, (iv) $600.0 million due 2023 at a fixed rate of 2.25% and (v) $500.0 million due 2029 at a fixed rate of 3.25%.

10

Unsecured revolving credit facilities

As of September 30, 2019, the total outstanding balance on the Company's unsecured revolving credit facilities was approximately $610.0 million. The total outstanding balance under the Company's unsecured revolving credit facilities was approximately $602.0 million as of December 31, 2018.

In May 2019, the Company amended and extended its committed unsecured revolving credit facility whereby, among other things, the Company extended the final maturity date from May 5, 2022 to May 5, 2023 and, after giving effect to commitments that matured on May 5, 2019, increased the total revolving commitments to approximately $5.8 billion, representing an increase of 26.6% from December 31, 2018, with a 0.20% facility fee and current borrowings bearing interest at a floating rate of LIBOR plus 1.05%. On July 31, 2019, the Company executed a commitment increase to its unsecured revolving credit facility, which increased the aggregate facility capacity by an additional $58.0 million. 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, commitments totaling approximately $5.0 million that mature on May 5, 2021, and commitments totaling $92.7 million that mature on May 5, 2020.

Maturities

Maturities of debt outstanding as of September 30, 2019 are as follows (in thousands):

Years ending December 31,
2019	$	31,189
2020		1,456,585
2021		1,993,870
2022		2,696,599
2023		2,966,461
Thereafter		4,754,313
Total	$	13,899,017

Note 5.  Commitments and Contingencies

As of September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table below, the Company had commitments to acquire a total of 316 new aircraft for delivery through 2024 as follows:

Aircraft Type	2019	2020	2021	2022	2023	Thereafter	Total
Airbus A320/321neo(1)	7	28	32	25	25	—	117
Airbus A330-900neo	1	3	3	6	3	—	16
Airbus A350-900/1000	—	3	6	3	2	—	14
Boeing 737-7/8/9 MAX(2)	—	31	46	28	25	5	135
Boeing 787-9/10(2)	1	15	7	6	5	—	34
Total(3)(4)	9	80	94	68	60	5	316

(1) Our Airbus A320/321neo aircraft orders include 56 long-range variants.

(2) The table above reflects the conversion of purchase orders for 15 Boeing 737 MAX aircraft to five Boeing 787-9 aircraft pursuant to an October 2019 agreement with Boeing. The table also reflects our estimate of future Boeing 737 MAX aircraft delivery delays based on information currently available to us. The actual delivery dates of such Boeing 737 MAX aircraft may differ from our estimate and could be further impacted by the length of the grounding and the pace at which Boeing can deliver aircraft following the lifting of the grounding, among other factors.

(3) In addition to the aircraft from our order book, we have a commitment to purchase one used Airbus A330-300 aircraft from a third party, which is scheduled for delivery in 2019.

(4) Excluded from the table above are memorandums of understanding (“MOU”) with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 100 aircraft comprised of 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft, and we have purchase options for an additional 25 A220 aircraft.

Pursuant to our purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agrees to contractual delivery dates for each aircraft ordered. However, these dates can change for a variety of reasons.

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In the last few years, Airbus and Boeing have had delivery delays, and these delays have significantly impacted when our aircraft have been delivered.

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

For several years, we have experienced delivery delays for certain of our Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. Airbus has told us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2021.

The worldwide grounding of the Boeing 737 MAX began on March 10, 2019, and remains in effect. As a result, Boeing has halted deliveries of all Boeing 737 MAX aircraft. Lifting of the grounding is subject to global regulatory authorities and we are unable to speculate as to when this may occur. Boeing 737 MAX deliveries may be impacted by the duration of the grounding and the speed by which Boeing can deliver aircraft following the lifting of the grounding. We expect that if the grounding continues for an extended time, or if there are significant Boeing 737 MAX delivery delays even after the grounding is lifted, some of our customers may seek to cancel their lease contracts with us. It is unclear at this point if we will cancel some of our Boeing 737 MAX delivery positions with Boeing or find replacement lessees. We are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of and the delivery delays associated with the Boeing 737 MAX aircraft that we own and have on order.

Commitments for the acquisition of aircraft and other equipment, calculated at an estimated aggregate purchase price (including adjustments for inflation) was approximately $22.5 billion at September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table above, and are due as follows (in thousands):

Years ending December 31,
2019	$	771,134
2020		6,419,215
2021		6,647,270
2022		4,750,559
2023		3,678,420
Thereafter		225,142
Total	$	22,491,740

In addition to the Company's commitments, as of September 30, 2019, the Company had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.

We have made non-refundable deposits on the aircraft for which we have commitments to purchase of $1.6 billion and $1.8 billion as of September 30, 2019 and December 31, 2018, respectively, which are subject to manufacturer performance commitments. If we are unable to satisfy our purchase commitments, we may be forced to forfeit our deposits. Further, we would be exposed to breach of contract claims by our lessees and manufacturers.

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Note 6.  Rental Income

At September 30, 2019, minimum future rentals on non-cancellable operating leases of flight equipment in our fleet, which have been delivered as of September 30, 2019, are as follows (in thousands):

Years ending December 31,
2019 (excluding the nine months ended September 30, 2019)	$	503,359
2020		1,999,804
2021		1,908,650
2022		1,765,865
2023		1,561,393
Thereafter		6,404,246
Total	$	14,143,317

Note 7.  Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Preferred stock dividends are subtracted from net income in determining net income available to common stockholders. 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, 2019, we 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, 2019, 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 946,406 and 950,761 shares related to restricted stock units for which the performance metric had yet to be achieved as of September 30, 2019 and 2018, respectively.

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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				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Basic earnings per share:
Numerator
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Net income available to common stockholders	$	151,943	$	146,574	$	414,071	$	372,436
Denominator
Weighted-average common shares outstanding		112,133,556		104,066,785		111,511,960		103,940,723
Basic earnings per share	$	1.36	$	1.41	$	3.71	$	3.58
Diluted earnings per share:
Numerator
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Assumed conversion of convertible senior notes		—		1,823		—		5,309
Net income available to common stockholders plus assumed conversions	$	151,943	$	148,397	$	414,071	$	377,745
Denominator
Number of shares used in basic computation		112,133,556		104,066,785		111,511,960		103,940,723
Weighted-average effect of dilutive securities		1,129,840		8,442,827		1,325,566		8,437,147
Number of shares used in per share computation		113,263,396		112,509,612		112,837,526		112,377,870
Diluted earnings per share	$	1.34	$	1.32	$	3.67	$	3.36

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Note 8.  Fair Value Measurements

Assets and liabilities measured at fair value on a recurring and non-recurring basis

The Company had no assets or liabilities which are measured at fair value on a recurring or non-recurring basis as of September 30, 2019 or December 31, 2018.

Financial instruments not measured at fair value

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, 2019 was approximately $14.2 billion compared to a book value of $13.9 billion. The estimated fair value of debt financing as of December 31, 2018 was $11.4 billion compared to a book value of $11.7 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at September 30, 2019, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at September 30, 2019 and December 31, 2018 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.

Note 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, 2019 and December 31, 2018. As of September 30, 2019 and December 31, 2018, the Company had 112,701,349 and 110,949,850 Class A common shares issued and 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 September 30, 2019 and December 31, 2018.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at September 30, 2019 and December 31, 2018. As of September 30, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million. The Company did not have any shares of preferred stock issued or outstanding as of December 31, 2018.

On March 5, 2019, the Company issued 10,000,000 shares of 6.150% 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. The Company will pay dividends on the 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 $25.00 per share at a rate per annum equal to: (i) 6.150% during the first five years and payable quarterly in arrears beginning on June 15, 2019, and (ii) three-month LIBOR plus a spread of 3.650% per annum from March 15, 2024, reset quarterly and payable quarterly in arrears beginning on June 15, 2024.

The Company may redeem shares of the Series A Preferred Stock at its option, in whole or in part, from time to time, on or after March 15, 2024, for cash at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date, without accumulation of any undeclared dividends. The Company may also redeem shares of the Series A Preferred Stock at the Company’s option under certain other limited conditions.

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Note 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, 2019, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) remaining under the 2014 Plan was approximately 5,282,848, which includes 282,848 shares which were previously reserved for issuance under the 2010 Plan. Stock Options are generally granted for a term of 10 years and generally vest ratably over a three-year period. The Company has issued RSUs with four different vesting criteria: those RSUs that vest based on the attainment of book value goals, those RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals, time based RSUs that vest ratably over a time period of three years and RSUs that cliff-vest at the end of a one- or two-year period. The Company has two types of book value RSUs; those that vest ratably over a three-year period if the performance condition has been met, and those that cliff-vest at the end of a three-year period if the performance condition has been met. For the book value RSUs that cliff-vest at the end of a three-year period, the number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the percentage change in the Company’s book value per share at the end of the vesting period. At each reporting period, the Company reassesses the probability of the performance condition being achieved and a stock-based compensation expense is recognized based upon management’s assessment. Book value RSUs for which the performance metric has not been met are forfeited. The TSR RSUs cliff-vest at the end of a three-year period. The number of TSR RSUs that will ultimately vest is based upon the percentile ranking of the Company’s TSR among a peer group. The number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the extent to which the TSR metric is achieved.

The Company recorded $4.9 million and $4.8 million of stock-based compensation expense related to RSUs for the three months ended September 30, 2019 and 2018, respectively. The Company recorded $14.9 million and $13.2 million of stock-based compensation expense related to RSUs for the nine months ended September 30, 2019 and 2018, respectively.

Stock Options

A summary of stock option activity for the nine months ended September 30, 2019 follows:

				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)(1)
Balance at December 31, 2018	2,620,295	$	20.40	1.49	$	25,697
Granted	—	$	—	—	$	—
Exercised	(1,603,139)	$	20.00	—	$	29,909
Forfeited/canceled	—	$	—	—	$	—
Balance at September 30, 2019	1,017,156	$	21.04	0.80	$	21,138
Vested and exercisable as of September 30, 2019	1,017,156	$	21.04	0.80	$	21,138

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of our Class A common stock as of the respective date.

As of September 30, 2019, all of the Company’s outstanding employee stock options had fully vested and there were no unrecognized compensation costs related to outstanding stock options as of September 30, 2019. As a result, there was no stock-based compensation expense related to Stock Options for the three and nine months ended September 30, 2019 and 2018.

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The following table summarizes additional information regarding exercisable and vested stock options at September 30, 2019:

	Stock Options Exercisable
	and Vested
		Weighted-
		Average
	Number of	Remaining Life
Range of exercise prices	Shares	(in years)
$20.00	897,156	0.69
$28.80	120,000	1.57
$20.00 - $28.80	1,017,156	0.80

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 time based and book value RSUs is determined based on the closing market price of the Company’s Class A common stock on the date of grant, while the fair value of TSR RSUs 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, 2019, the Company granted 670,279 RSUs of which 139,895 are TSR RSUs. The following table summarizes the activities for our unvested RSUs for the nine months ended September 30, 2019:

	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2018	1,055,325	$	41.66
Granted	670,279	$	39.64
Vested	(271,037)	$	34.58
Forfeited/canceled	(202,621)	$	32.40
Unvested at September 30, 2019	1,251,946	$	43.62
Expected to vest after September 30, 2019	1,341,575	$	43.45

As of September 30, 2019, there was $29.2 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 years.

Note 11.  Investments

The Company entered into an agreement with a co-investment vehicle arranged by Napier Park Global Capital (US) LP to participate in two joint ventures and formed Blackbird Capital I, LLC and Blackbird Capital II, LLC for the purpose of investing in commercial aircraft and leasing them to airlines throughout the world. We also provide management services to these joint ventures for a fee based upon aircraft assets under management. The Company’s non-controlling interests in each joint venture is 9.5% and are accounted for as investments under the equity method of accounting. The Company’s investment in these joint ventures was $45.9 million and $40.6 million as of September 30, 2019 and December 31, 2018, respectively, and is recorded in Other assets on the Consolidated Balance Sheets. As of September 30, 2019, the Company’s total unfunded commitment to Blackbird Capital II, LLC was $30.5 million.

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On August 1, 2018, we entered into an agreement to sell 18 aircraft to Thunderbolt Aircraft Lease Limited II (“Thunderbolt II”), an asset-backed securities platform that will facilitate the continued management and eventual sale of the aircraft assets. The Company’s non-controlling interest in Thunderbolt II is 5.1% and it is accounted for as an investment under the cost method of accounting. The Company manages all of the aircraft in Thunderbolt II’s portfolio. During the nine months ended September 30, 2019, we completed the sale of three aircraft from our operating lease portfolio to Thunderbolt II. We expect the sale of the remaining three aircraft to be completed in 2019. The Company’s investment in Thunderbolt II was $5.4 million as of September 30, 2019 and December 31, 2018, and is recorded in Other assets on the Consolidated Balance Sheets.

Note 12.  Flight Equipment Held for Sale

As of September 30, 2019, we had six aircraft, with a carrying value of $208.5 million, which were held for sale and included in Flight equipment subject to operating leases on the Consolidated Balance Sheets. We expect the sale of all six aircraft to be completed in 2019. We cease recognition of depreciation expense once an aircraft is classified as held for sale. As of December 31, 2018, we had six aircraft classified as held for sale, with a carrying value of $241.6 million.

Note 13.  Subsequent Events

On October 31, 2019, we initiated a portfolio sale of 19 aircraft to Thunderbolt Aircraft Lease Limited III (“Thunderbolt III”), an asset-backed securities platform. We anticipate closing the transaction on November 8, 2019 and will continue management of these aircraft assets. The Company’s non-controlling interest in Thunderbolt III will be approximately 5.0% and will be accounted for as an investment under the cost method of accounting. We expect a majority of the aircraft transfers to be completed over the next two quarters.

On November 6, 2019, our board of directors approved a quarterly cash dividend of $0.15 per share on our outstanding Class A common stock. The dividend will be paid on January 6, 2020 to holders of record of our Class A common stock as of December 20, 2019. Our board of directors also approved a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock, which will be paid on December 15, 2019 to holders of record of our Series A Preferred Stock as of November 30, 2019.

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

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

Overview

Air Lease Corporation is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as Boeing and 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 to third-parties, including other leasing companies, financial services companies, airlines and through our asset-backed securities platform. 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 owned fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by the gains from our aircraft sales, trading and other activities and our management fees.

During the nine months ended September 30, 2019, we purchased and took delivery of 42 aircraft from our new order pipeline, purchased one aircraft in the secondary market and sold 11 aircraft, ending the period with a total of 307 aircraft with a net book value of $18.9 billion. The weighted average lease term remaining on our operating lease portfolio was 7.2 years and the weighted average age of our owned fleet was 3.6 years as of September 30, 2019. Our fleet grew by 20.4% based on net book value of $18.9 billion as of September 30, 2019, compared to $15.7 billion as of December 31, 2018. In addition, we had a managed fleet of 64 aircraft as of September 30, 2019, compared to a managed fleet of 61 aircraft as of December 31, 2018. We have a globally diversified customer base comprised of 108 airlines in 59 countries. As of November 7, 2019, all aircraft in our operating lease portfolio, except for one aircraft, were subject to letters of intent or lease agreements.

In June 2019, we entered into memorandums of understanding (“MOU”) with Airbus to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 100 aircraft comprised of 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft, and we have purchase options for an additional 25 A220 aircraft.

As of September 30, 2019, we had commitments to purchase 316 aircraft from Airbus and Boeing for delivery through 2024, with an estimated aggregate commitment of $22.5 billion. Our purchase commitments include supplemental agreements entered into with Boeing in October 2019 to convert existing purchase orders of 15 737 MAX aircraft to five 787-9 aircraft. We ended the third quarter of 2019 with $28.7 billion in committed minimum future rental payments and had placed approximately 83% of our committed order book on long-term leases for aircraft delivering through 2021. This includes $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.6 billion in minimum future rental payments related to aircraft which will be delivered during the remainder of 2019 through 2023.

On October 31, 2019, we initiated a portfolio sale of 19 aircraft to Thunderbolt Aircraft Lease Limited III (“Thunderbolt III”), an asset-backed securities platform. We anticipate closing the transaction on November 8, 2019 and will continue management of these aircraft assets. The Company’s non-controlling interest in Thunderbolt III will be approximately 5.0% and will be accounted for as an investment under the cost method of accounting. We expect a majority of the aircraft transfers to be completed over the next two quarters.

In 2019, we raised approximately $4.5 billion in debt to finance the growth of our fleet and refinance existing debt maturities, increasing our liquidity position to $5.6 billion. During the first nine months of 2019, we have issued $2.85 billion in Medium-Term Notes, with maturities ranging between 2021 and 2029 and that bear interest at fixed rates between 2.25% and 4.25%, and floating rate notes that bear interest at three-month LIBOR plus 0.67%. In May 2019, we amended and extended our unsecured revolving credit facility and increased our unsecured revolving credit facility by an aggregate of $1.3 billion to $5.8 billion and extended the final maturity date to 2023 while maintaining our pricing with a facility fee of 0.20% and current borrowings bearing interest at a floating rate of LIBOR plus 1.05%. We ended the third quarter of 2019 with total debt outstanding, net of discounts and issuance costs, of $13.8 billion, of which 84.7%

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was at a fixed rate and 96.9% of which was unsecured. Our composite cost of funds was 3.37% as of September 30, 2019.

Our total revenues for the quarter ended September 30, 2019 increased by 17.8% to $530.9 million, compared to the quarter ended September 30, 2018. This increase was principally driven by the continued growth of our fleet and an increase in our aircraft sales, trading and other activity. Our net income available to common stockholders for the quarter ended September 30, 2019 was $151.9 million compared to $146.6 million for the quarter ended September 30, 2018. Our diluted earnings per share for the quarter ended September 30, 2019 was $1.34 compared to $1.32 for the quarter ended September 30, 2018. The increase in net income available to common stockholders in the third quarter of 2019 as compared to 2018 was primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

Our adjusted net income before income taxes excludes the effects of certain non-cash items, one-time or non-recurring items, that are not expected to continue in the future and certain other items. Our adjusted net income before income taxes for the three months ended September 30, 2019 was $203.9 million or $1.80 per diluted share, compared to $192.4 million or $1.73 per diluted share for the three months ended September 30, 2018. The increase in our adjusted net income before income taxes is primarily driven by the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses. Our adjusted pre-tax profit margin for the three months ended September 30, 2019 was 38.4% compared to 42.7% for the three months ended September 30, 2018. 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 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 reconciliation of these measures to net income available to common stockholders.

Our Fleet

Portfolio metrics of our fleet as of September 30, 2019 and December 31, 2018 are as follows:

	September 30, 2019		December 31, 2018
Aggregate fleet net book value	$	18.9 billion	$	15.7 billion
Weighted-average fleet age(1)		3.6 years		3.8 years
Weighted-average remaining lease term(1)		7.2 years		6.8 years
Owned fleet		307		275
Managed fleet		64		61
Aircraft on order(2)(3)		316		372
Aircraft purchase options(4)		50		50
Total		737		758
Current fleet contracted rentals	$	14.1 billion	$	11.8 billion
Committed fleet rentals	$	14.6 billion	$	13.9 billion
Total committed rentals	$	28.7 billion	$	25.7 billion

(1) Weighted-average fleet age and remaining lease term calculated based on net book value.

(2) Excluded from the table above are MOUs with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 100 aircraft comprised of 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft and we have purchase options for an additional 25 A220 aircraft.

(3) The table above reflects the conversion of purchase orders for 15 Boeing 737 MAX aircraft to five Boeing 787-9 aircraft pursuant to an October 2019 agreement with Boeing.

(4) As of September 30, 2019 and December 31, 2018, we had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft.

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The following table sets forth the net book value and percentage of the net book value of our flight equipment subject to operating lease in the indicated regions based on each airline’s principal place of business as of September 30, 2019 and December 31, 2018 (in thousands, except percentages):

	September 30, 2019				December 31, 2018
	Net Book				Net Book
Region	Value		% of Total		Value		% of Total
Europe	$	5,506,649	29.2	%	$	4,692,341	29.9	%
Asia (excluding China)		4,866,953	25.7	%		3,846,785	24.5	%
China		3,063,894	16.2	%		2,663,903	17.0	%
The Middle East and Africa		2,252,077	11.9	%		1,952,900	12.4	%
Central America, South America and Mexico		1,262,891	6.7	%		1,078,900	6.9	%
U.S. and Canada		1,006,765	5.3	%		757,884	4.8	%
Pacific, Australia and New Zealand		952,038	5.0	%		714,397	4.5	%
Total	$	18,911,267	100.0	%	$	15,707,110	100.0	%

The following table sets forth the number of aircraft we owned by aircraft type as of September 30, 2019 and December 31, 2018:

	September 30, 2019			December 31, 2018
	Number of			Number of
Aircraft type	Aircraft	% of Total		Aircraft	% of Total
Airbus A319-100	1	0.3	%	1	0.4	%
Airbus A320-200	30	9.8	%	35	12.7	%
Airbus A320-200neo	11	3.6	%	6	2.2	%
Airbus A321-200	33	10.7	%	34	12.4	%
Airbus A321-200neo	29	9.4	%	14	5.1	%
Airbus A330-200	14	4.6	%	15	5.4	%
Airbus A330-300	6	2.0	%	5	1.8	%
Airbus A330-900neo	6	2.0	%	1	0.4	%
Airbus A350-900	10	3.3	%	6	2.2	%
Boeing 737-700	4	1.3	%	4	1.4	%
Boeing 737-800	95	30.9	%	98	35.6	%
Boeing 737-8 MAX	15	4.9	%	14	5.1	%
Boeing 767-300ER	1	0.3	%	1	0.4	%
Boeing 777-200ER	1	0.3	%	1	0.4	%
Boeing 777-300ER	24	7.8	%	24	8.7	%
Boeing 787-9	23	7.5	%	15	5.4	%
Boeing 787-10	3	1.0	%	—	—	%
Embraer E190	1	0.3	%	1	0.4	%
Total(1)	307	100.0	%	275	100.0	%

(1) As of September 30, 2019 and December 31, 2018, we had six aircraft held for sale at the end of both periods.

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As of September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table below, the Company had commitments to acquire a total of 316 new aircraft for delivery through 2024 as follows:

Aircraft Type	2019	2020	2021	2022	2023	Thereafter	Total
Airbus A320/321neo(1)	7	28	32	25	25	—	117
Airbus A330-900neo	1	3	3	6	3	—	16
Airbus A350-900/1000	—	3	6	3	2	—	14
Boeing 737-7/8/9 MAX(2)	—	31	46	28	25	5	135
Boeing 787-9/10(2)	1	15	7	6	5	—	34
Total(3)(4)	9	80	94	68	60	5	316

(1) Our Airbus A320/321neo aircraft orders include 56 long-range variants.

(2) The table above reflects the conversion of purchase orders for 15 Boeing 737 MAX aircraft to five Boeing 787-9 aircraft pursuant to an October 2019 agreement with Boeing. The table also reflects our estimate of future Boeing 737 MAX aircraft delivery delays based on information currently available to us. The actual delivery dates of such Boeing 737 MAX aircraft may differ from our estimate and could be further impacted by the length of the grounding and the pace at which Boeing can deliver aircraft following the lifting of the grounding, among other factors.

(3) In addition to the aircraft from our order book, we have a commitment to purchase one used Airbus A330-300 aircraft from a third party, which is scheduled for delivery in 2019.

(4) Excluded from the table above are MOUs with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 100 aircraft comprised of 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft, and we have purchase options for an additional 25 A220 aircraft.

In addition to our commitments, as of September 30, 2019, we had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.

Pursuant to our purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agrees to contractual delivery dates for each aircraft ordered. However, these dates can change for a variety of reasons. In the last few years, Airbus and Boeing have had delivery delays, and these delays have significantly impacted when our aircraft have been delivered.

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

For several years, we have experienced delivery delays for certain of our Airbus orderbook aircraft, primarily A321neo aircraft and, to a lesser extent, A330neo aircraft. Airbus has told us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2021.

The worldwide grounding of the Boeing 737 MAX began on March 10, 2019, and remains in effect. As a result, Boeing has halted deliveries of all Boeing 737 MAX aircraft. Lifting of the grounding is subject to global regulatory authorities and we are unable to speculate as to when this may occur. Boeing 737 MAX deliveries may be impacted by the duration of the grounding and the speed by which Boeing can deliver aircraft following the lifting of the grounding. We expect that if the grounding continues for an extended time, or if there are significant Boeing 737 MAX delivery delays even after the grounding is lifted, some of our customers may seek to cancel their lease contracts with us. It is unclear at this point if we will cancel some of our Boeing 737 MAX delivery positions with Boeing or find replacement lessees. We are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of and the delivery delays associated with the Boeing 737 MAX aircraft that we own and have on order.

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The following table, which is subject to change based on Airbus delivery delays and the Boeing 737 MAX grounding, shows the number of new aircraft scheduled to be delivered as of September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table above, along with the lease placements of such aircraft as of November 7, 2019:

	Number of	Number
Delivery Year	Aircraft	Leased	% Leased
2019	9	9	100.0	%
2020	80	76	95.0	%
2021	94	67	71.3	%
2022	68	28	41.2	%
2023	60	6	10.0	%
Thereafter	5	—	—	%
Total	316	186

Aircraft Industry and Sources of Revenues

Our revenues are principally derived from operating leases with scheduled and charter airlines throughout the world. We have a globally diversified customer base of 108 airlines in 59 different countries, with over 95% of our business being sourced outside the U.S.

Demand for air travel has consistently grown in terms of both passenger traffic and number of aircraft in service. The International Air Transport Association (“IATA”) reported that passenger traffic for the first nine months of 2019 grew 4.5%. The number of aircraft in service has grown steadily and the number of leased aircraft in the global fleet has increased. The long-term outlook for aircraft demand remains robust due to increased passenger traffic and the need to replace aging aircraft.

From time to time, our airline customers face financial difficulties. In September 2019, Thomas Cook Airlines, a British airline, ceased all operations and filed for bankruptcy. At the time of the filing, we had seven aircraft from our owned fleet and four aircraft from our managed fleet leased to Thomas Cook Airlines. Despite the bankruptcy of Thomas Cook Airlines, we continue to see airlines globally performing well. We experienced strong demand for the aircraft that were previously leased to Thomas Cook Airlines and as of November 7, 2019, we have entered into leases or letters of intent for all of these aircraft.

The worldwide grounding of the Boeing 737 MAX began on March 10, 2019, and remains in effect. As a result, Boeing has halted deliveries of all Boeing 737 MAX aircraft. As of September 30, 2019, we owned and leased 15 Boeing 737 MAX aircraft and we have 135 Boeing 737 MAX aircraft on order. Lifting of the grounding is subject to global regulatory authorities and we are unable to speculate as to when this may occur. Because of this uncertainty, we have curtailed our leasing of our orderbook aircraft since the grounding.

With respect to the 15 Boeing 737 MAX aircraft we own and lease, our airline customers are obligated to continue to make payments under the lease, irrespective of any difficulties in which the lessees may encounter, including an aircraft fleet grounding. However, the airlines affected by this grounding have had to adjust flight schedules or cancel flights, back fill aircraft with other aircraft types or keep older aircraft in service longer. These operational changes and the uncertainty of when the Boeing 737 MAX aircraft will return to service and when Boeing will resume deliveries have impacted the profitability of certain airlines.

We expect that if the grounding continues for an extended time, or if there are significant Boeing 737 MAX delivery delays even after the grounding is lifted, some of our customers may seek to cancel their lease contracts with us. It is unclear at this point if we will cancel some of our Boeing 737 MAX delivery positions with Boeing or find replacement lessees. We are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of and the delivery delays associated with the Boeing 737 MAX aircraft that we own and have on order.

For several years, Airbus has had delivery delays for certain of its aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. Airbus has told us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2021. These delays also have impacted airline operations and the profitably of certain airlines.

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The Airbus delays and the Boeing 737 MAX grounding may impact airline growth, passenger growth and airline profitability.

The success of the commercial airline industry is linked to the strength of global economic development, which may be negatively impacted by macroeconomic conditions and geopolitical and policy risks. For example, the U.S. government has recently made statements and taken certain actions that have led to, and may lead to, further changes to U.S. and international trade policies, including recently imposed tariffs affecting certain products exported by a number of U.S. trading partners, such as Europe and China. In response, many U.S. trading partners, including Europe and China, have imposed or proposed new or higher tariffs on U.S. products. In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new aircraft imported from Europe, including Airbus aircraft. We are currently monitoring the impact of this announcement on our future Airbus deliveries to U.S. customers. We cannot predict what further actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and U.S. trading partners. Accordingly, it is difficult to predict exactly how, and to what extent, such actions may impact our business, or the business of our lessees or aircraft manufacturers. Any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for aircraft, increase the cost of aircraft components, further delay production, impact the competitive position of certain aircraft manufacturers or prevent aircraft manufacturers from being able to sell aircraft in certain countries. Our leases are primarily structured as triple net leases, whereby the lessee is responsible for all operating costs including taxes, insurance, and aircraft maintenance.

We believe the leasing industry has remained resilient over time across a variety of global economic conditions, and we remain optimistic about the long-term growth prospects for air transportation. We see a growing demand for aircraft leasing in the broader industry and a role for us in helping airlines modernize their fleets to support the growth of the airline industry. However, with the growth in aircraft leasing worldwide, we are witnessing an increase in competition among aircraft lessors resulting in more variation in lease rates.

Liquidity and Capital Resources

Overview

We finance the purchase of aircraft and our business with available cash balances, internally generated funds, including through aircraft sales and trading activity, and debt financings. We have structured ourselves with the goal to maintain investment-grade credit metrics and our debt financing strategy has focused on funding our business on an unsecured basis. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another. In addition, we may, to a limited extent, utilize export credit financing or other forms of secured financing in support of our new aircraft deliveries.

We ended the third quarter of 2019 with total debt outstanding, net of discounts and issuance costs, of $13.8 billion compared to $11.5 billion as of December 31, 2018. Our unsecured debt increased to $13.5 billion as of September 30, 2019 from $11.3 billion as of December 31, 2018. Our unsecured debt as a percentage of total debt increased to 96.9% as of September 30, 2019 from 96.5% as of December 31, 2018.

We increased our cash flows provided by operating activities by 11.7% or $101.5 million, to $971.6 million for the nine months ended September 30, 2019 as compared to $870.1 million for the nine months ended September 30, 2018. The increase in our cash flow provided by operating activities is due to the increase in our net income and growth of our fleet. Our cash flow used in investing activities was $3.6 billion for the nine months ended September 30, 2019, 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 $2.6 billion for the nine months ended September 30, 2019, which resulted primarily from the issuance of unsecured notes and the issuance of preferred stock during the first nine months of 2019, partially offset by the repayment of outstanding debt.

We ended the third quarter of 2019 with available liquidity of $5.6 billion which is comprised of unrestricted cash of $291.8 million and an undrawn balance under our committed unsecured revolving credit facility of $5.3 billion. We believe that we have sufficient liquidity to satisfy the operating requirements of our business through the next twelve months.

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Our financing plan for the next twelve months is focused on funding the purchase of aircraft, including the increased aircraft deliveries we expect in 2019, and our business with available cash balances, internally generated funds, including through aircraft sales and trading activities, and debt financings. Our debt financing plan continues to focus on raising unsecured debt in the global bank and investment grade capital markets. In addition, we may utilize, to a limited extent, export credit financing in support of our new aircraft deliveries.

We are in compliance in all material respects with the covenants 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, 2018 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

Debt

Our debt financing was comprised of the following at September 30, 2019 and December 31, 2018 (in thousands, except percentages):

	September 30, 2019			December 31, 2018
Unsecured
Senior notes	$	12,050,000		$	10,043,445
Term financings		813,150			607,340
Revolving credit facilities		610,000			602,000
Total unsecured debt financing		13,473,150			11,252,785
Secured
Term financings		392,593			371,203
Export credit financing		33,274			38,265
Total secured debt financing		425,867			409,468
Total debt financing		13,899,017			11,662,253
Less: Debt discounts and issuance costs		(147,145)			(123,348)
Debt financing, net of discounts and issuance costs	$	13,751,872		$	11,538,905
Selected interest rates and ratios:
Composite interest rate(1)		3.37	%		3.46	%
Composite interest rate on fixed-rate debt(1)		3.41	%		3.42	%
Percentage of total debt at fixed-rate		84.74	%		86.41	%

(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, 2019, we had $12.1 billion in senior unsecured notes outstanding. As of December 31, 2018, we had $10.0 billion in senior unsecured notes outstanding.

During the nine months ended September 30, 2019, we issued $2.85 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $700.0 million due 2024 at a fixed rate of 4.25%, (ii) $750.0 million due 2026 at a fixed rate of 3.75%, (iii) $300.0 million due 2021 that bear interest at a floating rate of three-month LIBOR plus 0.67%, (iv) $600.0 million due 2023 at a fixed rate of 2.25% and (v) $500.0 million due 2029 at a fixed rate of 3.25%.

Unsecured revolving credit facilities

As of September 30, 2019, the total outstanding balance on our unsecured revolving credit facilities was approximately $610.0 million. The total outstanding balance under our unsecured revolving credit facilities was approximately $602.0 million as of December 31, 2018.

In May 2019, we amended and extended our committed unsecured revolving credit facility whereby, among other things, we extended the final maturity date from May 5, 2022 to May 5, 2023 and, after giving effect to commitments

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that matured on May 5, 2019, increased the total revolving commitments to approximately $5.8 billion, representing an increase of 26.6% from December 31, 2018, with a 0.20% facility fee and current borrowings bearing interest at a floating rate of LIBOR plus 1.05%. On July 31, 2019, we executed a commitment increase to our unsecured revolving credit facility, which increased the aggregate facility capacity by an additional $58.0 million. 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, commitments totaling approximately $5.0 million that mature on May 5, 2021, and commitments totaling $92.7 million that mature on May 5, 2020.

As of September 30, 2019, borrowings under the committed unsecured revolving credit facility will generally bear interest at either (a) LIBOR plus a margin of 1.05% per year or (b) an alternative base rate plus a margin of 0.05% per year, subject, in each case, to increases or decreases based on declines in the credit ratings for our debt. We are required to pay a facility fee of 0.20% per year (also subject to increases or decreases based on declines in the credit ratings for our debt) in respect of total commitments under the committed unsecured revolving credit facility. Borrowings under the committed unsecured revolving credit facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.

Preferred equity

On March 5, 2019, we issued 10,000,000 shares of 6.150% 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. We will pay dividends on the 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 $25.00 per share at a rate per annum equal to: (i) 6.150% during the first five years and payable quarterly in arrears beginning on June 15, 2019, and (ii) three-month LIBOR plus a spread of 3.650% per annum from March 15, 2024, reset quarterly and payable quarterly in arrears beginning on June 15, 2024.

We may redeem shares of the Series A Preferred Stock at our option, in whole or in part, from time to time, on or after March 15, 2024, for cash at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date, without accumulation of any undeclared dividends. We may also redeem shares of the Series A Preferred Stock at our option under certain other limited conditions.

On May 8, 2019, our board of directors approved a quarterly cash dividend of $0.427083 per share on our outstanding Series A Preferred Stock, which was paid on June 15, 2019 to holders of record of our Series A Preferred Stock as of May 31, 2019.

On August 7, 2019, our board of directors also approved a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock, which was paid on September 15, 2019 to holders of record of our Series A Preferred Stock as of August 31, 2019.

Credit ratings

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. In July 2019, Fitch Ratings reaffirmed its issuer and senior unsecured debt ratings and outlook. 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-	A-	Stable	December 14, 2018
Standard and Poor's	BBB	BBB	Stable	December 18, 2018
Fitch Ratings	BBB	BBB	Stable	July 15, 2019

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.

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Results of Operations

The following table presents our historical operating results for the three and nine month periods ended September 30, 2019 and 2018 (in thousands, except per share amounts and percentages):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(unaudited)
Revenues
Rental of flight equipment	$	492,869		$	422,763		$	1,412,478		$	1,194,104
Aircraft sales, trading and other		38,033			27,935			55,870			35,617
Total revenues		530,902			450,698			1,468,348			1,229,721
Expenses
Interest		104,637			82,189			290,681			224,584
Amortization of debt discounts and issuance costs		9,078			8,199			26,330			24,231
Interest expense		113,715			90,388			317,011			248,815
Depreciation of flight equipment		183,788			149,703			514,948			428,437
Selling, general and administrative		34,715			26,377			92,188			71,194
Stock-based compensation		4,897			4,848			14,934			13,165
Total expenses		337,115			271,316			939,081			761,611
Income before taxes		193,787			179,382			529,267			468,110
Income tax expense		(38,000)			(32,808)			(107,081)			(95,674)
Net income	$	155,787		$	146,574		$	422,186		$	372,436
Preferred stock dividends		(3,844)			—			(8,115)			—
Net income available to common stockholders	$	151,943		$	146,574		$	414,071		$	372,436
Earnings per share of Class A and B common stock
Basic	$	1.36		$	1.41		$	3.71		$	3.58
Diluted	$	1.34		$	1.32		$	3.67		$	3.36
Other financial data
Pre-tax profit margin		36.5	%		39.8	%		36.0	%		38.1	%
Adjusted net income before income taxes(1)	$	203,918		$	192,429		$	562,416		$	505,506
Adjusted pre-tax profit margin(1)		38.4	%		42.7	%		38.3	%		41.1	%
Adjusted diluted earnings per share before income taxes(1)	$	1.80		$	1.73		$	4.98		$	4.55
Pre-tax return on common equity (trailing twelve months)		14.3	%		15.6	%		14.3	%		15.6	%
Adjusted pre-tax return on common equity (trailing twelve months)(1)		15.4	%		16.8	%		15.4	%		16.8	%

(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 plus assumed conversions 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.

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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 tables show the reconciliation of net income available to common stockholders to adjusted net income before income taxes and adjusted pre-tax profit margin (in thousands, except percentages):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted net income before income taxes and adjusted pre-tax profit margin:
Net income available to common stockholders	$	151,943		$	146,574		$	414,071		$	372,436
Amortization of debt discounts and issuance costs		9,078			8,199			26,330			24,231
Stock-based compensation		4,897			4,848			14,934			13,165
Provision for income taxes		38,000			32,808			107,081			95,674
Adjusted net income before income taxes	$	203,918		$	192,429		$	562,416		$	505,506
Total revenues	$	530,902		$	450,698		$	1,468,348		$	1,229,721
Adjusted pre-tax profit margin(1)		38.4	%		42.7	%		38.3	%		41.1	%

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

The following table shows the reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes:
Net income available to common stockholders	$	151,943	$	146,574	$	414,071	$	372,436
Amortization of debt discounts and issuance costs		9,078		8,199		26,330		24,231
Stock-based compensation		4,897		4,848		14,934		13,165
Provision for income taxes		38,000		32,808		107,081		95,674
Adjusted net income before income taxes	$	203,918	$	192,429	$	562,416	$	505,506
Assumed conversion of convertible senior notes		—		1,823		—		5,309
Adjusted net income before income taxes plus assumed conversions	$	203,918	$	194,252	$	562,416	$	510,815
Weighted-average diluted common shares outstanding		113,263,396		112,509,612		112,837,526		112,377,870
Adjusted diluted earnings per share before income taxes	$	1.80	$	1.73	$	4.98	$	4.55

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The following table shows the reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity (in thousands, except percentages):

	Trailing Twelve Months
	September 30,
	2019			2018
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity:
Net income available to common stockholders	$	552,470		$	843,538
Amortization of debt discounts and issuance costs		34,805			31,297
Stock-based compensation		19,247			18,534
Provision for income taxes		140,710			(209,764)
Adjusted net income before income taxes	$	747,232		$	683,605
Common shareholders' equity as of beginning of the period	$	4,478,918		$	3,655,583
Common shareholders' equity as of end of the period	$	5,212,173		$	4,478,918
Average common shareholders' equity	$	4,845,546		$	4,067,251
Adjusted pre-tax return on common equity		15.4	%		16.8	%

Three months ended September 30, 2019, compared to the three months ended September 30, 2018

Rental revenue

As of September 30, 2019, we owned 307 aircraft with a net book value of $18.9 billion and recorded $492.9 million in rental revenue for the quarter then ended, which included $4.6 million in amortization expense related to initial direct costs, which is net of overhaul revenue. In the prior year, as of September 30, 2018, we owned 268 aircraft with a net book value of $15.1 billion and recorded $422.8 million in rental revenue for the quarter ended September 30, 2018, which included overhaul revenue, net of amortization expense related to initial direct costs, of $0.3 million. The increase in rental revenue was primarily due to the increase in net book value of our operating lease portfolio to $18.9 billion as of September 30, 2019 from $15.1 billion as of September 30, 2018.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $38.0 million for the three months ended September 30, 2019 compared to $27.9 million for the three months ended September 30, 2018. During the quarter ended September 30, 2019, we recorded $17.3 million in gains from the sale of five aircraft from our operating lease portfolio. During the quarter ended September 30, 2018, we recorded $24.1 million in gains from the sale of 10 aircraft from our operating lease portfolio to Thunderbolt II. The increase in aircraft sales, trading and other revenue was primarily due to an increase in forfeitures of security deposits and servicing fee revenue from our managed fleet.

Interest expense

Interest expense totaled $113.7 million for the three months ended September 30, 2019 compared to $90.4 million for the three months ended September 30, 2018. The increase was primarily due to an increase in our aggregate debt balance partially offset by a decrease in our composite interest rate. 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 $183.8 million in depreciation expense of flight equipment for the three months ended September 30, 2019 compared to $149.7 million for the three months ended September 30, 2018. The increase in depreciation expense for the three months ended September 30, 2019, compared to the three months ended September 30, 2018, is primarily attributable to the acquisition of additional aircraft during the last twelve months.

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Selling, general and administrative expenses

We recorded selling, general and administrative expenses of $34.7 million for the three months ended September 30, 2019 compared to $26.4 million for the three months ended September 30, 2018. Selling, general and administrative expense as a percentage of total revenue increased to 6.5% for the three months ended September 30, 2019 compared to 5.9% for the three months ended September 30, 2018. Selling, general and administrative expenses increased due in part to increased transactional expenses incurred during the period. 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.

Taxes

The effective tax rate was 19.6% and 18.3% for the three months ended September 30, 2019 and 2018, respectively. Changes in the tax rate were primarily driven by variances in permanent items.

Net income available to common stockholders

For the three months ended September 30, 2019, we reported consolidated net income available to common stockholders of $151.9 million, or $1.34 per diluted share, compared to a consolidated net income available to common stockholders of $146.6 million, or $1.32 per diluted share, for the three months ended September 30, 2018. Net income available to common stockholders increased in the third quarter of 2019 as compared to 2018, primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

Adjusted net income before income taxes

For the three months ended September 30, 2019, we recorded adjusted net income before income taxes of $203.9 million, or $1.80 per diluted share, compared to an adjusted net income before income taxes of $192.4 million, or $1.73 per diluted share, for the three months ended September 30, 2018. Our adjusted net income before income taxes increased primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

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.

Nine months ended September 30, 2019, compared to the nine months ended September 30, 2018

Rental revenue

As of September 30, 2019, we owned 307 aircraft with a net book value of $18.9 billion and recorded $1.4 billion in rental revenue for the nine months then ended, which included overhaul revenue, net of amortization expense related to initial direct costs, of $11.3 million. In the prior year, as of September 30, 2018, we owned 268 aircraft with a net book value of $15.1 billion and recorded $1.2 billion in rental revenue for the nine months ended September 30, 2018, which included $2.4 million in amortization expense related to initial direct costs, which is net of overhaul revenue. The increase in rental revenue was primarily due to the increase in net book value of our operating lease portfolio to $18.9 billion as of September 30, 2019 from $15.1 billion as of September 30, 2018.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $55.9 million for the nine months ended September 30, 2019 compared to $35.6 million for the nine months ended September 30, 2018. During the nine months ended September 30, 2019, we recorded $18.9 million in gains from the sale of 11 aircraft from our operating lease portfolio. During the nine months ended September 30, 2018, we recorded $24.1 million in gains from the sale of 10 aircraft from our operating lease portfolio to Thunderbolt II. The increase in aircraft sales, trading and other revenue was primarily due to an increase in forfeitures of security deposits and servicing fee revenue from our managed fleet.

30

Interest expense

Interest expense totaled $317.0 million for the nine months ended September 30, 2019 compared to $248.8 million for the nine months ended September 30, 2018. The increase was primarily due to an increase in our aggregate debt balance partially offset by a decrease in our composite rate. 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 $514.9 million in depreciation expense of flight equipment for the nine months ended September 30, 2019 compared to $428.4 million for the nine months ended September 30, 2018. The increase in depreciation expense for the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018, 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 $92.2 million for the nine months ended September 30, 2019 compared to $71.2 million for the nine months ended September 30, 2018. Selling, general and administrative expense as a percentage of total revenue increased to 6.3% for the nine months ended September 30, 2019 compared to 5.8% for the nine months ended September 30, 2018. Selling, general and administrative expenses increased due in part to increased transactional expenses incurred during the period. 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.

Taxes

The effective tax rate was 20.2% and 20.4% for the nine months ended September 30, 2019 and 2018, respectively. Changes in the tax rate were primarily driven by variances in permanent items.

Net income available to common stockholders

For the nine months ended September 30, 2019, we reported consolidated net income available to common stockholders of $414.1 million, or $3.67 per diluted share, compared to a consolidated net income available to common stockholders of $372.4 million, or $3.36 per diluted share, for the nine months ended September 30, 2018. Net income available to common stockholders increased in the third quarter of 2019 as compared to 2018, primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

Adjusted net income before income taxes

For the nine months ended September 30, 2019, we recorded adjusted net income before income taxes of $562.4 million, or $4.98 per diluted share, compared to an adjusted net income before income taxes of $505.5 million, or $4.55 per diluted share, for the nine months ended September 30, 2018. Our adjusted net income before income taxes increased primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

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.

31

Contractual Obligations

Our contractual obligations as of September 30, 2019, are as follows (in thousands):

	2019		2020		2021		2022		2023		Thereafter		Total
Long-term debt obligations	$	31,189	$	1,456,585	$	1,993,870	$	2,696,599	$	2,966,461	$	4,754,313	$	13,899,017
Interest payments on debt outstanding(1)		84,716		453,489		400,871		338,513		247,512		494,986		2,020,087
Purchase commitments(2)		771,134		6,419,215		6,647,270		4,750,559		3,678,420		225,142		22,491,740
Operating leases		1,472		6,879		7,050		6,506		6,386		37,582		65,875
Total	$	888,511	$	8,336,168	$	9,049,061	$	7,792,177	$	6,898,779	$	5,512,023	$	38,476,719

(1)Future interest payments on floating rate debt are estimated using floating rates in effect at September 30, 2019.

(2)Purchase commitments include only the costs of aircraft in our committed order book 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

The above table does not include any dividends we may pay on our Series A 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 investments in two joint ventures in which we own 9.5% of the equity of each joint venture. We account for our investment in these joint ventures using the equity method of accounting due to our level of influence and involvement in the joint ventures. We also have a non-controlling interest in Thunderbolt Aircraft Lease Limited II of 5.1% and it is accounted for as an investment under the cost method of accounting.

Critical Accounting Policies

Our critical accounting policies reflecting management’s estimates and judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2018. 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 in the nine months ended September 30, 2019.

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. As of September 30, 2019 and December 31, 2018, we had $2.1 billion and $1.6 billion in floating-rate debt outstanding, respectively. If interest rates increase, we would be obligated to make higher interest payments to our lenders. 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 rate were to increase by 1.0%, we would expect to incur additional interest expense on our existing indebtedness of approximately $21.2 million and $15.9 million as of September 30, 2019 and December 31, 2018,

32

respectively, each on an annualized basis, which would put downward pressure on our operating margins. Further, as of September 30, 2019, 84.7% 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 0.6% and 0.7% of our lease revenues were denominated in foreign currency as of September 30, 2019 and December 31, 2018, 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.

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, 2019. Based on that evaluation, our Certifying Officers have concluded that our disclosure controls and procedures were effective at September 30, 2019.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2019 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.

33

ITEM 1A. RISK FACTORS

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, 2018 and “Part II—Item 1A. Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

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

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   MINE SAFETY DISCLOSURES

None.

ITEM 5.   OTHER INFORMATION

None.

34

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
10.1	Commitment Increase Supplement, dated July 31, 2019, to the Second Amended and Restated Credit Agreement, 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.	10-Q	001-35121	10.3	August 8, 2019
10.2†	Amendment No. 7 to A330-900 NEO Purchase Agreement, dated, August 8, 2019, by and between Air Lease Corporation and Airbus S.A.S.				Filed herewith
31.1	Certification of the Chief Executive Officer and President Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				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

35

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
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, 2019, formatted in Inline XBRL

†	Portions of the referenced exhibit have been omitted pursuant to Item 601(b) of Regulation S-K because it (i) is not material and (ii) would be competitively harmful if publicly disclosed.
§	Management contract or compensatory plan or arrangement.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AIR LEASE CORPORATION
November 7, 2019	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President
	(Principal Executive Officer)
November 7, 2019	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

37

EX-10.2

Exhibit 10.2

CERTAIN IDENTIFIED INFORMATION MARKED BY [*] HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED

AMENDMENT N°7

TO THE

A330-900neo PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

and

AIR LEASE CORPORATION

as Buyer

Amendment Nº7 to the ALC A330-900neo Purchase Agreement
Ref. CLC - CT1902127	Page 1/5

AMENDMENT N° 7 TO THE

A330-900neo PURCHASE AGREEMENT

This Amendment N°7 (the “Amendment N°7”) dated 8 August 2019 is made

BETWEEN:

AIRBUS S.A.S., a French société par actions simplifiée, with its registered office at 2, rond-point Emile Dewoitine, 31700 Blagnac, France, registered with the Commercial and Companies Register of Toulouse under number 383 474 814 (the “Seller”),

and

AIR LEASE CORPORATION, a corporation organised and existing under the laws of the State of Delaware, U.S.A., having its principal place of business at 2000 Avenue of the Stars, Suite 1000N, Los Angeles, California 90067, U.S.A. (the “Buyer”).

The Buyer and Seller together are referred to as the “Parties”.

WHEREAS:

A.  The Buyer and the Seller have signed on 03 March 2015 a purchase agreement with reference CLC-CT1405166 for the manufacture and sale by the Seller and purchase by the Buyer of twenty-five (25) A330-900neo aircraft hereinafter together with its Exhibits and Letter Agreements and as further amended from time to time referred to as the “Agreement”.

B.  The Buyer and the Seller have signed an amendment n°1 dated 31 May 2016 with reference CLC-CT1614983 (“Amendment N°1”) whereby the Buyer [*].

C.  The Buyer and the Seller have signed an amendment n°2 dated 19 June 2017 with reference CLC-CT1702508 (“Amendment N°2”) for the manufacture and sale by the Seller and purchase by the Buyer of two (2) incremental A330-900neo aircraft.

D.  The Buyer and the Seller have signed an amendment n°3 dated 02 October 2017 with reference CLC-CT1705177 (“Amendment N°3”) in order to [*].

E.  The Buyer and the Seller have signed an Amendment n°4 dated 27 December 2017 with reference CLC-CT1709653 (“Amendment N°4”) for the manufacture and sale by the Seller and purchase by the Buyer of two (2) incremental A330-900neo aircraft.

F.  The Buyer and the Seller have signed an amendment n°5 dated 31 December 2018 with reference CLC-CT1709653 (“Amendment N°5”) in order [*].

G.  The Buyer and the Seller have signed an amendment n°6 dated 27 February 2019 with reference CLC-CT1901550 (“Amendment N°6”) in order to [*].

H.  The Buyer and the Seller now wish to enter into this Amendment N°7 in order to [*].

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°7. Capitalized terms used herein and not otherwise defined herein will have the meanings assigned thereto in the Agreement.

NOW IT IS HEREBY AGREED AS FOLLOWS:

Amendment Nº7 to the ALC A330-900neo Purchase Agreement
Ref. CLC - CT1902127	Page 2/5

1           [*]

2           [*]

3           [*]

4           [*]

5           [*]

6          INCONSISTENCY AND CONFIDENTIALITY

6.1       In the event of any inconsistency between the terms and conditions of the Agreement and those of this Amendment N°7, the latter shall prevail to the extent of such inconsistency, whereas the part of the Agreement not concerned by such inconsistency shall remain in full force and effect.

6.2       This Amendment N°7 reflects the understandings, commitments, agreements, representations and negotiations related to the matters set forth herein whatsoever, oral and written, and may not be varied except by an instrument in writing of even date herewith or subsequent hereto executed by the duly authorised representatives of both Parties.

6.3       This Amendment N°7 shall be treated by both Parties as confidential and shall not be released in whole or in part to any third party without the prior consent of the other Party except as may be required by law, or to professional advisors for the implementation hereof.

7          COUNTERPARTS

This Amendment N°7 may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

8          LAW AND JURISDICTION

This Amendment N°7 will be governed by and construed and the performance thereof will be determined in accordance with the laws of the State of New York, without giving effect to its conflicts of laws provisions that would result in the application of the law of any other jurisdiction.

The other provisions of Clause 22.6 of the Purchase Agreement shall apply to this Amendment N°7 as if the same were set out in full herein, mutatis mutandis.

Amendment Nº7 to the ALC A330-900neo Purchase Agreement
Ref. CLC - CT1902127	Page 3/5

IN WITNESS WHEREOF this Amendment N°7 was entered into the day and year first above written.

For and on behalf of	For and on behalf of
AIR LEASE CORPORATION	AIRBUS S.A.S.
/s/ Steven F. Udvar-Hazy	/s/ Benoît de Saint-Exupéry
By: Steven F. Udvar-Hazy	By: Benoît de Saint-Exupéry
Its: Executive Chairman	Its: Senior Vice President, Contracts

Amendment Nº7 to the ALC A330-900neo Purchase Agreement
Ref. CLC - CT1902127	Page 4/5

APPENDIX 1

DELIVERY SCHEDULE

CAC ID	Aircraft Rank	Scheduled Delivery Month	Aircraft Type
[*]	[*]	[*]-18	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]-23	[*]

Amendment Nº7 to the ALC A330-900neo Purchase Agreement
Ref. CLC - CT1902127	Page 5/5

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND PRESIDENT
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Plueger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Air Lease Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2019

/s/ John L. Plueger

John L. Plueger

Chief Executive Officer and President

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory B. Willis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Air Lease Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2019

/s/ Gregory B. Willis

Gregory B. Willis

Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 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

In connection with the Quarterly Report of Air Lease Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2019 (the “Report”), I, John L. Plueger, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2019
	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President (Principal Executive Officer)

EX-32.2

EXHIBIT 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

In connection with the Quarterly Report of Air Lease Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2019 (the “Report”), I, Gregory B. Willis, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2019
	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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Flight Equipment held for sale (Details) - Aircraft Held For Sale $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2019 aircraft	Sep. 30, 2019 USD ($) aircraft	Dec. 31, 2018 USD ($) aircraft
Flight Equipment Held for Sale
Number of aircraft sold or agreed to be sold | aircraft	6	6	6
Flight Equipment, Net | $		$ 208.5	$ 241.6

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands		9 Months Ended
	Mar. 05, 2019	Sep. 30, 2019	Dec. 31, 2018
Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred Stock, shares authorized		50,000,000	50,000,000
Preferred Stock, shares issued		10,000,000	0
Preferred Stock, shares outstanding		10,000,000	0
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock	6.15%
Series A liquidation preference		$ 250,000
Common Stock, issued shares	10,000,000
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	0
Preferred Stock, shares outstanding		10,000,000	0
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock		6.15%
Series A liquidation preference		$ 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		112,701,349	110,949,850
Common Stock, outstanding shares		112,701,349	110,949,850
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

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating Activities
Net income	$ 422,186	$ 372,436
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment	514,948	428,437
Stock-based compensation	14,934	13,165
Deferred taxes	97,566	95,674
Amortization of debt discounts and issuance costs	26,330	24,231
Amortization of prepaid lease costs	24,190	18,713
Gain on aircraft sales, trading and other activity	(45,123)	(24,469)
Changes in operating assets and liabilities:
Other assets	(149,740)	(62,528)
Accrued interest and other payables	51,156	110
Rentals received in advance	15,109	4,335
Net cash provided by operating activities	971,556	870,104
Investing Activities
Acquisition of flight equipment under operating lease	(3,021,758)	(1,874,094)
Payments for deposits on flight equipment purchases	(727,982)	(548,225)
Proceeds from aircraft sales, trading and other activity	426,382	239,067
Acquisition of aircraft furnishings, equipment and other assets	(236,847)	(204,449)
Net cash used in investing activities	(3,560,205)	(2,387,701)
Financing Activities
Issuance of common stock upon exercise of options	31,823	4,188
Cash dividends paid on Class A common stock	(43,383)	(31,155)
Preferred dividends paid	(8,115)
Tax withholdings on stock-based compensation	(4,089)	(7,141)
Net change in unsecured revolving facility	8,000	(847,000)
Proceeds from debt financings	3,135,918	3,358,885
Payments in reduction of debt financings	(947,837)	(1,131,206)
Net proceeds from preferred stock issuance	242,139
Debt issuance costs	(9,443)	(9,327)
Security deposits and maintenance reserve receipts	230,966	173,754
Security deposits and maintenance reserve disbursements	(33,905)	(52,764)
Net cash provided by financing activities	2,602,074	1,458,234
Net increase/(decrease) in cash	13,425	(59,363)
Cash, cash equivalents and restricted cash at beginning of period	322,998	308,282
Cash, cash equivalents and restricted cash at end of period	336,423	248,919
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $46,314 and $38,947 at September 30, 2019 and 2018, respectively	358,237	278,297
Cash paid for income taxes	9,515	2,506
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	1,161,573	663,223
Cash dividends declared on Class A common stock, not yet paid	$ 14,644	$ 10,407

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Debt Financing (Tables)

9 Months Ended

Sep. 30, 2019

Debt Financing

Summary of consolidated debt

The Company’s debt financing was comprised of the following at September 30, 2019 and December 31, 2018 (dollars in thousands):

	September 30,		December 31,
	2019		2018
Unsecured
Senior notes	$	12,050,000	$	10,043,445
Term financings		813,150		607,340
Revolving credit facilities		610,000		602,000
Total unsecured debt financing		13,473,150		11,252,785
Secured
Term financings		392,593		371,203
Export credit financing		33,274		38,265
Total secured debt financing		425,867		409,468
Total debt financing		13,899,017		11,662,253
Less: Debt discounts and issuance costs		(147,145)		(123,348)
Debt financing, net of discounts and issuance costs	$	13,751,872	$	11,538,905

Schedule of secured obligations

The Company’s secured obligations as of September 30, 2019 and December 31, 2018 are summarized below (dollars in thousands):

	September 30,		December 31,
	2019		2018
Nonrecourse	$	138,797	$	167,245
Recourse		287,070		242,223
Total secured debt financing	$	425,867	$	409,468
Number of aircraft pledged as collateral		17		20
Net book value of aircraft pledged as collateral	$	915,211	$	1,132,111

Schedule of maturities of debt outstanding

Maturities of debt outstanding as of September 30, 2019 are as follows (in thousands):

Years ending December 31,
2019	$	31,189
2020		1,456,585
2021		1,993,870
2022		2,696,599
2023		2,966,461
Thereafter		4,754,313
Total	$	13,899,017

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Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

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, 2018	2,620,295	$	20.40	1.49	$	25,697
Granted	—	$	—	—	$	—
Exercised	(1,603,139)	$	20.00	—	$	29,909
Forfeited/canceled	—	$	—	—	$	—
Balance at September 30, 2019	1,017,156	$	21.04	0.80	$	21,138
Vested and exercisable as of September 30, 2019	1,017,156	$	21.04	0.80	$	21,138

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of our Class A common stock as of the respective date.

Summary of additional information regarding exercisable and vested stock options

	Stock Options Exercisable
	and Vested
		Weighted-
		Average
	Number of	Remaining Life
Range of exercise prices	Shares	(in years)
$20.00	897,156	0.69
$28.80	120,000	1.57
$20.00 - $28.80	1,017,156	0.80

Summary of activities for unvested RSUs

	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2018	1,055,325	$	41.66
Granted	670,279	$	39.64
Vested	(271,037)	$	34.58
Forfeited/canceled	(202,621)	$	32.40
Unvested at September 30, 2019	1,251,946	$	43.62
Expected to vest after September 30, 2019	1,341,575	$	43.45

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Investments

9 Months Ended

Sep. 30, 2019

Investments

Investments

Note 11.  Investments

The Company entered into an agreement with a co-investment vehicle arranged by Napier Park Global Capital (US) LP to participate in two joint ventures and formed Blackbird Capital I, LLC and Blackbird Capital II, LLC for the purpose of investing in commercial aircraft and leasing them to airlines throughout the world. We also provide management services to these joint ventures for a fee based upon aircraft assets under management. The Company’s non-controlling interests in each joint venture is 9.5% and are accounted for as investments under the equity method of accounting. The Company’s investment in these joint ventures was $45.9 million and $40.6 million as of September 30, 2019 and December 31, 2018, respectively, and is recorded in Other assets on the Consolidated Balance Sheets. As of September 30, 2019, the Company’s total unfunded commitment to Blackbird Capital II, LLC was $30.5 million.

On August 1, 2018, we entered into an agreement to sell 18 aircraft to Thunderbolt Aircraft Lease Limited II (“Thunderbolt II”), an asset-backed securities platform that will facilitate the continued management and eventual sale of the aircraft assets. The Company’s non-controlling interest in Thunderbolt II is 5.1% and it is accounted for as an investment under the cost method of accounting. The Company manages all of the aircraft in Thunderbolt II’s portfolio. During the nine months ended September 30, 2019, we completed the sale of three aircraft from our operating lease portfolio to Thunderbolt II. We expect the sale of the remaining three aircraft to be completed in 2019. The Company’s investment in Thunderbolt II was $5.4 million as of September 30, 2019 and December 31, 2018, and is recorded in Other assets on the Consolidated Balance Sheets.

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Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2019

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Note 3.Recently Issued Accounting Standards

In July 2019, the FASB issued ASU No. 2019-07 ("ASU 2019-07"), Codification Updates to SEC Sections. This ASU amends various Securities and Exchange Commission ("SEC") paragraphs pursuant to the issuance of SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification. One of the changes in the ASU requires a presentation of changes in stockholders' equity in the form of a reconciliation, either as a separate financial statement or in the notes to the financial statements, for the current and comparative year-to-date interim periods. The Company presented changes in stockholders' equity as separate financial statements for the current and comparative year-to-date interim periods beginning on January 1, 2019. The additional elements of the ASU did not have a material impact on the Company's Consolidated Financial Statements. This guidance was effective immediately upon issuance.

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Net Earnings Per Share

9 Months Ended

Sep. 30, 2019

Net Earnings Per Share

Net Earnings Per Share

Note 7.  Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Preferred stock dividends are subtracted from net income in determining net income available to common stockholders. 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, 2019, we 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, 2019, 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 946,406 and 950,761 shares related to restricted stock units for which the performance metric had yet to be achieved as of September 30, 2019 and 2018, 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				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Basic earnings per share:
Numerator
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Net income available to common stockholders	$	151,943	$	146,574	$	414,071	$	372,436
Denominator
Weighted-average common shares outstanding		112,133,556		104,066,785		111,511,960		103,940,723
Basic earnings per share	$	1.36	$	1.41	$	3.71	$	3.58
Diluted earnings per share:
Numerator
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Assumed conversion of convertible senior notes		—		1,823		—		5,309
Net income available to common stockholders plus assumed conversions	$	151,943	$	148,397	$	414,071	$	377,745
Denominator
Number of shares used in basic computation		112,133,556		104,066,785		111,511,960		103,940,723
Weighted-average effect of dilutive securities		1,129,840		8,442,827		1,325,566		8,437,147
Number of shares used in per share computation		113,263,396		112,509,612		112,837,526		112,377,870
Diluted earnings per share	$	1.34	$	1.32	$	3.67	$	3.36

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Fair Value Measurements - Debt Financing (Details) - USD ($) $ in Billions	Sep. 30, 2019	Dec. 31, 2018
Book Value
Financial Instruments Not Measured at Fair Value
Debt financing	$ 13.9	$ 11.7
Level 2
Financial Instruments Not Measured at Fair Value
Debt financing	$ 14.2	$ 11.4

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Commitments and Contingencies (Details) $ in Thousands	1 Months Ended		9 Months Ended
	Oct. 31, 2019 aircraft	Jun. 30, 2019 aircraft	Sep. 30, 2019 USD ($) aircraft item	Dec. 31, 2018 USD ($)
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
2019 | $			$ 771,134
2020 | $			6,419,215
2021 | $			6,647,270
2022 | $			4,750,559
2023 | $			3,678,420
Thereafter | $			225,142
Total | $			$ 22,491,740
Aircrafts
Commitments to acquire aircraft
2019			9
2020			80
2021			94
2022			68
2023			60
Thereafter			5
Total			316
Additional commitments under memorandums of understanding		100
Commitments for the acquisition of the aircraft and other equipment
Deposit Assets | $			$ 1,600,000	$ 1,800,000
Airbus A321 XLR
Commitments to acquire aircraft
Additional commitments under memorandums of understanding		27
Airbus A320/321neo
Commitments to acquire aircraft
2019			7
2020			28
2021			32
2022			25
2023			25
Total			117
Number of long-range variants | item			56
Additional commitments under memorandums of understanding		23
Airbus A220
Commitments to acquire aircraft
Additional commitments under memorandums of understanding		50
Memorandums of understanding commitment additional options		25
Airbus A330-900neo
Commitments to acquire aircraft
2019			1
2020			3
2021			3
2022			6
2023			3
Total			16
Airbus A350-900/1000
Commitments to acquire aircraft
2020			3
2021			6
2022			3
2023			2
Total			14
Boeing 737-7/8/9 MAX
Commitments to acquire aircraft
2020			31
2021			46
2022			28
2023			25
Thereafter			5
Total			135
Boeing 787-9/10
Commitments to acquire aircraft
2019			1
2020			15
2021			7
2022			6
2023			5
Total			34
Boeing 787-9 Aircraft
Commitments to acquire aircraft
Aircraft commitments converted	5
Airbus A330-300
Commitments to acquire aircraft
Additional purchase commitments			1
Airbus A350-1000 | Maximum
Commitments for the acquisition of the aircraft and other equipment
Aircraft to be acquired under non-binding commitment			5
B-737-Max
Commitments to acquire aircraft
Aircraft commitments converted	15
Boeing 737-8 MAX Aircraft | Maximum
Commitments for the acquisition of the aircraft and other equipment
Aircraft to be acquired under non-binding commitment			45

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Basis of Preparation and Critical Accounting Policies

9 Months Ended

Sep. 30, 2019

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 we have a controlling financial interest, including the accounts of any Variable Interest Entity in which we have a controlling financial interest and for which we are 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, 2019, and for all periods presented. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operating results expected for the year ending December 31, 2019. These financial statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recently adopted accounting standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842).” The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Subsequently, the FASB issued additional ASUs that further clarified ASU 2016-02. The Company adopted the amendments to Accounting Standards Codification (“ASC”) 842 on January 1, 2019 using the Effective Date Method. As a result, the Company continues to disclose comparative reporting periods under the previous accounting guidance, ASC 840. Based on our evaluation of the guidance, the Company noted that lessor accounting is similar to the current model, but the guidance impacted us in scenarios where we are the lessee.

For scenarios where we are the lessee, the Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets under Other assets, and long-term lease obligations under Accrued interest & other payables on the Company’s Consolidated Balance Sheets. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected to exclude recognition of leases with a term of 12 months or less (short-term leases) from the Consolidated Balance Sheets.

As of January 1, 2019, the Company recognized operating ROU lease assets and obligations in the amounts of $44.6 million and $51.2 million, respectively, on its Consolidated Balance Sheets. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

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Rental Income

9 Months Ended

Sep. 30, 2019

Rental Income

Rental Income

Note 6.  Rental Income

At September 30, 2019, minimum future rentals on non-cancellable operating leases of flight equipment in our fleet, which have been delivered as of September 30, 2019, are as follows (in thousands):

Years ending December 31,
2019 (excluding the nine months ended September 30, 2019)	$	503,359
2020		1,999,804
2021		1,908,650
2022		1,765,865
2023		1,561,393
Thereafter		6,404,246
Total	$	14,143,317

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Stock-based Compensation

9 Months Ended

Sep. 30, 2019

Stock-based Compensation

Stock-based Compensation

Note 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, 2019, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) remaining under the 2014 Plan was approximately 5,282,848, which includes 282,848 shares which were previously reserved for issuance under the 2010 Plan. Stock Options are generally granted for a term of 10 years and generally vest ratably over a three-year period. The Company has issued RSUs with four different vesting criteria: those RSUs that vest based on the attainment of book value goals, those RSUs that vest based on the attainment of Total Shareholder Return (“TSR”) goals, time based RSUs that vest ratably over a time period of three years and RSUs that cliff-vest at the end of a one- or two-year period. The Company has two types of book value RSUs; those that vest ratably over a three-year period if the performance condition has been met, and those that cliff-vest at the end of a three-year period if the performance condition has been met. For the book value RSUs that cliff-vest at the end of a three-year period, the number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the percentage change in the Company’s book value per share at the end of the vesting period. At each reporting period, the Company reassesses the probability of the performance condition being achieved and a stock-based compensation expense is recognized based upon management’s assessment. Book value RSUs for which the performance metric has not been met are forfeited. The TSR RSUs cliff-vest at the end of a three-year period. The number of TSR RSUs that will ultimately vest is based upon the percentile ranking of the Company’s TSR among a peer group. The number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the extent to which the TSR metric is achieved.

The Company recorded $4.9 million and $4.8 million of stock-based compensation expense related to RSUs for the three months ended September 30, 2019 and 2018, respectively. The Company recorded $14.9 million and $13.2 million of stock-based compensation expense related to RSUs for the nine months ended September 30, 2019 and 2018, respectively.

Stock Options

A summary of stock option activity for the nine months ended September 30, 2019 follows:

				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)(1)
Balance at December 31, 2018	2,620,295	$	20.40	1.49	$	25,697
Granted	—	$	—	—	$	—
Exercised	(1,603,139)	$	20.00	—	$	29,909
Forfeited/canceled	—	$	—	—	$	—
Balance at September 30, 2019	1,017,156	$	21.04	0.80	$	21,138
Vested and exercisable as of September 30, 2019	1,017,156	$	21.04	0.80	$	21,138

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of our Class A common stock as of the respective date.

As of September 30, 2019, all of the Company’s outstanding employee stock options had fully vested and there were no unrecognized compensation costs related to outstanding stock options as of September 30, 2019. As a result, there was no stock-based compensation expense related to Stock Options for the three and nine months ended September 30, 2019 and 2018.

The following table summarizes additional information regarding exercisable and vested stock options at September 30, 2019:

	Stock Options Exercisable
	and Vested
		Weighted-
		Average
	Number of	Remaining Life
Range of exercise prices	Shares	(in years)
$20.00	897,156	0.69
$28.80	120,000	1.57
$20.00 - $28.80	1,017,156	0.80

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 time based and book value RSUs is determined based on the closing market price of the Company’s Class A common stock on the date of grant, while the fair value of TSR RSUs 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, 2019, the Company granted 670,279 RSUs of which 139,895 are TSR RSUs. The following table summarizes the activities for our unvested RSUs for the nine months ended September 30, 2019:

	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2018	1,055,325	$	41.66
Granted	670,279	$	39.64
Vested	(271,037)	$	34.58
Forfeited/canceled	(202,621)	$	32.40
Unvested at September 30, 2019	1,251,946	$	43.62
Expected to vest after September 30, 2019	1,341,575	$	43.45

As of September 30, 2019, there was $29.2 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 years.

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Mar. 05, 2019	Sep. 30, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Common stock, shares issued	10,000,000
Preferred stock, shares authorized		50,000,000	50,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred Stock, shares issued		10,000,000	0
Preferred Stock, shares outstanding		10,000,000	0
Preferred Stock, Liquidation Preference, Value		$ 250,000
Preferred Stock, rate (as a percent)	6.15%
Preferred Stock, Liquidation Preference, per share	$ 25.00
Preferred Stock, state amount	$ 25.00
Dividend Payable Beginning on 15 June 2019
Class of Stock [Line Items]
Preferred Stock, rate (as a percent)	6.15%
Preferred Stock, term	5 years
Dividend Payable Beginning on 15 March 2024
Class of Stock [Line Items]
Preferred Stock, redemption price (in dollars per share)		$ 25.00
Dividend Payable Beginning on 15 March 2024 | Three-Month LIBOR
Class of Stock [Line Items]
Preferred Stock, spread	3.65%
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		112,701,349	110,949,850
Common stock, shares outstanding		112,701,349	110,949,850
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	0
Preferred Stock, shares outstanding		10,000,000	0
Preferred Stock, Liquidation Preference, Value		$ 250,000
Preferred Stock, rate (as a percent)		6.15%

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Rental Income (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Minimum future rentals on non-cancelable operating leases of flight equipment
2019 (excluding the nine months ended September 30, 2019)	$ 503,359
2020	1,999,804
2021	1,908,650
2022	1,765,865
2023	1,561,393
Thereafter	6,404,246
Total	$ 14,143,317

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Subsequent Events (Details) - USD ($)		3 Months Ended
	Nov. 06, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Oct. 31, 2019
Subsequent Events
Quarterly cash dividends on common stock		$ 0.13	$ 0.13	$ 0.13	$ 0.10	$ 0.10	$ 0.10
Subsequent Event | Series A Preferred Stock
Subsequent Events
Dividend declared per share of Series A preferred stock	$ 0.384375
Subsequent Event | Dividend Declared | Class A Common Stock
Subsequent Events
Quarterly cash dividends on common stock	$ 0.15
Thunderbolt III | Subsequent Event
Subsequent Events
Non-controlling interest (as a percent)								5.00%
Thunderbolt III | Aircraft Held For Sale | Subsequent Event
Subsequent Events
Long-lived assets held for sale								$ 19

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets
Cash and cash equivalents	$ 291,772	$ 300,127
Restricted cash	44,651	22,871
Flight equipment subject to operating leases	21,601,147	17,985,324
Less accumulated depreciation	(2,689,880)	(2,278,214)
Flight equipment subject to operating leases, net	18,911,267	15,707,110
Deposits on flight equipment purchases	1,600,959	1,809,260
Other assets	761,052	642,440
Total assets	21,609,701	18,481,808
Liabilities and Shareholders' Equity
Accrued interest and other payables	420,444	382,132
Debt financing, net of discounts and issuance costs	13,751,872	11,538,905
Security deposits and maintenance reserves on flight equipment leases	1,091,073	990,578
Rentals received in advance	134,635	119,526
Deferred tax liability	749,504	643,767
Total liabilities	16,147,528	13,674,908
Shareholders' Equity
Paid-in capital	2,758,928	2,474,238
Retained earnings	2,702,018	2,331,552
Total shareholders' equity	5,462,173	4,806,900
Total liabilities and shareholders' equity	21,609,701	18,481,808
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, 2019 and no shares issued or outstanding at December 31, 2018	100
Class A Common Stock
Shareholders' Equity
Common Stock	1,127	1,110
Class B Non-Voting Common Stock
Shareholders' Equity
Common Stock

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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Cash dividends declared per share (in dollars per share)	$ 0.13	$ 0.13	$ 0.13	$ 0.10	$ 0.10	$ 0.10

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Basis of Preparation and Critical Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Basis of Preparation and Critical Accounting Policies

Recent issued accounting pronouncements

Recently adopted accounting standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842).” The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Subsequently, the FASB issued additional ASUs that further clarified ASU 2016-02. The Company adopted the amendments to Accounting Standards Codification (“ASC”) 842 on January 1, 2019 using the Effective Date Method. As a result, the Company continues to disclose comparative reporting periods under the previous accounting guidance, ASC 840. Based on our evaluation of the guidance, the Company noted that lessor accounting is similar to the current model, but the guidance impacted us in scenarios where we are the lessee.

For scenarios where we are the lessee, the Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets under Other assets, and long-term lease obligations under Accrued interest & other payables on the Company’s Consolidated Balance Sheets. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected to exclude recognition of leases with a term of 12 months or less (short-term leases) from the Consolidated Balance Sheets.

As of January 1, 2019, the Company recognized operating ROU lease assets and obligations in the amounts of $44.6 million and $51.2 million, respectively, on its Consolidated Balance Sheets. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

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Net Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Net 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				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Basic earnings per share:
Numerator
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Net income available to common stockholders	$	151,943	$	146,574	$	414,071	$	372,436
Denominator
Weighted-average common shares outstanding		112,133,556		104,066,785		111,511,960		103,940,723
Basic earnings per share	$	1.36	$	1.41	$	3.71	$	3.58
Diluted earnings per share:
Numerator
Net income	$	155,787	$	146,574	$	422,186	$	372,436
Preferred stock dividends		(3,844)		—		(8,115)		—
Assumed conversion of convertible senior notes		—		1,823		—		5,309
Net income available to common stockholders plus assumed conversions	$	151,943	$	148,397	$	414,071	$	377,745
Denominator
Number of shares used in basic computation		112,133,556		104,066,785		111,511,960		103,940,723
Weighted-average effect of dilutive securities		1,129,840		8,442,827		1,325,566		8,437,147
Number of shares used in per share computation		113,263,396		112,509,612		112,837,526		112,377,870
Diluted earnings per share	$	1.34	$	1.32	$	3.67	$	3.36

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Fair Value Measurements - Assets and Liabilities Recurring and Non-recurring (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Recurring basis
Fair Value Measurements
Assets	$ 0	$ 0
Liabilities	0	0
Non-recurring basis
Fair Value Measurements
Assets	0	0
Liabilities	$ 0	$ 0

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Debt Financing - Maturities of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Maturities
2019	$ 31,189
2020	1,456,585
2021	1,993,870
2022	2,696,599
2023	2,966,461
Thereafter	4,754,313
Total	$ 13,899,017	$ 11,662,253

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Stock-based Compensation - Stock Option Exercise Price (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
$20.00
Stock options exercisable and vested by exercise price range
Exercise price (in dollars per share)	$ 20.00
Stock options exercisable and vested
Number of Shares | shares	897,156
Weighted-Average Remaining Life (in years)	8 months 8 days
$28.80
Stock options exercisable and vested by exercise price range
Exercise price (in dollars per share)	$ 28.80
Stock options exercisable and vested
Number of Shares | shares	120,000
Weighted-Average Remaining Life (in years)	1 year 6 months 25 days
$20.00 - $28.80
Stock options exercisable and vested
Number of Shares | shares	1,017,156
Weighted-Average Remaining Life (in years)	9 months 18 days
Minimum | $20.00 - $28.80
Stock options exercisable and vested by exercise price range
Exercise price (in dollars per share)	$ 20.00
Maximum | $20.00 - $28.80
Stock options exercisable and vested by exercise price range
Exercise price (in dollars per share)	$ 28.80

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Debt Financing

9 Months Ended

Sep. 30, 2019

Debt Financing

Debt Financing

Note 4.  Debt Financing

The Company’s debt financing was comprised of the following at September 30, 2019 and December 31, 2018 (dollars in thousands):

	September 30,		December 31,
	2019		2018
Unsecured
Senior notes	$	12,050,000	$	10,043,445
Term financings		813,150		607,340
Revolving credit facilities		610,000		602,000
Total unsecured debt financing		13,473,150		11,252,785
Secured
Term financings		392,593		371,203
Export credit financing		33,274		38,265
Total secured debt financing		425,867		409,468
Total debt financing		13,899,017		11,662,253
Less: Debt discounts and issuance costs		(147,145)		(123,348)
Debt financing, net of discounts and issuance costs	$	13,751,872	$	11,538,905

The Company’s secured obligations as of September 30, 2019 and December 31, 2018 are summarized below (dollars in thousands):

	September 30,		December 31,
	2019		2018
Nonrecourse	$	138,797	$	167,245
Recourse		287,070		242,223
Total secured debt financing	$	425,867	$	409,468
Number of aircraft pledged as collateral		17		20
Net book value of aircraft pledged as collateral	$	915,211	$	1,132,111

Senior unsecured notes (including Medium-Term Note Program)

As of September 30, 2019, the Company had $12.1 billion in senior unsecured notes outstanding. As of December 31, 2018, the Company had $10.0 billion in senior unsecured notes outstanding.

During the nine months ended September 30, 2019, the Company issued $2.85 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $700.0 million due 2024 at a fixed rate of 4.25%, (ii) $750.0 million due 2026 at a fixed rate of 3.75%, (iii) $300.0 million due 2021 that bear interest at a floating rate of three-month LIBOR plus 0.67%, (iv) $600.0 million due 2023 at a fixed rate of 2.25% and (v) $500.0 million due 2029 at a fixed rate of 3.25%.

Unsecured revolving credit facilities

As of September 30, 2019, the total outstanding balance on the Company's unsecured revolving credit facilities was approximately $610.0 million. The total outstanding balance under the Company's unsecured revolving credit facilities was approximately $602.0 million as of December 31, 2018.

In May 2019, the Company amended and extended its committed unsecured revolving credit facility whereby, among other things, the Company extended the final maturity date from May 5, 2022 to May 5, 2023 and, after giving effect to commitments that matured on May 5, 2019, increased the total revolving commitments to approximately $5.8 billion, representing an increase of 26.6% from December 31, 2018, with a 0.20% facility fee and current borrowings bearing interest at a floating rate of LIBOR plus 1.05%. On July 31, 2019, the Company executed a commitment increase to its unsecured revolving credit facility, which increased the aggregate facility capacity by an additional $58.0 million. 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, commitments totaling approximately $5.0 million that mature on May 5, 2021, and commitments totaling $92.7 million that mature on May 5, 2020.

Maturities

Maturities of debt outstanding as of September 30, 2019 are as follows (in thousands):

Years ending December 31,
2019	$	31,189
2020		1,456,585
2021		1,993,870
2022		2,696,599
2023		2,966,461
Thereafter		4,754,313
Total	$	13,899,017

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Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Fair Value Measurements

Note 8.  Fair Value Measurements

Assets and liabilities measured at fair value on a recurring and non-recurring basis

The Company had no assets or liabilities which are measured at fair value on a recurring or non-recurring basis as of September 30, 2019 or December 31, 2018.

Financial instruments not measured at fair value

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, 2019 was approximately $14.2 billion compared to a book value of $13.9 billion. The estimated fair value of debt financing as of December 31, 2018 was $11.4 billion compared to a book value of $11.7 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at September 30, 2019, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at September 30, 2019 and December 31, 2018 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.

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Investments (Details)	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2019 aircraft	Sep. 30, 2019 USD ($) aircraft item	Dec. 31, 2018 USD ($) aircraft	Aug. 01, 2018 USD ($)
Blackbird I and Blackbird II
Investments
Number of joint ventures | item		2
Equity method investment		$ 45,900,000	$ 40,600,000
Blackbird Capital I
Investments
Percentage of equity ownership		9.50%
Blackbird Capital II
Investments
Percentage of equity ownership		9.50%
Total unfunded commitment		$ 30,500,000
Thunderbolt II
Investments
Non-controlling interest (as a percent)				5.10%
Cost Method Investments			$ 5,400,000
Aircraft Held For Sale
Investments
Number of aircraft sold or agreed to be sold | aircraft	6	6	6
Aircraft Held For Sale | Thunderbolt II
Investments
Number of aircraft sold or agreed to be sold | aircraft		3
Long-lived assets held for sale				$ 18
Forecast | Aircraft Held For Sale | Thunderbolt II
Investments
Number of aircraft | aircraft	3

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Company Background and Overview (Details)	9 Months Ended
	Sep. 30, 2019 aircraft
Organization
Number of aircraft owned	307
Number of aircraft managed	64
Number of aircraft on order with manufacturers	316

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Flight Equipment Held for Sale

9 Months Ended

Sep. 30, 2019

Flight Equipment held for sale

Flight Equipment Held for Sale

Note 12.  Flight Equipment Held for Sale

As of September 30, 2019, we had six aircraft, with a carrying value of $208.5 million, which were held for sale and included in Flight equipment subject to operating leases on the Consolidated Balance Sheets. We expect the sale of all six aircraft to be completed in 2019. We cease recognition of depreciation expense once an aircraft is classified as held for sale. As of December 31, 2018, we had six aircraft classified as held for sale, with a carrying value of $241.6 million.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies

Schedule of commitments to acquire aircraft

Aircraft Type	2019	2020	2021	2022	2023	Thereafter	Total
Airbus A320/321neo(1)	7	28	32	25	25	—	117
Airbus A330-900neo	1	3	3	6	3	—	16
Airbus A350-900/1000	—	3	6	3	2	—	14
Boeing 737-7/8/9 MAX(2)	—	31	46	28	25	5	135
Boeing 787-9/10(2)	1	15	7	6	5	—	34
Total(3)(4)	9	80	94	68	60	5	316

(1) Our Airbus A320/321neo aircraft orders include 56 long-range variants.

(2) The table above reflects the conversion of purchase orders for 15 Boeing 737 MAX aircraft to five Boeing 787-9 aircraft pursuant to an October 2019 agreement with Boeing. The table also reflects our estimate of future Boeing 737 MAX aircraft delivery delays based on information currently available to us. The actual delivery dates of such Boeing 737 MAX aircraft may differ from our estimate and could be further impacted by the length of the grounding and the pace at which Boeing can deliver aircraft following the lifting of the grounding, among other factors.

(3) In addition to the aircraft from our order book, we have a commitment to purchase one used Airbus A330-300 aircraft from a third party, which is scheduled for delivery in 2019.

(4) Excluded from the table above are memorandums of understanding (“MOU”) with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 100 aircraft comprised of 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft, and we have purchase options for an additional 25 A220 aircraft.

Schedule of commitments for the acquisition of aircraft and other equipment at an estimated aggregate purchase price

Commitments for the acquisition of aircraft and other equipment, calculated at an estimated aggregate purchase price (including adjustments for inflation) was approximately $22.5 billion at September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table above, and are due as follows (in thousands):

Years ending December 31,
2019	$	771,134
2020		6,419,215
2021		6,647,270
2022		4,750,559
2023		3,678,420
Thereafter		225,142
Total	$	22,491,740

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, capitalized interest	$ 46,314	$ 38,947

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues
Rental of flight equipment	$ 492,869	$ 422,763	$ 1,412,478	$ 1,194,104
Aircraft sales, trading and other	38,033	27,935	55,870	35,617
Total revenues	530,902	450,698	1,468,348	1,229,721
Expenses
Interest	104,637	82,189	290,681	224,584
Amortization of debt discounts and issuance costs	9,078	8,199	26,330	24,231
Interest expense	113,715	90,388	317,011	248,815
Depreciation of flight equipment	183,788	149,703	514,948	428,437
Selling, general and administrative	34,715	26,377	92,188	71,194
Stock-based compensation	4,897	4,848	14,934	13,165
Total expenses	337,115	271,316	939,081	761,611
Income before taxes	193,787	179,382	529,267	468,110
Income tax expense	(38,000)	(32,808)	(107,081)	(95,674)
Net income	155,787	146,574	422,186	372,436
Preferred stock dividends	(3,844)		(8,115)
Net income available to common stockholders	$ 151,943	$ 146,574	$ 414,071	$ 372,436
Earnings per share of Class A and Class B common stock:
Basic (in dollars per share)	$ 1.36	$ 1.41	$ 3.71	$ 3.58
Diluted (in dollars per share)	$ 1.34	$ 1.32	$ 3.67	$ 3.36
Weighted-average shares outstanding
Basic (in shares)	112,133,556	104,066,785	111,511,960	103,940,723
Diluted (in shares)	113,263,396	112,509,612	112,837,526	112,377,870
Dividends declared per share of Class A common stock (in dollars per share)	$ 0.13	$ 0.10	$ 0.39	$ 0.30

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Stock-based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares
Stock-based compensation expense
Unrecognized compensation cost | $	$ 29.2
Weighted-average period of recognition of unrecognized stock-based compensation cost	1 year 10 months 9 days
Restricted Stock Units
Unvested Restricted Stock Units, Number of Shares
Unvested at the beginning of the period (in shares)	1,055,325
Granted (in shares)	670,279
Vested (in shares)	(271,037)
Forfeited/canceled (in shares)	(202,621)
Unvested at the end of the period (in shares)	1,251,946
Expected to vest after the end of the period (in shares)	1,341,575
Unvested Restricted Stock Units, Weighted-Average Grant-Date Fair Value
Unvested at the beginning of the period (in dollars per share) | $ / shares	$ 41.66
Granted (in dollars per share) | $ / shares	39.64
Vested (in dollars per share) | $ / shares	34.58
Forfeited/canceled (in dollars per share) | $ / shares	32.40
Unvested at the end of the period (in dollars per share) | $ / shares	43.62
Expected to vest after the end of the period (in dollars per share) | $ / shares	$ 43.45
Restricted Stock With Total Shareholder Return Conditions
Unvested Restricted Stock Units, Number of Shares
Granted (in shares)	139,895

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events

Subsequent Events

Note 13.  Subsequent Events

On October 31, 2019, we initiated a portfolio sale of 19 aircraft to Thunderbolt Aircraft Lease Limited III (“Thunderbolt III”), an asset-backed securities platform. We anticipate closing the transaction on November 8, 2019 and will continue management of these aircraft assets. The Company’s non-controlling interest in Thunderbolt III will be approximately 5.0% and will be accounted for as an investment under the cost method of accounting. We expect a majority of the aircraft transfers to be completed over the next two quarters.

On November 6, 2019, our board of directors approved a quarterly cash dividend of $0.15 per share on our outstanding Class A common stock. The dividend will be paid on January 6, 2020 to holders of record of our Class A common stock as of December 20, 2019. Our board of directors also approved a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock, which will be paid on December 15, 2019 to holders of record of our Series A Preferred Stock as of November 30, 2019.

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Rental Income (Tables)

9 Months Ended

Sep. 30, 2019

Rental Income

Schedule of minimum future rentals on non-cancellable operating leases of flight equipment

At September 30, 2019, minimum future rentals on non-cancellable operating leases of flight equipment in our fleet, which have been delivered as of September 30, 2019, are as follows (in thousands):

Years ending December 31,
2019 (excluding the nine months ended September 30, 2019)	$	503,359
2020		1,999,804
2021		1,908,650
2022		1,765,865
2023		1,561,393
Thereafter		6,404,246
Total	$	14,143,317

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Basis of Preparation and Critical Accounting Policies - Recently adopted accounting standards (Details) - ASU 2016-02 - Adjustment $ in Millions	Jan. 01, 2019 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating ROU lease assets	$ 44.6
Lease obligations	$ 51.2

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 06, 2019
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
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		112,704,349
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001487712
Amendment Flag	false
Class A Common Stock
Title of 12(b) Security	Class A Common Stock
Trading Symbol	AL
Security Exchange Name	NYSE
Series A Preferred Stock
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

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Class A Common Stock Common Stock	Preferred Stock	Paid-in Capital	Retained Earnings	Total
Balance at Dec. 31, 2017	$ 1,036		$ 2,260,064	$ 1,866,342	$ 4,127,442
Balance (in shares) at Dec. 31, 2017	103,621,629
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 4		2,632		2,636
Issuance of common stock upon vesting of restricted stock units and upon exercise of options (in shares)	514,773
Stock-based compensation			3,432		3,432
Cash dividends (declared $0.10 and $0.13 per share of Class A common stock)				(10,397)	(10,397)
Tax withholding related to vesting of restricted stock units and exercise of stock options			(7,141)		(7,141)
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares)	(156,568)
Net income				110,651	110,651
Balance at Mar. 31, 2018	$ 1,040		2,258,987	1,966,596	4,226,623
Balance (in shares) at Mar. 31, 2018	103,979,834
Balance at Dec. 31, 2017	$ 1,036		2,260,064	1,866,342	4,127,442
Balance (in shares) at Dec. 31, 2017	103,621,629
Increase (Decrease) in Shareholders' Equity
Net income					372,436
Balance at Sep. 30, 2018	$ 1,041		2,270,302	2,207,575	4,478,918
Balance (in shares) at Sep. 30, 2018	104,068,079
Balance at Mar. 31, 2018	$ 1,040		2,258,987	1,966,596	4,226,623
Balance (in shares) at Mar. 31, 2018	103,979,834
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 1		1,521		1,522
Issuance of common stock upon vesting of restricted stock units and upon exercise of options (in shares)	85,211
Stock-based compensation			4,885		4,885
Cash dividends (declared $0.10 and $0.13 per share of Class A common stock)				(10,399)	(10,399)
Net income				115,211	115,211
Balance at Jun. 30, 2018	$ 1,041		2,265,393	2,071,408	4,337,842
Balance (in shares) at Jun. 30, 2018	104,065,045
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options			61		61
Issuance of common stock upon vesting of restricted stock units and upon exercise of options (in shares)	3,034
Stock-based compensation			4,848		4,848
Cash dividends (declared $0.10 and $0.13 per share of Class A common stock)				(10,407)	(10,407)
Net income				146,574	146,574
Balance at Sep. 30, 2018	$ 1,041		2,270,302	2,207,575	4,478,918
Balance (in shares) at Sep. 30, 2018	104,068,079
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 upon 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 (declared $0.10 and $0.13 per share of Class A common stock)				(14,445)	(14,445)
Tax withholding related to vesting of restricted stock units and exercise of stock options	$ (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 upon exercise of options (in shares)	547,957
Issuance of preferred stock			(111)		(111)
Stock-based compensation			5,863		5,863
Dividends declared on preferred stock				(4,271)	(4,271)
Cash dividends (declared $0.10 and $0.13 per share of Class A common stock)				(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 upon exercise of options (in shares)	1,047,695
Stock-based compensation			4,897		4,897
Dividends declared on preferred stock				(3,844)	(3,844)
Cash dividends (declared $0.10 and $0.13 per share of Class A common stock)				(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
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

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Company Background and Overview

9 Months Ended

Sep. 30, 2019

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. We are principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and through our asset-backed securities platform. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. As of September 30, 2019, we owned a fleet of 307 aircraft, managed 64 aircraft and had 316 aircraft on order with aircraft manufacturers.

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Stock-based Compensation - Stock Options (Details) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	May 07, 2014 shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) item $ / shares shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) $ / shares shares
Stock-based Compensation
Unrecognized compensation cost		$ 29,200		$ 29,200
Equity Incentive Plan 2010
Stock-based Compensation
Number of shares authorized | shares		5,282,848		5,282,848
Shares included in the authorized shares which was previously reserved for issuance | shares		282,848		282,848
Shares
Granted (in shares) | shares	0
Employee and Directors Stock Options
Stock-based Compensation
Term of award				10 years
Vesting period				3 years
Stock-based compensation		$ 0	$ 0	$ 0	$ 0
Unrecognized compensation cost		$ 0		$ 0
Shares
Balance at the beginning of the period (in shares) | shares				2,620,295
Exercised (in shares) | shares				(1,603,139)
Balance at the end of the period (in shares) | shares		1,017,156		1,017,156		2,620,295
Vested and exercisable at the end of the period (in shares) | shares		1,017,156		1,017,156
Exercise Price
Balance at the beginning of the period (in dollars per share) | $ / shares				$ 20.40
Exercised (in dollars per share) | $ / shares				20.00
Balance at the end of the period (in dollars per share) | $ / shares		$ 21.04		21.04		$ 20.40
Vested and exercisable at the end of the period (in dollars per share) | $ / shares		$ 21.04		$ 21.04
Remaining Contractual Term
Remaining Contractual Term (in years)				9 months 18 days		1 year 5 months 26 days
Vested and exercisable				9 months 18 days
Aggregate Intrinsic Value
Balance at the beginning of the period				$ 25,697
Exercised				29,909
Balance at the end of the period		$ 21,138		21,138		$ 25,697
Vested and exercisable at the end of the period		21,138		$ 21,138
Restricted Stock Units
Stock-based Compensation
Number of different vesting criteria | item				4
Stock-based compensation		$ 4,900	$ 4,800	$ 14,900	$ 13,200
Restricted Stock Units | Vesting Tranche One
Stock-based Compensation
Vesting period				3 years
Restricted Stock Units | Vesting Tranche Three
Stock-based Compensation
Vesting period				3 years
Restricted Stock Units | Vesting Tranche Four
Stock-based Compensation
Vesting period				3 years
Restricted Stock Units | Minimum | Vesting Tranche Two
Stock-based Compensation
Vesting period				1 year
Restricted Stock Units | Maximum | Vesting Tranche Two
Stock-based Compensation
Vesting period				2 years
Restricted Stock With Total Shareholder Return Conditions | Minimum
Stock-based Compensation
Percentage of shares vested				0.00%
Restricted Stock With Total Shareholder Return Conditions | Maximum
Stock-based Compensation
Percentage of shares vested				200.00%

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Net Earnings Per Share (Details) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 USD ($) item $ / shares shares	Sep. 30, 2018 USD ($) $ / shares shares
Anti-dilutive securities
Number of classes of common stock | item							2
Numerator
Preferred stock dividends	$ (3,844)						$ (8,115)
Net income available to common stockholders	$ 151,943			$ 146,574			$ 414,071	$ 372,436
Denominator
Weighted-average common shares outstanding | shares	112,133,556			104,066,785			111,511,960	103,940,723
Basic earnings per share (in dollars per share) | $ / shares	$ 1.36			$ 1.41			$ 3.71	$ 3.58
Numerator
Net income	$ 155,787	$ 128,305	$ 138,094	$ 146,574	$ 115,211	$ 110,651	$ 422,186	$ 372,436
Preferred dividends paid							(8,115)
Assumed conversion of convertible senior notes				1,823				5,309
Net income plus assumed conversions	$ 151,943			$ 148,397			$ 414,071	$ 377,745
Denominator
Number of shares used in basic computation | shares	112,133,556			104,066,785			111,511,960	103,940,723
Weighted-average effect of dilutive securities (in shares) | shares	1,129,840			8,442,827			1,325,566	8,437,147
Number of shares used in per share computation | shares	113,263,396			112,509,612			112,837,526	112,377,870
Diluted net income per share (in dollars per share) | $ / shares	$ 1.34			$ 1.32			$ 3.67	$ 3.36
Restricted Stock Units
Anti-dilutive securities
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares) | shares							946,406	950,761

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Debt Financing (Details) $ in Thousands		9 Months Ended
	May 05, 2019 USD ($)	Sep. 30, 2019 USD ($) aircraft	Jul. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) aircraft
Debt financing
Total debt financing		$ 13,899,017		$ 11,662,253
Less: Debt discounts and issuance costs		(147,145)		(123,348)
Debt financing, net of discounts and issuance costs		13,751,872		11,538,905
Unsecured Debt
Debt financing
Total debt financing		13,473,150		11,252,785
Senior Notes
Debt financing
Total debt financing		12,050,000		10,043,445
Medium Term Note Program
Secured Obligations
Principal amount issued		2,850,000
Medium Term Note Program 4.25 Percent Due 2024
Secured Obligations
Principal amount issued		$ 700,000
Interest rate (as a percent)		4.25%
Medium Term Note Program 3.75 Percent Due 2026 [Member]
Secured Obligations
Principal amount issued		$ 750,000
Interest rate (as a percent)		3.75%
Medium Term Note Program Due 2021 [Member]
Secured Obligations
Principal amount issued		$ 300,000
Medium Term Note Program Due 2021 [Member] | LIBOR
Secured Obligations
Interest margin (as a percent)		0.67%
Medium Term Note Program 2.25 Percent Due 2023 [Member]
Secured Obligations
Principal amount issued		$ 600,000
Interest rate (as a percent)		2.25%
Medium Term Note Program 3.25 Percent Due 2029 [Member]
Secured Obligations
Principal amount issued		$ 500,000
Interest rate (as a percent)		3.25%
Unsecured Term financings
Debt financing
Total debt financing		$ 813,150		607,340
Revolving Credit Facilities
Debt financing
Total debt financing		610,000		602,000
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
Line of credit maturity amount	5,000
Unsecured Revolving Credit Facility Mature On 5 May 2022
Secured Obligations
Line of credit maturity amount	245,000
Unsecured Revolving Credit Facility Mature On 5 May 2023
Secured Obligations
Maximum borrowing capacity	$ 5,800,000
Incremental borrowing capacity			$ 58,000
Incremental borrowing capacity increase percentage	26.60%
Line of credit maturity amount	$ 5,500,000
Facility fee (as a percent)	0.20%
Unsecured Revolving Credit Facility Mature On 5 May 2023 | LIBOR
Secured Obligations
Interest margin (as a percent)	1.05%
Secured Debt
Debt financing
Total debt financing		425,867		409,468
Secured Obligations
Nonrecourse		138,797		167,245
Recourse		287,070		242,223
Total secured debt financing		$ 425,867		$ 409,468
Number of aircraft pledged as collateral | aircraft		17		20
Net book value of aircraft pledged as collateral		$ 915,211		$ 1,132,111
Export Credit Financing
Debt financing
Total debt financing		33,274		38,265
Term Financings
Debt financing
Total debt financing		$ 392,593		$ 371,203

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies

Commitments and Contingencies

Note 5.  Commitments and Contingencies

As of September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table below, the Company had commitments to acquire a total of 316 new aircraft for delivery through 2024 as follows:

Aircraft Type	2019	2020	2021	2022	2023	Thereafter	Total
Airbus A320/321neo(1)	7	28	32	25	25	—	117
Airbus A330-900neo	1	3	3	6	3	—	16
Airbus A350-900/1000	—	3	6	3	2	—	14
Boeing 737-7/8/9 MAX(2)	—	31	46	28	25	5	135
Boeing 787-9/10(2)	1	15	7	6	5	—	34
Total(3)(4)	9	80	94	68	60	5	316

(1) Our Airbus A320/321neo aircraft orders include 56 long-range variants.

(2) The table above reflects the conversion of purchase orders for 15 Boeing 737 MAX aircraft to five Boeing 787-9 aircraft pursuant to an October 2019 agreement with Boeing. The table also reflects our estimate of future Boeing 737 MAX aircraft delivery delays based on information currently available to us. The actual delivery dates of such Boeing 737 MAX aircraft may differ from our estimate and could be further impacted by the length of the grounding and the pace at which Boeing can deliver aircraft following the lifting of the grounding, among other factors.

(3) In addition to the aircraft from our order book, we have a commitment to purchase one used Airbus A330-300 aircraft from a third party, which is scheduled for delivery in 2019.

(4) Excluded from the table above are memorandums of understanding (“MOU”) with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 100 aircraft comprised of 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft, and we have purchase options for an additional 25 A220 aircraft.

Pursuant to our purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agrees to contractual delivery dates for each aircraft ordered. However, these dates can change for a variety of reasons.

In the last few years, Airbus and Boeing have had delivery delays, and these delays have significantly impacted when our aircraft have been delivered.

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

For several years, we have experienced delivery delays for certain of our Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. Airbus has told us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2021.

The worldwide grounding of the Boeing 737 MAX began on March 10, 2019, and remains in effect. As a result, Boeing has halted deliveries of all Boeing 737 MAX aircraft. Lifting of the grounding is subject to global regulatory authorities and we are unable to speculate as to when this may occur. Boeing 737 MAX deliveries may be impacted by the duration of the grounding and the speed by which Boeing can deliver aircraft following the lifting of the grounding. We expect that if the grounding continues for an extended time, or if there are significant Boeing 737 MAX delivery delays even after the grounding is lifted, some of our customers may seek to cancel their lease contracts with us. It is unclear at this point if we will cancel some of our Boeing 737 MAX delivery positions with Boeing or find replacement lessees. We are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of and the delivery delays associated with the Boeing 737 MAX aircraft that we own and have on order.

Commitments for the acquisition of aircraft and other equipment, calculated at an estimated aggregate purchase price (including adjustments for inflation) was approximately $22.5 billion at September 30, 2019, as adjusted for the conversion referenced in footnote 2 in the table above, and are due as follows (in thousands):

Years ending December 31,
2019	$	771,134
2020		6,419,215
2021		6,647,270
2022		4,750,559
2023		3,678,420
Thereafter		225,142
Total	$	22,491,740

In addition to the Company's commitments, as of September 30, 2019, the Company had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.

We have made non-refundable deposits on the aircraft for which we have commitments to purchase of $1.6 billion and $1.8 billion as of September 30, 2019 and December 31, 2018, respectively, which are subject to manufacturer performance commitments. If we are unable to satisfy our purchase commitments, we may be forced to forfeit our deposits. Further, we would be exposed to breach of contract claims by our lessees and manufacturers.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2019

Shareholders' Equity

Shareholders' Equity

Note 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, 2019 and December 31, 2018. As of September 30, 2019 and December 31, 2018, the Company had 112,701,349 and 110,949,850 Class A common shares issued and 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 September 30, 2019 and December 31, 2018.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at September 30, 2019 and December 31, 2018. As of September 30, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million. The Company did not have any shares of preferred stock issued or outstanding as of December 31, 2018.

On March 5, 2019, the Company issued 10,000,000 shares of 6.150% 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. The Company will pay dividends on the 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 $25.00 per share at a rate per annum equal to: (i) 6.150% during the first five years and payable quarterly in arrears beginning on June 15, 2019, and (ii) three-month LIBOR plus a spread of 3.650% per annum from March 15, 2024, reset quarterly and payable quarterly in arrears beginning on June 15, 2024.

The Company may redeem shares of the Series A Preferred Stock at its option, in whole or in part, from time to time, on or after March 15, 2024, for cash at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date, without accumulation of any undeclared dividends. The Company may also redeem shares of the Series A Preferred Stock at the Company’s option under certain other limited conditions.