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, 2020

OR

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

For the transition period from         to        

Commission file number 001-35121

AIR LEASE CORPORATION

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

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

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

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

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

At November 6, 2020, there were 113,778,906 shares of Air Lease Corporation’s Class A common stock outstanding.

Air Lease Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended September 30, 2020

TABLE OF CONTENTS

		Page
Note About Forward-Looking Statements		3
PART I—FINANCIAL INFORMATION
Item 1	Financial Statements	4
	Consolidated Balance Sheets—September 30, 2020 and December 31, 2019 (unaudited)	4
	Consolidated Statements of Income and Comprehensive Income—Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)	5
	Consolidated Statement of Shareholders’ Equity—Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)	6
	Consolidated Statements of Cash Flows—Nine Months Ended September 30, 2020 and 2019 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	35
PART II—OTHER INFORMATION
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3	Defaults Upon Senior Securities	36
Item 4	Mine Safety Disclosures	36
Item 5	Other Information	36
Item 6	Exhibits	37
	Signatures	39

2

NOTE ABOUT FORWARD-LOOKING STATEMENTS

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

● the extent to which the coronavirus (“COVID-19”) pandemic and measures taken to contain its spread ultimately impact our business, results of operation and financial condition;

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

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

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

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

● impaired financial condition and liquidity of our lessees;

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

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

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

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

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

● our inability to effectively oversee our managed fleet;

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

● other factors affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, including natural disasters, pandemics (such as COVID-19) and measures taken to contain its spread, and governmental actions; and

● the factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2019, “Part II — Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and other SEC filings, including future SEC filings.

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

3

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)

	September 30, 2020		December 31, 2019
	(unaudited)
Assets
Cash and cash equivalents	$	1,238,569	$	317,488
Restricted cash		23,568		20,573
Flight equipment subject to operating leases		22,671,435		21,286,154
Less accumulated depreciation		(3,154,939)		(2,581,817)
		19,516,496		18,704,337
Deposits on flight equipment purchases		1,634,152		1,564,188
Other assets		1,191,980		1,102,569
Total assets	$	23,604,765	$	21,709,155
Liabilities and Shareholders’ Equity
Accrued interest and other payables	$	401,443	$	516,497
Debt financing, net of discounts and issuance costs		15,180,145		13,578,866
Security deposits and maintenance reserves on flight equipment leases		1,054,757		1,097,061
Rentals received in advance		140,228		143,692
Deferred tax liability		850,869		749,495
Total liabilities	$	17,627,442	$	16,085,611
Shareholders’ Equity
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,000,000 shares of 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (aggregate liquidation preference of $250,000) issued and outstanding at September 30, 2020 and December 31, 2019, respectively		100		100
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 113,778,906 and 113,350,267 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		1,138		1,134
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding		—		—
Paid-in capital		2,788,490		2,777,601
Retained earnings		3,188,566		2,846,106
Accumulated other comprehensive loss		(971)		(1,397)
Total shareholders’ equity	$	5,977,323	$	5,623,544
Total liabilities and shareholders’ equity	$	23,604,765	$	21,709,155

(See Notes to Consolidated Financial Statements)

4

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share and per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
	(unaudited)
Revenues
Rental of flight equipment	$	468,443	$	492,869	$	1,462,999	$	1,412,478
Aircraft sales, trading and other		25,158		38,033		63,338		55,870
Total revenues		493,601		530,902		1,526,337		1,468,348
Expenses
Interest		107,519		104,637		317,753		290,681
Amortization of debt discounts and issuance costs		10,899		9,078		31,660		26,330
Interest expense		118,418		113,715		349,413		317,011
Depreciation of flight equipment		195,054		183,788		577,969		514,948
Selling, general and administrative		20,239		34,715		75,142		92,188
Stock-based compensation		6,635		4,897		14,956		14,934
Total expenses		340,346		337,115		1,017,480		939,081
Income before taxes		153,255		193,787		508,857		529,267
Income tax expense		(32,860)		(38,000)		(103,686)		(107,081)
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Other Comprehensive Income/(Loss):
Change in foreign currency translation adjustment		(5,637)		—		7,601		—
Change from current period hedged transaction		7,395		—		(7,086)		—
Total tax expense on other comprehensive income/loss		(378)		—		(89)		—
Other Comprehensive income available for common stockholders, net of tax		1,380		—		426		—
Total comprehensive income available for common stockholders	$	117,932	$	151,943	$	394,066	$	414,071
Earnings per share of common stock:
Basic	$	1.02	$	1.36	$	3.46	$	3.71
Diluted	$	1.02	$	1.34	$	3.46	$	3.67
Weighted-average shares outstanding
Basic		113,778,533		112,133,556		113,647,585		111,511,960
Diluted		113,951,102		113,263,396		113,928,775		112,837,526
Dividends declared per share of common stock	$	0.15	$	0.13	$	0.45	$	0.39

(See Notes to Consolidated Financial Statements)

5

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)

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

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, 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)

7

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Nine Months Ended
	September 30,
	2020		2019
	(unaudited)
Operating Activities
Net income	$	405,171	$	422,186
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment		577,969		514,948
Stock-based compensation		14,956		14,934
Deferred taxes		101,285		97,566
Amortization of debt discounts and issuance costs		31,660		26,330
Amortization of prepaid lease costs		32,142		24,190
Gain on aircraft sales, trading and other activity		(27,281)		(45,123)
Changes in operating assets and liabilities:
Other assets		(330,804)		(149,740)
Accrued interest and other payables		(84,045)		51,156
Rentals received in advance		(3,464)		15,109
Net cash provided by operating activities		717,589		971,556
Investing Activities
Acquisition of flight equipment under operating lease		(777,410)		(3,021,758)
Payments for deposits on flight equipment purchases		(581,054)		(727,982)
Proceeds from aircraft sales, trading and other activity		151,131		426,382
Acquisition of aircraft furnishings, equipment and other assets		(142,866)		(236,847)
Net cash used in investing activities		(1,350,199)		(3,560,205)
Financing Activities
Issuance of common stock upon exercise of options		4,556		31,823
Cash dividends paid on Class A common stock		(51,116)		(43,383)
Preferred dividends paid		(11,531)		(8,115)
Tax withholdings on stock-based compensation		(8,618)		(4,089)
Net change in unsecured revolving facility		(20,000)		8,000
Proceeds from debt financings		3,074,665		3,135,918
Payments in reduction of debt financings		(1,457,740)		(947,837)
Net proceeds from preferred stock issuance		—		242,139
Debt issuance costs		(5,692)		(9,443)
Security deposits and maintenance reserve receipts		91,337		230,966
Security deposits and maintenance reserve disbursements		(59,175)		(33,905)
Net cash provided by financing activities		1,556,686		2,602,074
Net increase in cash		924,076		13,425
Cash, cash equivalents and restricted cash at beginning of period		338,061		322,998
Cash, cash equivalents and restricted cash at end of period	$	1,262,137	$	336,423
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $39,960 and $46,314 at September 30, 2020 and 2019, respectively	$	371,947	$	358,237
Cash paid for income taxes	$	29,696	$	9,515
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	$	575,958	$	1,161,573
Cash dividends declared on common stock, not yet paid	$	17,068	$	14,644

(See Notes to Consolidated Financial Statements)

8

Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.   Company Background and Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S (“Airbus”). The Company leases these aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of September 30, 2020, the Company owned a fleet of 308 aircraft in its operating lease portfolio, managed 81 aircraft and had 372 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee.

Note 2.  Basis of Preparation and Critical Accounting Policies

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

The accompanying unaudited Consolidated Financial Statements include all adjustments, consisting only of normal, recurring adjustments, which are in the opinion of management necessary to present fairly the Company’s financial position, results of operations and cash flows at September 30, 2020, and for all periods presented. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020. These financial statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Note 3.  Debt Financing

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

	September 30,		December 31,
	2020		2019
Unsecured
Senior notes	$	14,069,115	$	12,357,811
Term financings		967,000		883,050
Revolving credit facility		—		20,000
Total unsecured debt financing		15,036,115		13,260,861
Secured
Term financings		289,207		428,824
Export credit financing		26,619		31,610
Total secured debt financing		315,826		460,434
Total debt financing		15,351,941		13,721,295
Less: Debt discounts and issuance costs		(171,796)		(142,429)
Debt financing, net of discounts and issuance costs	$	15,180,145	$	13,578,866

9

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

	September 30,		December 31,
	2020		2019
Nonrecourse	$	—	$	128,460
Recourse		315,826		331,974
Total secured debt financing	$	315,826	$	460,434
Number of aircraft pledged as collateral		12		15
Net book value of aircraft pledged as collateral	$	636,566	$	890,693

Senior unsecured notes (including Medium-Term Note Program)

As of September 30, 2020, the Company had $14.1 billion in senior unsecured notes outstanding. As of December 31, 2019, the Company had $12.4 billion in senior unsecured notes outstanding.

During the nine months ended September 30, 2020, the Company issued approximately $3.0 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $750.0 million due 2025 at a fixed rate of 2.30%, (ii) $650.0 million due 2030 at a fixed rate of 3.00%, (iii) $850.0 million due 2025 at a fixed rate of 3.375% and (iv) $700.0 million due 2026 at a fixed rate of 2.875%.

During the nine months ended September 30, 2020, the Company repurchased $206.1 million in aggregate principal amount of Floating Rate Medium-Term Notes due 2021. The debt repurchases resulted in a gain of $14.0 million and is included in Aircraft sales, trading and other revenue in the Company’s Consolidated Statements of Income and Comprehensive Income.

Unsecured revolving credit facility

As of September 30, 2020, the Company did not have any amounts outstanding under its unsecured revolving credit facility. The total amount outstanding under the Company’s unsecured revolving credit facility was $20.0 million as of December 31, 2019.

The Company has an unsecured revolving credit facility with JPMorgan Chase Bank, N.A. as agent (the “Revolving Credit Facility”). During the nine months ended September 30, 2020, the Company increased the aggregate capacity of the Revolving Credit Facility by $250.0 million. On May 5, 2020, commitments totaling $92.7 million of the Revolving Credit Facility matured. Lenders hold revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on May 5, 2022 and commitments totaling $5.0 million that mature on May 5, 2021. As of September 30, 2020, the aggregate capacity of the Revolving Credit Facility was approximately $6.0 billion.

As of September 30, 2020, borrowings under the Revolving Credit Facility will generally bear interest at either (a) LIBOR plus a margin of 1.05% per year or (b) an alternative base rate plus a margin of 0.05% per year, subject, in each case, to increases or decreases based on declines in the credit ratings for the Company’s debt. The Company is required to pay a facility fee of 0.20% per year (also subject to increases or decreases based on declines in the credit ratings for the Company’s debt) in respect of total commitments under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are used to finance the Company’s working capital needs in the ordinary course of business and for other general corporate purposes.

Secured debt financing

In June 2020, the Company entered into an amendment to its secured warehouse facility to extend the final maturity to June 2021. The facility will continue to bear a floating interest rate of LIBOR plus 2.00%. As part of the amendment, the credit facility was converted to full recourse against the Company and excess cash collateral was released. The outstanding balance on the Company’s secured warehouse facility was $100.4 million and $128.5 million as of September 30, 2020 and December 31, 2019, respectively.

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As of September 30, 2020, the outstanding balance on the Company’s secured debt financings, including its secured warehouse facility and its export credit financing, was $315.8 million and it had pledged 12 aircraft as collateral with a net book value of $636.6 million. As of December 31, 2019, the outstanding balance on the Company’s secured debt financings, including its secured warehouse facility and its export credit financing, was $460.4 million and it had pledged 15 aircraft as collateral with a net book value of $890.7 million.

Maturities

Maturities of debt outstanding as of September 30, 2020 are as follows (in thousands):

Years ending December 31,
2020	$	172,778
2021		1,934,141
2022		2,730,561
2023		2,502,123
2024		1,525,428
Thereafter		6,486,910
Total	$	15,351,941

Note 4.  Commitments and Contingencies

As of September 30, 2020, the Company had commitments to acquire a total of 372 new aircraft for delivery through 2026 as follows:

	Estimated Delivery Years
Aircraft Type	2020	2021	2022	2023	2024	Thereafter	Total
Airbus A220-300(1)	—	—	3	14	12	21	50
Airbus A320/321neo(2)	7	32	22	23	27	37	148
Airbus A330-900neo	1	3	7	4	—	—	15
Airbus A350-900/1000	1	4	3	4	5	1	18
Boeing 737-7/8/9 MAX	—	15	20	42	30	—	107
Boeing 787-9/10	5	9	8	10	2	—	34
Total	14	63	63	97	76	59	372

(1) In addition to the Company’s commitments, as of September 30, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028.

(2) The Company’s Airbus A320/321neo aircraft orders include 45 long-range variants and 29 extra long-range variants.

Pursuant to the Company's purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, and in the last several years manufacturing delays have significantly impacted the Company’s actual delivery dates. For several years, the Company has also experienced delivery delays for certain of its Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) began on March 10, 2019, and remains in effect. As a result, Boeing temporarily halted production and delivery of all 737 MAX aircraft. While production of the 737 MAX has now resumed, deliveries remain on hold. The Federal Aviation Administration (“FAA”) and the European Union Aviation Safety Agency (“EASA”) have both completed flight testing for recertification of the 737 MAX, though a number of key milestones remain before the aircraft can return to service. Lifting of the grounding is subject to the approval of the FAA, EASA and other global regulatory authorities, and the Company is unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic. The Company is currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of, and the delivery delays associated with the 737 MAX aircraft that the Company owns or has on order, which could result in changes to the commitment table.

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The ongoing COVID-19 pandemic has caused delivery delays of aircraft in the Company’s orderbook and is expected to continue to cause delays of aircraft delivery. As discussed in further detail in Note 12, “Impact of COVID-19 Pandemic,” the COVID-19 pandemic has resulted in numerous travel restrictions and business shutdowns or other operating limitations, including the temporary closure of final aircraft assembly facilities for each of Boeing and Airbus. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output. As a result of the temporary closures of the Boeing and Airbus facilities and the subsequently reduced production by these manufacturers, most of our expected aircraft deliveries were delayed during the second and third quarter. Given the dynamic nature of the ongoing COVID-19 pandemic, the Company is in ongoing discussions with Boeing and Airbus to determine the impact and duration of delivery delays. However, the Company is not yet able to determine the impact of the delivery delays, and as such, the delivery dates listed could materially change.

The aircraft purchase commitments discussed above also could be impacted by lease cancellation. The Company's leases typically provide that the Company and the airline customer each have a cancellation right related to certain aircraft delivery delays. The Company’s purchase agreements with Boeing and Airbus also generally provide that the Company and the manufacturer each have cancellation rights that typically are parallel with the Company’s cancellation rights in its leases. The Company’s leases and its purchase agreements with Boeing and Airbus typically provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause. As of September 30, 2020, the Company has canceled its orders for 19 737 MAX aircraft with Boeing.

The Company has commitments for the acquisition of 372 aircraft for delivery through 2026, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $24.8 billion at September 30, 2020, which are due as follows (in thousands):

Years ending December 31,
2020	$	1,213,581
2021		4,841,564
2022		5,604,050
2023		6,153,520
2024		4,211,633
Thereafter		2,789,136
Total	$	24,813,484

The Company has made non-refundable deposits on the aircraft for which the Company has commitments to purchase of approximately $1.6 billion as of September 30, 2020 and December 31, 2019, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits. Further, the Company would be exposed to breach of contract claims by its lessees and manufacturers.

Note 5.  Rental Income

At September 30, 2020, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s fleet are as follows (in thousands):

Years ending December 31,
2020 (excluding the nine months ended September 30, 2020)	$	495,367
2021		1,942,269
2022		1,833,191
2023		1,636,744
2024		1,502,227
Thereafter		5,977,449
Total	$	13,387,247

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Note 6.  Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s two classes of common stock, Class A and Class B Non-Voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of September 30, 2020, the Company did not have any Class B Non-Voting common stock outstanding.

Diluted earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. For the three and nine months ended September 30, 2020, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. The Company excluded 1,032,305 and 946,406 shares related to restricted stock units for which the performance metric had yet to be achieved as of September 30, 2020 and 2019, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic earnings per share:
Numerator
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Denominator
Weighted-average common shares outstanding		113,778,533		112,133,556		113,647,585		111,511,960
Basic earnings per share	$	1.02	$	1.36	$	3.46	$	3.71
Diluted earnings per share:
Numerator
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Denominator
Number of shares used in basic computation		113,778,533		112,133,556		113,647,585		111,511,960
Weighted-average effect of dilutive securities		172,569		1,129,840		281,190		1,325,566
Number of shares used in per share computation		113,951,102		113,263,396		113,928,775		112,837,526
Diluted earnings per share	$	1.02	$	1.34	$	3.46	$	3.67

Note 7.  Fair Value Measurements

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

The Company has a cross-currency swap related to its Canadian dollar Medium-Term Notes which was issued in December 2019. The fair value of the swap as a foreign currency exchange derivative is categorized as a Level 2 measurement in the fair value hierarchy and is measured on a recurring basis. As of September 30, 2020, the estimated fair value of the foreign currency exchange derivative liability was $1.6 million. As of December 31, 2019, the estimated fair value of the foreign currency exchange derivative asset was $5.4 million.

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Financial Instruments Not Measured at Fair Values

The fair value of debt financing is estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities, which would be categorized as a Level 2 measurement in the fair value hierarchy. The estimated fair value of debt financing as of September 30, 2020 was approximately $15.5 billion compared to a book value of $15.4 billion. The estimated fair value of debt financing as of December 31, 2019 was $14.1 billion compared to a book value of $13.7 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at September 30, 2020, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at September 30, 2020 and December 31, 2019 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.

Note 8.  Shareholders’ Equity

The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had 113,778,906 and 113,350,267 Class A common shares issued 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, 2020 and December 31, 2019.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million.

Note 9.  Stock-based Compensation

On May 7, 2014, the stockholders of the Company approved the Air Lease Corporation 2014 Equity Incentive Plan (the “2014 Plan”). Upon approval of the 2014 Plan, no new awards may be granted under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). As of September 30, 2020, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 4,860,870.

The Company recorded $6.6 million and $4.9 million of stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively. The Company recorded $15.0 million and $14.9 million of stock-based compensation expense for the nine months ended September 30, 2020 and 2019, respectively.

Stock Options

A summary of stock option activity for the nine months ended September 30, 2020 follows:

				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)(1)
Balance at December 31, 2019	364,153	$	22.90	0.75	$	8,965
Granted	—	$	—	—	$	—
Exercised	(244,153)	$	20.00	—	$	3,078
Forfeited/canceled	—	$	—	—	$	—
Balance at September 30, 2020	120,000	$	28.80	0.57	$	74
Vested and exercisable as of September 30, 2020	120,000	$	28.80	0.57	$	74

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

All of the Company’s outstanding employee stock options had fully vested as of June 30, 2013. As of September 30, 2020 there were no unrecognized compensation costs related to outstanding stock options. For the three and nine months ended September 30, 2020 and 2019 there were no stock-based compensation expenses related to Stock Options.

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Restricted Stock Units

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

During the nine months ended September 30, 2020, the Company granted 670,621 RSUs of which 133,699 are TSR RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the nine months ended September 30, 2020:

	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2019	1,254,904	$	43.62
Granted	670,621	$	42.20
Vested	(406,067)	$	46.96
Forfeited/canceled	(49,407)	$	43.97
Unvested at September 30, 2020	1,470,051	$	42.04
Expected to vest after September 30, 2020	1,470,051	$	42.04

As of September 30, 2020, there was $29.1 million of unrecognized compensation cost related to unvested stock-based payments granted to employees. Total unrecognized compensation cost will be recognized over a weighted-average remaining period of 1.79 years.

Note 10.  Aircraft Under Management

As of September 30, 2020, the Company managed 81 aircraft across three aircraft management platforms. The Company managed 51 aircraft through its Thunderbolt platform, 26 aircraft through the Blackbird investment funds and four on behalf of a financial institution.

The Company managed 26 aircraft on behalf of third-party investors, through two investment funds, Blackbird Capital I, LLC and Blackbird Capital II, LLC (“Blackbird II”). These funds invest in commercial aircraft and lease them to airlines throughout the world. The Company provides management services to these funds for a fee. As of September 30, 2020, the Company's non-controlling interests in each fund are 9.5% and are accounted for under the equity method of accounting. The Company’s investment in these funds aggregated $52.2 million and $46.5 million as of September 30, 2020 and December 31, 2019, respectively, and is included in Other assets on the Consolidated Balance Sheets. The Company continues to source aircraft investment opportunities for Blackbird II. As of September 30, 2020, Blackbird II has remaining equity capital commitments to acquire up to approximately $1.0 billion in aircraft assets, for which the Company has committed to fund up to $29.1 million related to these potential investments.

Additionally, the Company continues to manage aircraft that it sells through its Thunderbolt platform. As of September 30, 2020, the Company managed 51 aircraft through its Thunderbolt platform sold across three separate transactions. The Company has non-controlling interests in two of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. During the three months ended September 30, 2020, the Company completed the sale of one aircraft from its held for sale portfolio through its Thunderbolt platform. The Company’s total investment in aircraft sold through its Thunderbolt platform was $9.3 million and $9.9 million as of September 30, 2020 and December 31, 2019, respectively and is included in Other assets on the Consolidated Balance Sheets.

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Note 11.  Flight Equipment Held for Sale

As of September 30, 2020, the Company did not have any flight equipment classified as held for sale. As of December 31, 2019, the Company had eight aircraft, with a carrying value of $249.6 million, which were classified as held for sale and included in Other assets on the Consolidated Balance Sheets.

Note 12.  Impact of COVID-19 Pandemic

On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization (the “WHO”). On March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic. In response to the COVID-19 pandemic, governments around the world have implemented numerous measures to try to contain the virus, including travel restrictions. Although some of these measures have been lifted or scaled back, a recent resurgence of COVID-19 in certain parts of the world, including the United States and parts of Europe, has resulted in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. These measures, coupled with a decrease in consumer spending on travel as a result of COVID-19, have materially impacted airline traffic and operations throughout the world, including the Company’s airline customers. It is unclear how long and to what extent these measures will remain in place and they may remain in place in some form for an extended period of time. Aircraft manufacturers and suppliers also have been impacted, including causing the temporary closure of Boeing and Airbus’ final assembly facilities and also closures of various facilities across their supply chain. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output.

As the virus spread globally, its impact on the global economy increased significantly, resulting in a rapid decline in global air travel. While domestic and regional airline traffic improved over the last several months, demand for international and business air travel remains challenged. Since the pandemic began in the first quarter of 2020, the Company has received requests from most of its customers for accommodations such as deferrals of lease payments or other lease concessions. On a case-by-case basis, the Company has agreed to accommodations with approximately 58% of its lessees. Generally, these accommodations have been in the form of partial lease deferrals for payments due during the first three quarters of 2020, typically with a short repayment period. The majority of these deferrals are to be repaid within 12 months from the date the deferrals were granted, and in many cases, include lease extensions. The Company remains in active discussions with its airline customers and may continue to provide accommodations on a case-by-case basis.

While lease deferrals may delay the Company’s receipt of cash, the Company generally recognizes the lease revenue during the period even if a deferral is provided to the lessee, unless it determines collection is not reasonably assured. The Company monitors all lessees with past due lease payments and discusses relevant operational and financial issues facing those lessees in order to determine an appropriate course of action. In addition, if collection is not reasonably assured, the Company will not recognize rental income for amounts due under the Company’s lease contracts and will recognize revenue for such lessees on a cash basis. For the quarter ended September 30, 2020, the Company did not recognize rental revenue of $25.3 million because collection was not reasonably assured for certain lessees. Aircraft on lease with these lessees represented approximately 6.6% of our fleet by net book value.

Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on its business, results of operations and financial condition for the foreseeable future.

Note 13. Subsequent Events

On November 5, 2020, the Company’s board of directors approved an increase in the Company’s quarterly cash dividend from $0.15 per share to $0.16 per share on its outstanding Class A common stock. The dividend will be paid on January 6, 2021 to holders of record of the Company’s Class A common stock as of December 18, 2020. The Company’s board of directors also approved a cash dividend of $0.384375 per share on its outstanding Series A Preferred Stock, which will be paid on December 15, 2020 to holders of record of the Company’s Series A Preferred Stock as of November 30, 2020. In addition, on November 5, 2020, the Company’s board of directors authorized a share repurchase program of up to $100.0 million of Class A common stock that expires on June 15, 2021.

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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 (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 other investors. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our 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.

Impact of COVID-19 Pandemic

On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization (the “WHO”). On March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic. In response to the COVID-19 pandemic, governments around the world have implemented numerous measures to try to contain the virus, including travel restrictions. Although some of these measures have been lifted or scaled back, a recent resurgence of COVID-19 in certain parts of the world, including the United States and parts of Europe, has resulted in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. These measures, coupled with a decrease in consumer spending on travel as a result of COVID-19, have materially impacted airline traffic and operations throughout the world, including our airline customers. It is unclear how long and to what extent these measures will remain in place and they may remain in place in some form for an extended period of time. Aircraft manufacturers and suppliers also have been impacted, including causing the temporary closure of Boeing and Airbus’ final assembly facilities and also closures of various facilities across their supply chain. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output.

As the virus spread globally, its impact on the global economy increased significantly, resulting in a rapid decline in global air travel. While domestic and regional airline traffic improved over the last several months, demand for international and business air travel remains challenged. Since the pandemic began in the first quarter of 2020, we have received requests from our customers for accommodations such as deferrals of lease payments or other lease concessions. As of November 9, 2020, most of our lessees have requested some form of accommodation. On a case-by-case basis, we have agreed to accommodations with approximately 58% of our lessees. Generally, these accommodations have been in the form of partial lease deferrals for payments due during the first three quarters of 2020, typically with a short repayment period. The majority of these deferrals are to be repaid within 12 months from the date the deferrals were granted, and in many cases, include lease extensions. Through November 9, 2020, we have agreed to defer approximately $201.5 million in lease payments, of which $59.8 million or 30% of the total deferrals have been repaid. These lease deferrals have negatively impacted our cash flow provided by operating activities but only represented approximately 3% of our total available liquidity as of September 30, 2020. We remain in active discussions with our airline customers and may continue to provide accommodations on a case-by-case basis.

Our collection rate for the three and nine months ended September 30, 2020 was 86% and 89%, respectively. Collection rate is defined as the sum of cash collected from lease rentals and maintenance reserves, and includes cash recovered from outstanding receivables from previous periods, as a percentage of the total contracted receivables due for the period. The collection rate is calculated after giving effect to lease deferral arrangements made as of November 9, 2020. In addition, we did not recognize rental revenue of $25.3 million for the quarter ended September 30, 2020 because collection was not reasonably assured for certain lessees. Aircraft on lease with these lessees represented approximately 6.6% of our fleet by net book value as of September 30, 2020. The severity and the length of the impact

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of the COVID-19 pandemic on air travel continues to be uncertain. However, the adverse impact of the pandemic on our airline customers could intensify with the beginning of the winter season and the resurgence of COVID-19 in recent months in certain parts of the world. If this occurs, we expect we will experience increased requests for lease deferrals, a continuing decline in our collection rate and additional lease revenue that will not be recognized in future quarters because collection will not be reasonably assured for certain lessees.

Our lease utilization rate for the third quarter of 2020 was 99.6%. The lease utilization rate is calculated based on the number of days each aircraft was subject to a lease or letter of intent during the period, weighted by the net book value of the aircraft. The severity and longevity of the COVID-19 pandemic on our airline customers could result in a decline in our lease utilization rate if our lessees continue to return aircraft to us before the return date in their lease agreement or experience insolvency or initiate bankruptcy or similar proceedings that result in aircraft being returned to us. If this occurs, we may not be able to reposition the aircraft with other airlines as quickly as we have historically been able to do and we may incur increased costs in repositioning such aircraft. A decline in our lease utilization rate would adversely impact our financial results, including our revenue and profitability. As of the date of this filing, we had 19 aircraft across five airlines which were subject to various forms of insolvency proceedings.

In addition, the impact of the COVID-19 pandemic on airlines could result in the cancellation of leases that we have in place for our committed orderbook or a decline in the number of aircraft in our orderbook that we can place into leases prior to their delivery, which would also result in a decline in our lease utilization rate. If we are not able to place aircraft from our orderbook into leases prior to delivery, it may cause downward pressure on our lease rates. As of September 30, 2020, we had commitments to purchase 372 aircraft from Airbus and Boeing for delivery through 2026, and we had placed approximately 90% of our committed orderbook on long-term leases for aircraft delivering through 2022.

During the third quarter, our employees continued to work remotely, and due to travel restrictions and business limitations and shutdowns, some transitions of our aircraft from one lessee to another lessee have been delayed. As a result of travel restrictions, we expect some challenges when transitioning, acquiring or selling aircraft. Some planned aircraft sales have also been delayed or terminated as a result of business limitations and shutdowns. We expect these disruptions to continue and they could worsen. The decline in demand for used aircraft may result in impairment charges to the aircraft in our fleet.

We have also experienced aircraft delivery delays related to COVID-19. While the commitment table in Note 4, “Commitments and Contingencies” above and the discussion of “Our Fleet” below reflects our current delivery expectations, we are in ongoing discussions with Boeing and Airbus to determine the extent and duration of delivery delays. The delays could result in a cancellation of leases for those aircraft. As of September 30, 2020, we have canceled our orders for 19 737 MAX aircraft with Boeing. While we have planned our capital expenditures for the remainder of 2020 and beyond based on currently expected delivery schedules, given the current industry circumstances, our aircraft delivery schedule could continue to be subject to material changes. In any case, our capital expenditures will be significantly less than what we planned prior to the pandemic, which will slow our revenue growth, but will further improve our strong liquidity position. As a result of these delivery delays, we also anticipate reduced sales activity.

COVID-19 has also continued to cause disruption in the financial markets and has caused volatility and uncertainty in the bond market. 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. As of September 30, 2020, we had an undrawn balance of $6.0 billion under our Revolving Credit Facility (as defined below). We have continued to have access to the unsecured debt capital markets issuing (i) $850.0 million in aggregate principal amount of Medium-Term Notes due 2025 at a fixed rate of 3.375% and (ii) and $700.0 million in aggregate principal amount of Medium-Term Notes due 2026 at a fixed rate of 2.875% in the last two quarters and we believe we will continue to have access to such markets. We could also seek to enter into more secured debt financings, including financings supported through the Export-Import Bank of the United States or other export credit agencies (“ECAs”) to fund future aircraft deliveries from our orderbook. Our liquidity is discussed below in more detail under “Liquidity and Capital Resources.”

We cannot currently reasonably estimate the extent to which the COVID-19 pandemic will ultimately impact our business, and its impact on our business and financial results may worsen during the upcoming winter months if there is a resurgence of COVID-19 globally resulting in the re-imposition of certain restrictions or a decrease in consumer and business spending on travel. We expect our business, results of operations and financial condition will continue to be negatively impacted in the near term, and the pandemic could have a larger impact on our results of operations for the

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remainder of this year and into 2021 than has been reflected in our year to date and second and third quarter results for 2020. We believe, however, that the airline industry will eventually recover and aircraft travel will return to historical levels over the long term. See “Aircraft Industry and Sources of Revenues” below. Further, we believe we are well positioned to offer solutions for airlines, because we can offer the ability to lease younger, more fuel-efficient aircraft at a time when airlines will be focused on reducing capital requirements and managing costs.

Given the dynamic nature of this situation, however, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our business, results of operations and financial condition for the foreseeable future.

Third Quarter Overview

During the three months ended September 30, 2020, we purchased and took delivery of seven aircraft from our new order pipeline and sold one aircraft, ending the period with a total of 308 aircraft with a net book value of $19.5 billion. The weighted average lease term remaining on our operating lease portfolio was 6.9 years and the weighted average age of our fleet was 4.0 years as of September 30, 2020. Our fleet grew by 4.3% based on net book value of $19.5 billion as of September 30, 2020, compared to $18.7 billion as of December 31, 2019. In addition, we had a managed fleet of 81 aircraft as of September 30, 2020, compared to a managed fleet of 83 aircraft as of December 31, 2019. We had a globally diversified customer base comprised of 107 airlines in 61 countries. As of November 9, 2020, all aircraft in our operating lease portfolio, except for one aircraft, were subject to letters of intent or lease agreements.

As of September 30, 2020, we had commitments to purchase 372 aircraft from Airbus and Boeing for delivery through 2026, with an estimated aggregate commitment of $24.8 billion. We ended the third quarter of 2020 with $27.2 billion in committed minimum future rental payments and placed approximately 90% of our committed orderbook on long-term leases for aircraft delivering through 2022. This includes $13.4 billion in contracted minimum rental payments on the aircraft in our existing fleet and $13.8 billion in minimum future rental payments related to aircraft which will be delivered during the remainder of 2020 through 2024.

During the three months ended September 30, 2020, we issued $700.0 million in Medium-Term Notes due 2026 bearing interest at a fixed rate of 2.875%. In addition, we ended the third quarter of 2020 with an aggregate borrowing capacity under the Revolving Credit Facility of $6.0 billion and total liquidity of $7.2 billion. We ended the third quarter of 2020 with total debt outstanding of $15.4 billion, of which 91.4% was at a fixed rate and 97.9% of which was unsecured. Our composite cost of funds decreased to 3.13% as of September 30, 2020 as compared to 3.34% as of December 31, 2019.

Our total revenues for the quarter ended September 30, 2020 decreased by 7.0% to $493.6 million, compared to the quarter ended September 30, 2019. This decrease was primarily due to a decrease of $25.3 million in rental revenue not recognized because collection was not reasonably assured for certain lessees and a decrease in our aircraft sales, trading and other activity. Our net income available to common stockholders for the quarter ended September 30, 2020 was $116.6 million compared to $151.9 million for the quarter ended September 30, 2019. Our diluted earnings per share for the quarter ended September 30, 2020 was $1.02 compared to $1.34 for the quarter ended September 30, 2019. The decrease in net income available to common stockholders in the third quarter of 2020 as compared to 2019 was primarily due to the decrease in rental revenues and an increase in interest expense, partially offset by a decrease in 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, 2020 was $166.9 million or $1.47 per diluted share, compared to $203.9 million or $1.80 per diluted share for the three months ended September 30, 2019. The decrease in our adjusted net income before income taxes in the third quarter of 2020 as compared to 2019, was primarily due to the decrease in rental revenues and an increase in interest expense, partially offset by a decrease in selling, general and administrative expenses. Our adjusted pre-tax profit margin for the three months ended September 30, 2020 was 33.8% compared to 38.4% for the three months ended September 30, 2019. 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.

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Our Fleet

Portfolio metrics of our fleet as of September 30, 2020 and December 31, 2019 are as follows:

	September 30, 2020		December 31, 2019
Aggregate fleet net book value	$	19.5 billion	$	18.7 billion
Weighted-average fleet age(1)		4.0 years		3.5 years
Weighted-average remaining lease term(1)		6.9 years		7.2 years
Owned fleet(2)		308		292
Managed fleet(2)		81		83
Aircraft on order		372		413
Aircraft purchase options(3)		25		70
Total		786		858
Current fleet contracted rentals	$	13.4 billion	$	14.1 billion
Committed fleet rentals	$	13.8 billion	$	15.0 billion
Total committed rentals	$	27.2 billion	$	29.1 billion

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

(2) As of September 30, 2020 we did not have any aircraft classified as flight equipment held for sale. As of December 31, 2019 we had eight aircraft classified as flight equipment held for sale which are included in Other assets on the Consolidated Balance Sheet. All of these aircraft are excluded from the owned fleet count and included in our managed fleet count.

(3) As of September 30, 2020, we had options to acquire up to 25 Airbus A220 aircraft. As of December 31, 2019, we had options to acquire up to 45 Boeing 737-8 MAX aircraft, that have since expired without being exercised, and up to 25 Airbus A220 aircraft.

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, 2020 and December 31, 2019 (in thousands, except percentages):

	September 30, 2020				December 31, 2019
	Net Book				Net Book
Region	Value		% of Total		Value		% of Total
Europe	$	6,062,005	31.1	%	$	5,438,775	29.0	%
Asia (excluding China)		5,364,212	27.5	%		4,985,525	26.7	%
China		2,795,615	14.3	%		2,930,752	15.7	%
The Middle East and Africa		2,317,599	11.9	%		2,242,215	12.0	%
Central America, South America and Mexico		1,085,289	5.6	%		1,116,814	6.0	%
Pacific, Australia and New Zealand		965,884	4.9	%		993,858	5.3	%
U.S. and Canada		925,892	4.7	%		996,398	5.3	%
Total	$	19,516,496	100.0	%	$	18,704,337	100.0	%

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The following table sets forth the number of aircraft we owned by aircraft type as of September 30, 2020 and December 31, 2019:

	September 30, 2020			December 31, 2019
	Number of			Number of
Aircraft type	Aircraft	% of Total		Aircraft	% of Total
Airbus A319-100	1	0.3	%	1	0.3	%
Airbus A320-200	21	6.8	%	21	7.2	%
Airbus A320-200neo	17	5.5	%	13	4.5	%
Airbus A321-200	28	9.1	%	28	9.6	%
Airbus A321-200neo	43	14.0	%	35	12.0	%
Airbus A330-200	13	4.2	%	12	4.1	%
Airbus A330-300	8	2.6	%	7	2.4	%
Airbus A330-900neo	7	2.3	%	7	2.4	%
Airbus A350-900	11	3.6	%	10	3.4	%
Airbus A350-1000	1	0.3	%	—	—	%
Boeing 737-700	4	1.3	%	4	1.4	%
Boeing 737-800	84	27.3	%	85	29.1	%
Boeing 737-8 MAX	15	4.9	%	15	5.1	%
Boeing 767-300ER	—	—	%	1	0.3	%
Boeing 777-200ER	1	0.3	%	1	0.3	%
Boeing 777-300ER	24	7.8	%	24	8.2	%
Boeing 787-9	23	7.5	%	23	8.0	%
Boeing 787-10	6	1.9	%	4	1.4	%
Embraer E190	1	0.3	%	1	0.3	%
Total	308	100.0	%	292	100.0	%

As of September 30, 2020, we had commitments to acquire a total of 372 new aircraft for delivery through 2026 as follows:

	Estimated Delivery Years
Aircraft Type	2020	2021	2022	2023	2024	Thereafter	Total
Airbus A220-300(1)	—	—	3	14	12	21	50
Airbus A320/321neo(2)	7	32	22	23	27	37	148
Airbus A330-900neo	1	3	7	4	—	—	15
Airbus A350-900/1000	1	4	3	4	5	1	18
Boeing 737-7/8/9 MAX	—	15	20	42	30	—	107
Boeing 787-9/10	5	9	8	10	2	—	34
Total	14	63	63	97	76	59	372

(1) In addition to our commitments, as of September 30, 2020, we had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028.

(2) Our Airbus A320/321neo aircraft orders include 45 long-range variants and 29 extra long-range variants.

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Aircraft Delivery Delays

Pursuant to our purchase agreements with Boeing and Airbus for new aircraft, we and each manufacturer agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, and in the last several years manufacturing delays have significantly impacted our actual delivery dates. 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. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) began on March 10, 2019, and remains in effect. As a result, Boeing temporarily halted production and delivery of all 737 MAX aircraft. While production of the 737 MAX resumed in the second quarter, deliveries remain on hold. The Federal Aviation Administration (“FAA”) and the European Union Aviation Safety Agency (“EASA”) have both completed flight testing for recertification of the 737 MAX , though a number of key milestones remain before the aircraft can return to service. Lifting of the grounding is subject to the approval of the FAA, EASA and other global regulatory authorities, and we are unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic. 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 737 MAX aircraft that we own or have on order, which could result in changes to the commitment table.

The ongoing COVID-19 pandemic has caused delivery delays of aircraft in our orderbook and is expected to continue to cause delays of aircraft deliveries. As discussed in further detail above in “Impact of COVID-19 Pandemic,” the pandemic has resulted in numerous travel restrictions and business shutdowns or other operating limitations, including the temporary closure of final aircraft assembly facilities for each of Boeing and Airbus. In the second quarter of 2020, Boeing and Airbus resumed production in these facilities but with reduced output.

As a result of the temporary closures of the Boeing and Airbus facilities and the subsequently reduced production by these manufacturers, most of our expected aircraft deliveries were delayed during the second and third quarter. Given the dynamic nature of the ongoing COVID-19 pandemic, we are in ongoing discussions with Boeing and Airbus to determine the impact and duration of delivery delays. However, we are not yet able to determine the impact of the delivery delays, and as such, expected delivery dates could materially change.

The aircraft purchase commitments discussed above also could be impacted by lease cancellation. Our leases typically provide that we and our airline customer each have a cancellation right related to certain aircraft delivery delays. Our purchase agreements with Boeing and Airbus also generally provide that we and the manufacturer each have cancellation rights that typically are parallel with our cancellation rights in our leases. Our leases and our purchase agreements with Boeing and Airbus generally provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause. As of September 30, 2020, we have canceled our orders for 19 737 MAX aircraft with Boeing. We believe that the majority of our 737 MAX aircraft deliveries in our orderbook will be delayed more than 12 months.

The following table, which is subject to change based on Airbus and Boeing delivery delays, shows the number of new aircraft scheduled to be delivered as of September 30, 2020. As noted above, we expect delivery delays for all aircraft deliveries in our orderbook, including Boeing 737 MAX delivery delays after the grounding of such aircraft is lifted. We remain in discussions with Boeing and Airbus to determine the extent and duration of delivery delays, but given the dynamic nature of the ongoing COVID-19 pandemic, we are not yet able to determine the full impact of the delivery delays.

	Number of	Number
Delivery Year	Aircraft	Leased	% Leased
2020	14	14	100.0	%
2021	63	62	98.4	%
2022	63	50	79.4	%
2023	97	36	37.1	%
2024	76	14	18.4	%
Thereafter	59	1	1.7	%
Total	372	177

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Aircraft Industry and Sources of Revenues

Our revenues are principally derived from operating leases with scheduled and charter airlines throughout the world. As of September 30, 2020, we had a globally diversified customer base comprised of 107 airlines in 61 different countries, with over 95% of our business revenues from airlines domiciled outside of the U.S., and we anticipate that most of our revenues in the future will be generated from foreign customers.

Performance of the commercial airline industry is linked to global economic health and development, which may be negatively impacted by economic disruption, macroeconomic conditions and geopolitical and policy risks, among other factors. COVID-19 has caused significant disruption to the commercial airline industry resulting in a meaningful decline in air travel demand and subsequent flight cancellations, negatively impacting airlines, aircraft manufacturers, and other related businesses. The International Air Transport Association (“IATA”) reported that passenger traffic fell 65% year-over-year for the first nine months of 2020 and 73% year-over-year for the month of September 2020, primarily due to COVID-19. As a result, IATA now expects airline passenger volumes to fall 68% in 2020 as compared to 2019, with the path of recovery dependent upon the pandemic and the relaxation of enforced air travel restrictions in many countries globally. While domestic and regional airline traffic have improved since the industry low in April, international and business air travel demand remain challenged.

We expect a significant increase in financial difficulties for our airline customers through the remainder of 2020 and into 2021 and potentially longer, resulting in additional requests for lease deferrals or other lease concessions, requests to return aircraft early and lease defaults. We also expect increased airline reorganizations, liquidations, or other forms of bankruptcies, which may include our aircraft customers and result in the early return of aircraft or changes in our lease terms. As of the date of this filing, we had 19 aircraft across five airlines which were subject to various forms of insolvency proceedings.

Approximately 73% of the net book value of our fleet are leased to flag carriers or airlines that have some form of governmental ownership; however, this does not guarantee our ability to collect contractual rent payments. We believe that having a large portion of the net book value of our fleet on lease with flag carriers or airlines with some form of governmental ownership, coupled with the overall quality of our aircraft and security deposits and maintenance reserves under our leases will help mitigate our customer default risk.

We expect the aviation industry to recover over time from the impact of COVID-19, and in the long-term we remain optimistic. While we believe some aircraft lessors may consolidate or cease operations as a result of the pandemic, we believe the aircraft leasing industry has remained resilient over time across a variety of global economic conditions and remain optimistic about the long-term fundamentals of our business. As a result of the COVID-19 pandemic, some airlines have accelerated their plans to retire older, less fuel-efficient aircraft that have higher maintenance costs in the current environment, and we anticipate that airlines will continue to accelerate the retirement of this type of aircraft, ultimately increasing demand for newer aircraft over time. We also anticipate that when airlines need to add new aircraft to their fleet, they will increasingly elect to lease aircraft instead of purchasing aircraft to reduce capital requirements and manage other operating expenses, and that we will benefit from that trend. A number of these trends have already begun during the last several months and we continue to closely monitor market impact from the pandemic.

We and airlines around the world have continued to experience delivery delays from Boeing and Airbus, from which we have 372 aircraft on order as of September 30, 2020, as discussed above in “Our Fleet.” The Airbus delays and the 737 MAX grounding have impacted the growth of our company as well as the growth of our airline customers, passenger growth and airline profitability and we expect this to continue. As a result of continued production delays and the impact of COVID-19, we expect aircraft deliveries to be lower than previously anticipated for 2020 and delivery delays could potentially extend well into 2021 and beyond. While we have planned our capital expenditures for the remainder of 2020 and beyond based on currently expected delivery schedules, given the current industry circumstances, our aircraft delivery schedule could continue to be subject to material changes. As a result of these delivery delays, we also anticipate reduced sales activity.

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The worldwide grounding of the 737 MAX began on March 10, 2019, and remains in effect. As a result, Boeing temporarily halted production and delivery of all 737 MAX aircraft. While production of the 737 MAX has since resumed, deliveries remain on hold. Since March of 2019, 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 737 MAX aircraft will return to service and when Boeing will resume deliveries have impacted the profitability of certain airlines. The FAA and EASA have both completed flight testing for recertification of the 737 MAX, though a number of key milestones remain before the aircraft can return to service. Lifting of the grounding is subject to the approval of the FAA, EASA and other global regulatory authorities, and we are unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic.

As of September 30, 2020, we owned and leased 15 737 MAX aircraft and we had 107 737 MAX aircraft on order. With respect to the 15 737 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, some of our airline customers for these 15 737 MAX aircraft lease payments are in arrears.

We expect that if the grounding continues for an extended time, or if there are significant 737 MAX delivery delays even after the grounding is lifted as a result of the impact of the COVID-19 pandemic, more of our customers may seek to cancel their lease contracts with us. As of September 30, 2020, we have canceled our orders for 19 737 MAX aircraft with Boeing. It is unclear at this point if we will cancel more of our 737 MAX delivery positions with Boeing or attempt to 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 737 MAX aircraft that we own and have on order.

For several years, Airbus has also had delivery delays for certain of its aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. Those delays are continuing and have worsened. Airbus has told us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2022. These delays also have impacted airline operations and the profitably of certain airlines.

Further as it relates to Airbus aircraft, in October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new aircraft imported from Europe, including Airbus aircraft. In March 2020, the tariffs on aircraft were raised to 15%. 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 2020, the World Trade Organization authorized the European Union (“E.U.”) to enact approximately $4.0 billion of tariffs on products manufactured in the U.S. On November 9, 2020, the E.U. announced a 15% tariff on new aircraft imported into the E.U. from the U.S., including Boeing aircraft, effective November 10, 2020. We are currently monitoring the impact of U.S. trade policies on our future Airbus deliveries to U.S. customers, and are assessing the impact the new E.U. tariffs will have on our Boeing deliveries to customers in the E.U. 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, aircraft maintenance and the costs associated with the importation of the aircraft.

Given the impact of COVID-19 on our industry, it is unclear at this time how competition within the aircraft leasing industry will evolve or change in the coming months and what the corresponding impact on lease rates will be as a result of the change in the competitive landscape, COVID-19, trade matters, the aircraft delays from Airbus and Boeing or other items.

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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 an array of debt financing products. 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 with primarily fixed-rate debt. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another and also reduces structural subordination in our capital structure. We also have the ability to seek debt financing secured by our assets, as well as financings supported through the Export-Import Bank of the United States and other export credit agencies for future aircraft deliveries. Our access to a variety of financing alternatives including unsecured public bonds, private capital, bank debt and secured markets serves as a key advantage in managing our liquidity. Aircraft delivery delays as a product of the COVID-19 pandemic and the 737 MAX grounding are expected to further reduce our debt financing needs for the next six to twelve months and potentially beyond. We continue to monitor COVID-19 and its impact on our overall liquidity position and outlook.

We ended the third quarter of 2020 with total debt outstanding, net of discounts and issuance costs, of $15.2 billion compared to $13.6 billion as of December 31, 2019. Our unsecured debt increased to $15.0 billion as of September 30, 2020 from $13.3 billion as of December 31, 2019. Our unsecured debt as a percentage of total debt increased to 97.9% as of September 30, 2020 from 96.6% as of December 31, 2019.

Our cash flows provided by operating activities decreased by 26.1% or $254.0 million, to $717.6 million for the nine months ended September 30, 2020 as compared to $971.6 million for the nine months ended September 30, 2019. The decrease in our cash flow provided by operating activities is primarily due to an increase in deferred lease payments as a result of the COVID-19 pandemic. Our cash flow used in investing activities was $1.4 billion for the nine months ended September 30, 2020, which resulted primarily from the purchase of aircraft, partially offset by proceeds from our sales and trading activity. Our cash flow provided by financing activities was $1.6 billion for the nine months ended September 30, 2020, which resulted primarily from the issuance of unsecured notes partially offset by the repayment of outstanding debt. We expect the impact of COVID-19, including as a result of rent deferrals and other lease concessions made or that we may make in the future to our customers, will continue to have negative impact on cash flow from operating activities.

We ended the third quarter of 2020 with available liquidity of $7.2 billion which is comprised of unrestricted cash of $1.2 billion and an available borrowing capacity under our Revolving Credit Facility of $6.0 billion. Our Revolving Credit Facility does not condition our ability to borrow on the lack of a material adverse effect to us or the general economy. We believe that we have sufficient liquidity to satisfy the operating requirements of our business through at least next 12 months. A key component of the ongoing liquidity available to us is our Revolving Credit Facility, for which the substantial majority of the commitments mature in 2023. Our Revolving Credit Facility is syndicated across 49 financial institutions from around various regions of the world, diversifying our reliance on any individual lending institution. We continue to utilize our Revolving Credit Facility in the normal course of business.

We have a balanced approach to capital allocation based on the following priorities, ranked in order of importance: first, investing in modern, in-demand aircraft to profitably grow our core aircraft leasing business while maintaining strong fleet metrics and creating sustainable long-term shareholder value; second, maintaining our investment grade balance sheet utilizing unsecured debt as our primary form of financing; and finally, in lockstep with the aforementioned priorities, returning excess cash to shareholders through our dividend policy as well as regular evaluation of share repurchases, as appropriate.

The ultimate impact the COVID-19 pandemic may have on our business, results of operations and financial condition over the next 12 months is currently uncertain and will depend on certain developments, including, among others, the impact of the COVID-19 pandemic on our airline customers and the magnitude and duration of the pandemic. We currently believe that our cash on hand, current debt arrangements and general ability to access the capital markets will be sufficient to finance our operations and fund our debt service requirements and capital expenditures, including aircraft acquisition over the next 12 months. We also have the ability to seek debt financing secured by our assets, as well as financings supported through the Export-Import Bank of the United States and other export credit agencies, or ECAs for future aircraft deliveries, which will further enhance our liquidity position.

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As of September 30, 2020, we were in compliance in all material respects with the covenants contained in our debt agreements. A ratings downgrade will not result in a default under any of our debt agreements, but 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, 2019, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

Debt

Our debt financing was comprised of the following at September 30, 2020 and December 31, 2019 (in thousands, except percentages):

	September 30, 2020			December 31, 2019
Unsecured
Senior notes	$	14,069,115		$	12,357,811
Term financings		967,000			883,050
Revolving credit facility		—			20,000
Total unsecured debt financing		15,036,115			13,260,861
Secured
Term financings		289,207			428,824
Export credit financing		26,619			31,610
Total secured debt financing		315,826			460,434
Total debt financing		15,351,941			13,721,295
Less: Debt discounts and issuance costs		(171,796)			(142,429)
Debt financing, net of discounts and issuance costs	$	15,180,145		$	13,578,866
Selected interest rates and ratios:
Composite interest rate(1)		3.13	%		3.34	%
Composite interest rate on fixed-rate debt(1)		3.29	%		3.39	%
Percentage of total debt at fixed-rate		91.35	%		88.40	%

(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, 2020, we had $14.1 billion in senior unsecured notes outstanding. As of December 31, 2019, we had $12.4 billion in senior unsecured notes outstanding.

During the nine months ended September 30, 2020, we issued $3.0 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $750.0 million due 2025 at a fixed rate of 2.30%, (ii) $650.0 million due 2030 at a fixed rate of 3.00% (iii) $850.0 million due 2025 at a fixed rate of 3.375% and (iv) $700.0 million due 2026 at a fixed rate of 2.875%.

During the nine months ended September 30, 2020, we repurchased $206.1 million in aggregate principal amount of Floating Rate Medium-Term Notes due 2021. The debt repurchases resulted in a gain of $14.0 million and is included in Aircraft sales, trading and other revenue in our Consolidated Statements of Income and Comprehensive Income.

Unsecured revolving credit facility

As of September 30, 2020, we did not have amounts outstanding under the Revolving Credit Facility. The total amount outstanding under the Revolving Credit Facility was $20.0 million as of December 31, 2019.

We have an unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as agent (the “Revolving Credit Facility”). During the nine months ended September 30, 2020, we increased the aggregate capacity of our unsecured revolving credit facility by $250.0 million. On May 5, 2020, commitments totaling $92.7 million of our committed

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unsecured revolving credit facility matured. As of September 30, 2020, the aggregate capacity of our committed unsecured revolving credit facility was approximately $6.0 billion. Lenders hold revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on May 5, 2022 and commitments totaling $5.0 million that mature on May 5, 2021.

As of September 30, 2020, borrowings under our 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 our unsecured revolving credit facility. Borrowings under our 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.

Secured debt financing

In June 2020, we entered into an amendment to our secured warehouse facility to extend the final maturity to June 2021. The facility will continue to bear a floating interest rate of LIBOR plus 2.00%. As part of the amendment, the credit facility was converted to full recourse against us and excess cash collateral was released. The outstanding balance on our secured warehouse facility was $100.4 million and $128.5 million as of September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the outstanding balance on our secured debt financings, including our secured warehouse facility and our export credit financing, was $315.8 million and we had pledged 12 aircraft as collateral with a net book value of $636.6 million. As of December 31, 2019, the outstanding balance on our secured debt financings, including our secured warehouse facility and our export credit financing, was $460.4 million and we had pledged 15 aircraft as collateral with a net book value of $890.7 million.

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 Series A 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.

We paid a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock on each of March 15, 2020, June 15, 2020 and September 15, 2020, and our board of directors has approved a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock to be paid on December 15, 2020.

Potential Impact of LIBOR Transition

As of September 30, 2020, we had approximately $1.3 billion of floating rate debt outstanding that used LIBOR as the applicable reference rate to calculate the interest on such debt. Additionally, our Series A Preferred Stock will in the future accrue dividends at a floating rate determined by reference to LIBOR, if available. The Chief Executive of the U.K. Financial Conduct Authority (the “FCA”), which regulates LIBOR, has announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. That announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Moreover, it is possible that LIBOR will be discontinued or modified prior to 2021. The U.S. Federal Reserve and the Bank of England have begun publishing a Secured Overnight Funding Rate and a reformed Sterling Overnight Index Average, respectively, which are currently intended to serve as alternative reference rates to LIBOR. At this time, however, it is not possible to predict the

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establishment of any market-accepted alternative reference rates or any other reforms to LIBOR and the effect of any such changes.

Furthermore, due to the uncertainty surrounding the discontinuation of LIBOR and the effects resulting therefrom, financial market participants have yet to establish standard fallback provisions governing the calculation of floating rate interest and dividends in the event LIBOR is unavailable. The lack of a market practice and inconsistency in fallback provisions is reflected across our floating rate debt and Series A Preferred Stock and the discontinuation of LIBOR could lead to unexpected outcomes that may vary between our various debt and equity securities that reference LIBOR to determine the rate in which interest or dividends, as applicable, accrue. For example, if LIBOR is discontinued, the various fallback provisions contained in our floating rate debt agreements could lead to such debt bearing interest at, among other things, a rate of interest equal to the interest rate last in effect for which LIBOR was determinable, a floating rate determined in reference to a predetermined fallback reference rate or an alternative reference rate to be agreed upon by the parties to such agreement, and a rate of interest representative of the cost to applicable lenders of funding their participation in the debt.

If the rate used to calculate interest on our outstanding floating rate debt that currently uses LIBOR and our Series A Preferred Stock were to increase by 1.0% either as a result of an increase in LIBOR or the result of the use of an alternative reference rate determined under the fallback provisions in the applicable debt if LIBOR is discontinued, we would expect to incur additional interest expense on such indebtedness as of September 30, 2020 of approximately $13.3 million on an annualized basis. Further, if LIBOR is discontinued and there is no acceptable alternative reference rate, some of our floating rate debt, including certain senior unsecured notes issued under our Medium-Term Note Program, may effectively become fixed rate debt. As a result, the cost of this debt would increase to us if and as interest rates decreased.

While we do not expect the potential impact of any LIBOR transition to have a material effect on our financial results based on our currently outstanding debt, uncertainty as to the nature of potential changes to LIBOR, fallback provisions, alternative reference rates or other reforms could adversely impact our interest expense on our floating rate debt that currently uses LIBOR as the applicable reference rate and our Series A Preferred Stock. In addition, any alternative reference rates to LIBOR may result in interest or dividend payments that do not correlate over time with the payments that would have been made on our indebtedness or Series A Preferred Stock, respectively, if LIBOR was available in its current form. Further, the discontinuance or modification of LIBOR and uncertainty of an alternative reference rate may result in the increase in the cost of future indebtedness, which could have a material adverse effect on our financial condition, cash flow and results of operations. We intend to closely monitor the financial markets and the use of fallback provisions and alternative reference rates in 2020 in anticipation of the discontinuance or modification of LIBOR by the end of 2021.

Credit ratings

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-	Negative	March 26, 2020
Standard and Poor's	BBB	BBB	Negative	April 10, 2020
Fitch Ratings	BBB	BBB	Negative	July 9, 2020

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, 2020 and 2019 (in thousands, except per share amounts and percentages):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
	(unaudited)
Revenues
Rental of flight equipment	$	468,443		$	492,869		$	1,462,999		$	1,412,478
Aircraft sales, trading and other		25,158			38,033			63,338			55,870
Total revenues		493,601			530,902			1,526,337			1,468,348
Expenses
Interest		107,519			104,637			317,753			290,681
Amortization of debt discounts and issuance costs		10,899			9,078			31,660			26,330
Interest expense		118,418			113,715			349,413			317,011
Depreciation of flight equipment		195,054			183,788			577,969			514,948
Selling, general and administrative		20,239			34,715			75,142			92,188
Stock-based compensation		6,635			4,897			14,956			14,934
Total expenses		340,346			337,115			1,017,480			939,081
Income before taxes		153,255			193,787			508,857			529,267
Income tax expense		(32,860)			(38,000)			(103,686)			(107,081)
Net income	$	120,395		$	155,787		$	405,171		$	422,186
Preferred stock dividends		(3,843)			(3,844)			(11,531)			(8,115)
Net income available to common stockholders	$	116,552		$	151,943		$	393,640		$	414,071
Earnings per share of common stock
Basic	$	1.02		$	1.36		$	3.46		$	3.71
Diluted	$	1.02		$	1.34		$	3.46		$	3.67
Other financial data
Pre-tax profit margin		31.0	%		36.5	%		33.3	%		36.0	%
Adjusted net income before income taxes(1)	$	166,946		$	203,918		$	543,942		$	562,416
Adjusted pre-tax profit margin(1)		33.8	%		38.4	%		35.6	%		38.3	%
Adjusted diluted earnings per share before income taxes(1)	$	1.47		$	1.80		$	4.77		$	4.98
Pre-tax return on common equity (trailing twelve months)		12.8	%		14.3	%		12.8	%		14.3	%
Adjusted pre-tax return on common equity (trailing twelve months)(1)		13.9	%		15.4	%		13.9	%		15.4	%

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

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

The following 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,
	2020			2019			2020			2019
	(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	$	116,552		$	151,943		$	393,640		$	414,071
Amortization of debt discounts and issuance costs		10,899			9,078			31,660			26,330
Stock-based compensation		6,635			4,897			14,956			14,934
Provision for income taxes		32,860			38,000			103,686			107,081
Adjusted net income before income taxes	$	166,946		$	203,918		$	543,942		$	562,416
Total revenues	$	493,601		$	530,902		$	1,526,337		$	1,468,348
Adjusted pre-tax profit margin(1)		33.8	%		38.4	%		35.6	%		38.3	%

(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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes:
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Amortization of debt discounts and issuance costs		10,899		9,078		31,660		26,330
Stock-based compensation		6,635		4,897		14,956		14,934
Provision for income taxes		32,860		38,000		103,686		107,081
Adjusted net income before income taxes	$	166,946	$	203,918	$	543,942	$	562,416
Weighted-average diluted common shares outstanding		113,951,102		113,263,396		113,928,775		112,837,526
Adjusted diluted earnings per share before income taxes	$	1.47	$	1.80	$	4.77	$	4.98

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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,
	2020			2019
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity:
Net income available to common stockholders	$	554,732		$	552,470
Amortization of debt discounts and issuance costs		42,021			34,805
Stock-based compensation		20,767			19,247
Provision for income taxes		145,169			140,710
Adjusted net income before income taxes	$	762,689		$	747,232
Common shareholders' equity as of beginning of the period	$	5,212,173		$	4,478,918
Common shareholders' equity as of end of the period	$	5,727,323		$	5,212,173
Average common  shareholders' equity	$	5,469,748		$	4,845,546
Adjusted pre-tax return on common equity		13.9	%		15.4	%

Three months ended September 30, 2020, compared to the three months ended September 30, 2019

Rental revenue

As of September 30, 2020, we owned 308 aircraft with a net book value of $19.5 billion and recorded $468.4 million in rental revenue for the quarter then ended, which included $8.8 million in amortization expense related to initial direct costs, which is net of overhaul revenue. In the prior year, 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 ended September 30, 2019, which included $4.6 million in amortization expense related to initial direct costs, which is net of overhaul revenue. Our rental revenue for the quarter ended September 30, 2020 decreased as compared to the prior year due to $25.3 million in rental revenue not recognized because collection was not reasonably assured for certain lessees. Aircraft on lease with these lessees represented approximately 6.6% of our fleet by net book value as of September 30, 2020.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $25.2 million for the three months ended September 30, 2020, of which $17.3 million was related to the sale of one aircraft and lease termination fees recognized during the quarter. Aircraft sales, trading and other revenue totaled $38.0 million for the three months ended September 30, 2019, of which $31.5 million was related to the sale of five aircraft from our operating lease portfolio and lease termination fees recognized during the quarter.

Interest expense

Interest expense totaled $118.4 million for the three months ended September 30, 2020 compared to $113.7 million for the three months ended September 30, 2019. The increase was primarily due to an increase in our aggregate debt balance driven by the growth of our fleet and the increase in our liquidity position, partially offset by a decrease in our composite interest rate. We ended the quarter with an available liquidity balance of $7.2 billion. 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 $195.1 million in depreciation expense of flight equipment for the three months ended September 30, 2020 compared to $183.8 million for the three months ended September 30, 2019. The increase in depreciation expense for the three months ended September 30, 2020, compared to the three months ended September 30, 2019, is primarily attributable to the acquisition of additional aircraft in our operating fleet during the last twelve months.

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Selling, general and administrative expenses

We recorded selling, general and administrative expenses of $20.2 million for the three months ended September 30, 2020 compared to $34.7 million for the three months ended September 30, 2019. Selling, general and administrative expense as a percentage of total revenue decreased to 4.1% for the three months ended September 30, 2020 compared to 6.5% for the three months ended September 30, 2019. The decrease in selling, general and administrative expenses is primarily due to a decrease in operating expenses and lower transactional costs incurred during the period.

Taxes

The effective tax rate was 21.4% and 19.6% for the three months ended September 30, 2020 and 2019, 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, 2020, we reported consolidated net income available to common stockholders of $116.6 million, or $1.02 per diluted share, compared to a consolidated net income available to common stockholders of $151.9 million, or $1.34 per diluted share, for the three months ended September 30, 2019. Net income available to common stockholders decreased in the third quarter of 2020 as compared to 2019, primarily due to the decrease in rental revenue and an increase in interest expense, partially offset by a decrease in selling, general and administrative expenses.

Adjusted net income before income taxes

For the three months ended September 30, 2020, we recorded adjusted net income before income taxes of $166.9 million, or $1.47 per diluted share, compared to an adjusted net income before income taxes of $203.9 million, or $1.80 per diluted share, for the three months ended September 30, 2019. Our adjusted net income before income taxes decreased primarily due to a decrease in rental revenue and an increase in interest expense, partially offset by a decrease in 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, 2020, compared to the nine months ended September 30, 2019

Rental revenue

As of September 30, 2020, we owned 308 aircraft with a net book value of $19.5 billion and recorded $1.5 billion in rental revenue for the nine months then ended, $22.4 million in amortization expense related to initial direct costs, which is net of overhaul revenue. In the prior year, 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. This increase was primarily driven by the continued growth of our fleet as compared to prior year, partially offset by $30.8 million in rental revenue not recognized during the nine months ended September 30, 2020 because collection was not reasonably assured for certain lessees. Aircraft on lease with these lessees represented approximately 6.6% of our fleet by net book value as of September 30, 2020.

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Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $63.3 million for the nine months ended September 30, 2020, of which $31.1 million was related to the sale of eight aircraft and lease termination fees recognized during the nine month period. In addition, we recorded $14.0 million in other revenue related to the repurchase of $206.1 million in aggregate principal amount of our Floating Rate Medium-Term Notes due 2021. Aircraft sales, trading and other revenue totaled $55.9 million for the nine months ended September 30, 2019, of which $33.4 million was related to the sale of 11 aircraft from our operating lease portfolio and lease termination fees recognized during the nine month period.

Interest expense

Interest expense totaled $349.4 million for the nine months ended September 30, 2020 compared to $317.0 million for the nine months ended September 30, 2019. The increase was primarily due to an increase in our aggregate debt balance driven by the growth of our fleet and the increase in our liquidity position, partially offset by the decrease in our composite interest rate. We ended the quarter with an available liquidity balance of $7.2 billion. 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 $578.0 million in depreciation expense of flight equipment for the nine months ended September 30, 2020 compared to $514.9 million for the nine months ended September 30, 2019. The increase in depreciation expense for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, 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 $75.1 million for the nine months ended September 30, 2020 compared to $92.2 million for the nine months ended September 30, 2019. Selling, general and administrative expense as a percentage of total revenue decreased to 4.9% for the nine months ended September 30, 2020 compared to 6.3% for the nine months ended September 30, 2019. The decrease in selling, general and administrative expenses is primarily due to a decrease in operating expenses and lower transactional costs incurred during the period.

Taxes

The effective tax rate was 20.4% and 20.2% for the nine months ended September 30, 2020 and 2019, 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, 2020, we reported consolidated net income available to common stockholders of $393.6 million, or $3.46 diluted share, compared to a consolidated net income available to common stockholders of $414.1 million, or $3.67 per diluted share, for the nine months ended September 30, 2019. Net income available to common stockholders decreased for the nine months ended September 30, 2020 as compared to 2019, primarily due to an increase in interest expense, partially offset by an increase in rental revenue and a decrease in selling, general and administrative expenses.

Adjusted net income before income taxes

For the nine months ended September 30, 2020, we recorded adjusted net income before income taxes of $543.9 million, or $4.77 per diluted share, compared to an adjusted net income before income taxes of $562.4 million, or $4.98 per diluted share, for the nine months ended September 30, 2019. Our adjusted net income before income taxes decreased for the nine months ended September 30, 2020 as compared to 2019, primarily due to an increase in interest expense, partially offset by an increase in rental revenue and a decrease in selling, general and administrative expenses.

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

Contractual Obligations

Our contractual obligations as of September 30, 2020, are as follows (in thousands):

	2020		2021		2022		2023		2024		Thereafter		Total
Long-term debt obligations	$	172,778	$	1,934,141	$	2,730,561	$	2,502,123	$	1,525,428	$	6,486,910	$	15,351,941
Interest payments on debt outstanding(1)		83,800		458,685		404,501		333,891		257,424		504,325		2,042,626
Purchase commitments(2)(3)		1,213,581		4,841,564		5,604,050		6,153,520		4,211,633		2,789,136		24,813,484
Operating leases		1,725		7,426		6,583		6,398		4,556		33,086		59,774
Total	$	1,471,884	$	7,241,816	$	8,745,695	$	8,995,932	$	5,999,041	$	9,813,457	$	42,267,825

(1) Future interest payments on floating rate debt are estimated using floating rates in effect at September 30, 2020.

(2) Purchase commitments reflect our estimate of future Boeing and Airbus aircraft deliveries based on information currently available to us. The actual delivery dates of such aircraft and expected time for payment of such aircraft may differ from our estimates and could be further impacted by ongoing COVID-19 pandemic and the length of the 737 MAX grounding and the pace at which Boeing can deliver aircraft following the lifting of the 737 MAX grounding, among other factors. Purchase commitments include only the costs of aircraft in our committed orderbook and do not include costs of aircraft that we have the option to purchase or have the right to purchase through memorandums of understanding or letters of intent.

(3) Due to the expected aircraft delivery delays, we expect approximately $5.1 billion of our purchase commitments will be subject to cancellation by the time of delivery.

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

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, 2019. 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, 2020.

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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, 2020 and December 31, 2019, we had $1.3 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 $13.3 million and $15.9 million as of September 30, 2020 and December 31, 2019, respectively, each on an annualized basis, which would put downward pressure on our operating margins. Further, as of September 30, 2020, 91.4% 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 0.8% and 0.7% of our lease revenues were denominated in foreign currency as of September 30, 2020 and December 31, 2019, respectively. As our principal currency is the U.S. dollar, fluctuations in the U.S. dollar as compared to other major currencies should not have a significant impact on our future operating results.

In December 2019, we issued C$400.0 million in aggregate principal amount of 2.625% notes due 2024. We effectively hedged our foreign currency exposure on this transaction through a cross-currency swap that converts the borrowing rate to a fixed 2.535% U.S. dollar denominated rate. See Note 7 of Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details on the fair value of the swap.

ITEM 4.   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”), and such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer (collectively, the “Certifying Officers”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives as the Company’s controls are designed to do, and management necessarily was required to apply its judgment in evaluating the risk related to controls and procedures.

35

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, 2020. Based on that evaluation, our Certifying Officers have concluded that our disclosure controls and procedures were effective at September 30, 2020.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in litigation and claims incidental to the conduct of our business in the ordinary course. Our industry is also subject to scrutiny by government regulators, which could result in enforcement proceedings or litigation related to regulatory compliance matters. We are not presently a party to any enforcement proceedings or litigation related to regulatory compliance matters or material legal proceedings. We maintain insurance policies in amounts and with the coverage and deductibles we believe are adequate, based on the nature and risks of our business, historical experience and industry standards.

ITEM 1A. RISK FACTORS

There 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, 2019 and in “Part II—Item 1A. Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

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.

36

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
4.1	Description of Capital Stock	10-K	001-35121	4.1	February 14, 2020
10.1†	Amendment No. 15 to the A350XWB Family Purchase Agreement, dated August 31, 2020, by and between Air Lease Corporation and Airbus S.A.S.				Filed herewith
10.2†	Amendment No. 3 to Agreement, dated August 31, 2020, between Airbus S.A.S. and Air Lease Corporation				Filed herewith
10.3†	Amendment No. 11 to the A330-900 NEO Purchase Agreement, dated August 31, 2020, between Air Lease Corporation and Airbus S.A.S.				Filed herewith
10.4†	Amendment No. 27 to A320 NEO Family Purchase Agreement, dated August 31, 2020, by and between Air Lease Corporation and Airbus S.A.S.				Filed herewith
10.5†	Amendment No. 1 to the A220 Purchase Agreement, dated August 31, 2020, by and between Air Lease Corporation and Airbus Canada Limited Partnership.				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

37

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
101.INS	XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
104	The cover page from Air Lease Corporation's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, 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.

38

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 9, 2020	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President
	(Principal Executive Officer)
November 9, 2020	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

39

EX-10.1

EXHIBIT 10.1

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° 15

TO THE

A350 FAMILY PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

and

AIR LEASE CORPORATION

As Buyer

Amendment Nº15 to the ALC A350 Family PA Ref. CLC - CT2001909 Page 1/6

AMENDMENT N° 15 TO THE

A350 FAMILY PURCHASE AGREEMENT

This amendment N°15 (the “Amendment N°15”) dated 31^st August 2020 is made

BETWEEN:

AIRBUS S.A.S., a société par actions simplifiée, created and existing under French law having its registered office at 2, rond-point Emile Dewoitine, 31700 Blagnac, France (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” and individually as a “Party”.

WHEREAS:

A. The Buyer and the Seller have signed a purchase agreement with reference CLC-CT1103521 on 01 February 2013 for the manufacture and sale by the Seller and purchase by the Buyer of twenty-five (25) firm A350 Family aircraft hereinafter together with its Exhibits and Letter Agreements referred to as the “Purchase Agreement”.

B. On 03 March 2015, the Buyer and the Seller entered into an Amendment N°1 to the Purchase Agreement to modify the terms and conditions with respect to certain A350XWB Family Aircraft.

C. On 03 March 2015, the Buyer and the Seller entered into an Amendment N°2 to the Purchase Agreement in order to, among other things, provide for the manufacture and sale by the Seller and purchase by the Buyer of one (1) incremental A350-900 Aircraft.

D. On 08 September 2015, the Buyer and the Seller entered into an Amendment N°3 to the Purchase Agreement for (i) the manufacture and sale by the Seller and purchase by the Buyer of two (2) incremental A350-900 Aircraft and (ii) [*].

E. On 14 April 2016, the Buyer and the Seller entered into an Amendment N°4 to the Purchase Agreement in order to (i) provide the terms by which the Seller shall manufacture and sell and the Buyer shall purchase one (1) incremental A350-900 Aircraft, and (ii) [*].

F. On 25 May 2016, the Buyer and the Seller entered into an Amendment N°5 to the Purchase Agreement in order to [*].

G. On 18 July 2016, the Buyer and the Seller entered into an Amendment N°6 to the Purchase Agreement in order to, among other things, (i) address specifications issues for both A350-900 Aircraft and A350-1000 Aircraft, (ii) [*] and (iii) [*].

H. On 31 July 2017, the Buyer and the Seller entered into an Amendment N°7 to the Purchase Agreement in order to [*].

I. On 27 December 2017, the Buyer and the Seller entered into an Amendment N°8 to the Purchase Agreement in order to (i) [*].

Amendment Nº15 to the ALC A350 Family PA Ref. CLC - CT2001909 Page 2/6

J. On 01 June 2018, the Buyer and the Seller entered into an Amendment N°9 to the Purchase Agreement in order to [*].

K. On 31 December 2018, the Buyer and the Seller agreed to [*].

L. [*], the Buyer and the Seller have entered into an amendment N° 5 to the A330 Agreement dated as of 31 December 2018 to provide for [*].

M. On 31 December 2018, the Buyer and the Seller entered into an Amendment N°10 to the Purchase Agreement in order to, among other things, (i) provide the terms under which the Seller shall manufacture and sell and the Buyer shall purchase three (3) incremental A350-900 aircraft and one (1) A350-1000 aircraft and (ii) [*].

N. On 26 April 2019, the Buyer and the Seller entered into an Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10 in order to cancel and replace Clause 4 of the Original Letter Agreement.

O. On 15 May 2019, the Buyer and the Seller entered into an Amendment N°11 in order to [*].

P. On 20 December 2019, the Buyer and the Seller entered into an Amendment N°12 in order to (i) provide the terms under which the Seller shall manufacture and sell and the Buyer shall purchase one (1) incremental A350-900 aircraft, [*].

Q. On 21 February 2020, the Buyer and the Seller entered into an Amendment N°13 in order to [*].

R. On 30 June 2020, the Buyer and the Seller entered into an Amendment N°14 in order to [*].

The Purchase Agreement as amended and supplemented pursuant to the foregoing being referred to as the “Agreement”.

S. The Parties now wish to enter into this Amendment N°15 in order to, [*], pursuant to the terms and conditions set out herein.

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°15. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Agreement.

NOW IT IS HEREBY AGREED AS FOLLOWS:

Amendment Nº15 to the ALC A350 Family PA Ref. CLC - CT2001909 Page 3/6

1.[*]

2[*]

3     [*]

4 INCONSISTENCY AND CONFIDENTIALITY

4.1 In the event of any inconsistency between the terms and conditions of the Agreement and those of this Amendment N°15, 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.

4.2 This Amendment N°15 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.

4.3 This Amendment N°15 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.

5 COUNTERPARTS

This Amendment N°15 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.

6 LAW AND JURISDICTION

This Amendment N°15 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°15 as if the same were set out in full herein, mutatis mutandis.

Amendment Nº15 to the ALC A350 Family PA Ref. CLC - CT2001909 Page 4/6

IN WITNESS WHEREOF this Amendment N°15 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.
By: /s/ Grant Levy	By: /s/ Benoît de Saint-Exupéry
Its: Executive Vice President	Its: Senior Vice President, Contracts

Amendment Nº15 to the ALC A350 Family PA Ref. CLC - CT2001909 Page 5/6

APPENDIX 1

APPENDIX 1

Delivery Schedule

CAC ID	Aircraft Rank	Scheduled Delivery Month	Aircraft Type
[*]	[*]	[*]-17	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]-25	[*]

Amendment Nº15 to the ALC A350 Family PA Ref. CLC - CT2001909 Page 6/6

LETTER AGREEMENT N° 1

AIR LEASE CORPORATION

2000 Avenue of the Stars, Suite 1000N

Los Angeles, California 90067, U.S.A.

August 31^st, 2020

Subject  : SPECIFIC TERMS

AIR LEASE CORPORATION (the “Buyer") and AIRBUS S.A.S. (the “Seller") have entered into an Amendment N°15 dated even date herewith (the “Amendment”) to the A350 Purchase Agreement dated as of February 1, 2013 (the “Agreement”) [*]. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°1 to the Amendment (the “Letter Agreement”) certain additional terms and conditions regarding the A350 Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and the Amendment.

The Parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, non-severable part of the Amendment, that the provisions of the Amendment are hereby incorporated herein by reference, and that if the Agreement, the Amendment and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement shall govern.

Amendment Nº15 to the ALC A350 Purchase Agreement – Letter Agreement N°1 Ref. CLC - CT2001909 Page 1/3

LETTER AGREEMENT N° 1

1SPECIFIC TERMS

[*]

2ASSIGNMENT

The provisions of Clause 21 of the Agreement shall apply to this Letter Agreement as if the same were set out in full herein, mutatis mutandis.

3 LAW AND JURISDICTION

This Letter Agreement 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 Letter Agreement as if the same were set out in full herein, mutatis mutandis.

Amendment Nº15 to the ALC A350 Purchase Agreement – Letter Agreement N°1 Ref. CLC - CT2001909 Page 2/3

LETTER AGREEMENT N° 1

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

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

Amendment Nº15 to the ALC A350 Purchase Agreement – Letter Agreement N°1 Ref. CLC - CT2001909 Page 3/3

LETTER AGREEMENT N° 2

AIR LEASE CORPORATION

2000 Avenue of the Stars, Suite 1000N

Los Angeles, California 90067, U.S.A.

August 31^st, 2020

Subject : SPECIFIC PROVISIONS

AIR LEASE CORPORATION (the “Buyer") and AIRBUS S.A.S. (the “Seller") have entered into an Amendment N°15 dated even date herewith (the “Amendment”) to the A350 Purchase Agreement dated as of February 1, 2013 (the “Agreement”) [*]. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°2 to the Amendment (the “Letter Agreement”) certain additional terms and conditions regarding the A350 Aircraft as described in the Agreement.

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and the Amendment.

The Parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, non-severable part of the Amendment, that the provisions of the Amendment are hereby incorporated herein by reference, and that if the Agreement, the Amendment and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement shall govern.

Amendment Nº15 to the ALC A350 Family PA – Letter Agreement N°2 Ref. CLC - CT2001909 Page 1/3

LETTER AGREEMENT N° 2

1 [*]

2ASSIGNMENT

The provisions of Clause 21 of the Agreement shall apply to this Letter Agreement as if the same were set out in full herein, mutatis mutandis.

3 LAW AND JURISDICTION

This Letter Agreement 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 Letter Agreement as if the same were set out in full herein, mutatis mutandis.

Amendment Nº15 to the ALC A350 Family PA – Letter Agreement N°2 Ref. CLC - CT2001909 Page 2/3

LETTER AGREEMENT N° 2

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

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

Amendment Nº15 to the ALC A350 Family PA – Letter Agreement N°2 Ref. CLC - CT2001909 Page 3/3

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°3

TO THE

[*] Agreement

BETWEEN

AIRBUS S.A.S.

AND

AIR LEASE CORPORATION

Amendment Nº3 to the [*] Agreement

Ref. CLC - CT2004626‌Page 1/5

AMENDMENT N°3 TO THE

[*] AGREEMENT

This amendment n°3 (the “Amendment N°3”) dated 31^st August 2020 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 the Seller, each a “Party”, together referred to as the “Parties”.

WHEREAS:

A. [*]

B. [*]

C. [*]

D. [*]

E. [*]

F. [*]

G. [*]

H. [*]

The Parties agree that this Amendment N°3, upon signature thereof, shall constitute an integral, non-severable part of the [*] Agreement as amended by Amendment N°1 and Amendment N°2, and that if the [*] Agreement, the Amendment N°1, the Amendment N°2 and this Amendment N°3 have specific provisions which are inconsistent, the specific provisions contained in this Amendment N°3 shall govern.

Capitalized terms used herein and not otherwise specified in this Amendment N°3 shall, unless otherwise specified in the [*] Agreement or its Amendment N°1 or its Amendment N°2, have the meaning assigned thereto in the [*], as applicable.

NOW IT IS HEREBY AGREED AS FOLLOWS:

Amendment Nº3 to the [*] Agreement

Ref. CLC - CT2004626‌Page 2/5

1DEFINITIONS

[*]

2[*]

3 INCONSISTENCY AND CONFIDENTIALITY

3.1 In the event of any inconsistency between the terms and conditions of the [*] Agreement, as amended by Amendment N°1 and Amendment N°2 and those of this Amendment N°3, the latter shall prevail to the extent of such inconsistency, whereas the part of the [*] Agreement as amended by Amendment N°1 and Amendment N°2 not concerned by such inconsistency shall remain in full force and effect.

3.2 This Amendment N°3 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.

3.3 This Amendment N°3 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.

4 COUNTERPARTS

This Amendment N°3 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.

5LAW AND JURISDICTION

5.1 THIS AMENDMENT N°3 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.

5.2 [*]

5.3 [*]

5.4 [*]

5.5 [*]

5.6 [*]

Amendment Nº3 to the [*] Agreement

Ref. CLC - CT2004626‌Page 3/5

IN WITNESS WHEREOF this Amendment N°3 was entered into the day and year first above written.

For and on behalf ofFor and on behalf of

AIR LEASE CORPORATIONAIRBUS S.A.S.

By: /s/ Grant LevyBy: /s/ Benoît de Saint-Exupéry

Its: Executive Vice President Its: Senior Vice President, Contracts

Amendment Nº3 to the [*] Agreement

Ref. CLC - CT2004626‌Page 4/5

Schedule 1

[*]

Amendment Nº3 to the [*] Agreement

Ref. CLC - CT2004626‌Page 5/5

EX-10.3

EXHIBIT 10.3

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°11

TO THE

A330-900neo PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

and

AIR LEASE CORPORATION

As Buyer

Amendment Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 1/7

AMENDMENT N°11 TO THE

A330-900neo PURCHASE AGREEMENT

This amendment n°11 (the “Amendment N°11”) dated 31^st August 2020 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 the Seller together are referred to as the “Parties” and individually as a “Party”.

WHEREAS:

A.   On 03 March 2015, the Buyer and the Seller entered into 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 referred to as the “Purchase Agreement”.

B.   On 31 May 2016, the Buyer and the Seller entered into Amendment N°1 to the Purchase Agreement with reference CLC-CT1614983 whereby the Buyer [*].

C.   On 19 June 2017, the Buyer and the Seller entered into Amendment N°2 to the Purchase Agreement with reference CLC-CT1702508 for the manufacture and sale by the Seller and purchase by the Buyer of two (2) incremental A330-900neo Aircraft.

D.   On 02 October 2017, the Buyer and the Seller entered into Amendment N°3 to the Purchase Agreement with reference CLC-CT1705177 in order to [*].

E.   On 27 December 2017, the Buyer and the Seller entered into Amendment N°4 to the Purchase Agreement with reference CLC-CT1709653 for the manufacture and sale by the Seller and purchase by the Buyer of two (2) incremental A330-900neo Aircraft.

F.   On 31 December 2018, the Buyer and the Seller entered into Amendment N°5 to the Purchase Agreement with reference CLC-CT1709653 in order [*].

G.  On 27 February 2019, the Buyer and the Seller entered into Amendment N°6 to the Purchase Agreement with reference CLC-CT1901550 in order to [*].

H.   On 08 August 2019, the Buyer and the Seller entered into Amendment N°7 to the Purchase Agreement with reference CT1902127 in order to [*].

I.   On 18 October 2019, the Buyer and the Seller entered into Amendment N°8 to the Purchase Agreement with reference CT1905423 in order to [*].

J.   On 20 December 2019, the Buyer and the Seller entered into Amendment N°9 to the Purchase Agreement with reference CT1909530 in order to [*].

Amendment Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 2/7

K.   On 14 June 2020, the Buyer and the Seller entered into Amendment N°10 to the Purchase Agreement with reference CT2001904 in order to [*].

The Purchase Agreement, as amended and supplemented pursuant to the foregoing being referred to as the “Agreement”.

L.   The Parties now wish to enter into this Amendment N°11 in order to, among other things, [*], pursuant to the terms and conditions set out herein.

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°11. 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 Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 3/7

1          [*]

2          [*]

3          [*]

4          OTHER MATTERS

The Buyer and the Seller agree that (i) the first sentence on page one of the Letter Agreement N°1 to the Amendment N°10 and (ii) the first sentence on page one of the Letter Agreement N°2 to the Amendment N°10, both starting with “AIR LEASE CORPORATION” and ending with “pursuant to the Agreement”, shall be entirely deleted and replaced by the following quoted text:

QUOTE

AIR LEASE CORPORATION (the “Buyer") and AIRBUS S.A.S. (the “Seller") have entered into an Amendment N°10 dated even date herewith (the “Amendment”) to the A330neo Purchase Agreement dated as of March 03, 2015 (the “Agreement”) [*].

UNQUOTE

5          INCONSISTENCY AND CONFIDENTIALITY

5.1       In the event of any inconsistency between the terms and conditions of the Agreement and those of this Amendment N°11, 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.

5.2       This Amendment N°11 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.

5.3       This Amendment N°11 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.

6          COUNTERPARTS

This Amendment N°11 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.

7          LAW AND JURISDICTION

This Amendment N°11 will be governed by and construed and the performance thereof

Amendment Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 4/7

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 Agreement shall apply to this Amendment N°11 as if the same were set out in full herein, mutatis mutandis.

Amendment Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 5/7

IN WITNESS WHEREOF this Amendment N°11 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.
By: /s/ Grant Levy	By: /s/ Benoît de Saint-Exupéry
Its: Executive Vice President	Its: Senior Vice President, Contracts

Amendment Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 6/7

APPENDIX 1

DELIVERY SCHEDULE

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

Amendment Nº11 to the ALC A330-900neo Purchase Agreement
Ref. CLC – CT2004261	Page 7/7

EX-10.4

EXHIBIT 10.4

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°27

TO THE

A320 NEO FAMILY PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

and

AIR LEASE CORPORATION

as Buyer

Amendment Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 1/7

AMENDMENT N°27 TO THE

A320 NEO FAMILY PURCHASE AGREEMENT

This amendment N°27 (the “Amendment N°27”) dated 31^st August 2020 is made

BETWEEN:

AIRBUS S.A.S., a société par actions simplifiée, created and existing under French law having its registered office at 2 Rond-Point Emile Dewoitine, 31707 Blagnac-Cedex, France and registered with the Toulouse Registre du Commerce under number RCS Toulouse 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 the Seller together are referred to collectively as the “Parties”, and individually as a “Party”.

WHEREAS:

A.   On 10 May 2012, the Buyer and the Seller have signed a purchase agreement with reference CLC-CT1103377 for the manufacture and sale by the Seller and purchase by the Buyer of thirty-six (36) firm A320 NEO Family aircraft hereinafter together with its Exhibits and Letter Agreements referred to as the “Purchase Agreement”.

B.   On 28 December 2012, the Buyer and the Seller entered into Amendment N°1 to the Purchase Agreement for the manufacture and sale by the Seller and purchase by the Buyer of fourteen (14) incremental A320 NEO Family aircraft.

C.    On 14 July 2014, the Seller and the Buyer entered into Amendment N°2 to the Purchase Agreement in order to, among other things, [*].

D.   On 14 July 2014, the Buyer and the Seller entered into Amendment N°3 to the Purchase Agreement for the manufacture and sale by the Seller and purchase by the Buyer of sixty (60) incremental A320 NEO Family aircraft.

E.   On 10 October 2014, the Buyer and the Seller entered into Amendment N°4 to the Purchase Agreement for [*].

F.   On 03 March 2015, the Buyer and the Seller entered into Amendment N°5 to the Purchase Agreement for the cancellation of sixty (60) Amendment 3 NEO Aircraft and for the manufacture and sale by the Seller and purchase by the Buyer of ninety (90) incremental A321 NEO Family aircraft.

G.   On 18 March 2015, the Buyer and the Seller entered into Amendment N°6 to the Purchase Agreement in order to [*].

H.   On 09 November 2015, the Buyer and the Seller entered into Amendment N°7 to the Purchase Agreement in order to [*].

I.     On 08 January 2016, the Buyer and the Seller entered into Amendment N°8 to the Purchase Agreement in order to [*].

Amendment Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 2/7

J.    On 04 April 2016, the Buyer and the Seller entered into Amendment N°9 to the Purchase Agreement in order to [*].

K.   On 12 April 2016, the Buyer and the Seller entered into Amendment N°10 to the Purchase Agreement in order to [*].

L.    On 02 June 2016, the Buyer and the Seller entered into Amendment N°11 to the Purchase Agreement in order to [*].

M.   On 17 August 2016, the Buyer and the Seller entered into Amendment n°12 to the Purchase Agreement in order to, among other things, (i) introduce the new A321-200NX standard specification, [*].

N.   On 20 December 2016, the Buyer and the Seller entered into Amendment N°13 to the Purchase Agreement in order to [*].

O.   On 03 March 2017, the Buyer and the Seller entered into Amendment N°14 to the Purchase Agreement in order to, among other things, [*].

P.   On 10 April 2017, the Buyer and the Seller entered into Amendment N°15 to the Purchase Agreement in order to, among other things, [*].

Q.   On 19 June 2017, the Buyer and the Seller entered into Amendment N°16 to the Purchase Agreement in order to [*].

R.   On 19 June 2017, the Buyer and the Seller entered into Amendment N°17 to the Purchase Agreement in order to provide for the manufacture and sale of twelve (12) incremental A320 NEO Family aircraft.

S.   On 12 July 2017, the Buyer and the Seller entered into Amendment N°18 to the Purchase Agreement in order to amend certain terms of Amendment N°16.

T.   On 31 July 2017, the Buyer and the Seller entered into Amendment N°19 to the Purchase Agreement in order to [*].

U.   On 29 September 2017, the Buyer and the Seller entered into Amendment N°20 to the Purchase Agreement in order to [*].

V.   On 27 December 2017, the Buyer and the Seller entered into Amendment N°21 to the Purchase Agreement in order to provide for the manufacture and sale of six (6) incremental A320 NEO Family Aircraft.

W.   On 16 February 2018, the Buyer and the Seller entered into Amendment N°22 to the Purchase Agreement in order to, among other things, [*].

X.   On 31 December 2018, the Buyer and the Seller entered into Amendment N°23 to the Purchase Agreement in order to, among other things, [*].

Y.    On 18 October 2019, the Buyer and the Seller entered into Amendment N°24 to the Purchase Agreement in order to [*].

Z.    On 20 December 2019, the Buyer and the Seller entered into Amendment N°25 to the Purchase Agreement in order to cover (i) the manufacture and sale by the Seller and purchase by the Buyer of twenty-five (25) incremental A321 NEO Aircraft; (ii) the manufacture and sale by the Seller and purchase by the Buyer of twenty-seven (27) A321XLR Aircraft (as defined below); and (iii) [*].

Amendment Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 3/7

AA.  On 07 April 2020, the Buyer and the Seller entered into Amendment N°26 to the Purchase Agreement in order to, among other things, [*].

The Purchase Agreement as amended and supplemented pursuant to the foregoing shall be referred to as the “Agreement”.

AC. The Parties now wish to enter into this Amendment N°27 in order to [*], subject to the terms and conditions set out herein.

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°27. 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 Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 4/7

1.         [*]

2.         [*]

3.         [*]

4.         INCONSISTENCY AND CONFIDENTIALITY

4.1       In the event of any inconsistency between the terms and conditions of the Agreement and those of this Amendment N°27, 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.

4.2       This Amendment N°27 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.

4.3       This Amendment N°27 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.

5          COUNTERPARTS

This Amendment N°27 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.

6          LAW AND JURISDICTION

This Amendment N°27 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 Agreement shall apply to this Amendment N°27 as if the same were set out in full herein, mutatis mutandis.

Amendment Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 5/7

IN WITNESS WHEREOF this Amendment N°27 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.
By:	/s/ Grant Levy	By:	/s/ Benoît de Saint-Exupéry
Its:	Executive Vice President	Its:	Senior Vice President, Contracts

Amendment Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 6/7

APPENDIX 1

DELIVERY SCHEDULE

[*]

Amendment Nº27 to the ALC A320 NEO Family PA
Ref. CLC-CT2004503	Page 7/7

LETTER AGREEMENT N° 1

AIR LEASE CORPORATION

2000 Avenue of the Stars, Suite 1000N

Los Angeles, California 90067, U.S.A.

August 31^st, 2020

Subject : SPECIFIC PROVISIONS

AIR LEASE CORPORATION (the “Buyer") and AIRBUS S.A.S. (the “Seller") have entered into an Amendment N°27 dated even date herewith (the “Amendment”) to the A320 NEO Family Purchase Agreement dated as of May 10, 2012 (the “Agreement”) [*]. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°1 to the Amendment (the “Letter Agreement”) certain additional terms and conditions regarding the [*].

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement and the Amendment.

The Parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, non-severable part of the Amendment, that the provisions of the Amendment are hereby incorporated herein by reference, and that if the Agreement, the Amendment and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement shall govern.

Amendment Nº27 to the ALC A320 NEO Family PA – Letter Agreement N°1
Ref. CLC-CT2004503	Page 1/3

LETTER AGREEMENT N° 1

1          [*]

2          ASSIGNMENT

The provisions of Clause 21 of the Agreement shall apply to this Letter Agreement as if the

same were set out in full herein, mutatis mutandis.

3          LAW AND JURISDICTION

This Letter Agreement 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 Letter Agreement as if the same were set out in full herein, mutatis mutandis.

Amendment Nº27 to the ALC A320 NEO Family PA – Letter Agreement N°1
Ref. CLC-CT2004503	Page 2/3

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

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

Amendment Nº27 to the ALC A320 NEO Family PA – Letter Agreement N°1
Ref. CLC-CT2004503	Page 3/3

EX-10.5

EXHIBIT 10.5

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°1

TO THE

A220

PURCHASE AGREEMENT

BETWEEN

AIRBUS CANADA LIMITED PARTNERSHIP

as the Seller

AND

AIR LEASE CORPORATION

as the Buyer

ALC – Amendment N°1 to A220 Purchase Agreement
Ref. CLC-CT2004507	Page 1/6

This amendment N°1 (the “Amendment N°1”) is made on the 31^st day of August 2020,

BETWEEN:

AIRBUS CANADA LIMITED PARTNERSHIP, duly acting and represented by its managing general partner, AIRBUS CANADA MANAGING GP INC., having its registered office at 13100 Boulevard Henri Fabre, Mirabel, QC, Canada J7N 3C6 (the “Seller”)

AND:

AIR LEASE CORPORATION, a corporation organised and existing under the Iaws 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” and individually as a “Party”.

WHEREAS

A.  On 20 December 2019 the Buyer and the Seller have signed a purchase agreement with reference CLC-CT1906081 for the manufacture and sale by the Seller and purchase by the Buyer of certain A220 Aircraft hereinafter together with its Annexes and Letter Agreements referred to as the “Agreement”.

B.  The Parties now wish to enter into this Amendment N°1 in order to [*], pursuant to the terms and conditions set out herein.

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°1. 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:

ALC – Amendment N°1 to A220 Purchase Agreement
Ref. CLC-CT2004507	Page 2/6

1          [*]

2          [*]

3          [*]

4          CUSTOMIZATION

Clause 6.1.1 of the Agreement is hereby deleted in its entirety and replaced by the following quoted text:

QUOTE

6.1.1    Customization Milestones for Head of Version

Contractual Definition Freeze for a Head of Version (as such term is defined in Clause 6.2 herein) Aircraft shall be [*] prior to the first day of the Scheduled Delivery Month (the “Leadtime”) for the Aircraft scheduled for delivery [*]. This Leadtime [*].

Notwithstanding the foregoing, should the Buyer wish to select Long Lead Items (“LLI”), corresponding to A220 features that require selection and contractual commitment by the Buyer [*] corresponding Aircraft.

UNQUOTE

5          INCONSISTENCY AND CONFIDENTIALITY

5.1       In the event of any inconsistency between the terms and conditions of the Agreement and those of this Amendment N°1, 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.

5.2       This Amendment N°1 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.

5.3       This Amendment N°1 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.

6          COUNTERPARTS

This Amendment N°1 may be executed by the Parties in separate counterparts, each

ALC – Amendment N°1 to A220 Purchase Agreement
Ref. CLC-CT2004507 – Draft without prejudice	Page 3/6

of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

7          LAW AND JURISDICTION

This Amendment N°1 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 21 of the Agreement shall apply to this Amendment N°1 as if the same were set out in full herein, mutatis mutandis.

ALC – Amendment N°1 to A220 Purchase Agreement
Ref. CLC-CT2004507 – Draft without prejudice	Page 4/6

IN WITNESS WHEREOF this Amendment N°1 has been entered into on the date first written above.

AIRBUS CANADA LIMITED PARTNERSHIP,
duly acting and represented by its managing general partner,
AIRBUS CANADA MANAGING GP INC.,
Per:	/s/ Philippe Balducchi
Name:	Philippe Balducchi
Title:	CEO
AIR LEASE CORPORATION
Per:	/s/ Grant Levy
Name:	Grant Levy
Title:	Executive Vice President

ALC – Amendment N°1 to A220 Purchase Agreement
Ref. CLC-CT2004507 – Draft without prejudice	Page 5/6

APPENDIX 1

DELIVERY SCHEDULE

[*]

ALC – Amendment N°1 to A220 Purchase Agreement
Ref. CLC-CT2004507 – Draft without prejudice	Page 6/6

LETTER AGREEMENT N° 1

AIR LEASE CORPORATION

2000 Avenue of the Stars, Suite 1000N

Los Angeles, California 90067, U.S.A.

August 31^st, 2020

Subject: SPECIFIC PROVISIONS

AIR LEASE CORPORATION ("the Buyer") and AIRBUS CANADA LIMITED PARTNERSHIP ("the Seller") have entered into an Amendment N°1 dated even date herewith (the “Amendment”) to the A220 Purchase Agreement dated as of December 20, 2019 ("the Agreement") [*]. The Buyer and the Seller have agreed to set forth in this Letter Agreement N°1 to the Amendment (the “Letter Agreement”) certain additional terms and conditions regarding [*].

Capitalized terms used herein and not otherwise defined in this Letter Agreement shall have the meanings assigned thereto in the Agreement.

Both parties agree that this Letter Agreement, upon execution thereof, shall constitute an integral, nonseverable part of said Agreement and shall be governed by all its provisions, as such provisions have been specifically amended pursuant to this Letter Agreement.

ALC – Amendment N°1 to A220 Purchase Agreement – Letter Agreement N°1
Ref. CLC-CT2004507	Page 1/4

LETTER AGREEMENT N° 1

1          DEFINITION

The following term shall have the following meaning:

[*]

2          [*]

3          MISCELLANEOUS

3.1       Inconsistencies

In the event of any inconsistency between the terms of this Letter Agreement and the terms of the Agreement, the terms of this Letter Agreement shall prevail over the terms of the Agreement to the extent of such inconsistency, whereas the part of the Agreement not concerned by such inconsistency shall remain in full force and effect.

3.2       Assignment

Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer herein shall not be assigned or transferred in any manner, and any attempted assignment or transfer in contravention of the provisions of this clause shall be void and of no force or effect.

3.3      Confidentiality

This Letter Agreement (and its existence) shall be treated by both parties as confidential and shall not be released (or revealed) in whole or in part to any third party without the prior consent of the other party. In particular, each party agrees not to make any press release concerning the whole or any part of the contents and/or subject matter hereof or of any future addendum hereto without the prior consent of the other party.

3.4       Law and jurisdiction

This Letter Agreement shall be governed by, and construed in accordance with, the laws of the state of New York, United States of America and the provisions of Clause 21 of the Agreement shall apply to this Letter Agreement.

3.5      Counterparts

This Letter Agreement 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.

ALC – Amendment N°1 to A220 Purchase Agreement – Letter Agreement N°1
Ref. CLC-CT2004507	Page 2/4

LETTER AGREEMENT N° 1

If the foregoing correctly sets forth our understanding, please execute two (2) originals in the space provided below and return one (1) original of this Letter Agreement to the Seller.

Agreed and Accepted		Agreed and Accepted
For and on behalf of		For and on behalf of
AIR LEASE CORPORATION		AIRBUS CANADA LIMITED
		PARTNERSHIP
		by its managing general partner,
		AIRBUS CANADA MANAGING GP INC.
By:	/s/ Grant Levy	By:	/s/ Philippe Balducchi
Its:	Executive Vice President	Its:	CEO

ALC – Amendment N°1 to A220 Purchase Agreement – Letter Agreement N°1
Ref. CLC-CT2004507	Page 3/4

LETTER AGREEMENT N° 1

Schedule 1

[*]

ALC – Amendment N°1 to A220 Purchase Agreement – Letter Agreement N°1
Ref. CLC-CT2004507	Page 4/4

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 9, 2020

/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 9, 2020

/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, 2020 (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 9, 2020
	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President (Principal Executive Officer)

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

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, 2020 (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 9, 2020
	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 06, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-35121
Entity Registrant Name	AIR LEASE CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-1840403
Entity Address, Address Line One	2000 Avenue of the Stars, Suite 1000N
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90067
City Area Code	310
Local Phone Number	553-0555
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		113,778,906
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001487712
Amendment Flag	false
Class A Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock
Trading Symbol	AL
Security Exchange Name	NYSE
Series A Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A
Trading Symbol	AL PRA
Security Exchange Name	NYSE

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 1,238,569	$ 317,488
Restricted cash	23,568	20,573
Flight equipment subject to operating leases	22,671,435	21,286,154
Less accumulated depreciation	(3,154,939)	(2,581,817)
Flight equipment subject to operating leases, net	19,516,496	18,704,337
Deposits on flight equipment purchases	1,634,152	1,564,188
Other assets	1,191,980	1,102,569
Total assets	23,604,765	21,709,155
Liabilities and Shareholders' Equity
Accrued interest and other payables	401,443	516,497
Debt financing, net of discounts and issuance costs	15,180,145	13,578,866
Security deposits and maintenance reserves on flight equipment leases	1,054,757	1,097,061
Rentals received in advance	140,228	143,692
Deferred tax liability	850,869	749,495
Total liabilities	17,627,442	16,085,611
Shareholders' Equity
Paid-in capital	2,788,490	2,777,601
Retained earnings	3,188,566	2,846,106
Accumulated other comprehensive loss	(971)	(1,397)
Total shareholders' equity	5,977,323	5,623,544
Total liabilities and shareholders' equity	23,604,765	21,709,155
Series A Preferred Stock
Shareholders' Equity
Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 10,000,000 shares of 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (aggregate liquidation preference of $250,000) issued and outstanding at September 30, 2020 and December 31, 2019, respectively	100	100
Class A Common Stock
Shareholders' Equity
Common Stock	1,138	1,134
Class B Non-Voting Common Stock
Shareholders' Equity
Common Stock

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized	50,000,000	50,000,000
Preferred Stock, shares issued	10,000,000	10,000,000
Preferred Stock, shares outstanding	10,000,000	10,000,000
Series A liquidation preference	$ 250,000	$ 250,000
Series A Preferred Stock
Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized	50,000,000	50,000,000
Preferred Stock, shares issued	10,000,000	10,000,000
Preferred Stock, shares outstanding	10,000,000	10,000,000
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock	6.15%	6.15%
Series A liquidation preference	$ 250,000	$ 250,000
Class A Common Stock
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, authorized shares	500,000,000	500,000,000
Common Stock, issued shares	113,778,906	113,350,267
Common Stock, outstanding shares	113,778,906	113,350,267
Class B Non-Voting Common Stock
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, authorized shares	10,000,000	10,000,000
Common Stock, issued shares	0	0
Common Stock, outstanding shares	0	0

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues
Rental of flight equipment	$ 468,443	$ 492,869	$ 1,462,999	$ 1,412,478
Aircraft sales, trading and other	25,158	38,033	63,338	55,870
Total revenues	493,601	530,902	1,526,337	1,468,348
Expenses
Interest	107,519	104,637	317,753	290,681
Amortization of debt discounts and issuance costs	10,899	9,078	31,660	26,330
Interest expense	118,418	113,715	349,413	317,011
Depreciation of flight equipment	195,054	183,788	577,969	514,948
Selling, general and administrative	20,239	34,715	75,142	92,188
Stock-based compensation	6,635	4,897	14,956	14,934
Total expenses	340,346	337,115	1,017,480	939,081
Income before taxes	153,255	193,787	508,857	529,267
Income tax expense	(32,860)	(38,000)	(103,686)	(107,081)
Net income	120,395	155,787	405,171	422,186
Preferred stock dividends	(3,843)	(3,844)	(11,531)	(8,115)
Net income available to common stockholders	116,552	151,943	393,640	414,071
Other Comprehensive Income/(Loss):
Change in foreign currency translation adjustment	(5,637)		7,601
Change from current period hedged transaction	7,395		(7,086)
Total tax expense on other comprehensive income/loss	(378)		(89)
Other Comprehensive income available for common stockholders, net of tax	1,380		426
Total comprehensive income available for common stockholders	$ 117,932	$ 151,943	$ 394,066	$ 414,071
Earnings per share of common stock:
Basic (in dollars per share)	$ 1.02	$ 1.36	$ 3.46	$ 3.71
Diluted (in dollars per share)	$ 1.02	$ 1.34	$ 3.46	$ 3.67
Weighted-average shares outstanding
Basic (in shares)	113,778,533	112,133,556	113,647,585	111,511,960
Diluted (in shares)	113,951,102	113,263,396	113,928,775	112,837,526
Dividends declared per share of common stock	$ 0.15	$ 0.13	$ 0.45	$ 0.39

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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	Accumulated Other Comprehensive (Loss)/Income	Total
Balance at Dec. 31, 2018	$ 1,110		$ 2,474,238	$ 2,331,552	$ 4,806,900
Balance (in shares) at Dec. 31, 2018	110,949,850
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 2		439		441
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares)	263,218
Issuance of preferred stock		$ 100	242,141		242,241
Issuance of preferred stock (in shares)		10,000,000
Stock-based compensation			4,174		4,174
Cash dividends				(14,445)	(14,445)
Tax withholding related to vesting of restricted stock units and exercise of stock options	$ (1)		(3,587)		(3,588)
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares)	(94,899)
Net income				138,094	138,094
Balance at Mar. 31, 2019	$ 1,111	$ 100	2,717,405	2,455,201	5,173,817
Balance (in shares) at Mar. 31, 2019	111,118,169	10,000,000
Balance at Dec. 31, 2018	$ 1,110		2,474,238	2,331,552	4,806,900
Balance (in shares) at Dec. 31, 2018	110,949,850
Increase (Decrease) in Shareholders' Equity
Net income						$ 422,186
Balance at Sep. 30, 2019	$ 1,127	$ 100	2,758,928	2,702,018	5,462,173
Balance (in shares) at Sep. 30, 2019	112,701,349	10,000,000
Balance at Mar. 31, 2019	$ 1,111	$ 100	2,717,405	2,455,201	5,173,817
Balance (in shares) at Mar. 31, 2019	111,118,169	10,000,000
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 6		10,791		10,797
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares)	547,957
Issuance of preferred stock			(111)		(111)
Dividends declared on preferred stock				(4,271)	(4,271)
Stock-based compensation			5,863		5,863
Cash dividends				(14,516)	(14,516)
Net income				128,305	128,305
Balance at Jun. 30, 2019	$ 1,117	$ 100	2,733,948	2,564,719	5,299,884
Balance (in shares) at Jun. 30, 2019	111,666,126	10,000,000
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 11		20,584		20,595
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares)	1,047,695
Dividends declared on preferred stock				(3,844)	(3,844)
Stock-based compensation			4,897		4,897
Cash dividends				(14,644)	(14,644)
Tax withholding related to vesting of restricted stock units and exercise of stock options	$ (1)		(501)		(502)
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares)	(12,472)
Net income				155,787	155,787	155,787
Balance at Sep. 30, 2019	$ 1,127	$ 100	2,758,928	2,702,018	5,462,173
Balance (in shares) at Sep. 30, 2019	112,701,349	10,000,000
Balance at Dec. 31, 2019	$ 1,134	$ 100	2,777,601	2,846,106	(1,397)	5,623,544
Balance (in shares) at Dec. 31, 2019	113,350,267	10,000,000
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 4		2,021			2,025
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares)	480,978
Dividends declared on preferred stock				(3,844)		(3,844)
Stock-based compensation			4,429			4,429
Cash dividends				(17,045)		(17,045)
Change in foreign currency translation adjustment and from current period hedged transactions					(1,478)	(1,478)
Tax withholding related to vesting of restricted stock units and exercise of stock options	$ (2)		(8,411)			(8,413)
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares)	(191,334)
Net income				137,151		137,151
Balance at Mar. 31, 2020	$ 1,136	$ 100	2,775,640	2,962,368	(2,875)	5,736,369
Balance (in shares) at Mar. 31, 2020	113,639,911	10,000,000
Balance at Dec. 31, 2019	$ 1,134	$ 100	2,777,601	2,846,106	(1,397)	5,623,544
Balance (in shares) at Dec. 31, 2019	113,350,267	10,000,000
Increase (Decrease) in Shareholders' Equity
Change in foreign currency translation adjustment and from current period hedged transactions						426
Net income						405,171
Balance at Sep. 30, 2020	$ 1,138	$ 100	2,788,490	3,188,566	(971)	5,977,323
Balance (in shares) at Sep. 30, 2020	113,778,906	10,000,000
Balance at Mar. 31, 2020	$ 1,136	$ 100	2,775,640	2,962,368	(2,875)	5,736,369
Balance (in shares) at Mar. 31, 2020	113,639,911	10,000,000
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 2		2,500			2,502
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares)	144,417
Dividends declared on preferred stock				(3,844)		(3,844)
Stock-based compensation			3,892			3,892
Cash dividends				(17,067)		(17,067)
Change in foreign currency translation adjustment and from current period hedged transactions					524	524
Tax withholding related to vesting of restricted stock units and exercise of stock options			(200)			(200)
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares)	(6,605)
Net income				147,625		147,625
Balance at Jun. 30, 2020	$ 1,138	$ 100	2,781,832	3,089,082	(2,351)	5,869,801
Balance (in shares) at Jun. 30, 2020	113,777,723	10,000,000
Increase (Decrease) in Shareholders' Equity
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	$ 1		27			28
Issuance of common stock upon vesting of restricted stock units and exercise of options (in shares)	1,352
Dividends declared on preferred stock				(3,843)		(3,843)
Stock-based compensation			6,635			6,635
Cash dividends				(17,068)		(17,068)
Change in foreign currency translation adjustment and from current period hedged transactions					1,380	1,380
Tax withholding related to vesting of restricted stock units and exercise of stock options	$ (1)		(4)			(5)
Tax withholding related to vesting of restricted stock units and exercise of stock options (in shares)	(169)
Net income				120,395		120,395
Balance at Sep. 30, 2020	$ 1,138	$ 100	$ 2,788,490	$ 3,188,566	$ (971)	$ 5,977,323
Balance (in shares) at Sep. 30, 2020	113,778,906	10,000,000

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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Cash dividends declared per share (in dollars per share)	$ 0.15	$ 0.15	$ 0.15	$ 0.13	$ 0.13	$ 0.13

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating Activities
Net income	$ 405,171	$ 422,186
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment	577,969	514,948
Stock-based compensation	14,956	14,934
Deferred taxes	101,285	97,566
Amortization of debt discounts and issuance costs	31,660	26,330
Amortization of prepaid lease costs	32,142	24,190
Gain on aircraft sales, trading and other activity	(27,281)	(45,123)
Changes in operating assets and liabilities:
Other assets	(330,804)	(149,740)
Accrued interest and other payables	(84,045)	51,156
Rentals received in advance	(3,464)	15,109
Net cash provided by operating activities	717,589	971,556
Investing Activities
Acquisition of flight equipment under operating lease	(777,410)	(3,021,758)
Payments for deposits on flight equipment purchases	(581,054)	(727,982)
Proceeds from aircraft sales, trading and other activity	151,131	426,382
Acquisition of aircraft furnishings, equipment and other assets	(142,866)	(236,847)
Net cash used in investing activities	(1,350,199)	(3,560,205)
Financing Activities
Issuance of common stock upon exercise of options	4,556	31,823
Cash dividends paid on Class A common stock	(51,116)	(43,383)
Preferred dividends paid	(11,531)	(8,115)
Tax withholdings on stock-based compensation	(8,618)	(4,089)
Net change in unsecured revolving facility	(20,000)	8,000
Proceeds from debt financings	3,074,665	3,135,918
Payments in reduction of debt financings	(1,457,740)	(947,837)
Net proceeds from preferred stock issuance		242,139
Debt issuance costs	(5,692)	(9,443)
Security deposits and maintenance reserve receipts	91,337	230,966
Security deposits and maintenance reserve disbursements	(59,175)	(33,905)
Net cash provided by financing activities	1,556,686	2,602,074
Net increase in cash	924,076	13,425
Cash, cash equivalents and restricted cash at beginning of period	338,061	322,998
Cash, cash equivalents and restricted cash at end of period	1,262,137	336,423
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $39,960 and $46,314 at September 30, 2020 and 2019, respectively	371,947	358,237
Cash paid for income taxes	29,696	9,515
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	575,958	1,161,573
Cash dividends declared on common stock, not yet paid	$ 17,068	$ 14,644

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Supplemental Disclosure of Cash Flow Information
Cash paid for interest, capitalized interest	$ 39,960	$ 46,314

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Company Background and Overview

9 Months Ended

Sep. 30, 2020

Company Background and Overview

Company Background and Overview

Note 1.   Company Background and Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S (“Airbus”). The Company leases these aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of September 30, 2020, the Company owned a fleet of 308 aircraft in its operating lease portfolio, managed 81 aircraft and had 372 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee.

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Basis of Preparation and Critical Accounting Policies

9 Months Ended

Sep. 30, 2020

Basis of Preparation and Critical Accounting Policies

Basis of Preparation and Critical Accounting Policies

Note 2.  Basis of Preparation and Critical Accounting Policies

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

The accompanying unaudited Consolidated Financial Statements include all adjustments, consisting only of normal, recurring adjustments, which are in the opinion of management necessary to present fairly the Company’s financial position, results of operations and cash flows at September 30, 2020, and for all periods presented. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020. These financial statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

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Debt Financing

9 Months Ended

Sep. 30, 2020

Debt Financing

Debt Financing

Note 3.  Debt Financing

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

	September 30,		December 31,
	2020		2019
Unsecured
Senior notes	$	14,069,115	$	12,357,811
Term financings		967,000		883,050
Revolving credit facility		—		20,000
Total unsecured debt financing		15,036,115		13,260,861
Secured
Term financings		289,207		428,824
Export credit financing		26,619		31,610
Total secured debt financing		315,826		460,434
Total debt financing		15,351,941		13,721,295
Less: Debt discounts and issuance costs		(171,796)		(142,429)
Debt financing, net of discounts and issuance costs	$	15,180,145	$	13,578,866

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

	September 30,		December 31,
	2020		2019
Nonrecourse	$	—	$	128,460
Recourse		315,826		331,974
Total secured debt financing	$	315,826	$	460,434
Number of aircraft pledged as collateral		12		15
Net book value of aircraft pledged as collateral	$	636,566	$	890,693

Senior unsecured notes (including Medium-Term Note Program)

As of September 30, 2020, the Company had $14.1 billion in senior unsecured notes outstanding. As of December 31, 2019, the Company had $12.4 billion in senior unsecured notes outstanding.

During the nine months ended September 30, 2020, the Company issued approximately $3.0 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $750.0 million due 2025 at a fixed rate of 2.30%, (ii) $650.0 million due 2030 at a fixed rate of 3.00%, (iii) $850.0 million due 2025 at a fixed rate of 3.375% and (iv) $700.0 million due 2026 at a fixed rate of 2.875%.

During the nine months ended September 30, 2020, the Company repurchased $206.1 million in aggregate principal amount of Floating Rate Medium-Term Notes due 2021. The debt repurchases resulted in a gain of $14.0 million and is included in Aircraft sales, trading and other revenue in the Company’s Consolidated Statements of Income and Comprehensive Income.

Unsecured revolving credit facility

As of September 30, 2020, the Company did not have any amounts outstanding under its unsecured revolving credit facility. The total amount outstanding under the Company’s unsecured revolving credit facility was $20.0 million as of December 31, 2019.

The Company has an unsecured revolving credit facility with JPMorgan Chase Bank, N.A. as agent (the “Revolving Credit Facility”). During the nine months ended September 30, 2020, the Company increased the aggregate capacity of the Revolving Credit Facility by $250.0 million. On May 5, 2020, commitments totaling $92.7 million of the Revolving Credit Facility matured. Lenders hold revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on May 5, 2022 and commitments totaling $5.0 million that mature on May 5, 2021. As of September 30, 2020, the aggregate capacity of the Revolving Credit Facility was approximately $6.0 billion.

As of September 30, 2020, borrowings under the Revolving Credit Facility will generally bear interest at either (a) LIBOR plus a margin of 1.05% per year or (b) an alternative base rate plus a margin of 0.05% per year, subject, in each case, to increases or decreases based on declines in the credit ratings for the Company’s debt. The Company is required to pay a facility fee of 0.20% per year (also subject to increases or decreases based on declines in the credit ratings for the Company’s debt) in respect of total commitments under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are used to finance the Company’s working capital needs in the ordinary course of business and for other general corporate purposes.

Secured debt financing

In June 2020, the Company entered into an amendment to its secured warehouse facility to extend the final maturity to June 2021. The facility will continue to bear a floating interest rate of LIBOR plus 2.00%. As part of the amendment, the credit facility was converted to full recourse against the Company and excess cash collateral was released. The outstanding balance on the Company’s secured warehouse facility was $100.4 million and $128.5 million as of September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the outstanding balance on the Company’s secured debt financings, including its secured warehouse facility and its export credit financing, was $315.8 million and it had pledged 12 aircraft as collateral with a net book value of $636.6 million. As of December 31, 2019, the outstanding balance on the Company’s secured debt financings, including its secured warehouse facility and its export credit financing, was $460.4 million and it had pledged 15 aircraft as collateral with a net book value of $890.7 million.

Maturities

Maturities of debt outstanding as of September 30, 2020 are as follows (in thousands):

Years ending December 31,
2020	$	172,778
2021		1,934,141
2022		2,730,561
2023		2,502,123
2024		1,525,428
Thereafter		6,486,910
Total	$	15,351,941

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies

Commitments and Contingencies

Note 4.  Commitments and Contingencies

As of September 30, 2020, the Company had commitments to acquire a total of 372 new aircraft for delivery through 2026 as follows:

	Estimated Delivery Years
Aircraft Type	2020	2021	2022	2023	2024	Thereafter	Total
Airbus A220-300(1)	—	—	3	14	12	21	50
Airbus A320/321neo(2)	7	32	22	23	27	37	148
Airbus A330-900neo	1	3	7	4	—	—	15
Airbus A350-900/1000	1	4	3	4	5	1	18
Boeing 737-7/8/9 MAX	—	15	20	42	30	—	107
Boeing 787-9/10	5	9	8	10	2	—	34
Total	14	63	63	97	76	59	372

(1) In addition to the Company’s commitments, as of September 30, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028.

(2) The Company’s Airbus A320/321neo aircraft orders include 45 long-range variants and 29 extra long-range variants.

Pursuant to the Company's purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, and in the last several years manufacturing delays have significantly impacted the Company’s actual delivery dates. For several years, the Company has also experienced delivery delays for certain of its Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) began on March 10, 2019, and remains in effect. As a result, Boeing temporarily halted production and delivery of all 737 MAX aircraft. While production of the 737 MAX has now resumed, deliveries remain on hold. The Federal Aviation Administration (“FAA”) and the European Union Aviation Safety Agency (“EASA”) have both completed flight testing for recertification of the 737 MAX, though a number of key milestones remain before the aircraft can return to service. Lifting of the grounding is subject to the approval of the FAA, EASA and other global regulatory authorities, and the Company is unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic. The Company is currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of, and the delivery delays associated with the 737 MAX aircraft that the Company owns or has on order, which could result in changes to the commitment table.

The ongoing COVID-19 pandemic has caused delivery delays of aircraft in the Company’s orderbook and is expected to continue to cause delays of aircraft delivery. As discussed in further detail in Note 12, “Impact of COVID-19 Pandemic,” the COVID-19 pandemic has resulted in numerous travel restrictions and business shutdowns or other operating limitations, including the temporary closure of final aircraft assembly facilities for each of Boeing and Airbus. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output. As a result of the temporary closures of the Boeing and Airbus facilities and the subsequently reduced production by these manufacturers, most of our expected aircraft deliveries were delayed during the second and third quarter. Given the dynamic nature of the ongoing COVID-19 pandemic, the Company is in ongoing discussions with Boeing and Airbus to determine the impact and duration of delivery delays. However, the Company is not yet able to determine the impact of the delivery delays, and as such, the delivery dates listed could materially change.

The aircraft purchase commitments discussed above also could be impacted by lease cancellation. The Company's leases typically provide that the Company and the airline customer each have a cancellation right related to certain aircraft delivery delays. The Company’s purchase agreements with Boeing and Airbus also generally provide that the Company and the manufacturer each have cancellation rights that typically are parallel with the Company’s cancellation rights in its leases. The Company’s leases and its purchase agreements with Boeing and Airbus typically provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause. As of September 30, 2020, the Company has canceled its orders for 19 737 MAX aircraft with Boeing.

The Company has commitments for the acquisition of 372 aircraft for delivery through 2026, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $24.8 billion at September 30, 2020, which are due as follows (in thousands):

Years ending December 31,
2020	$	1,213,581
2021		4,841,564
2022		5,604,050
2023		6,153,520
2024		4,211,633
Thereafter		2,789,136
Total	$	24,813,484

The Company has made non-refundable deposits on the aircraft for which the Company has commitments to purchase of approximately $1.6 billion as of September 30, 2020 and December 31, 2019, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits. Further, the Company would be exposed to breach of contract claims by its lessees and manufacturers.

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Rental Income

9 Months Ended

Sep. 30, 2020

Rental Income

Rental Income

Note 5.  Rental Income

At September 30, 2020, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s fleet are as follows (in thousands):

Years ending December 31,
2020 (excluding the nine months ended September 30, 2020)	$	495,367
2021		1,942,269
2022		1,833,191
2023		1,636,744
2024		1,502,227
Thereafter		5,977,449
Total	$	13,387,247

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Earnings Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share

Earnings Per Share

Note 6.  Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s two classes of common stock, Class A and Class B Non-Voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of September 30, 2020, the Company did not have any Class B Non-Voting common stock outstanding.

Diluted earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. For the three and nine months ended September 30, 2020, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. The Company excluded 1,032,305 and 946,406 shares related to restricted stock units for which the performance metric had yet to be achieved as of September 30, 2020 and 2019, respectively.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic earnings per share:
Numerator
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Denominator
Weighted-average common shares outstanding		113,778,533		112,133,556		113,647,585		111,511,960
Basic earnings per share	$	1.02	$	1.36	$	3.46	$	3.71
Diluted earnings per share:
Numerator
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Denominator
Number of shares used in basic computation		113,778,533		112,133,556		113,647,585		111,511,960
Weighted-average effect of dilutive securities		172,569		1,129,840		281,190		1,325,566
Number of shares used in per share computation		113,951,102		113,263,396		113,928,775		112,837,526
Diluted earnings per share	$	1.02	$	1.34	$	3.46	$	3.67

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Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Measurements

Fair Value Measurements

Note 7.  Fair Value Measurements

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

The Company has a cross-currency swap related to its Canadian dollar Medium-Term Notes which was issued in December 2019. The fair value of the swap as a foreign currency exchange derivative is categorized as a Level 2 measurement in the fair value hierarchy and is measured on a recurring basis. As of September 30, 2020, the estimated fair value of the foreign currency exchange derivative liability was $1.6 million. As of December 31, 2019, the estimated fair value of the foreign currency exchange derivative asset was $5.4 million.

Financial Instruments Not Measured at Fair Values

The fair value of debt financing is estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities, which would be categorized as a Level 2 measurement in the fair value hierarchy. The estimated fair value of debt financing as of September 30, 2020 was approximately $15.5 billion compared to a book value of $15.4 billion. The estimated fair value of debt financing as of December 31, 2019 was $14.1 billion compared to a book value of $13.7 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at September 30, 2020, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at September 30, 2020 and December 31, 2019 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2020

Shareholders' Equity

Shareholders' Equity

Note 8.  Shareholders’ Equity

The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had 113,778,906 and 113,350,267 Class A common shares issued 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, 2020 and December 31, 2019.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million.

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Stock-based Compensation

9 Months Ended

Sep. 30, 2020

Stock-based Compensation

Stock-based Compensation

Note 9.  Stock-based Compensation

On May 7, 2014, the stockholders of the Company approved the Air Lease Corporation 2014 Equity Incentive Plan (the “2014 Plan”). Upon approval of the 2014 Plan, no new awards may be granted under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). As of September 30, 2020, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 4,860,870.

The Company recorded $6.6 million and $4.9 million of stock-based compensation expense for the three months ended September 30, 2020 and 2019, respectively. The Company recorded $15.0 million and $14.9 million of stock-based compensation expense for the nine months ended September 30, 2020 and 2019, respectively.

Stock Options

A summary of stock option activity for the nine months ended September 30, 2020 follows:

				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)(1)
Balance at December 31, 2019	364,153	$	22.90	0.75	$	8,965
Granted	—	$	—	—	$	—
Exercised	(244,153)	$	20.00	—	$	3,078
Forfeited/canceled	—	$	—	—	$	—
Balance at September 30, 2020	120,000	$	28.80	0.57	$	74
Vested and exercisable as of September 30, 2020	120,000	$	28.80	0.57	$	74

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

All of the Company’s outstanding employee stock options had fully vested as of June 30, 2013. As of September 30, 2020 there were no unrecognized compensation costs related to outstanding stock options. For the three and nine months ended September 30, 2020 and 2019 there were no stock-based compensation expenses related to Stock Options.

Restricted Stock Units

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

During the nine months ended September 30, 2020, the Company granted 670,621 RSUs of which 133,699 are TSR RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the nine months ended September 30, 2020:

	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2019	1,254,904	$	43.62
Granted	670,621	$	42.20
Vested	(406,067)	$	46.96
Forfeited/canceled	(49,407)	$	43.97
Unvested at September 30, 2020	1,470,051	$	42.04
Expected to vest after September 30, 2020	1,470,051	$	42.04

As of September 30, 2020, there was $29.1 million of unrecognized compensation cost related to unvested stock-based payments granted to employees. Total unrecognized compensation cost will be recognized over a weighted-average remaining period of 1.79 years.

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Aircraft under management

9 Months Ended

Sep. 30, 2020

Aircraft under management

Aircraft under management

Note 10.  Aircraft Under Management

As of September 30, 2020, the Company managed 81 aircraft across three aircraft management platforms. The Company managed 51 aircraft through its Thunderbolt platform, 26 aircraft through the Blackbird investment funds and four on behalf of a financial institution.

The Company managed 26 aircraft on behalf of third-party investors, through two investment funds, Blackbird Capital I, LLC and Blackbird Capital II, LLC (“Blackbird II”). These funds invest in commercial aircraft and lease them to airlines throughout the world. The Company provides management services to these funds for a fee. As of September 30, 2020, the Company's non-controlling interests in each fund are 9.5% and are accounted for under the equity method of accounting. The Company’s investment in these funds aggregated $52.2 million and $46.5 million as of September 30, 2020 and December 31, 2019, respectively, and is included in Other assets on the Consolidated Balance Sheets. The Company continues to source aircraft investment opportunities for Blackbird II. As of September 30, 2020, Blackbird II has remaining equity capital commitments to acquire up to approximately $1.0 billion in aircraft assets, for which the Company has committed to fund up to $29.1 million related to these potential investments.

Additionally, the Company continues to manage aircraft that it sells through its Thunderbolt platform. As of September 30, 2020, the Company managed 51 aircraft through its Thunderbolt platform sold across three separate transactions. The Company has non-controlling interests in two of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. During the three months ended September 30, 2020, the Company completed the sale of one aircraft from its held for sale portfolio through its Thunderbolt platform. The Company’s total investment in aircraft sold through its Thunderbolt platform was $9.3 million and $9.9 million as of September 30, 2020 and December 31, 2019, respectively and is included in Other assets on the Consolidated Balance Sheets.

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Flight Equipment Held for Sale

9 Months Ended

Sep. 30, 2020

Flight Equipment held for sale

Flight Equipment Held for Sale

Note 11.  Flight Equipment Held for Sale

As of September 30, 2020, the Company did not have any flight equipment classified as held for sale. As of December 31, 2019, the Company had eight aircraft, with a carrying value of $249.6 million, which were classified as held for sale and included in Other assets on the Consolidated Balance Sheets.

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Impact of COVID-19 Pandemic

9 Months Ended

Sep. 30, 2020

COVID 19

Unusual or Infrequent Item, or Both [Line Items]

Impact of COVID-19 Pandemic

Note 12.  Impact of COVID-19 Pandemic

On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization (the “WHO”). On March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic. In response to the COVID-19 pandemic, governments around the world have implemented numerous measures to try to contain the virus, including travel restrictions. Although some of these measures have been lifted or scaled back, a recent resurgence of COVID-19 in certain parts of the world, including the United States and parts of Europe, has resulted in the re-imposition of certain restrictions and may lead to more restrictions to reduce the spread of COVID-19. These measures, coupled with a decrease in consumer spending on travel as a result of COVID-19, have materially impacted airline traffic and operations throughout the world, including the Company’s airline customers. It is unclear how long and to what extent these measures will remain in place and they may remain in place in some form for an extended period of time. Aircraft manufacturers and suppliers also have been impacted, including causing the temporary closure of Boeing and Airbus’ final assembly facilities and also closures of various facilities across their supply chain. In the second quarter of 2020, Boeing and Airbus resumed production at these facilities, but with reduced output.

As the virus spread globally, its impact on the global economy increased significantly, resulting in a rapid decline in global air travel. While domestic and regional airline traffic improved over the last several months, demand for international and business air travel remains challenged. Since the pandemic began in the first quarter of 2020, the Company has received requests from most of its customers for accommodations such as deferrals of lease payments or other lease concessions. On a case-by-case basis, the Company has agreed to accommodations with approximately 58% of its lessees. Generally, these accommodations have been in the form of partial lease deferrals for payments due during the first three quarters of 2020, typically with a short repayment period. The majority of these deferrals are to be repaid within 12 months from the date the deferrals were granted, and in many cases, include lease extensions. The Company remains in active discussions with its airline customers and may continue to provide accommodations on a case-by-case basis.

While lease deferrals may delay the Company’s receipt of cash, the Company generally recognizes the lease revenue during the period even if a deferral is provided to the lessee, unless it determines collection is not reasonably assured. The Company monitors all lessees with past due lease payments and discusses relevant operational and financial issues facing those lessees in order to determine an appropriate course of action. In addition, if collection is not reasonably assured, the Company will not recognize rental income for amounts due under the Company’s lease contracts and will recognize revenue for such lessees on a cash basis. For the quarter ended September 30, 2020, the Company did not recognize rental revenue of $25.3 million because collection was not reasonably assured for certain lessees. Aircraft on lease with these lessees represented approximately 6.6% of our fleet by net book value.

Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on its business, results of operations and financial condition for the foreseeable future.

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Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events

Subsequent Events

Note 13. Subsequent Events

On November 5, 2020, the Company’s board of directors approved an increase in the Company’s quarterly cash dividend from $0.15 per share to $0.16 per share on its outstanding Class A common stock. The dividend will be paid on January 6, 2021 to holders of record of the Company’s Class A common stock as of December 18, 2020. The Company’s board of directors also approved a cash dividend of $0.384375 per share on its outstanding Series A Preferred Stock, which will be paid on December 15, 2020 to holders of record of the Company’s Series A Preferred Stock as of November 30, 2020. In addition, on November 5, 2020, the Company’s board of directors authorized a share repurchase program of up to $100.0 million of Class A common stock that expires on June 15, 2021.

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Debt Financing (Tables)

9 Months Ended

Sep. 30, 2020

Debt Financing

Summary of consolidated debt

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

	September 30,		December 31,
	2020		2019
Unsecured
Senior notes	$	14,069,115	$	12,357,811
Term financings		967,000		883,050
Revolving credit facility		—		20,000
Total unsecured debt financing		15,036,115		13,260,861
Secured
Term financings		289,207		428,824
Export credit financing		26,619		31,610
Total secured debt financing		315,826		460,434
Total debt financing		15,351,941		13,721,295
Less: Debt discounts and issuance costs		(171,796)		(142,429)
Debt financing, net of discounts and issuance costs	$	15,180,145	$	13,578,866

Schedule of secured obligations

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

	September 30,		December 31,
	2020		2019
Nonrecourse	$	—	$	128,460
Recourse		315,826		331,974
Total secured debt financing	$	315,826	$	460,434
Number of aircraft pledged as collateral		12		15
Net book value of aircraft pledged as collateral	$	636,566	$	890,693

Schedule of maturities of debt outstanding

Maturities of debt outstanding as of September 30, 2020 are as follows (in thousands):

Years ending December 31,
2020	$	172,778
2021		1,934,141
2022		2,730,561
2023		2,502,123
2024		1,525,428
Thereafter		6,486,910
Total	$	15,351,941

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies

Schedule of commitments to acquire aircraft

	Estimated Delivery Years
Aircraft Type	2020	2021	2022	2023	2024	Thereafter	Total
Airbus A220-300(1)	—	—	3	14	12	21	50
Airbus A320/321neo(2)	7	32	22	23	27	37	148
Airbus A330-900neo	1	3	7	4	—	—	15
Airbus A350-900/1000	1	4	3	4	5	1	18
Boeing 737-7/8/9 MAX	—	15	20	42	30	—	107
Boeing 787-9/10	5	9	8	10	2	—	34
Total	14	63	63	97	76	59	372

(1) In addition to the Company’s commitments, as of September 30, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028.

(2) The Company’s Airbus A320/321neo aircraft orders include 45 long-range variants and 29 extra long-range variants.

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

The Company has commitments for the acquisition of 372 aircraft for delivery through 2026, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $24.8 billion at September 30, 2020, which are due as follows (in thousands):

Years ending December 31,
2020	$	1,213,581
2021		4,841,564
2022		5,604,050
2023		6,153,520
2024		4,211,633
Thereafter		2,789,136
Total	$	24,813,484

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Rental Income (Tables)

9 Months Ended

Sep. 30, 2020

Rental Income

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

At September 30, 2020, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s fleet are as follows (in thousands):

Years ending December 31,
2020 (excluding the nine months ended September 30, 2020)	$	495,367
2021		1,942,269
2022		1,833,191
2023		1,636,744
2024		1,502,227
Thereafter		5,977,449
Total	$	13,387,247

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share

Schedule of reconciliation of basic and diluted net income per share

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic earnings per share:
Numerator
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Denominator
Weighted-average common shares outstanding		113,778,533		112,133,556		113,647,585		111,511,960
Basic earnings per share	$	1.02	$	1.36	$	3.46	$	3.71
Diluted earnings per share:
Numerator
Net income	$	120,395	$	155,787	$	405,171	$	422,186
Preferred stock dividends		(3,843)		(3,844)		(11,531)		(8,115)
Net income available to common stockholders	$	116,552	$	151,943	$	393,640	$	414,071
Denominator
Number of shares used in basic computation		113,778,533		112,133,556		113,647,585		111,511,960
Weighted-average effect of dilutive securities		172,569		1,129,840		281,190		1,325,566
Number of shares used in per share computation		113,951,102		113,263,396		113,928,775		112,837,526
Diluted earnings per share	$	1.02	$	1.34	$	3.46	$	3.67

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Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Stock-based Compensation

Summary of stock option activity

				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)(1)
Balance at December 31, 2019	364,153	$	22.90	0.75	$	8,965
Granted	—	$	—	—	$	—
Exercised	(244,153)	$	20.00	—	$	3,078
Forfeited/canceled	—	$	—	—	$	—
Balance at September 30, 2020	120,000	$	28.80	0.57	$	74
Vested and exercisable as of September 30, 2020	120,000	$	28.80	0.57	$	74

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

Summary of activities for unvested RSUs

	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2019	1,254,904	$	43.62
Granted	670,621	$	42.20
Vested	(406,067)	$	46.96
Forfeited/canceled	(49,407)	$	43.97
Unvested at September 30, 2020	1,470,051	$	42.04
Expected to vest after September 30, 2020	1,470,051	$	42.04

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Company Background and Overview (Details)	9 Months Ended
	Sep. 30, 2020 aircraft
Organization
Number of aircraft owned	308
Number of aircraft managed	81
Number of aircraft on order with manufacturers	372

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Debt Financing (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) aircraft	May 05, 2020 USD ($)	Dec. 31, 2019 USD ($) aircraft
Debt financing
Total debt financing	$ 15,351,941		$ 13,721,295
Less: Debt discounts and issuance costs	(171,796)		(142,429)
Debt financing, net of discounts and issuance costs	15,180,145		13,578,866
Unsecured Debt
Debt financing
Total debt financing	15,036,115		13,260,861
Senior Notes
Debt financing
Total debt financing	14,069,115		12,357,811
Medium Term Note Program
Secured Obligations
Principal amount issued	3,000,000
Medium Term Note Program Due 2021 [Member]
Secured Obligations
Debt Instrument, Repurchase Amount	206,100
Gain (Loss) on Repurchase of Debt Instrument	14,000
Medium Term Note Program 2.30% Due 2025
Secured Obligations
Principal amount issued	$ 750,000
Interest rate (as a percent)	2.30%
Medium Term Note Program 3.00% Due 2030
Secured Obligations
Principal amount issued	$ 650,000
Interest rate (as a percent)	3.00%
Medium Term Note Program 3.375 Percent Due 2025 [Member]
Secured Obligations
Principal amount issued	$ 850,000
Interest rate (as a percent)	3.375%
Medium Term Note Program 2.875 Percent Due 2026 [Member]
Secured Obligations
Principal amount issued	$ 700,000
Interest rate (as a percent)	2.875%
Unsecured Term financings
Debt financing
Total debt financing	$ 967,000		883,050
Unsecured Revolving Credit Facility
Debt financing
Total debt financing			20,000
Revolving Credit Facility
Debt financing
Total debt financing	245,000		20,000
Secured Obligations
Increase in maximum borrowing capacity	250,000
Available borrowing capacity	$ 6,000,000
Facility fee (as a percent)	0.20%
Revolving Credit Facility | LIBOR
Secured Obligations
Interest margin (as a percent)	1.05%
Revolving Credit Facility | ABR
Secured Obligations
Interest margin (as a percent)	0.05%
Unsecured Revolving Credit Facility Maturing on May 5, 2020
Secured Obligations
Line of credit maturity amount		$ 92,700
Unsecured Revolving Credit Facility Mature On 5 May 2021
Secured Obligations
Revolving commitments held by lenders	$ 5,000
Unsecured Revolving Credit Facility Mature On 5 May 2022
Secured Obligations
Revolving commitments held by lenders	245,000
Unsecured Revolving Credit Facility Mature On 5 May 2023
Secured Obligations
Revolving commitments held by lenders	5,500,000
Secured Debt
Debt financing
Total debt financing	315,826		460,434
Secured Obligations
Nonrecourse			128,460
Recourse	315,826		331,974
Total secured debt financing	$ 315,826		$ 460,434
Number of aircraft pledged as collateral | aircraft	12		15
Net book value of aircraft pledged as collateral	$ 636,566		$ 890,693
Secured Debt | LIBOR
Secured Obligations
Interest margin (as a percent)	2.00%
Term Financings
Debt financing
Total debt financing	$ 289,207		428,824
Warehouse Facility
Secured Obligations
Total secured debt financing	100,400		128,500
Export Credit Financing
Debt financing
Total debt financing	$ 26,619		$ 31,610

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Debt Financing - Maturities of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Maturities
2020	$ 172,778
2021	1,934,141
2022	2,730,561
2023	2,502,123
2024	1,525,428
Thereafter	6,486,910
Total	$ 15,351,941	$ 13,721,295

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Commitments and Contingencies (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) aircraft item	Dec. 31, 2019 USD ($)
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
2020 | $	$ 1,213,581
2021 | $	4,841,564
2022 | $	5,604,050
2023 | $	6,153,520
2024 | $	4,211,633
Thereafter | $	2,789,136
Total | $	$ 24,813,484
Aircrafts
Commitments to acquire aircraft
2020	14
2021	63
2022	63
2023	97
2024	76
Thereafter	59
Total	372
Commitments for the acquisition of the aircraft and other equipment
Deposit Assets | $	$ 1,600,000	$ 1,600,000
Airbus A220-300
Commitments to acquire aircraft
2022	3
2023	14
2024	12
Thereafter	21
Total	50
Number of purchase agreement options | item	25
Airbus A320/321neo
Commitments to acquire aircraft
2020	7
2021	32
2022	22
2023	23
2024	27
Thereafter	37
Total	148
Number of long-range variants | item	45
Number of extra long-range variants | item	29
Airbus A330-900neo
Commitments to acquire aircraft
2020	1
2021	3
2022	7
2023	4
Total	15
Airbus A350-900/1000
Commitments to acquire aircraft
2020	1
2021	4
2022	3
2023	4
2024	5
Thereafter	1
Total	18
Boeing 737-7/8/9 MAX
Commitments to acquire aircraft
2021	15
2022	20
2023	42
2024	30
Total	107
Boeing 787-9/10
Commitments to acquire aircraft
2020	5
2021	9
2022	8
2023	10
2024	2
Total	34
Boeing 737-8/9 MAX
Commitments to acquire aircraft
Long Term Purchase Commitment Quantity Required Aircraft Canceled	19

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Rental Income (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Minimum future rentals on non-cancelable operating leases of flight equipment
2020 (excluding the nine months ended September 30, 2020)	$ 495,367
2021	1,942,269
2022	1,833,191
2023	1,636,744
2024	1,502,227
Thereafter	5,977,449
Total	$ 13,387,247

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Earnings Per Share (Details) $ / shares in Units, $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) item $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares
Anti-dilutive securities
Number of classes of common stock | item					2
Numerator
Net income available to common stockholders | $	$ 116,552			$ 151,943	$ 393,640	$ 414,071
Denominator
Weighted-average common shares outstanding	113,778,533			112,133,556	113,647,585	111,511,960
Basic earnings per share (in dollars per share) | $ / shares	$ 1.02			$ 1.36	$ 3.46	$ 3.71
Numerator
Net income | $	$ 120,395	$ 147,625	$ 137,151	$ 155,787	$ 405,171	$ 422,186
Preferred stock dividends | $	(3,843)			(3,844)	(11,531)	(8,115)
Net income available to common stockholders | $	$ 116,552			$ 151,943	$ 393,640	$ 414,071
Denominator
Number of shares used in basic computation	113,778,533			112,133,556	113,647,585	111,511,960
Weighted-average effect of dilutive securities (in shares)	172,569			1,129,840	281,190	1,325,566
Number of shares used in per share computation	113,951,102			113,263,396	113,928,775	112,837,526
Diluted net income per share (in dollars per share) | $ / shares	$ 1.02			$ 1.34	$ 3.46	$ 3.67
Restricted Stock Units
Anti-dilutive securities
Anti-dilutive securities excluded from the computation of diluted earnings per share (in shares)					1,032,305	946,406

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Fair Value Measurements - Assets and Liabilities Recurring and Non-recurring (Details) - Recurring basis - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Fair Value Measurements
Assets		$ 5.4
Liabilities	$ 1.6

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Fair Value Measurements - Debt Financing (Details) - USD ($) $ in Billions	Sep. 30, 2020	Dec. 31, 2019
Book Value
Financial Instruments Not Measured at Fair Value
Debt financing	$ 15.4	$ 13.7
Level 2
Financial Instruments Not Measured at Fair Value
Debt financing	$ 15.5	$ 14.1

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	10,000,000	10,000,000
Preferred Stock, shares outstanding	10,000,000	10,000,000
Preferred Stock, Liquidation Preference, Value	$ 250,000	$ 250,000
Class A Common Stock
Class of Stock [Line Items]
Common Stock, authorized shares	500,000,000	500,000,000
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	113,778,906	113,350,267
Common stock, shares outstanding	113,778,906	113,350,267
Class B Non-Voting Common Stock
Class of Stock [Line Items]
Common Stock, authorized shares	10,000,000	10,000,000
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	0	0
Common stock, shares outstanding	0	0
Series A Preferred Stock
Class of Stock [Line Items]
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	10,000,000	10,000,000
Preferred Stock, shares outstanding	10,000,000	10,000,000
Preferred Stock, Liquidation Preference, Value	$ 250,000	$ 250,000

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Stock-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	May 07, 2014	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Stock-based Compensation
Unrecognized compensation cost		$ 29,100		$ 29,100
Equity Incentive Plan 2010
Shares
Granted (in shares)	0
Equity Incentive Plan 2014
Stock-based Compensation
Number of shares authorized		4,860,870		4,860,870
Employee and Directors Stock Options
Stock-based Compensation
Stock-based compensation		$ 0	$ 0	$ 0	$ 0
Unrecognized compensation cost		$ 0		$ 0
Shares
Balance at the beginning of the period (in shares)				364,153
Exercised (in shares)				(244,153)
Balance at the end of the period (in shares)		120,000		120,000		364,153
Vested and exercisable at the end of the period (in shares)		120,000		120,000
Exercise Price
Balance at the beginning of the period (in dollars per share)				$ 22.90
Exercised (in dollars per share)				20.00
Balance at the end of the period (in dollars per share)		$ 28.80		28.80		$ 22.90
Vested and exercisable at the end of the period (in dollars per share)		$ 28.80		$ 28.80
Remaining Contractual Term
Remaining Contractual Term (in years)				6 months 25 days		9 months
Vested and exercisable				6 months 25 days
Aggregate Intrinsic Value
Balance at the beginning of the period				$ 8,965
Exercised				3,078
Balance at the end of the period		$ 74		74		$ 8,965
Vested and exercisable at the end of the period		74		74
Restricted Stock Units
Stock-based Compensation
Stock-based compensation		$ 6,600	$ 4,900	$ 15,000	$ 14,900

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Stock-based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Stock-based compensation expense
Unrecognized compensation cost | $	$ 29.1
Weighted-average period of recognition of unrecognized stock-based compensation cost	1 year 9 months 14 days
Restricted Stock Units
Unvested Restricted Stock Units, Number of Shares
Unvested at the beginning of the period (in shares)	1,254,904
Granted (in shares)	670,621
Vested (in shares)	(406,067)
Forfeited/canceled (in shares)	(49,407)
Unvested at the end of the period (in shares)	1,470,051
Expected to vest after the end of the period (in shares)	1,470,051
Unvested Restricted Stock Units, Weighted-Average Grant-Date Fair Value
Unvested at the beginning of the period (in dollars per share) | $ / shares	$ 43.62
Granted (in dollars per share) | $ / shares	42.20
Vested (in dollars per share) | $ / shares	46.96
Forfeited/canceled (in dollars per share) | $ / shares	43.97
Unvested at the end of the period (in dollars per share) | $ / shares	42.04
Expected to vest after the end of the period (in dollars per share) | $ / shares	$ 42.04
Restricted Stock With Total Shareholder Return Conditions
Unvested Restricted Stock Units, Number of Shares
Granted (in shares)	133,699

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Aircraft under management (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020 USD ($) aircraft	Sep. 30, 2020 USD ($) item aircraft	Dec. 31, 2019 USD ($)
Investments
Number of aircraft managed		81
Number of platforms		3
Total unfunded commitment | $	$ 29.1	$ 29.1
Financial Institution
Investments
Number of aircraft managed		4
Third-Party Investors
Investments
Number of aircraft managed		26
Thunderbolt
Investments
Number of aircraft managed		51
Number of investing funds | item		2
Equity method investment | $	$ 9.3	$ 9.3	$ 9.9
Number of aircraft sale transactions | item		3
Non-controlling interest (as a percent)	5.00%	5.00%
Number of aircraft sold or agreed to be sold	1
Blackbird
Investments
Number of aircraft managed		26
Number of investing funds | item		2
Percentage of equity ownership	9.50%	9.50%
Equity method investment | $	$ 52.2	$ 52.2	$ 46.5
Blackbird II
Investments
Total unfunded commitment | $	$ 1,000.0	$ 1,000.0

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Flight Equipment held for sale (Details) - Aircraft Held For Sale $ in Millions	Sep. 30, 2020 aircraft	Dec. 31, 2019 USD ($) aircraft
Flight Equipment Held for Sale
Number of aircraft held for sale | aircraft	0	8
Assets held for sale | $		$ 249.6

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Impact of COVID-19 Pandemic (Details) - COVID 19 - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Unusual or Infrequent Item, or Both [Line Items]
Accommodation arrangement percentage of lessees		58.00%
Unrecognized rental revenue	$ 25.3
Percentage of lessees in fleet	6.60%

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended						9 Months Ended
	Nov. 05, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Dec. 31, 2020
Subsequent Events
Quarterly cash dividends on common stock		$ 0.15	$ 0.15	$ 0.15	$ 0.13	$ 0.13	$ 0.13
Class A Common Stock
Subsequent Events
Quarterly cash dividends on common stock								$ 0.15
Subsequent Event | Class A Common Stock
Subsequent Events
Quarterly cash dividends on common stock	$ 0.16
Amount of common stock repurchase authorized									$ 100.0
Subsequent Event | Series A Preferred Stock
Subsequent Events
Dividend declared per share of Series A preferred stock	$ 0.384375