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What changed in AIR LEASE CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AIR LEASE CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+401 added−390 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in AIR LEASE CORP's 2024 10-K

401 paragraphs added · 390 removed · 317 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+11 added−22 removed74 unchanged
Biggest changeThe following table sets forth the dollar amount and percentage of our Rental of flight equipment revenues attributable to the respective geographical regions based on each airline’s principal place of business: Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Region Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total (in thousands, except percentages) Asia Pacific $ 1,156,837 46.7 % $ 1,067,270 48.2 % $ 992,849 49.6 % Europe 769,407 31.1 % 611,091 27.6 % 564,479 28.2 % The Middle East and Africa 262,554 10.6 % 251,243 11.3 % 210,977 10.5 % Central America, South America and Mexico 156,275 6.3 % 141,638 6.4 % 104,315 5.2 % U.S. and Canada 132,534 5.3 % 143,266 6.5 % 130,717 6.5 % Total $ 2,477,607 100.0 % $ 2,214,508 100.0 % $ 2,003,337 100.0 % The following table sets forth the regional concentration based on each airline’s principal place of business of our flight equipment subject to operating lease based on net book value as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Region Net Book Value % of Total Net Book Value % of Total (in thousands, except percentages) Asia Pacific $ 10,456,435 39.8 % $ 10,818,250 44.1 % Europe 9,881,024 37.7 % 7,985,317 32.5 % Central America, South America, and Mexico 2,361,089 9.0 % 1,924,216 7.8 % The Middle East and Africa 2,062,420 7.9 % 2,253,342 9.3 % U.S. and Canada 1,470,240 5.6 % 1,557,260 6.3 % Total (1) $ 26,231,208 100.0 % $ 24,538,385 100.0 % (1) As of December 31, 2022, we had four aircraft classified as held for sale with a carrying value of $153.5 million included in the table above.
Biggest changeThe following table sets forth the dollar amount and percentage of our Rental of flight equipment revenues attributable to the respective geographical regions based on each airline’s principal place of business: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Region Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total Amount of Rental Revenue % of Total (in thousands, except percentages) Asia Pacific $ 1,004,202 40.4 % $ 1,156,837 46.7 % $ 1,067,270 48.2 % Europe 944,637 38.0 % 769,407 31.1 % 611,091 27.6 % The Middle East and Africa 206,846 8.3 % 262,554 10.6 % 251,243 11.3 % Central America, South America and Mexico 189,919 7.6 % 156,275 6.3 % 141,638 6.4 % U.S. and Canada 142,351 5.7 % 132,534 5.3 % 143,266 6.5 % Total $ 2,487,955 100.0 % $ 2,477,607 100.0 % $ 2,214,508 100.0 % The following table sets forth the regional concentration based on each airline’s principal place of business of our flight equipment subject to operating lease based on net book value as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Region Net Book Value % of Total Net Book Value % of Total (in thousands, except percentages) Europe $ 11,653,668 41.4 % $ 9,881,024 37.7 % Asia Pacific 10,077,621 35.8 % 10,456,435 39.8 % Central America, South America, and Mexico 2,685,098 9.5 % 2,361,089 9.0 % The Middle East and Africa 1,971,448 7.0 % 2,062,420 7.9 % U.S. and Canada 1,782,631 6.3 % 1,470,240 5.6 % Total $ 28,170,466 100.0 % $ 26,231,208 100.0 % The following table sets forth our top five lessees by net book value as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Lessee % of Total Lessee % of Total Virgin Atlantic 6.5 % EVA Air 4.9 % Air France-KLM Group 6.2 % Virgin Atlantic 4.8 % ITA 5.6 % Air France-KLM Group 4.3 % Vietnam 4.6 % ITA 4.2 % Aeromexico 4.4 % Vietnam Airlines 4.1 % 6 Table of Contents At December 31, 2024 and 2023, we owned and managed leased aircraft to customers in the following regions based on each airline’s principal place of business: December 31, 2024 December 31, 2023 Region Number of Customers (1) % of Total Number of Customers (1) % of Total Europe 51 44.0 % 50 42.0 % Asia Pacific 32 27.6 % 34 28.6 % The Middle East and Africa 14 12.1 % 15 12.6 % U.S. and Canada 11 9.5 % 12 10.1 % Central America, South America and Mexico 8 6.8 % 8 6.7 % Total 116 100.0 % 119 100.0 % (1) A customer is an airline with its own operating certificate.
Furthermore, the hull war policies generally contain full war risk endorsements, including, but not limited to, confiscation (where available), seizure, hijacking and similar forms of retention or terrorist acts.
Furthermore, the hull war policies generally contain war risk endorsements, including, but not limited to, confiscation (where available), seizure, hijacking and similar forms of retention or terrorist acts.
In addition, factors and trends including increased airline financing needs, Original Equipment Manufacturer (“OEM”) supply chain challenges and backlogs, the rising price of jet fuel, and environmental sustainability objectives impact the commercial aircraft leasing industry in the short-term and may increase the demand for our aircraft.
In addition, factors and trends including increased airline financing needs, Original Equipment Manufacturer (“OEM”) supply chain challenges and backlogs, the elevated price of jet fuel, and environmental sustainability objectives impact the commercial aircraft leasing industry in the short-term and may increase the demand for our aircraft.
We work to mitigate the risks associated with owning and leasing aircraft and cyclical variations in the airline industry through careful management of our fleet, including managing customer concentrations by geography and region, entering into long-term 7 Table of Contents leases, staggering lease maturities, balancing aircraft type exposures, and maintaining a young fleet age.
We work to mitigate the risks associated with owning and leasing aircraft and cyclical variations in the airline industry through careful management of our fleet, including managing customer concentrations by geography and region, entering into long-term leases, staggering lease maturities, balancing aircraft type exposures, and maintaining a young fleet age.
Airline reorganizations, liquidations, or other forms of bankruptcies occurring in the industry may impact some of our aircraft customers and result in the early return of aircraft or changes in our lease terms.
Airline reorganizations, liquidations, or other forms of bankruptcies occurring in the industry may include some of our aircraft customers and result in the early return of aircraft or changes in our lease terms.
Ethical and inclusive behavior is strongly promoted by the management team and these values are reflected in our long-term strategy and our way of doing business. 12 Table of Contents Employees, Compensation and Benefits Pay equity is central to our mission to attract and retain the best talent.
Ethical and inclusive behavior is strongly promoted by the management team and these values are reflected in our long-term strategy and our way of doing business. Employees, Compensation and Benefits Pay equity is central to our mission to attract and retain the best talent.
Lease agreements generally require hull and liability limits to be in U.S. dollars, which are shown on the certificate of insurance. 9 Table of Contents In accordance with our lease agreements, insurance premiums are paid by the lessee, with coverage acknowledged by the broker or carrier.
Lease agreements generally require hull and liability limits to be in U.S. dollars, which are shown on the certificate of insurance. In accordance with our lease agreements, insurance premiums are paid by the lessee, with coverage acknowledged by the broker or carrier.
We had a managed fleet of 78 aircraft as of December 31, 2023 compared to 85 as of December 31, 2022. 3 References throughout this Annual Report on Form 10-K to “our fleet” refer to the aircraft included in flight equipment subject to operating leases and do not include aircraft in our managed fleet, our flight equipment held for sale or aircraft classified as net investments in sales-type leases unless the context indicates otherwise. 5 Table of Contents Geographic Diversification Over 95% of our aircraft are operated internationally.
We had a managed fleet of 60 aircraft as of December 31, 2024 compared to 78 as of December 31, 2023. 2 References throughout this Annual Report on Form 10-K to “our fleet” refer to the aircraft included in flight equipment subject to operating leases and do not include aircraft in our managed fleet, our flight equipment held for sale or aircraft classified as net investments in sales-type leases unless the context indicates otherwise. 5 Table of Contents Geographic Diversification Over 95% of our aircraft are operated internationally.
This allows us to better serve our airline customers and expand our existing airline customer base by providing additional leasing opportunities beyond our own aircraft portfolio, new order pipeline, and customer or regional concentration limits. As of December 31, 2023, we had a managed fleet of 78 aircraft.
This allows us to better serve our airline customers and expand our existing airline customer base by providing additional leasing opportunities beyond our own aircraft portfolio, new order pipeline, and customer or regional concentration limits. As of December 31, 2024, we had a managed fleet of 60 aircraft.
As of December 31, 2023, we had 163 full-time employees. None of our employees are represented by a union or collective bargaining agreements. Access to Our Information We file annual, quarterly, current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”).
As of December 31, 2024, we had 165 full-time employees. None of our employees are represented by a union or collective bargaining agreements. Access to Our Information We file annual, quarterly, current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”).
We also believe the increase in lease rates and the tightening of credit markets may result in a shortfall of available capital to finance aircraft purchases, which could increase the demand for leasing.
We also believe the increase in lease rates and the sustained tightness in the credit markets may result in a shortfall of available capital to finance aircraft purchases, which could increase the demand for leasing.
We work closely with our airline customers throughout the world to help optimize their long-term aircraft fleet strategies. We may also, from time to time, work with our airline customers to assist them in obtaining financing for aircraft.
We work 7 Table of Contents closely with our airline customers throughout the world to help optimize their long-term aircraft fleet strategies. We may also, from time to time, work with our airline customers to assist them in obtaining financing for aircraft.
In order to maximize residual values and minimize the risk of obsolescence, our strategy is to own an aircraft during the first third of its expected 25-year useful life. During the year ended December 31, 2023, we purchased 71 new aircraft from Airbus and Boeing, and sold 27 aircraft 1 .
In order to maximize residual values and minimize the risk of obsolescence, our strategy is to own an aircraft during the first third of its expected 25-year useful life. During the year ended December 31, 2024, we purchased 65 new aircraft from Airbus and Boeing, and sold 39 aircraft.
As of December 31, 2023, the weighted average fleet age and weighted average remaining lease term of our fleet was 4.6 years and 7.0 years, respectively.
As of December 31, 2024, the weighted average fleet age and weighted average remaining lease term of our fleet was 4.6 years and 7.2 years, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for a discussion of adjusted net income before income taxes and adjusted diluted earnings per share before income taxes as non-GAAP measures and a reconciliation of these measures to net income attributable to common stockholders. 4 Table of Contents traffic volume into 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for a discussion of adjusted net income before income taxes and adjusted diluted earnings per share before income taxes as non-GAAP measures and a reconciliation of these measures to net income attributable to common stockholders. 4 Table of Contents the Boeing labor strike in late 2024.
The weighted average age of our fleet was 4.6 years and the weighted average lease term remaining was 7.0 years as of December 31, 2023. Our managed fleet was comprised of 78 aircraft as of December 31, 2023 compared to 85 aircraft as of December 31, 2022.
The weighted average age of our fleet was 4.6 years and the weighted average lease term remaining was 7.2 years as of December 31, 2024. Our managed fleet was comprised of 60 aircraft as of December 31, 2024 compared to 78 aircraft as of December 31, 2023.
As a standard in the industry, airline operator’s policies contain a sublimit for third-party war risk liability generally in the amount of at least $150 million. We require each lessee to purchase higher limits of third-party war risk liability or obtain an indemnity from its respective government.
As a standard in the industry, airline operator’s policies contain a sublimit for third-party war risk liability generally in the amount of at least $150 million. We require each lessee to purchase higher limits of third-party war risk liability.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information on our financial results for the year ended December 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information on our financial results for the year ended December 31, 2024.
We operate our business on a global basis, providing aircraft to airline customers in every major geographical region, including markets such as Asia Pacific, Europe, the Middle East and Africa, Central America, South America and Mexico, and the U.S. and Canada.
We currently have relationships with over 200 airlines across 70 countries. We operate our business on a global basis, providing aircraft to airline customers in every major geographical region, including markets such as Asia Pacific, Europe, the Middle East and Africa, Central America, South America and Mexico, and the U.S. and Canada.
Our airline customers are facing higher operating costs as a result of higher fuel costs, interest rates and inflation, foreign currency risk, ongoing labor shortages and disputes, as well as delays and cancellations caused by the global air traffic control system and airports, although the magnitude of underlying pre-pandemic demand returning to the market is offering a strong counterbalance to these increased costs.
Our airline customers are facing higher operating costs as a result of higher fuel costs, persistently elevated interest rates, inflation, foreign currency risk, ongoing labor shortages and disputes, as well as delays and cancellations caused by the global air traffic control system and airports, although strong air traffic demand has provided a counterbalance to these increased costs.
Insurance We require our lessees to obtain insurance coverage that is customary in the air transportation industry, including comprehensive liability insurance, aircraft all-risk hull insurance, and war-risk insurance covering risks such as hijacking, terrorism, confiscation, expropriation, seizure, and nationalization. We generally require a certificate of insurance from the lessee’s insurance broker prior to delivery of an aircraft.
Insurance We require our lessees to obtain insurance coverage that is customary in the air transportation industry, including comprehensive liability insurance, aircraft all-risk hull insurance, and war-risk insurance covering risks such as hijacking, terrorism, confiscation, expropriation, seizure, and nationalization.
Our customer base is highly diversified, with an average customer concentration of approximately 1.0% of our fleet net book value as of December 31, 2023. We also have a globally diversified customer base with an average country concentration of approximately 1.8% of our fleet net book value as of December 31, 2023.
We also have a globally diversified customer base with an average country concentration of approximately 1.9% of our fleet net book value as of December 31, 2024.
Adjusted net income before income taxes 2 during the year ended December 31, 2023 was $733.6 million or $6.58 per adjusted diluted share, as compared to $659.9 million, or $5.89 per adjusted diluted share, for the year ended December 31, 2022.
Adjusted net income before income taxes 1 during the year ended December 31, 2024 was $574.2 million or $5.13 per adjusted diluted share, as compared to $733.6 million, or $6.58 per adjusted diluted share, for the year ended December 31, 2023.
We maintain a high level of communication with the lessee and frequently evaluate the state of the market in which the lessee operates, including the impact of changes in passenger air travel and preferences, the impact of delivery delays, changes in general economic conditions, emerging competition, new government regulations, regional catastrophes, and other unforeseen shocks that are relevant to the airline’s market.
We maintain a high level of communication with the lessee and frequently evaluate the state of the market in which the lessee operates, including the impact of changes in passenger air travel and preferences, the impact of delivery delays, changes in general economic conditions, emerging competition, new government regulations, regional catastrophes, and other unforeseen shocks that are relevant to the airline’s market. 8 Table of Contents This enables us to identify lessees that may be experiencing operating and financial difficulties.
This enables us to identify lessees that may be experiencing operating and financial difficulties. This identification assists us in assessing the lessee’s ability to fulfill its obligations under the lease. This monitoring also identifies candidates, where appropriate, to restructure the lease prior to the lessee’s insolvency or the initiation of bankruptcy or similar proceedings.
This identification assists us in assessing the lessee’s ability to fulfill its obligations under the lease. This monitoring also identifies candidates, where appropriate, to restructure the lease prior to the lessee’s insolvency or the initiation of bankruptcy or similar proceedings.
We have a globally diversified customer base comprised of 119 airlines in 62 countries as of December 31, 2023. We continued to maintain a strong lease utilization rate of 99.9% for the year ended December 31, 2023.
We have a globally diversified customer base comprised of 116 airlines in 58 countries as of December 31, 2024. We continued to maintain a strong lease utilization rate of 100.0% for the year ended December 31, 2024.
For example, Russia, Ukraine, Belarus and the Republic of Sudan are now generally excluded from coverage in our contingent liability, contingent hull and contingent hull war insurance consistent with insurance market terms available at the time these policies were last renewed. Competition The leasing, remarketing, and sale of aircraft is highly competitive.
For example, Russia, Ukraine, Belarus and the Republic of Sudan are now generally excluded from coverage in our contingent liability, contingent hull and contingent hull war insurance. Competition The leasing, remarketing, and sale of aircraft is highly competitive.
We ended the year with a total of 463 aircraft in our owned fleet. The net book value of our fleet grew by 6.9% to $26.2 billion as of December 31, 2023 compared to $24.5 billion as of December 31, 2022.
We ended the year with a total of 489 aircraft in our owned fleet. The net book value of our fleet grew by 7.4% to $28.2 billion as of December 31, 2024 compared to $26.2 billion as of December 31, 2023.
Our net income attributable to common stockholders for the year ended December 31, 2023 was $572.9 million, or $5.14 per diluted share, as compared to a net loss attributable to common stockholders of $138.7 million, or $1.24 loss per diluted share, for the year ended December 31, 2022.
Our net income attributable to common stockholders for the year ended December 31, 2024 was $372.1 million, or $3.33 per diluted share, as compared to $572.9 million, or $5.14 per diluted share, for the year ended December 31, 2023.
When we repossess an aircraft leased in a foreign country, we generally expect to export the aircraft from the lessee’s jurisdiction. In some situations, the lessees may not fully cooperate in returning the aircraft. In those cases, we will take appropriate legal action, a process that could ultimately delay the return and export of the aircraft.
In some situations, the lessees may not fully cooperate in returning the aircraft. In those cases, we will take appropriate legal action, a process that could ultimately delay the return and export of the aircraft.
As of December 31, 2023, we had commitments to purchase 334 aircraft from Airbus and Boeing for delivery through 2028, with an estimated aggregate commitment of $21.7 billion. We have placed 100% of our committed orderbook on long-term leases for aircraft delivering through the end of 2025 and have placed approximately 65% of our entire orderbook.
As of December 31, 2024, we had commitments to purchase 269 aircraft from Airbus and Boeing for delivery through 2029, with an estimated aggregate commitment of $17.1 billion. We have placed 100% of our expected orderbook on long-term leases for aircraft delivering through the end of 2026 and have placed approximately 62% of our entire orderbook.
During 2023, we raised approximately $3.6 billion in committed debt financings, with floating interest rates ranging from SOFR plus 0.42% and SOFR plus 1.50% and fixed interest rates ranging from 5.30% to 5.94%, net of the effects of cross-currency hedging arrangements.
During 2024, we raised approximately $5.6 billion in committed debt financings, with floating interest rates ranging from one-month SOFR plus 1.02% and one-month SOFR plus 1.40% and fixed interest rates ranging from 5.10% to 5.95%, net of the effects of cross-currency hedging arrangements.
The International Air Transport Association (“IATA”) reported that passenger traffic was up 37% during 2023 relative to the prior year, primarily due to a significant acceleration in international traffic and strong continued expansion of domestic traffic in most markets.
The International Air Transport Association (“IATA”) reported that passenger traffic was up 10% during 2024 relative to the prior year, primarily due to continued strength in international traffic and healthy continued expansion of domestic traffic globally.
Khatibi 63 Executive Vice President Kishore Korde 50 Executive Vice President, Marketing Grant A. Levy 61 Executive Vice President, Marketing and Commercial Affairs John D. Poerschke 62 Executive Vice President of Aircraft Procurement and Specifications 13 Table of Contents
Willis 46 Executive Vice President and Chief Financial Officer Alex A. Khatibi 64 Executive Vice President, Marketing Kishore Korde 51 Executive Vice President, Marketing Grant A. Levy 62 Executive Vice President, Marketing and Commercial Affairs John D. Poerschke 63 Executive Vice President of Aircraft Procurement and Specifications David Beker 47 Executive Vice President, Marketing 13 Table of Contents
Operations to Date Current Fleet The net book value of our fleet 3 increased by 6.9% to $26.2 billion as of December 31, 2023 compared to $24.5 billion as of December 31, 2022. As of December 31, 2023, we owned 463 aircraft in our aircraft portfolio, comprised of 345 narrowbody aircraft and 118 widebody aircraft.
Operations to Date Current Fleet The net book value of our fleet 2 increased by 7.4% to $28.2 billion as of December 31, 2024 compared to $26.2 billion as of December 31, 2023. As of December 31, 2024, we owned 489 aircraft in our aircraft portfolio, comprised of 355 narrowbody aircraft and 134 widebody aircraft.
We ended 2023 with $31.0 billion in committed minimum future rental payments, consisting of $16.4 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.6 billion in minimum future rental payments related to aircraft which will deliver between 2024 through 2027.
We ended 2024 with $29.5 billion in committed minimum future rental payments, consisting of $18.3 billion in contracted minimum rental payments on the aircraft in our existing fleet and $11.2 billion in minimum future rental payments related to aircraft which will deliver between 2025 through 2029.
In addition, in 2023, we recognized a net benefit of approximately $67.0 million from the settlement of insurance claims under JSC Siberia Airline’s (“S7”, a Russian airline) insurance policies related to four aircraft previously included in our owned fleet and our equity interest in certain aircraft from our managed fleet that were previously on lease to S7, whereas in 2022, we recognized a net write-off of $771.5 million related to our Russian fleet.
In addition, for the year ended December 31, 2023, we recognized a net benefit of approximately $67.0 million for the settlement of insurance claims under S7’s insurance policies related to four aircraft previously included in our owned fleet and our equity interest in certain aircraft in our managed fleet that were previously on lease to S7. See “Item 7.
The increase in our adjusted net income before income taxes and adjusted diluted earnings per share before income taxes primarily relates to the increase in revenues as discussed above, partially offset by higher interest expense. Aircraft Industry We believe the current airline operating environment is favorably positioned for our Company and the broader commercial aircraft leasing industry.
Adjusted net income before income taxes decreased primarily due to higher interest expense, driven by the increase in our composite cost of funds and overall outstanding debt balance, partially offset by the increase in total revenue as discussed above. Aircraft Industry We believe the current airline operating environment is favorably positioned for us and the broader commercial aircraft leasing industry.
Generally, all certificates of insurance contain a breach of warranty endorsement so that our interests are not prejudiced by any act or omission of the lessee.
We generally require a certificate of insurance from the lessee’s insurance 9 Table of Contents broker prior to delivery of an aircraft. Generally, all certificates of insurance contain a breach of warranty endorsement so that our interests are not prejudiced by any act or omission of the lessee.
We believe that a diverse and inclusive culture helps maintain our position as a preeminent aircraft leasing company. As of December 31, 2023, 39% of our employees are multicultural and 52% are female. Our values and priorities are further specified in our code of conduct and our ethics-related compliance policies, procedures, trainings, and programs.
We are also committed to fostering and cultivating a culture of inclusion. As of December 31, 2024, 39% of our employees are multicultural and 52% are female. Our values and priorities are further specified in our code of conduct and our ethics-related compliance policies, procedures, trainings, and programs.
ITEM 1. BUSINESS 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.
ITEM 1. BUSINESS Overview Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing the most modern, fuel-efficient new technology commercial jet aircraft directly from aircraft manufacturers, such as Airbus S.A.S.
Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by gains from aircraft sales and our management fees. We currently have relationships with over 200 airlines across 70 countries.
We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by gains from aircraft sales and our management fees.
International traffic in 2023 rose 42% relative to the prior year, benefiting from a significant recovery in international travel in the Asia Pacific region, as well as continued robust international traffic expansion in all other major markets reported by IATA.
International traffic in 2024 rose 14% relative to the prior year, benefiting from robust continued international travel expansion in the Asia Pacific region, as well as strong expansion in most other major international markets reported by IATA. Global domestic traffic rose 6% during 2024 as compared to the prior year, remaining above the pace of global GDP expansion.
China was the only individual country that represented at least 10% of our rental revenue based on each airline’s principal place of business in each of 2021, 2022 and 2023; however, no individual airline contributed more than 10% to our rental revenue.
For the year ended December 31, 2024, no individual country represented at least 10% of our rental revenue based on each airline’s principal place of business; however, for the years ended December 31, 2023 and 2022, China was the only individual country that represented at least 10% of our rental revenue based on each airline’s principal place of business with rental revenues of $330.8 million and $360.0 million, respectively.
Once an insolvency or bankruptcy occurs, we typically have less control over, and would most likely incur greater costs in connection with, the restructuring of the lease or the repossession of the aircraft. 8 Table of Contents During the life of the lease, situations may emerge that place our customers under significant financial pressure, which may lead us to repossess our aircraft or restructure our leases with our airline customers.
Once an insolvency or bankruptcy occurs, we typically have less control over, and would most likely incur greater costs in connection with, the restructuring of the lease or the repossession of the aircraft.
Global domestic traffic rose 30% during 2023 as compared to the prior year, with most major markets experiencing double-digit percentage increases as compared to 2022. Meanwhile, passenger load factors also continue to rise and are persisting at historically high levels, which is compounding airline demand for additional aircraft.
Meanwhile, passenger load factors also continue to rise and are persisting at historically high levels, which is compounding airline demand for additional aircraft. IATA reported total global passenger load factors of 84% for 2024, as compared to 82% in the prior year period and 79% for full-year 2022.
The increase compared to the prior year was primarily due to the increase in revenues as discussed above partially offset by higher interest expense, which resulted from an increase in our composite cost of funds.
Our net income attributable to common stockholders decreased from the prior year primarily due to higher interest expense, driven by the increase in our composite cost of funds and overall outstanding debt balance, partially offset by the increase in total revenue as discussed above.
We finance the purchase of aircraft and our business with available cash balances and internally generated funds, including through cash flows from our operating leases, aircraft sales and trading activity and debt financings.
During the year ended December 31, 2024, we recognized $169.7 million in gains from the sale of 39 aircraft, compared to $146.4 million in gains from the sale of 25 aircraft for the year ended December 31, 2023. 3 Table of Contents We finance the purchase of aircraft and our business with available cash balances and internally generated funds, including through cash flows from our operating leases, aircraft sales and trading activity and debt financings.
Corporate Responsibility and Sustainability Climate Change We believe our strategy of leasing the most modern, fuel-efficient aircraft available, contributes to the ability of our airline industry customers to work towards their sustainability goals. Aligned with the needs of our customers, reduced fuel consumption, emissions, and noise are a priority when selecting an aircraft to join our fleet.
Aligned with the needs of our customers, reduced fuel consumption, emissions, and noise are a priority when selecting an aircraft to join our fleet.
Human Capital Resources Culture and Values We strive to conduct our business with integrity and in an honest and responsible manner and to build and maintain long-term, mutually beneficial relationships with our customers, suppliers, shareholders, employees and other stakeholders. We are also committed to fostering, cultivating and preserving a culture of diversity, equity, and inclusion.
Many of the improvements related to fuel efficiency within the aviation industry have been the result of airlines operating new, more fuel-efficient aircraft. 11 Table of Contents Human Capital Resources Culture and Values We strive to conduct our business with integrity and in an honest and responsible manner and to build and maintain long-term, mutually beneficial relationships with our customers, suppliers, shareholders, employees and other stakeholders.
Udvar-Házy 77 Executive Chairman of the Board of Directors John L. Plueger 69 Chief Executive Officer, President and Director Carol H. Forsyte 61 Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer Gregory B. Willis 45 Executive Vice President and Chief Financial Officer Alex A.
All of our executive officers have been employed by us during the past five years. Name Age Company Position Steven F. Udvar-Házy 78 Executive Chairman of the Board of Directors John L. Plueger 70 Chief Executive Officer, President and Director Carol H. Forsyte 62 Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer Gregory B.
In addition to our leasing activities, we sell aircraft from our fleet to third parties, including other leasing companies, financial services companies, airlines and other investors. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee.
(“Airbus”) and The Boeing Company (“Boeing”), 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 fleet to third parties, including other leasing companies, financial services companies, airlines and other investors.
As of December 31, 2023, we had total debt outstanding of $19.4 billion, of which 84.7% was at a fixed rate and 98.4% of which was unsecured, and in the aggregate, our composite cost of funds was 3.77%. Our total revenues for the year ended December 31, 2023 increased by 15.9% to $2.7 billion as compared to 2022.
We ended 2024 with an aggregate borrowing capacity under our revolving credit facility of $7.6 billion and total liquidity of $8.1 billion. As of December 31, 2024, we had total debt outstanding of $20.4 billion, of which 79.0% was at a fixed rate and 97.3% of which was unsecured, and in the aggregate, our composite cost of funds was 4.14%.
Airline forward ticket sales as reported by IATA remained strong in 2023, illustrating continued support for 2 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, such as net write-offs and recoveries related to our former Russian fleet.
In addition, both Airbus and Boeing have ongoing delivery delays which have been further compounded by engine manufacturer delays, shorter on-wing engine time of most new technology engines and, most recently, 1 Adjusted net income before income taxes excludes the effects of certain non-cash items such as non-cash deemed dividends upon redemption of our Series A preferred stock, one-time or non-recurring items that are not expected to continue in the future, such as net write-offs and recoveries related to our former Russian fleet, and certain other items.
We may post information that is important to investors on our website. Information included or referred to on, or otherwise accessible through, our website is not intended to form a part of or be incorporated by reference into this report.
Information included or referred to on, or otherwise accessible through, our website is not intended to form a part of or be incorporated by reference into this report. 12 Table of Contents Information about our Executive Officers Set forth below is certain information concerning each of our executive officers as of February 13, 2025, including his/her age and current position with us.
We also expect that relatively low levels of widebody retirements in recent years could lead to an accelerated replacement cycle of older widebody aircraft in the near future. The increased demand for our aircraft, combined with elevated interest rates and inflation, helped to increase lease rates during the year ended December 31, 2023.
The increased demand for our aircraft, combined with elevated interest rates and inflation, helped to increase lease rates on new lease agreements and lease extensions during the year ended December 31, 2024.
However, lease rate increases continue to lag behind interest rate increases. We expect that lease rates will continue to increase as airlines adjust to a persistently higher interest rate environment and our funding advantage relative to our airline customers widens.
We expect that lease rates will remain strong as the supply and demand environment for commercial aircraft remains tight and our funding advantage relative to our airline customers widens.
IATA reported a total global passenger load factor of 82% for the full-year 2023, as compared to 79% for full-year 2022, and 80% for full-year 2013. As global air traffic continues to expand, we are experiencing increased demand for our aircraft through new lease requests and lease extension requests.
As global air traffic continues to expand, we are experiencing increased demand for our aircraft through new lease requests and lease extension requests, which we expect to continue into 2025. Airline forward ticket sales as reported by a number of major airlines remained healthy in the fourth quarter 2024, illustrating continued support for traffic volume expansion.
The increase in total revenues was primarily driven by the continued growth in our fleet, an increase in sales activity and higher end of lease revenue.
The increase in our total revenues was primarily due to an increase in aircraft sales and trading activity and the growth of our fleet, partially offset by a decrease in end of lease revenue of $100.1 million as compared to the prior period, due to fewer aircraft returns during the year ended December 31, 2024, as well as a slight decrease in our lease yields due to the sales of older aircraft with higher lease yields and the purchases of new aircraft with lower initial lease yields.
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We are principally engaged in purchasing the most modern, fuel-efficient new technology commercial jet aircraft directly from aircraft manufacturers, such as Airbus S.A.S.(“Airbus”) and The Boeing Company (“Boeing”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity.
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Our total revenues for the year ended December 31, 2024 increased by 1.8% to $2.7 billion as compared to 2023.
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We ended 2023 with an aggregate borrowing capacity under our 1 Aircraft sales include two sales-type lease transactions and nine sales-type lease transactions during the year ended December 31, 2023 and 2022, respectively. 3 Table of Contents revolving credit facility of $6.3 billion and total liquidity of $6.8 billion.
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The labor strike impacted Boeing’s ability to produce and deliver aircraft in our orderbook and we anticipate ongoing impacts to our Boeing orderbook deliveries. We expect deliveries of our 737MAX aircraft and some 787 deliveries will continue to be impacted by the residual effects of the labor strike and the FAA’s heightened involvement in Boeing’s production rates.
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During the year ended December 31, 2023, we recognized $156.3 million in gains from the sale of 27 aircraft and also recognized $124.4 million in end of lease revenue from the return of 22 aircraft. During the year ended December 31, 2022, we recognized $48.0 million in gains from the sale of 15 aircraft 1 .
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In addition, the Boeing labor strike could lead to negative impacts on the broader aviation supply chain which could ultimately impact other OEMs, including Airbus. We also expect that relatively low levels of widebody retirements in recent years could lead to an accelerated replacement cycle of older widebody aircraft in the future.
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In addition, in 2022, we recorded $76.6 million in income related to security deposit forfeitures and maintenance reserve revenue from the return of 12 aircraft as well as the termination of our leasing activities in Russia.
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Our new aircraft deliveries in the fourth quarter of 2024 represented our highest delivery lease yield in a quarter in over four years; however, lease rate increases continue to lag behind our rising borrowing costs.
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In addition, both Airbus and Boeing have ongoing delivery delays which have been further compounded by engine manufacturer delays, as well as shorter on-wing engine time of most new technology engines. These delays have impacted and may continue to impact the ability of Airbus and Boeing to meet their contractual delivery obligations to us.
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Based on our views of the market and assumptions around our sales activity and interest rate environment, we expect to see a moderately-sized upward trajectory in lease yield by the end of 2025 and for each year for the next three to four years.
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The following table sets forth our top five lessees by net book value as of December 31, 2023: December 31, 2023 Lessee % of Total EVA Air 4.9 % Virgin Atlantic 4.8 % Air France-KLM Group 4.3 % ITA 4.2 % Vietnam Airlines 4.1 % 6 Table of Contents At December 31, 2023 and 2022, we owned and managed leased aircraft to customers in the following regions based on each airline’s principal place of business: December 31, 2023 December 31, 2022 Region Number of Customers (1) % of Total Number of Customers (1) % of Total Europe 50 42.0 % 49 41.9 % Asia Pacific 34 28.6 % 34 29.0 % The Middle East and Africa 15 12.6 % 14 12.0 % U.S. and Canada 12 10.1 % 13 11.1 % Central America, South America and Mexico 8 6.7 % 7 6.0 % Total 119 100.0 % 117 100.0 % (1) A customer is an airline with its own operating certificate.
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For the years ended December 31, 2024, 2023 and 2022, no individual airline contributed more than 10% to our rental revenue. Our customer base is highly diversified, with an average customer concentration of approximately 1.0% of our fleet net book value as of December 31, 2024.
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For the years ended December 31, 2023, 2022, and 2021, our rental revenues from China were $330.8 million, $360.0 million and $352.4 million, respectively.
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During the life of the lease, situations may emerge that place our customers under significant financial pressure, which may lead us to repossess our aircraft or restructure our leases with our airline customers. When we repossess an aircraft leased in a foreign country, we generally expect to export the aircraft from the lessee’s jurisdiction.
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By focusing on these qualities, we strive to introduce more environmentally conscious aircraft into the world’s fleet. Many of the improvements related to fuel efficiency within the aviation industry have been the result of airlines operating new, more fuel-efficient aircraft.
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Corporate Responsibility and Sustainability Climate Change Since the inception of our company in 2010, we have focused on purchasing the most modern, fuel-efficient aircraft available and leasing them to our customers worldwide.
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Below is a summary of the Greenhouse Gas (“GHG”) emissions factors used and the GHG emissions by type for the year ended December 31, 2022. We present gross Scope 1 and 2 emissions below. Scope 1 represents direct GHG emissions that occur from sources that are owned or controlled by us.
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In many cases, we serve as a launch customer for Boeing or Airbus, whereby we play a crucial role in introducing a new aircraft type into the global fleet.
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Scope 2 represents GHG emissions from the generation of purchased electricity consumed by us.
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Our core strategy is helping our airline customers modernize their fleets through our fleet planning services and our portfolio of aircraft that are generally 20 to 25% more fuel-efficient and have a significantly smaller noise footprint than the aircraft they will replace.
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Scope 1 and Scope 2 GHG emissions information has been prepared in accordance with the World Resources Institute (“WRI”)/World Business Council for Sustainable Development (“WBCSD”) GHG Protocol: A Corporate Accounting and Reporting Standard and WRI/WBCSD GHG Protocol Scope 2 Guidance, collectively referred to here as the GHG Protocol. 11 Table of Contents GHG Emissions Factors Emissions Scope Emissions Source Emissions Factor Employed Scope 1 (Direct) Natural Gas Diesel Backup Generators Corporate Jet Fuel Natural Gas: Emissions factors are applied to primary data obtained from utility bill (metered consumption).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have concentrated customer exposure and economic, legal and political risks associated with these lessees, including adverse events involving the regions in which these lessees operate may have an adverse effect on our financial condition. 18 Table of Contents Through our lessees and the countries in which they operate, we are exposed to the specific economic, legal and political conditions and associated risks of those jurisdictions.
Biggest changeAny of these factors could cause our lessees to incur higher costs and to generate lower revenues which could adversely affect their ability to make lease payments which in turn could impact our financial results. 18 Table of Contents We have concentrated customer exposure and economic, legal and political risks associated with these lessees, including adverse events involving the regions in which these lessees operate may have an adverse effect on our financial condition.
As a result of these factors, our earnings and cash flows may be impacted by any decrease in the value of aircraft that we own or acquire or decrease in market rates for leases for these aircraft. 17 Table of Contents Inflationary pressure may have a negative impact on our financial results, including by diminishing the value of our leases.
As 17 Table of Contents a result of these factors, our earnings and cash flows may be impacted by any decrease in the value of aircraft that we own or acquire or decrease in market rates for leases for these aircraft. Inflationary pressure may have a negative impact on our financial results, including by diminishing the value of our leases.
Violation of laws or regulations may result in increased liabilities including penalties and fines as well as reputational harm. A lessee’s failure to obtain required licenses, consents and approvals could negatively affect our ability to remarket or sell aircraft. 26 Table of Contents Airlines are subject to extensive regulation in the jurisdictions in which they are registered and operate.
Violation of laws or regulations may result in increased liabilities including penalties and fines as well as reputational harm. 26 Table of Contents A lessee’s failure to obtain required licenses, consents and approvals could negatively affect our ability to remarket or sell aircraft. Airlines are subject to extensive regulation in the jurisdictions in which they are registered and operate.
Macroeconomic and global risks relating to our business Events outside of our control, including the threat or realization of epidemic diseases such as the COVID-19 pandemic, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors, may adversely affect the demand for air travel, the financial condition of our lessees and of the aviation industry more broadly, and may ultimately impact our business.
Macroeconomic and global risks relating to our business Events outside of our control, including the threat or realization of epidemic diseases such as the COVID-19 pandemic, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors, may adversely affect the demand for air travel, the financial condition of our lessees and of the aviation industry more broadly, or our operations and may ultimately impact our business.
Doing business in countries around the world, including in emerging markets, has and may continue to expose our business to heightened risks and negatively impact our earnings and cash flows. Changes in fuel costs could negatively affect our lessees’ ability to honor the terms of their leases and by extension the demand for our aircraft.
Doing business in countries around the world, including in emerging markets, has and may continue to expose us to heightened risks and negatively impact our earnings and cash flows. Changes in fuel costs could negatively affect our lessees’ ability to honor the terms of their leases and by extension the demand for our aircraft.
Following the Russia-Ukraine conflict, insurance coverage for claims resulting from acts of terrorism, war or confiscation are subject to increased coverage limitations and increased premiums. Even where we, or our lessees, have insurance, we or they may face difficulties in recovering losses under such policies.
Following the Russia-Ukraine conflict, insurance coverage for claims resulting from acts of terrorism or war are subject to increased coverage limitations and increased premiums. Even where we, or our lessees, have insurance, we or they may face difficulties in recovering losses under such policies.
While we devote resources to maintaining and developing cyber-security measures, our resources and technical sophistication may be unable to prevent all types of cyberattacks. We take steps to detect and remediate vulnerabilities in our IT systems, but we may not be able to detect and remediate all vulnerabilities including on a timely basis.
While we devote resources to maintaining and developing cyber-security measures, our resources and technical sophistication may be unable to prevent all types of cyberattacks. We take steps designed to detect and remediate vulnerabilities in our IT systems, but we may not be able to detect and remediate all vulnerabilities including on a timely basis.
Our financial performance is driven by our ability to acquire strategically attractive commercial passenger aircraft, profitably lease and re-lease them, and finally sell such aircraft in order to generate sufficient revenues to finance our growth and operations, pay our debt service obligations, and meet our other corporate and contractual obligations.
Our financial performance is driven by our ability to acquire strategically attractive commercial aircraft, profitably lease and re-lease them, and finally sell such aircraft in order to generate sufficient revenues to finance our growth and operations, pay our debt service obligations, and meet our other corporate and contractual obligations.
Existing export restrictions impact where we can place and deliver our aircraft. New export restrictions, including those implemented quickly or as a result of geopolitical events, may impact where we can place and deliver our aircraft or the ability of our lessees to operate our aircraft in certain jurisdictions, which may negatively impact our earnings and cash flows.
New export restrictions, including those implemented quickly or as a result of geopolitical events, may impact where we can place and deliver our aircraft or the ability of our lessees to operate our aircraft in certain jurisdictions, which may negatively impact our earnings and cash flows.
Risks related to concentrated exposure can include economic recessions, financial, public health and political emergencies, burdensome local regulations, trade disputes, and increased risks of requisition of our aircraft and risks of wide-ranging sanctions prohibiting us from leasing flight equipment in certain jurisdictions.
Risks related to concentrated exposure include economic recessions, financial, public health and political emergencies, burdensome local regulations, trade disputes, and increased risks of requisition of our aircraft and risks of wide-ranging sanctions prohibiting us from leasing flight equipment in certain jurisdictions.
Climate and environmental regulations may impact the types of aircraft we target for investment and the demand for certain aircraft and engine types, and could result in a significant increase in our costs and expenses and adversely affect future revenue, cash flows and financial performance.
Climate and environmental regulations may impact the types of aircraft we target for investment and the demand for certain aircraft and engine types, and could result in a significant increase in our aircraft costs and may adversely affect future revenue, cash flows and financial performance.
Upon a lessee default, we may incur significant costs in connection with repossessing our aircraft and we may be delayed in repossessing our aircraft or are unable to obtain possession of our aircraft.
Upon a lessee default, we may incur significant costs in connection with repossessing our aircraft and we may be delayed in repossessing our aircraft or may be unable to obtain possession of our aircraft.
Finally, our lessees may also be affected by aircraft accidents, in particular a loss if the aircraft is damaged or destroyed by an event for which insurance coverage is prohibited or limited. These factors could cause our lessees to incur higher costs and to generate lower revenues which could adversely affect their ability to make lease payments.
Finally, our lessees may also be affected by aircraft accidents, in particular a loss if the aircraft is damaged or destroyed by an event for which insurance coverage is excluded or limited. These factors could cause our lessees to incur higher costs and to generate lower revenues, which could adversely affect their ability to make lease payments.
In addition, lease default levels will likely increase over time if economic conditions deteriorate. A majority of our lessees received lease deferrals or other accommodations during the COVID-19 pandemic, and we may agree to deferrals, restructurings and terminations in the ordinary course of our business in the future.
In addition, lease default levels will likely increase over time if economic conditions deteriorate. In recent years, a majority of our lessees received lease deferrals or other accommodations during the COVID-19 pandemic, and we may agree to deferrals, restructurings and terminations in the ordinary course of our business in the future.
For example, as a result of the Russia-Ukraine conflict, we recorded a net write-off of our interests in our owned and managed aircraft detained in Russia totaling approximately $771.5 million for the year ended December 31, 2022. In addition, the escalating conflict between Hamas and Israel resulted in a declaration of war from Israel.
For example, as a result of the Russia-Ukraine conflict, we recorded a net write-off of our interests in our owned and managed aircraft detained in Russia totaling approximately $771.5 million for the year ended December 31, 2022. In addition, the Hamas-Israel conflict resulted in a declaration of war from Israel.
Parts of our business depend on the secure operation of our and our third-party providers’ IT systems to manage, process, store, and transmit sensitive information, including our proprietary information and that of our customers, suppliers and employees and aircraft leasing information. We have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks.
Parts of our business depend on the secure operation of our and our third-party providers’ IT systems to manage, process, store, and transmit sensitive information, including our proprietary information and that of our customers, suppliers and employees and aircraft leasing information. We have experienced threats to our data and systems, including malware and computer virus attacks.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to applicable laws or regulations prohibiting such payments. Damage or interruption to such IT systems may require significant investment to fix or replace, and we may suffer operational interruptions.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to applicable laws or regulations prohibiting such payments. Damage or interruption to such IT systems or our data may require significant investment to fix or replace, and we may suffer operational interruptions.
Future epidemic diseases and other diseases, or the fear of such events could provoke responses that negatively affect passenger air travel. Air travel has also been disrupted by the occurrence of natural disasters and other natural phenomena, such as extreme weather conditions, floods, earthquakes, and volcanic eruptions.
Future epidemic diseases and other diseases, or the fear of such events could provoke responses that negatively affect passenger air travel. Air travel has also been disrupted by the occurrence of natural disasters and other natural phenomena, such as extreme weather conditions, floods, fires, hurricanes, earthquakes, and volcanic eruptions.
In addition, legal systems in all markets in which we operate may have different liability standards, which could make it more difficult for us to enforce our legal rights in such countries, while legal systems in emerging market countries may also be less developed and less predictable.
In addition, legal systems in markets in which we operate may have different liability standards, which could make it more difficult for us to enforce our legal rights in such countries, while legal systems in emerging market countries may be less developed and less predictable.
Further, compliance with current or future regulations, fees, taxes and reporting imposed to address environmental concerns could cause our lessees to incur higher costs and to generate lower revenues, which could adversely affect their ability to make lease payments to us. 25 Table of Contents The airline industry has come under scrutiny by the press, public and investors regarding environmental impacts of air travel.
Further, compliance with current or future regulations, fees, taxes and reporting imposed to address environmental concerns could cause our lessees to incur higher costs and to generate lower revenues, which could adversely affect their ability to make lease payments to us. The airline industry has come under scrutiny by the press, public and investors regarding environmental impacts of air travel.
For the year ended December 31, 2023, more than 95% of our revenues were derived from customers who have their principal place of business outside the U.S. and most leases designated payment currency is U.S. dollars.
For the year ended December 31, 2024, more than 95% of our revenues were derived from customers who have their principal place of business outside the U.S. and most leases designated payment currency is U.S. dollars.
As a result of airframe and engine delays, our orderbook delivery schedule could continue to be subject to material changes and delivery delays are expected to extend beyond 2024. Our leases and purchase agreements with Airbus and Boeing typically provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause.
As a result of airframe and engine delays, our orderbook delivery schedule could continue to be subject to material changes and delivery delays are expected to extend beyond 2025. Our leases and purchase agreements with Airbus and Boeing typically provide for cancellation rights starting at one year after the contractual delivery date, regardless of cause.
Remote work by our employees also increases risks to our IT systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home and while traveling.
Remote work by our employees also increases risks to our IT systems and data, as our employees utilize network connections, computers and devices outside our premises or network, including working at home and while traveling.
Due to the competitive nature of the aviation industry, operators may be unable to pass on increases in fuel prices to their customers by increasing fares in a manner that fully offsets increased fuel costs. In addition, they may not be able to manage this risk by appropriately hedging their 24 Table of Contents exposure to fuel price fluctuations.
Due to the competitive nature of the aviation industry, operators may be unable to pass on increases in fuel prices to their customers by increasing fares in a manner that fully offsets increased fuel costs. In addition, they may not be able to manage this risk by appropriately hedging their exposure to fuel price fluctuations.
This exclusive forum provision is intended to apply to claims arising under Delaware state law and would not apply to claims brought pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) or Securities Act of 1933 (the “Securities Act”), each as amended, or any other claim for which the federal courts have exclusive jurisdiction.
This exclusive forum provision is intended to apply to claims arising under Delaware state law and 27 Table of Contents would not apply to claims brought pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) or Securities Act of 1933 (the “Securities Act”), each as amended, or any other claim for which the federal courts have exclusive jurisdiction.
As of December 31, 2023, we had two aircraft in our owned fleet on lease to one customer in Israel and a limited number of customers who operate aircraft in the region.
As of December 31, 2024, we had two aircraft in our owned fleet on lease to one customer in Israel and a limited number of customers who operate aircraft in the region.
Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, could increase our borrowing costs and limit our access to the capital markets, which may adversely impact our net income and/or our ability to compete in the marketplace.
Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, could increase our borrowing costs and limit our access to the capital markets, including our commercial paper program which may adversely impact our net income and/or our ability to compete in the marketplace.
We could also incur other costs in connection with the physical possession of the aircraft. 19 Table of Contents When a lessee fails to fulfill their obligations under the lease or enters into bankruptcy proceedings, the lessee may not make lease payments or may return aircraft to us before the lease expires.
We could also incur other costs in connection with the physical possession of the aircraft. When a lessee fails to fulfill their obligations under the lease or enters into bankruptcy proceedings, the lessee may not make lease payments or may return aircraft to us before the lease expires.
Moreover, as our aircraft are operated by our lessees in multiple states and foreign jurisdictions, we may have nexus or taxable presence as a result of our aircraft landings in various states or foreign jurisdictions. Such landings may result in us being subject to various foreign, state and local taxes in such states or foreign jurisdictions.
Moreover, because our aircraft are operated by our lessees in multiple states and foreign jurisdictions, we may have nexus or taxable presence as a result of our aircraft landings in such states or foreign jurisdictions, which may result in our being subject to various foreign, state and local taxes in such jurisdictions .
Applicable data privacy and security obligations may also require us to notify relevant stakeholders of cyberattacks or make disclosures to applicable regulatory bodies. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
Applicable data privacy and security obligations require us to notify relevant stakeholders of certain cyberattacks or make disclosures to applicable regulatory bodies. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
This can result in economic and political instability which could negatively affect the ability of our lessees to meet their lease obligations leading to higher default rates, which could cause us to record asset write-offs.
This can result in economic and political instability which could negatively affect the ability of our lessees to meet their 24 Table of Contents lease obligations leading to higher default rates, which could cause us to record asset write-offs.
The exclusive 27 Table of Contents forum provision in our amended and restated bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
The exclusive forum provision in our amended and restated bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
Some of our lessees have defaulted on their lease obligations or filed for bankruptcy or otherwise sought protection from creditors (collectively referred to as “bankruptcy”). One of our lessees is subject to bankruptcy proceedings as of February 15, 2024 and lessee bankruptcies may increase in the future.
Some of our lessees have defaulted on their lease obligations or filed for bankruptcy or otherwise sought protection from creditors (collectively referred to as “bankruptcy”). One of our lessees is subject to bankruptcy proceedings as of February 13, 2025 and lessee bankruptcies may increase in the future.
Our inability to compete successfully with our competitors may impact our ability to execute our long-term strategy. Our lessees may fail to adequately insure our aircraft or fulfill their indemnity obligations, or we may not be able to adequately insure our aircraft, which may result in increased costs and liabilities.
Our inability to compete successfully with our competitors may impact our ability to execute our long-term strategy. 20 Table of Contents Our lessees may fail to adequately insure our aircraft or fulfill their indemnity obligations, or we may not be able to adequately insure our aircraft, which may result in increased costs and liabilities.
While we believe 20 Table of Contents our insurance is adequate both as to coverages and amounts based on industry standards in the current market, we cannot assure you that we are adequately insured against all risks and in all territories in which our aircraft operate.
While we believe our insurance is adequate both as to coverages and amounts based on industry standards in the current market, we cannot assure you that we are adequately insured against all risks and in all territories in which our aircraft operate.
If we are unable to complete the sales of such aircraft on the timeline anticipated, or at all, it could impact our net income and may lead us to use alternative sources of liquidity to fund our operations such as additional capital markets issuances or borrowings under our credit facilities.
Our inability to complete the sales of such aircraft on the timeline anticipated, or at all, it could impact our net income and may lead us to use alternative sources of liquidity to fund our operations such as additional capital markets issuances or borrowings under our credit facilities.
Further, any changes in tax laws in any of the jurisdictions that subject us to income or other taxes, such as increases in tax rates or limitations on our ability to deduct certain expenses from taxable income, such as depreciation expense and interest expense, could materially affect our tax obligations and effective tax rate.
Further, any changes in tax laws in any of the jurisdictions in which we are subject to income or other taxes, such as increases in tax rates or limitations on our ability to deduct certain expenses from taxable income, such as depreciation expense and interest expense, could materially affect our tax obligations and effective tax rate.
We could also incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs when necessary to put the aircraft in suitable condition for remarketing or sale.
We could also incur substantial maintenance, refurbishment or repair costs if a defaulting lessee fails to pay such costs when necessary to put the aircraft in suitable condition for remarketing or 19 Table of Contents sale.
Increases in production levels could result in an oversupply of relatively new aircraft if growth in airline traffic does not meet airline industry expectations.
Increases in 23 Table of Contents production levels could result in an oversupply of relatively new aircraft if growth in airline traffic does not meet airline industry expectations.
A cyberattack could adversely impact our daily operations and lead to the loss of sensitive information, including our proprietary information and that of our customers, suppliers and employees. Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, reputational harm, interruptions in our operations, additional costs and liabilities.
A cyberattack could adversely impact our operations and lead to the loss of sensitive information, including our proprietary information and that of our customers, suppliers and employees. Such losses could result in material adverse consequences, such as competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, reputational harm, interruptions in our operations, additional costs and liabilities.
For example, the CCPA, which applies to business representative and other types of personal data of California residents, provides for civil penalties of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
For example, the CCPA, which applies to business representative and other types of personal data of California residents, provides for civil penalties and allows private litigants affected by certain data breaches to recover significant statutory damages.
Growing our fleet will require us to obtain substantial capital through additional financing, which may not be available to us on favorable terms or at all. As of December 31, 2023, we had 334 new aircraft on order with an estimated aggregate purchase price of approximately $21.7 billion.
Growing our fleet will require us to obtain substantial capital through additional financing, which may not be available to us on favorable terms or at all. As of December 31, 2024, we had 269 new aircraft on order with an estimated aggregate purchase price of approximately $17.1 billion.
In particular, severe ransomware 21 Table of Contents attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive information and income, reputational harm, and diversion of funds.
Laws, regulations and other obligations (including applicable guidance, industry standards, external and internal privacy and security policies and contractual requirements) relating to personal data constantly evolve, as federal, state and foreign governments continue to adopt new measures addressing data privacy and processing (including collection, storage, transfer, disposal, disclosure, security and use) of personal data, and the interpretation and application of many existing privacy and data protection laws and regulations in the U.S.
Laws, regulations and other obligations (including applicable guidance, industry standards, external and internal privacy and security policies and contractual requirements) relating to personal data constantly evolve, as federal, state and foreign governments continue to adopt new measures addressing data privacy and processing (including collection, storage, transfer, disposal, disclosure, security and use) of personal data.
As of December 31, 2023, our total consolidated indebtedness, net of discounts and issuance costs, was approximately $19.2 billion and our interest payments were approximately $693.8 million for the year ended December 31, 2023. We expect these amounts to grow as we acquire more aircraft.
As of December 31, 2024, our total consolidated indebtedness, net of discounts and issuance costs, was approximately $20.2 billion and our interest payments were approximately $794.3 million for the year ended December 31, 2024. We expect these amounts to grow as we acquire more aircraft.
Privacy-related claims or lawsuits initiated by governmental bodies, customers or other third parties, irrespective of the merits, could be time consuming, result in costly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), litigation (including class action claims) or mass arbitration demands, penalties and fines, require us to change our business practices or cause business interruptions and may lead to administrative, civil, or criminal liability.
Privacy-related claims or lawsuits initiated by governmental bodies, customers or other third parties (including class action claims), costly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), or mass arbitration demands, penalties and fines, require us to change our business practices or cause business interruptions and may lead to administrative, civil, or criminal liability.
After a sustained period of relatively low inflation rates, current rates of inflation are above or near recent historical highs in the United States, the European Union, the United Kingdom and other countries. High rates of inflation may have a number of adverse effects on our business.
After a sustained period of relatively low inflation rates, current rates of inflation are above long-term targets in the United States, the European Union, the United Kingdom and other countries. High rates of inflation may have a number of adverse effects on our business.
For example, we have experienced ongoing delivery delays of Airbus and Boeing aircraft and have been advised delays could extend through 2028. Additionally, recent events surrounding the 737-9 MAX and the FAA’s increased oversight of Boeing’s quality control procedures and constraints placed on 737 MAX program production may result in further delivery delays.
For example, we have experienced ongoing delivery delays of Airbus and Boeing aircraft and have been advised delays could extend through 2029. Additionally, recent events, including the Boeing labor strike and the FAA’s increased oversight of Boeing’s quality control procedures and constraints placed on 737 MAX program production have resulted in further delivery delays.
Such interests involve significant risks that may not be present with other methods of ownership, including that: • we may not realize a satisfactory return on our investment; • the investment may divert management’s attention from our core business; • our investment partners could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments; • our investment partners may fail to fund their share of required capital contributions or fulfill their other obligations; and • our investment partners may have competing interests in our markets that could create conflict of interest issues, particularly if aircraft owned by the applicable investment entity are being marketed for lease or sale at a time when we also have comparable aircraft available for lease or sale. 22 Table of Contents The agreements governing these entities typically provide the non-managing investment partner certain veto rights over various significant actions and the right to remove us as the manager under certain circumstances.
Such interests involve significant risks that may not be present with other methods of ownership, including that: • we may not realize a satisfactory return on our investment; • the investment may divert management’s attention from our core business; 22 Table of Contents • our investment partners could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments; • our investment partners may fail to fund their share of required capital contributions or fulfill their other obligations; and • our investment partners may have competing interests in our markets that could create conflict of interest issues, particularly if aircraft owned by the applicable investment entity are being marketed for lease or sale at a time when we also have comparable aircraft available for lease or sale.
Moreover, if interest rates continue to rise sharply, we will not be able to immediately offset the negative impact on our net income by increasing lease rates, even if the market were able to bear the increased lease rates.
Moreover, if interest rates remain elevated, we will be unable to immediately offset the negative impact on our net income by increasing lease rates, even if the market were able to bear the increased lease rates.
Various countries, including the United States and the European Union, have announced sustainability initiatives to reduce carbon emissions, explore sustainable aviation fuels, require tracking and disclosure of emissions metrics, or the establishment of sustainability measures and targets.
Various jurisdictions have announced sustainability initiatives to reduce carbon emissions, explore sustainable aviation fuels, require tracking and disclosure of emissions metrics, or the establishment of sustainability measures and targets.
We may experience the death, incapacity or departure of one of our key officers which may negatively impact our business. We believe that our senior management’s reputation and relationships with lessees, manufacturers, buyers and financiers of aircraft are a critical element to the success of our business.
We may experience the death, incapacity or departure of one of our key officers which may negatively impact our business. We believe our senior management’s reputation and relationships with lessees, manufacturers, buyers and financiers of aircraft are a critical element to our business. We depend on the diligence, skill and network of business contacts of our management team.
Failure to complete our planned aircraft sales could affect our net income and may lead us to use alternative sources of liquidity. Proceeds from the sale of aircraft in our owned portfolio help to supplement our liquidity position and contribute to our net income. We currently expect to sell approximately $1.5 billion in aircraft for the full year 2024.
Failure to complete our planned aircraft sales could affect our net income and may lead us to use alternative sources of liquidity. Proceeds from aircraft sales in our owned portfolio help supplement our liquidity position, contribute to our net income and improve our debt-to-equity ratio. We currently expect to sell approximately $1.5 billion in aircraft in 2025.
As of December 31, 2023, we had entered into binding purchase commitments to acquire a total of 334 new aircraft for delivery through 2028.
As of December 31, 2024, we had entered into binding purchase commitments to acquire a total of 269 new aircraft for delivery through 2029.
As a result, increased tariffs will result in a higher cost for imported aircraft that our lessees may not be willing to assume and which could adversely impact demand for aircraft, creating an oversupply of aircraft and potentially placing downward pressure on lease rates and aircraft market values. For example, in October 2019, the Office of the U.S.
As a result, increased tariffs will result in a higher cost for imported aircraft that our lessees may not be willing to assume and which could adversely impact demand for aircraft, creating an oversupply of aircraft and potentially placing downward pressure on lease rates and aircraft market values. Tariffs could also increase our costs for aircraft components that we purchase.
We operate in multiple jurisdictions and may become subject to a wide range of income and other taxes. If we are unable to execute our business in jurisdictions with favorable tax treatment, our operations may be subject to significant income and other taxes.
We operate in multiple jurisdictions, the income and other tax regimes of which may be unsettled and subject to change. If we are unable to execute our business in jurisdictions with favorable tax treatment, our operations may be subject to significant income and other taxes.
We finance our business through a combination of short-term and long-term debt financings, with most bearing interest at a fixed rate and some bearing interest at a floating rate. As of December 31, 2023, we had $16.4 billion of fixed rate debt and $3.0 billion of floating rate debt outstanding.
We finance our business through a combination of short-term and long-term debt financings predominantly at fixed rate. As of December 31, 2024, we had $16.1 billion of fixed rate debt and $4.3 billion of floating rate debt outstanding.
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%. In November 2020, the E.U. announced a 15% tariff on new aircraft imported into the E.U. from the U.S., including Boeing aircraft.
For example, in October 2019, the U.S. announced a 10% tariff on new aircraft imported from Europe, including Airbus aircraft which was raised to 15% in March 2020. In November 2020, the E.U. announced a 15% tariff on new aircraft imported into the E.U. from the U.S., including Boeing aircraft.
Nevertheless, despite these contractual waivers, competing with our fleet management clients in practice may result in strained relationships with them. Any conflicts of interest that arise between us and the clients which utilize our fleet management services may result in legal challenges or reputational harm to our business.
Any conflicts of interest that arise between us and the clients which utilize our fleet management services may result in legal challenges or reputational harm to our business.
Inflation may increase the costs of goods, services and labor used in our operations, thereby increasing our expenses. Because the majority of our income is derived from leases with fixed rates of payment, high rates of inflation will cause a greater decrease in the value of those payments than had the rates of inflation remained lower.
Because the majority of our income is derived from leases with fixed rates of payment, high rates of inflation will cause a greater decrease in the value of those payments than had the rates of inflation remained lower.
Oversupply may produce sharp and prolonged decreases in market lease rates and residual values and may affect our ability to remarket or sell at a profit, or at all, some of the aircraft in our fleet which would impact our earnings and cash flows. 23 Table of Contents Export restrictions and tariffs may impact where we can place and deliver our aircraft and negatively impact our ability to execute on our long-term strategy.
Oversupply may produce sharp and prolonged decreases in market lease rates and residual values and may affect our ability to remarket or sell at a profit, or at all, some of the aircraft in our fleet which would impact our earnings and cash flows.
We also separately require our lessees to obtain specified levels of insurance customary in the aviation industry and indemnify us for, and insure against, liabilities arising out of the lessee’s use and operation of the aircraft.
For example, Russia, Ukraine, Belarus and Crimea are now generally excluded from coverage in our contingent liability, contingent hull and contingent hull war insurance. We also separately require our lessees to obtain specified levels of insurance customary in the aviation industry and indemnify us for, and insure against, liabilities arising out of the lessee’s use and operation of the aircraft.
A cyberattack could lead to a material disruption of our information technology (“IT”) systems or the IT systems of our third-party providers and the loss of business information, which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.
If we were to lose the services of any of the members of our senior management team, it may negatively impact our business. 21 Table of Contents A cyberattack or other interruption could lead to a material disruption of our information technology (“IT”) systems or the IT systems of our third-party providers and the loss of information, which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.
Disruptions due to natural disasters may become more frequent or severe because of climate change. Terrorist attacks, war or armed hostilities between countries or non-state actors, including the fear of such events may adversely affect our business and financial condition.
Terrorist attacks, war or hostilities between countries or non-state actors, including the fear of such events may adversely affect our business and financial condition.
In addition, a manufacturing flaw impacting certain Pratt & Whitney engines is resulting in accelerated engine removal and incremental shop visits, which may result in delivery delays of these engines for new aircraft.
In addition, the ongoing impact from Pratt & Whitney GTF engine manufacturing flaws is resulting in accelerated engine removal and incremental shop visits, which have resulted and may continue to result in delivery delays of these engines for new aircraft.
To the extent such changes are within the United States, we may be disproportionately impacted as compared to our competitor aircraft lessors. For example, certain provisions of the Tax Cuts and Jobs Act that phased into effect in 2022 limit our ability to deduct interest expense from taxable income in future financial statements.
For example, certain provisions of the Tax Cuts and Jobs Act that phased into effect in 2022 limit our ability to deduct interest expense from taxable income in future financial statements.
Increased interest rates prevailing in the market at the time of our incurrence of new debt will also increase our interest expense.
Treasury rates and SOFR, as applicable, changes in credit spreads, and the duration of the debt being issued. Increased interest rates prevailing in the market at the time of our incurrence of new debt will also increase our interest expense.
Plueger, our Chief Executive Officer and President; and our other senior officers, each of whose services are critical to the success of our business strategies. We do not have employment agreements with Mr. Udvar-Házy or Mr. Plueger for their services at Air Lease Corporation, although one of our Irish subsidiaries has limited duration employment agreements under which Mr.
We do not have employment agreements with Mr. Udvar-Házy or Mr. Plueger for their services at Air Lease Corporation, although one of our Irish subsidiaries has limited duration employment agreements under which Mr. Udvar-Házy and Mr. Plueger may terminate their employment at any time.
(including the California Consumer Privacy Act, as amended (“CCPA”)), Europe (including the E.U.’s General Data Protection Regulation) and elsewhere impose stringent obligations.
The interpretation and application of many existing privacy and data protection laws and regulations in the U.S. (including the California Consumer Privacy Act, as amended (“CCPA”)), Europe (including the E.U.’s General Data Protection Regulation) and elsewhere impose stringent obligations on processing personal data and impose significant fines.
We depend on the diligence, skill and network of business contacts of our management team. Our future success will depend, to a significant extent, upon the continued service of our senior management team, particularly: Mr. Udvar-Házy, our founder, and Executive Chairman of the Board; Mr.
Our future success will depend, to a significant extent, upon the continued service of our senior management team, particularly: Mr. Udvar-Házy, our founder, and Executive Chairman of the Board; Mr. Plueger, our Chief Executive Officer and President; and our other senior officers, each of whose services are critical to the success of our business strategies.
As of December 31, 2023, we had concentrated customer exposure with our top five lessees by net book value, listed below under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Fleet”, and we also had approximately 6.8% of our aircraft by net book value on lease to lessees located in China.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Fleet” and we also had approximately 7.8% and 2.5% of our aircraft by net book value on lease to lessees located in Taiwan and China, respectively.
Conflicts of interest between us and clients utilizing our fleet management services could arise which may result in legal challenges or reputational harm. Conflicts of interest may arise between us and customers from our managed business who hire us to perform fleet management services such as leasing, acquisition and sales services.
Conflicts of interest may arise between us and customers from our managed business who hire us to perform fleet management services such as leasing, acquisition and sales services. These conflicts may arise because services we provide for these clients are also services which we provide for our own fleet, including placement of aircraft with lessees.
If we were to be removed as the manager from a managed fleet portfolio, our reputation may be harmed and we would lose the benefit of future management fees.
The agreements governing these entities typically provide the non-managing investment partner certain veto rights over various significant actions and the right to remove us as the manager under certain circumstances. If we were to be removed as the manager from a managed fleet portfolio, our reputation may be harmed and we would lose the benefit of future management fees.
Risks and requirements related to transacting business in foreign countries may result in increased liabilities including penalties and fines as well as reputational harm. Our international operations expose us to trade and economic sanctions and other restrictions imposed by the United States or other governments or organizations. The U.S.
Our international operations expose us to trade and economic sanctions and other restrictions imposed by the United States or other governments or organizations. The U.S.
Further, the base erosion and profit shifting (“BEPS”) project that was undertaken by the Organization for Economic Cooperation and Development (“OECD”), a coalition of member countries, could result in changes in the tax laws of many of the foreign jurisdictions in which we do business, including Ireland and Hong Kong.
Further, our tax obligations and effective tax rate could increase as a result of international tax developments, including the implementation of the base erosion and profit shifting (“BEPS”) project that was led by the Organization for Economic Cooperation and Development (“OECD”), a coalition of member countries.
We currently do not expect these changes to have a material impact on our financial position; however, we will continue to evaluate the impact as further information becomes available. Environmental regulations, fees, taxes and reporting, and other concerns may negatively affect demand for our aircraft, reduce travel and ultimately impact the operating results of our customers.
Environmental regulations, fees, taxes and reporting, and other concerns may negatively affect demand for our aircraft, reduce travel and ultimately impact the operating results of our customers.
These vulnerabilities pose material risks to our business. Further, we may experience delays in developing and deploying remedial measures designed to address identified vulnerabilities. A cyberattack leading to a disruption of our IT systems or of those of our third-party providers may negatively affect our ability to conduct our business effectively and may result in lost revenues and additional costs.
A cyberattack leading to a disruption of our IT systems or of those of our third-party providers may negatively affect our ability to conduct our business effectively and may result in lost revenues and additional costs. Conflicts of interest between us and clients utilizing our fleet management services could arise which may result in legal challenges or reputational harm.
These conflicts may arise because services we provide for these clients are also services which we provide for our own fleet, including placement of aircraft with lessees. Our current fleet management services agreements provide that we will use our reasonable commercial efforts in providing services.
Our current fleet management services agreements provide that we will use our reasonable commercial efforts in providing services. Nevertheless, despite these contractual waivers, competing with our fleet management clients in practice may result in strained relationships with them.
In June 2021, the U.S. and the E.U. agreed to temporarily suspend all retaliatory tariffs related to new aircraft imports for five years. We cannot predict what further actions may ultimately be taken with respect to export controls, tariffs or trade relations between the U.S. and other countries.
As of December 31, 2024, approximately 5% of our total commitments are future Boeing placements to lessees in Mexico, Canada and China. We cannot predict what further actions may ultimately be taken with respect to export controls, tariffs or trade relations between the U.S. and other countries.
Interest rates that we obtain on our debt financings can fluctuate based on, among other things, changes in views of our credit risk, fluctuations in U.S. Treasury rates and SOFR, as applicable, changes in credit spreads, and the duration of the debt being issued.
Persistently elevated interest rates in 2024 increased our borrowing costs, with our composite cost of funds increasing from 3.77% at December 31, 2023 to 4.14% at December 31, 2024. Interest rates that we obtain on our debt financings can fluctuate based on, among other things, changes in views of our credit risk, fluctuations in U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also employ a range of tools and services, depending on the environment, including network and endpoint monitoring, vulnerability assessments, penetration testing and tabletop exercises, to inform our cybersecurity risk identification and assessment.
Biggest changeWe also employ a range of tools and services, depending on the environment, including network and endpoint monitoring, vulnerability assessments, penetration testing and tabletop exercises, to inform our cybersecurity risk identification and assessment. We use third-party service providers to perform a variety of functions throughout our business, such as professional services firms and cybersecurity software providers.
Our Head of Information Technology reports directly to our Chief Financial Officer. For a description of the risks from cybersecurity threats that are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, and how they may do so, see our risk factors under Part 1. Item 1A.
Our Head of Information Technology reports directly to our Chief Financial Officer. For a description of the risks from cybersecurity threats that may materially affect us, including our business strategy, results of operations or financial condition, and how they may do so, see our risk factors under Part 1. Item 1A.
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Depending on the nature of the services provided and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table shows the scheduled lease terminations (for the minimum non-cancellable period which does not include contracted unexercised lease extension options) of our owned fleet as of December 31, 2023: Aircraft Type 2024 2025 2026 2027 2028 Thereafter Total Airbus A220-100 — — — — — 2 2 Airbus A220-300 — — — — — 13 13 Airbus A319-100 — 1 — — — — 1 Airbus A320-200 2 8 3 2 2 11 28 Airbus A320-200neo — — — 4 4 17 25 Airbus A321-200 — 5 9 2 6 1 23 Airbus A321-200neo — — 2 7 8 78 95 Airbus A330-200 2 1 2 — 2 6 13 Airbus A330-300 — 3 1 — — 1 5 Airbus A330-900neo — — 1 — — 22 23 Airbus A350-900 — — 1 1 1 11 14 Airbus A350-1000 — — — — — 7 7 Boeing 737-700 1 2 — — — — 3 Boeing 737-800 3 20 21 13 4 12 73 Boeing 737-8 MAX — 13 — 1 1 37 52 Boeing 737-9 MAX — — — — — 29 29 Boeing 777-200ER — 1 — — — — 1 Boeing 777-300ER — 2 9 4 6 3 24 Boeing 787-9 — — 1 2 3 19 25 Boeing 787-10 — — — — — 6 6 Embraer E190 — 1 — — — — 1 Total 8 57 50 36 37 275 463 30 Table of Contents Commitments As of December 31, 2023, we had committed to purchase the following new aircraft at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $21.7 billion for delivery as shown below.
Biggest changeThe following table shows the scheduled lease terminations (for the minimum non-cancellable period which does not include contracted unexercised lease extension options) of our owned fleet as of December 31, 2024: Aircraft Type 2025 2026 2027 2028 2029 Thereafter Total Airbus A220-100 — — — — — 7 7 Airbus A220-300 — — 2 — — 20 22 Airbus A320-200 8 3 1 — 1 10 23 Airbus A320-200neo — — 3 4 3 13 23 Airbus A321-200 1 4 3 6 5 — 19 Airbus A321-200neo — 1 6 7 10 84 108 Airbus A330-200 2 2 — 1 7 1 13 Airbus A330-300 1 1 1 1 1 — 5 Airbus A330-900neo — 1 — — 1 26 28 Airbus A350-900 — 1 1 1 — 14 17 Airbus A350-1000 — — — — — 8 8 Boeing 737-700 2 — — — — — 2 Boeing 737-800 11 14 11 9 8 8 61 Boeing 737-8 MAX — 2 2 4 1 50 59 Boeing 737-9 MAX — — — — 1 29 30 Boeing 777-200ER — — 1 — — — 1 Boeing 777-300ER 1 9 4 6 1 3 24 Boeing 787-9 — 1 2 3 2 18 26 Boeing 787-10 — — — — — 12 12 Embraer E190 — — — — — 1 1 Total 26 39 37 42 41 304 489 Commitments As of December 31, 2024, we had committed to purchase the following new aircraft at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $17.1 billion for delivery as shown below.
New Aircraft Placements 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 December 31, 2023, along with the lease placements of such aircraft as of February 15, 2024.
New Aircraft Placements The following table, which is subject to change based on Airbus and Boeing delivery delays, shows the number of new aircraft expected to be delivered as of December 31, 2024, along with the lease placements of such aircraft as of February 13, 2025.
Our aircraft delivery schedule could continue to be subject to material changes, and delivery delays are expected to extend beyond 2024. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays, but we are not yet able to determine the full impact of these delays. See “Item 7.
Our aircraft delivery schedule could continue to be subject to material changes, and delivery delays are expected to extend beyond 2025. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays, but we are currently unable to determine the full impact of these delays. See “Item 7.
ITEM 2. PROPERTIES Flight Equipment As of December 31, 2023, we owned 463 aircraft, comprised of 345 narrowbody aircraft and 118 widebody aircraft. Our fleet has a weighted average age of 4.6 years.
ITEM 2. PROPERTIES Flight Equipment As of December 31, 2024, we owned 489 aircraft, comprised of 355 narrowbody aircraft and 134 widebody aircraft. Our fleet has a weighted average age of 4.6 years.
The table is subject to change based on Airbus and Boeing delivery delays. As noted below, we expect delivery delays for some aircraft in our orderbook. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays; however, we are not yet able to determine the full impact of these delays. See “Item 7.
The tables are subject to change based on Airbus and Boeing delivery delays. As noted below, we expect delivery delays for most of the aircraft in our orderbook. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays; however, we are currently unable to determine the full impact of these delays.
While we actively seek lease placements for all aircraft in our orderbook, in making our lease placement decisions, we also take into consideration the anticipated growth in the aircraft leasing market and anticipated improvements in lease rates, which could lead us to determine that entering into particular lease arrangements at a later date would be more beneficial to us. 31 Table of Contents Facilities We lease our principal executive office at 2000 Avenue of the Stars, Suite 1000N, Los Angeles, California 90067, USA.
While we actively seek lease placements for all aircraft in our orderbook, in making our lease placement decisions, we also take into consideration the anticipated growth in the aircraft leasing market and anticipated improvements in lease rates, which could lead us to determine that entering into particular lease arrangements at a later date would be more beneficial to us.
We also lease offices in Hong Kong and Dallas, Texas and own our office in Dublin, Ireland. We believe our current facilities are adequate for our current needs and for the foreseeable future.
Facilities We lease our principal executive office at 2000 Avenue of the Stars, Suite 1000N, Los Angeles, California 90067, USA. We also lease offices in Hong Kong and Dallas, Texas and own our office in Dublin, Ireland. We believe our current facilities are adequate for our current needs and for the foreseeable future.
Estimated Delivery Years Aircraft Type 2024 2025 2026 2027 2028 Thereafter Total Airbus A220-100/300 19 10 18 14 — — 61 Airbus A320/321neo (1) 21 13 40 40 38 — 152 Airbus A330-900neo 6 1 — — — — 7 Airbus A350-900/1000 4 — — — — — 4 Airbus A350F — — — 4 3 — 7 Boeing 737-7/8/9 MAX 31 32 16 — 2 — 81 Boeing 787-9/10 11 10 1 — — — 22 Total (2) 92 66 75 58 43 — 334 (1) Our Airbus A320/321neo aircraft orders include 11 long-range variants and 49 extra long-range variants.
Expected commitment schedule Estimated Delivery Years Aircraft Type 2025 2026 2027 2028 2029 Thereafter Total Airbus A220-100/300 14 2 12 15 3 — 46 Airbus A320/321neo (1) 4 25 47 48 7 — 131 Airbus A330-900neo — 1 — — — — 1 Airbus A350F — — 1 5 1 — 7 Boeing 737-8/9 MAX 20 21 25 4 — — 70 Boeing 787-9/10 8 5 1 — — — 14 Total 46 54 86 72 11 — 269 (1) Our Airbus A320/321neo aircraft orders include seven long-range variants and 49 extra long-range variants.
(2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation.
(2) The table above reflects Airbus and Boeing aircraft delivery delays based on contractual documentation. The table below reflects management’s further refinement of expectations on future deliveries based on facts and circumstances known by management as of February 13, 2025.
Delivery Year Total number of lease placements Number of aircraft in our orderbook % Leased 2024 92 92 100.0 % 2025 66 66 100.0 % 2026 42 75 56.0 % 2027 17 58 29.3 % 2028 — 43 — % Thereafter — — — % Total 217 334 Our lease commitments for all of the lease placements noted in the table above, except five aircraft delivering in 2026, are binding leases.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Our Fleet — Aircraft Delivery Delays” for more information. 31 Table of Contents Delivery Year Total number of lease placements Number of aircraft in our orderbook % Leased 2025 46 46 100.0 % 2026 54 54 100.0 % 2027 58 86 67.4 % 2028 8 72 11.1 % 2029 — 11 — % Thereafter — — — % Total 166 269 Our lease commitments for all of the lease placements noted in the table above are binding leases except for two aircraft delivering in 2027.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Our Fleet — Aircraft Delivery Delays” for more information.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Our Fleet — Aircraft Delivery Delays” for more information. 30 Table of Contents Contractual commitment schedule Estimated Delivery Years Aircraft Type 2025 2026 2027 2028 2029 Thereafter Total Airbus A220-100/300 14 6 12 12 2 — 46 Airbus A320/321neo (1) 7 23 57 40 4 — 131 Airbus A330-900neo — 1 — — — — 1 Airbus A350F — — 2 4 1 — 7 Boeing 737-7/8/9 MAX 27 20 21 2 — — 70 Boeing 787-9/10 8 5 1 — — — 14 Total (2) 56 55 93 58 7 — 269 (1) Our Airbus A320/321neo aircraft orders include seven long-range variants and 49 extra long-range variants.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Our Fleet — Aircraft Delivery Delays” for more information.
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Our expected delivery schedule is subject to a number of factors outside our control, including ongoing delays by Airbus and Boeing for certain aircraft, and we cannot guarantee delivery of any particular aircraft at any specific time notwithstanding our expected commitment schedule. For more information on the risks and uncertainties impacting our aircraft deliveries, see “Part I—Item 1A.
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Risk Factors” in this Annual Report on Form 10-K.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently a party to any enforcement proceedings or litigation related to regulatory compliance matters. 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.
Biggest changeWe are not presently a party to any enforcement proceedings or litigation related to 32 Table of Contents regulatory compliance matters. 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.
On January 19, 2024, certain of the Plaintiffs filed suit in the High Court of Justice, Business & Property Courts of England & Wales, Commercial Court against the Russian airlines’ aviation insurers and reinsurance insurers (collectively, the “Airlines’ Insurers”) seeking recovery under the Russian airlines’ insurance policies for aircraft that remain in Russia.
On January 19, 2024, certain of the Plaintiffs filed suit in the High Court of Justice, Business & Property Courts of England & Wales, Commercial Court against the Russian airlines’ aviation insurers and reinsurance insurers (collectively, the “Airlines’ Insurers”) seeking recovery under the Russian airlines’ insurance policies for certain aircraft that remain in Russia.
On December 20, 2022, the Plaintiffs filed suit in the Los Angeles County Superior Court of the State of California seeking recovery of actual damages (subject to proof at trial) and declaratory relief against the Plaintiffs’ Insurers for breach of contract and breach of the covenant of good faith and fair dealing in connection with the Plaintiffs’ previously submitted insurance claims for which a trial date has been set for April 17, 2025.
On December 20, 2022, the Plaintiffs filed suit in the Los Angeles County Superior Court of the State of California seeking recovery of actual damages (subject to proof at trial) and declaratory relief against the Plaintiffs’ Insurers for breach of contract and breach of the covenant of good faith and fair dealing in connection with the Plaintiffs’ previously submitted insurance claims for which a jury trial has been set for April 17, 2025.
The lawsuit against the Airlines’ Insurers is in the early stages and no trial date has been set.
The lawsuit against the Airlines’ Insurers remains in the early stages and no trial date has been set.
Added
Fact and expert discovery are complete. In November 2024, certain Plaintiffs’ Insurers filed motions for summary judgment, which the Plaintiffs opposed in December 2024. A hearing on these motions for summary judgment is set for February 20, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe dividend will be paid on April 10, 2024 to holders of record of Class A common stock as of March 15, 2024. Performance Graph The graph below compares the 5-year cumulative return of the Company’s Class A common stock, the S&P Midcap 400 Index, the Company’s 2022 custom benchmark group and the Company’s 2023 custom benchmark group.
Biggest changePerformance Graph The graph below compares the 5-year cumulative return of the Company’s Class A common stock, the S&P Midcap 400 Index, the S&P SmallCap 600 Index, the Company’s 2023 custom benchmark group and the Company’s 2024 custom benchmark group.
The stock price performance shown in the graph is not necessarily indicative of future stock price performance. 33 Table of Contents Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 December 31, 2023 The foregoing Performance Graph does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by the Company (including any future filings) under the Securities Act, or the Exchange Act, except to the extent the Company specifically incorporates such report by reference therein.
The stock price performance shown in the graph is not necessarily indicative of future stock price performance. 34 Table of Contents Comparison of 5 Year Cumulative Total Return Assumes Initial Investment of $100 December 31, 2024 The foregoing Performance Graph does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by the Company (including any future filings) under the Securities Act, or the Exchange Act, except to the extent the Company specifically incorporates such report by reference therein.
Dividends The following table sets forth the dividends declared on the Company’s outstanding Class A common stock for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Dividends declared per share $ 0.81 $ 0.755 $ 0.665 The board of directors approved quarterly cash dividends on the Company’s outstanding Class A common stock in 2023 and expects to continue approving a comparable quarterly cash dividend on the Company’s outstanding Class A common stock for the foreseeable future.
Dividends The following table sets forth the dividends declared on the Company’s outstanding Class A common stock for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Dividends declared per share $ 0.85 $ 0.81 $ 0.755 The board of directors approved quarterly cash dividends on the Company’s outstanding Class A common stock in 2024 and expects to continue approving a comparable quarterly cash dividend on the Company’s outstanding Class A common stock for the foreseeable future.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our Class A common stock, the 2022 custom benchmarking group, the 2023 custom benchmarking group and the S&P Midcap 400 Index on December 31, 2018, and the relative performance of each is tracked through December 31, 2023.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our Class A common stock, the 2023 custom benchmarking group, the 2024 custom benchmarking group, the S&P Midcap 400 Index and S&P SmallCap 600 Index on December 31, 2019, and the relative performance of each is tracked through December 31, 2024.
However, the Company’s cash dividend policy can be changed at any time at the discretion of the Company’s board of directors. On February 13, 2024, the Company’s board of directors approved a quarterly cash dividend of $0.21 per share on the Company’s outstanding Class A common stock.
However, the Company’s cash dividend policy can be changed at any time at the discretion of the Company’s board of directors. On February 11, 2025, the Company’s board of directors approved a quarterly cash dividend of $0.22 per share on the Company’s outstanding Class A common stock.
As of December 31, 2023, there were 111,027,252 shares of Class A common stock outstanding. As of February 7, 2024, shares of the Company’s Class A common stock outstanding were held by approximately 64 holders of record.
As of December 31, 2024, there were 111,376,884 shares of Class A common stock outstanding. As of February 6, 2025, shares of the Company’s Class A common stock outstanding were held by approximately 61 holders of record.
This custom benchmarking group reflects companies with similar characteristics to the Company’s business, including exposure to real assets, dependence on a highly skilled management team, credit exposure/underwriting expertise, and significant capital investments. The Company’s 2023 custom benchmark group was updated to remove certain size outliers based on market capitalization and to maintain a balanced industry representation.
This custom benchmarking group reflects companies with similar characteristics to the Company’s business, including exposure to real assets, dependence on a highly skilled management team, credit exposure/underwriting expertise, and significant capital investments. The Company’s 2024 custom benchmark group was updated to remove one company that was acquired and is no longer publicly traded.
The customized benchmarking group investments are weighted by market capitalization as of December 31, 2018, and adjusted monthly. The Company believes that the S&P Midcap 400 Index, as measured by market capitalization, is currently still the most similar index benchmark to the Company.
The customized benchmarking group investments are weighted by market capitalization as of December 31, 2019, and adjusted monthly.
Added
The dividend will be paid on April 7, 2025 to holders of record of Class A common stock as of March 18, 2025.
Added
In 2024, the Company was added to the S&P SmallCap 600 Index; as such, the Company is electing to remove the S&P Midcap 400 Index from future Performance Graphs.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

141 edited+45 added−36 removed50 unchanged
Biggest changeThe following table sets forth our top five lessees by net book value as of December 31, 2023: December 31, 2023 Lessee % of Total EVA Air 4.9 % Virgin Atlantic 4.8 % Air France-KLM Group 4.3 % ITA 4.2 % Vietnam Airlines 4.1 % 37 Table of Contents The following table sets forth the number of aircraft in our owned fleet by aircraft type as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Aircraft type Number of Aircraft % of Total Number of Aircraft % of Total Airbus A220-100 2 0.4 % — — % Airbus A220-300 13 2.8 % 4 1.0 % Airbus A319-100 1 0.2 % 1 0.2 % Airbus A320-200 28 6.0 % 28 6.7 % Airbus A320-200neo 25 5.4 % 23 5.5 % Airbus A321-200 23 5.0 % 23 5.5 % Airbus A321-200neo 95 20.6 % 78 18.7 % Airbus A330-200 (1) 13 2.8 % 13 3.1 % Airbus A330-300 5 1.1 % 5 1.2 % Airbus A330-900neo 23 5.0 % 16 3.8 % Airbus A350-900 14 3.0 % 13 3.1 % Airbus A350-1000 7 1.5 % 6 1.4 % Boeing 737-700 3 0.6 % 4 1.0 % Boeing 737-800 73 15.8 % 82 19.7 % Boeing 737-8 MAX 52 11.2 % 47 11.3 % Boeing 737-9 MAX 29 6.3 % 15 3.7 % Boeing 777-200ER 1 0.2 % 1 0.2 % Boeing 777-300ER 24 5.2 % 24 5.8 % Boeing 787-9 25 5.4 % 27 6.5 % Boeing 787-10 6 1.3 % 6 1.4 % Embraer E190 1 0.2 % 1 0.2 % Total (2) 463 100.0 % 417 100.0 % (1) As of December 31, 2023, aircraft count includes two Airbus A330-200 aircraft classified as freighters.
Biggest changeSee “Results of Operations” below for a discussion of adjusted net income before income taxes and adjusted diluted earnings per share before income taxes as non-GAAP measures and a reconciliation of these measures to net income attributable to common stockholders. 37 Table of Contents The following table sets forth the net book value and percentage of the net book value of our flight equipment subject to operating leases in the indicated regions based on each airline's principal place of business as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Region Net Book Value % of Total Net Book Value % of Total (in thousands, except percentages) Europe $ 11,653,668 41.4 % $ 9,881,024 37.7 % Asia Pacific 10,077,621 35.8 % 10,456,435 39.8 % Central America, South America, and Mexico 2,685,098 9.5 % 2,361,089 9.0 % The Middle East and Africa 1,971,448 7.0 % 2,062,420 7.9 % U.S. and Canada 1,782,631 6.3 % 1,470,240 5.6 % Total $ 28,170,466 100.0 % $ 26,231,208 100.0 % The following table sets forth our top five lessees by net book value as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Lessee % of Total Lessee % of Total Virgin Atlantic 6.5 % EVA Air 4.9 % Air France-KLM Group 6.2 % Virgin Atlantic 4.8 % ITA 5.6 % Air France-KLM Group 4.3 % Vietnam 4.6 % ITA 4.2 % Aeromexico 4.4 % Vietnam Airlines 4.1 % 38 Table of Contents The following table sets forth the number of aircraft in our owned fleet by aircraft type as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Aircraft type Number of Aircraft % of Total Number of Aircraft % of Total Airbus A220-100 7 1.4 % 2 0.4 % Airbus A220-300 22 4.5 % 13 2.8 % Airbus A319-100 — — % 1 0.2 % Airbus A320-200 23 4.7 % 28 6.0 % Airbus A320-200neo 23 4.7 % 25 5.4 % Airbus A321-200 19 3.9 % 23 5.0 % Airbus A321-200neo 108 22.1 % 95 20.6 % Airbus A330-200 (1) 13 2.7 % 13 2.8 % Airbus A330-300 5 1.0 % 5 1.1 % Airbus A330-900neo 28 5.7 % 23 5.0 % Airbus A350-900 17 3.5 % 14 3.0 % Airbus A350-1000 8 1.6 % 7 1.5 % Boeing 737-700 2 0.4 % 3 0.6 % Boeing 737-800 61 12.5 % 73 15.8 % Boeing 737-8 MAX 59 12.1 % 52 11.2 % Boeing 737-9 MAX 30 6.1 % 29 6.3 % Boeing 777-200ER 1 0.2 % 1 0.2 % Boeing 777-300ER 24 4.9 % 24 5.2 % Boeing 787-9 26 5.3 % 25 5.4 % Boeing 787-10 12 2.5 % 6 1.3 % Embraer E190 1 0.2 % 1 0.2 % Total (2) 489 100.0 % 463 100.0 % (1) As of December 31, 2024 and 2023, aircraft count includes two Airbus A330-200 aircraft classified as freighters.
Passenger traffic volume has historically expanded at a faster rate than global GDP growth, in part due to the expansion of the global middle class and the ease and affordability of air travel, which we expect to continue.
Passenger traffic volume has historically expanded at a faster rate than GDP growth, in part due to the expansion of the global middle class and the ease and affordability of air travel, which we expect to continue.
We expect to have continued access to the investment grade bond market and other unsecured securities in the future, although we anticipate that interest rates for issuances in the near term will remain elevated compared to those available prior to 2022. • Unsecured bank facilities: We have active dialogue with a variety of global financial institutions and enter into new unsecured credit facilities from time to time as a means to supplement our liquidity and sources of funding.
We expect to have continued access to the investment grade bond market and other unsecured securities in the future, although we continue to anticipate that interest rates for issuances in the near term will remain elevated compared to those available prior to 2022. • Unsecured bank facilities: We have active dialogue with a variety of global financial institutions and enter into new unsecured credit facilities from time to time as a means to supplement our liquidity and sources of funding.
Deterioration of future lease rates and the residual values of our aircraft could result in impairment charges which could have a significant impact on our results of operations and financial condition. We record flight equipment at fair value if we determine the carrying value may not be recoverable.
Deterioration of 58 future lease rates and the residual values of our aircraft could result in impairment charges which could have a significant impact on our results of operations and financial condition. We record flight equipment at fair value if we determine the carrying value may not be recoverable.
The increase in selling, general and administrative expenses was primarily due to the increase in insurance premiums, aircraft transition costs and general operating expenses. Selling, general and administrative expenses represented 6.9% and 6.8% as a percentage of total revenue for the years ended December 31, 2023 and 2022, respectively.
The increase in selling, general and administrative expenses was primarily due to the increase in insurance 57 premiums, aircraft transition costs and general operating expenses. Selling, general and administrative expenses represented 6.9% and 6.8% as a percentage of total revenue for the years ended December 31, 2023 and 2022, respectively.
We may also redeem shares of the Series A Preferred Stock at our option under certain other limited conditions. The Series A Preferred Stock ranks on a parity with the Series B and Series C Preferred Stock.
We may also redeem shares of the Series B Preferred Stock at our option under certain other limited conditions. The Series B Preferred Stock ranks on a parity with the Series C Preferred Stock and the Series D Preferred Stock.
The final maturity for the facility is May 2027, although we expect to refinance this facility in advance of that date. The facility contains standard investment grade covenants and does not condition our ability to borrow on the lack of a material adverse effect on us or the general economy.
The final maturity for the facility is May 2028, although we expect to refinance this facility in advance of that date. The facility contains standard investment grade covenants and does not condition our ability to borrow on the lack of a material adverse effect on us or the general economy.
As of December 31, 2023 and 2022, we had 300,000 shares of 4.65% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), $0.01 par value, outstanding, with an aggregate liquidation preference of $300.0 million ($1,000 per share).
As of December 31, 2024 and 2023, we had 300,000 shares of 4.65% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B (the “Series B Preferred Stock”), $0.01 par value, outstanding, with an aggregate liquidation preference of $300.0 million ($1,000 per share).
As of December 31, 2023 and 2022, we had 300,000 shares of 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), $0.01 par value, outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share).
As of December 31, 2024 and 2023, we had 300,000 shares of 4.125% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), $0.01 par value, outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share).
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.
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.
In addition, factors and trends including increased airline financing needs, OEM supply chain challenges and backlogs, the rising price of jet fuel, and environmental sustainability objectives impact the commercial aircraft leasing industry in the short-term and may increase the demand for our aircraft.
In addition, factors and trends including increased airline financing needs, OEM supply chain challenges and backlogs, the elevated price of jet fuel, and environmental sustainability objectives impact the commercial aircraft leasing industry in the short-term and may increase the demand for our aircraft.
Our senior unsecured notes also require us to offer to purchase all of the notes at a purchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest if a “change of control repurchase event” (as defined in the applicable indenture or supplemental indenture) occurs. 45 Table of Contents The indentures that govern our senior unsecured notes requires us to comply with certain covenants, including restrictions on our ability to (i) incur liens on assets and (ii) merge, consolidate or transfer all or substantially all of our assets.
Our senior unsecured notes also require us to offer to purchase all of the notes at a purchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest if a “change of control repurchase event” (as defined in the applicable indenture or supplemental indenture) occurs. 47 The indentures that govern our senior unsecured notes requires us to comply with certain covenants, including restrictions on our ability to (i) incur liens on assets and (ii) merge, consolidate or transfer all or substantially all of our assets.
We believe the current airline operating environment is favorably positioned for our Company and the broader commercial aircraft leasing industry. Factors such as increases in population growth and the size of the global middle class as well as air travel demand, and improved global economic health and development positively affect the long-term performance of the commercial aircraft leasing industry.
We believe the current airline operating environment is favorably positioned for us and the broader commercial aircraft leasing industry. Factors such as increases in population growth and the size of the global middle class as well as air travel demand, and improved global economic health and development positively affect the long-term performance of the commercial aircraft leasing industry.
We expect to sell approximately $1.5 billion in aircraft for the full year 2024 and continue to see robust demand in the secondary market to support our aircraft sales program. • Other sources: In addition to the above, we generate liquidity through cash received from security deposits and maintenance reserves from our lease agreements, other sources of debt financings (including secured bank term loans, export credit and private placements), as well as issuances of preferred stock.
We expect to sell approximately $1.5 billion in aircraft for 2025 and continue to see robust demand in the secondary market to support our aircraft sales program. • Other sources: In addition to the above, we generate liquidity through cash received from security deposits and maintenance reserves from our lease agreements, other sources of debt financings (including secured bank term loans, export credit and private placements), as well as issuances of preferred stock.
Our access to a variety of financing alternatives and the global capital markets, including capital raises through unsecured public notes denominated in U.S. dollars or various foreign currencies, private capital, bank debt, secured debt and preferred stock issuances serves as a key advantage in managing our liquidity.
Our access to a variety of financing alternatives and the global capital markets, including capital raises through unsecured public notes denominated in U.S. dollars or various foreign currencies, our commercial paper program, private capital, bank debt, secured debt and preferred stock issuances serves as a key advantage in managing our liquidity.
Syndicated unsecured revolving credit facility As of December 31, 2023 and December 31, 2022, we had $1.1 billion and $1.0 billion, respectively, outstanding under our syndicated unsecured revolving credit facility (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.
Unsecured syndicated revolving credit facility As of December 31, 2024 and 2023, we had $0.2 billion and $1.1 billion, respectively, outstanding under our unsecured syndicated revolving credit facility (the “Revolving Credit Facility”). Borrowings under the Revolving Credit Facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.
(2) Future interest payments on floating rate debt are estimated using floating rates in effect at December 31, 2023, which is inclusive of any cross-currency hedging arrangements.
(2) Future interest payments on floating rate debt are estimated using floating rates in effect at December 31, 2024, which is inclusive of any cross-currency hedging arrangements.
Lease rates are influenced by several factors above and beyond interest rates, including aircraft demand, supply technicals, supply chain disruptions, environmental initiatives and other factors that may result in a change in lease rates regardless of the interest rate environment and therefore, are difficult to project or forecast.
Lease rates are influenced by several factors above and beyond interest rates, including aircraft demand, supply technicals, supply chain disruptions, environmental initiatives and 42 Table of Contents other factors that may result in a change in lease rates regardless of the interest rate environment and therefore, are difficult to project or forecast.
We may also redeem shares of the Series B Preferred Stock at our option under certain other limited conditions. The Series B Preferred Stock ranks on a parity with the Series A Preferred Stock and the Series C Preferred Stock.
We may redeem shares of the Series D Preferred Stock at our option under certain other limited conditions. The Series D Preferred Stock ranks on a parity with the Series B and Series C Preferred Stock.
Adjusted net income before income taxes For the year ended December 31, 2023, our adjusted net income before income taxes was $733.6 million, or $6.58 per adjusted diluted share, compared to an adjusted net income before income taxes of $659.9 million, or $5.89 per adjusted diluted share, for the 54 Table of Contents year ended December 31, 2022.
Adjusted net income before income taxes For the year ended December 31, 2023, our adjusted net income before income taxes was $733.6 million, or $6.58 per adjusted diluted share, compared to an adjusted net income before income taxes of $659.9 million, or $5.89 per adjusted diluted share, for the year ended December 31, 2022.
When declared, dividends on the Series A Preferred Stock are reset quarterly and payable quarterly in arrears and dividends on the Series B Preferred Stock and Series C Preferred Stock are reset every five years and payable quarterly in arrears.
When declared, dividends on the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are reset every five years and payable quarterly in arrears.
We will pay dividends on the Series A Preferred Stock only when, as and if declared by the board of directors.
We will pay dividends on the Series D Preferred Stock only when, as and if declared by the board of directors.
We also believe the increase in lease rates and the tightening of credit markets may result in a shortfall of available capital to finance aircraft purchases, which could increase the demand for leasing.
We also believe the increase in lease rates and the sustained tightness in the credit markets may result in a shortfall of available capital to finance aircraft purchases, which could increase the demand for leasing.
As of December 31, 2023, we were in compliance in all material respects with the covenants contained in our debt agreements.
As of December 31, 2024, we were in compliance in all material respects with the covenants contained in our debt agreements.
The actual delivery dates of the aircraft in our commitments table and the expected time for payment of such aircraft may differ from our estimates and could be further impacted by the pace at which Airbus and Boeing can deliver aircraft, among other factors.
The actual delivery dates of the aircraft in our commitments table and the expected time for payment of such aircraft are currently expected to differ from our estimates and could be further impacted by the pace at which Airbus and Boeing can deliver aircraft, among other factors.
Our debt financing strategy is focused on raising unsecured debt in the global bank and debt capital markets, with limited utilization of government guaranteed export credit or other forms of secured financing. We ended 2023 with an aggregate borrowing capacity under our revolving credit facility of $6.3 billion and total liquidity of $6.8 billion.
Our debt financing strategy is focused on raising unsecured debt in the global bank and debt capital markets, with limited utilization of government guaranteed export credit or other forms of secured financing. We ended 2024 with an aggregate borrowing capacity under our unsecured revolving credit facility of $7.6 billion and total liquidity of $8.1 billion.
Adjusted 50 Table of Contents net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations.
Adjusted net income before income taxes, adjusted pre-tax margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity are presented as supplemental disclosure because management believes they provide useful information on our earnings from ongoing operations.
These events of default are subject to certain exceptions and qualifications set forth in the indentures. On May 7, 2021, we renewed and refreshed our Medium-Term Note Program, under which we may issue, from time to time, up to $15.0 billion (or their U.S. dollar equivalent) of debt securities designated as our Medium-Term Notes, Series A.
These events of default are subject to certain exceptions and qualifications set forth in the indentures. On May 6, 2024, we renewed and refreshed our Medium-Term Note Program, under which we may issue, from time to time, up to $20.0 billion (or their U.S. dollar equivalent) of debt securities designated as our Medium-Term Notes, Series A.
As of December 31, 2023, we had a globally diversified customer base of 119 airlines in 62 different countries, with over 95% of our business revenues from airlines domiciled outside of the U.S., and we anticipate that most of our revenues in the future will be generated from foreign customers.
As of December 31, 2024, we had a globally diversified customer base of 116 airlines in 58 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.
Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by gains from aircraft sales and our management fees. 2023 Summary During the year ended December 31, 2023, we purchased 71 new aircraft from Airbus and Boeing and sold 27 aircraft 1 .
Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by gains from aircraft sales and our management fees. 2024 Summary During the year ended December 31, 2024, we purchased 65 new aircraft from Airbus and Boeing and sold 39 aircraft.
The weighted average age of our fleet 2 was 4.6 years and the weighted average lease term remaining was 7.0 years as of December 31, 2023. Our managed fleet was comprised of 78 aircraft as of December 31, 2023 compared to 85 aircraft as of December 31, 2022.
The weighted average age of our fleet was 4.6 years and the weighted average lease term remaining was 7.2 years as of December 31, 2024. Our managed fleet was comprised of 60 aircraft as of December 31, 2024 compared to 78 aircraft as of December 31, 2023.
The table is subject to change based on Airbus and Boeing delivery delays. As noted below, we expect delivery delays for all of the aircraft in our orderbook. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays; however, we are not currently able to determine the full impact of these delays.
The tables are subject to change based on Airbus and Boeing delivery delays. As noted below, we expect delivery delays for most of the aircraft in our orderbook. We remain in discussions with Airbus and Boeing to determine the extent and duration of delivery delays; however, we are not currently unable to determine the full impact of these delays.
The Series B Preferred Stock and Series C Preferred Stock each have a redemption price of $1,000.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date without accumulation of any undeclared dividends. (3) Dividends on preferred stock are discretionary and non-cumulative.
Treasury plus 2.560% Total 900,000 $ 900,000 (1) The Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock each have a redemption price of $1,000.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date without accumulation of any undeclared dividends. (2) Dividends on preferred stock are discretionary and non-cumulative.
(2) As of December 31, 2023, our owned fleet count included 14 aircraft classified as flight equipment held for sale and 12 aircraft classified as net investments in sales-type leases, which are both included in Other assets on the Consolidated Balance Sheet. 3 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, such as net write-offs and recoveries related to our former Russian fleet.
(2) As of December 31, 2024 and 2023, our owned fleet count included 30 and 14 aircraft classified as flight equipment held for sale, respectively, and 15 and 12 aircraft classified as net investments in sales-type leases, respectively, which are both included in Other assets on the Consolidated Balance Sheet. 2 Adjusted net income before income taxes excludes the effects of certain non-cash items, such as non-cash deemed dividends upon redemption of our Series A preferred stock, one-time or non-recurring items that are not expected to continue in the future, such as net write-offs and recoveries related to our former Russian fleet, and certain other items.
Ongoing aircraft delivery delays as a product of manufacturer delays are expected to further reduce our aircraft investment and debt financing needs for the next 12 months and potentially beyond.
Ongoing aircraft delivery delays due to manufacturer delays are expected to further reduce our aircraft investment and debt financing needs for the next 12 months and potentially beyond.
As of February 15, 2024, we or the respective managed platform maintain title to 16 aircraft previously included in our owned fleet and two aircraft previously included in our managed fleet that are still detained in Russia.
As of February 13, 2025, we maintain title to 16 aircraft previously included in our owned fleet and the respective managed platform maintains title to two aircraft previously included in our managed fleet that are still detained in Russia.
We expect the sale of the majority of our aircraft classified as flight equipment held for sale to be completed in 2024.
We expect the sale of the majority of our aircraft classified as flight equipment held for sale to be completed during 2025.
As of December 31, 2023, we had $15.7 billion in aggregate principal amount of senior unsecured notes outstanding, all of which have been issued in SEC-registered offerings and with remaining terms ranging from one month to 8.04 years and bearing interest at fixed rates ranging from 0.70% to 5.94%.
As of December 31, 2024, we had $15.4 billion in aggregate principal amount of senior unsecured notes outstanding, all of which have been issued in SEC-registered offerings and with remaining terms ranging from one month to 7.04 years and bearing interest at fixed rates ranging from 1.875% to 5.95%.
The Revolving Credit Facility provides for certain covenants, including covenants that limit our subsidiaries’ ability to incur, create, or assume certain unsecured indebtedness, and our subsidiaries’ abilities to engage in certain mergers, consolidations, and asset sales.
Interest rate and facility fees are subject to changes in our credit ratings. The Revolving Credit Facility provides for certain covenants, including covenants that limit our subsidiaries’ ability to incur, create, or assume certain unsecured indebtedness, and our subsidiaries’ abilities to engage in certain mergers, consolidations, and asset sales.
(2) As of December 31, 2023, our owned fleet count included 14 aircraft classified as flight equipment held for sale and 12 aircraft classified as net investments in sales-type leases, which are both included in Other assets on the Consolidated Balance Sheet. 38 Table of Contents As of December 31, 2023, we had contractual commitments to purchase 334 new aircraft, with an estimated aggregate purchase price (including adjustments for anticipated inflation) of $21.7 billion, for delivery through 2028 as shown in the following table.
(2) As of December 31, 2024 and 2023, our owned fleet count included 30 and 14 aircraft classified as flight equipment held for sale, respectively, and 15 and 12 aircraft classified as net investments in sales-type leases, respectively, which are both included in Other assets on the Consolidated Balance Sheet. 39 Table of Contents As of December 31, 2024, we had contractual commitments to purchase 269 new aircraft, with an estimated aggregate purchase price (including adjustments for anticipated inflation) of $17.1 billion, for delivery through 2029 as shown in the following tables.
This higher interest rate environment has resulted in increased borrowing costs for us during 2023 and will result in increased borrowing costs until interest rates decline. Historically, there has been a lag between a rise in interest rates and subsequent increases in lease rates.
This persistently elevated interest rate environment has resulted in increased borrowing costs for us and will continue to result in increased borrowing costs until interest rates decline. Historically, there has been a lag between a rise in interest rates and subsequent increases in lease rates.
Our airline customers are facing higher operating costs as a result of higher fuel costs, interest rates and inflation, foreign currency risk, ongoing labor shortages and disputes, as well as delays and cancellations caused by the global air traffic control system and airports, although the magnitude of underlying pre-pandemic demand returning to the market is offering a strong counterbalance to these increased costs.
Our airline customers are facing higher operating costs as a result of higher fuel costs, persistently elevated interest rates, inflation, foreign currency risk, ongoing labor shortages and disputes, as well as delays and cancellations caused by the global air traffic control system and airports, although strong air traffic demand has provided a counterbalance to these increased costs.
Preferred equity The following table summarizes the Company’s preferred stock issued and outstanding as of December 31, 2023 and 2022(in thousands, except for share amounts and percentages): Shares Issued and Outstanding as of December 31, 2023 and 2022 Liquidation Preference as of December 31, 2023 and 2022 (2) Issue Date Dividend Rate in Effect at December 31, 2023 and 2022 (3) Next dividend rate reset date Dividend rate after reset date Series A 10,000,000 $ 250,000 March 5, 2019 6.150 % March 15, 2024 3M Term SOFR (1) plus 3.65% Series B 300,000 300,000 March 2, 2021 4.650 % June 15, 2026 5 Yr U.S.
Preferred equity The following table summarizes our preferred stock issued and outstanding as of December 31, 2024 (in thousands, except for share amounts and percentages): Shares Issued and Outstanding as of December 31, 2024 Liquidation Preference as of December 31, 2024 (1) Issue Date Dividend Rate in Effect at December 31, 2024 (2) Next dividend rate reset date Dividend rate after reset date (3) Series B 300,000 $ 300,000 March 2, 2021 4.650 % June 15, 2026 5 Yr U.S.
Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. 42 Table of Contents • Unsecured revolving credit facility : As of February 15, 2024, our $7.4 billion revolving credit facility is syndicated across 51 financial institutions from various regions of the world, diversifying our reliance on any individual lending institution.
Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. • Unsecured revolving credit facility : As of February 13, 2025, our $7.8 billion revolving credit facility is syndicated across 52 financial institutions from various regions of the world, diversifying our reliance on any individual lending institution.
As a result, the timing of our purchase commitments shown in the table above may not reflect when the aircraft investments are eventually made. For 2024, we currently expect to make between $4.5 billion and $5.5 billion in aircraft investments.
As a result, the timing of our contractual purchase commitments shown in the table above may not reflect when the aircraft investments are actually made. For 2025, we currently expect to make between $3.0 billion to $3.5 billion in aircraft investments.
As of December 31, 2022, we had $17.1 billion in aggregate principal amount of senior unsecured notes outstanding bearing interest at fixed rates ranging from 0.70% to 5.85%.
As of December 31, 2023, we had $15.7 billion in aggregate principal amount of senior unsecured notes outstanding bearing interest at fixed rates ranging from 0.70% to 5.94%.
We ended 2023 with total debt outstanding of $19.4 billion, of which 84.7% was at a fixed rate and 98.4% of which was unsecured, and in the aggregate, our composite cost of funds was 3.77%.
As of December 31, 2023, we had total debt outstanding of 43 Table of Contents $19.4 billion, of which 84.7% was at a fixed rate and 98.4% of which was unsecured, and in the aggregate, our composite cost of funds was 3.77%.
As of December 31, 2023, we had an outstanding balance of $305.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $445.9 million.
As of December 31, 2023, we had an outstanding balance of $305.5 million in secured debt financings and pledged four aircraft as collateral with a net book value of $445.9 million. All of our secured obligations as of December 31, 2024 and 2023 were recourse in nature to us.
Senior unsecured securities (including Medium-Term Note Program) As of December 31, 2023, we had $16.3 billion in senior unsecured securities outstanding. As of December 31, 2022, we had $17.1 billion in senior unsecured securities outstanding. Public unsecured notes.
Senior unsecured securities (including Medium-Term Note Program) As of December 31, 2024 and 2023, we had $16.0 billion and $16.3 billion in senior unsecured securities outstanding, respectively. Public unsecured notes.
We believe leasing will continue to be an attractive form of aircraft financing for airlines because less cash and financing is required for the airlines, lessors maintain key delivery positions, and it provides fleet flexibility while eliminating residual value risk for lessees.
We believe leasing will continue to be an attractive form of aircraft financing for airlines because less cash and financing is required for the airlines, lessors maintain key delivery positions, and it provides fleet flexibility while eliminating residual value risk for lessees. Update on Russian Fleet As previously disclosed in our filings with the U.S.
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 redeem shares of the Series D Preferred Stock at our option, in whole or in part, from time to time, on any dividend payment date on or after December 15, 2029, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.
Our portfolio metrics as of December 31, 2023 and 2022 are as follows: December 31, 2023 December 31, 2022 Net book value of flight equipment subject to operating lease $ 26.2 billion $ 24.5 billion Weighted-average fleet age (1) 4.6 years 4.5 years Weighted-average remaining lease term (1) 7.0 years 7.1 years Owned fleet (2) 463 417 Managed fleet 78 85 Aircraft on order 334 398 Total 875 900 Current fleet contracted rentals $ 16.4 billion $ 15.6 billion Committed fleet rentals $ 14.6 billion $ 15.8 billion Total committed rentals $ 31.0 billion $ 31.4 billion (1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease.
Our portfolio metrics as of December 31, 2024 and 2023 are as follows: December 31, 2024 December 31, 2023 Net book value of flight equipment subject to operating lease $ 28.2 billion $ 26.2 billion Weighted-average fleet age (1) 4.6 years 4.6 years Weighted-average remaining lease term (1) 7.2 years 7.0 years Owned fleet (2) 489 463 Managed fleet 60 78 Aircraft on order 269 334 Total 818 875 Current fleet contracted rentals $ 18.3 billion $ 16.4 billion Committed fleet rentals $ 11.2 billion $ 14.6 billion Total committed rentals $ 29.5 billion $ 31.0 billion (1) Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating lease.
All of our senior unsecured notes issued since 2019 have consisted of Medium-Term Notes, Series A, issued under our Medium-Term Note Program. As of February 15, 2024, we had approximately $8.3 billion remaining capacity under our Medium-Term Note Program. Private placement securities.
All of our senior unsecured notes issued since 2019 have consisted of Medium-Term Notes, Series A, issued under our Medium-Term Note Program. As of February 13, 2025, we had approximately $18.8 billion remaining capacity under our Medium-Term Note Program.
Our interest expense increased due to an increase in our composite cost of funds to 3.77% as compared to 3.07% in the prior year. We expect our interest expense will continue to increase as our average debt balance outstanding increases along with our composite cost of funds.
Our interest expense increased due to an increase in our composite cost of funds to 4.14% as compared to 3.77% in the prior year. We expect our interest expense will continue to increase as our average debt balance outstanding increases with the growth of our fleet based on prevailing interest rates.
Adjusted net income before income taxes 3 during the year ended December 31, 2023 was $733.6 million or $6.58 per adjusted diluted share, as compared to $659.9 million, or $5.89 per adjusted diluted share, for the year ended December 31, 2022.
Adjusted net income before income taxes 2 during the year ended December 31, 2024 was $574.2 million or $5.13 per adjusted diluted share, as compared to $733.6 million, or $6.58 per adjusted diluted share, for the year ended December 31, 2023.
The above table does not include any tax payments we may pay nor any dividends we may pay on our preferred stock or common stock. Cash Flows Our cash flow provided by operating activities increased by $0.4 billion to $1.7 billion for the year ended December 31, 2023.
The above table does not include any tax payments we may pay nor any dividends our board of directors may declare on our preferred stock or common stock. Cash Flows Our cash flow provided by operating activities decreased by $69.9 million to $1.7 billion for the year ended December 31, 2024.
The following table shows the reconciliation of the numerator for adjusted pre-tax margin (in thousands, except percentages): Year Ended December 31, 2023 2022 2021 (unaudited) Reconciliation of the numerator for adjusted pre-tax margin (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): Net income/(loss) attributable to common stockholders $ 572,922 $ (138,724) $ 408,159 Amortization of debt discounts and issuance costs 54,053 53,254 50,620 Write-off of Russian fleet, net of (recoveries) (67,022) 771,476 — Stock-based compensation expense 34,615 15,603 26,516 Income tax expense/(benefit) 139,012 (41,741) 104,384 Adjusted net income before income taxes $ 733,580 $ 659,868 $ 589,679 Denominator for adjusted pre-tax margin: Total revenues 2,684,977 2,317,302 2,088,389 Adjusted pre-tax margin (a) 27.3 % 28.5 % 28.2 % (a) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues 51 Table of Contents The following table shows the reconciliation of the numerator for adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts): Year Ended December 31, 2023 2022 2021 Reconciliation of the numerator for adjusted diluted earnings per share (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): Net income/(loss) attributable to common stockholders $ 572,922 $ (138,724) $ 408,159 Amortization of debt discounts and issuance costs 54,053 53,254 50,620 Write-off of Russian fleet, net of (recoveries) (67,022) 771,476 — Stock-based compensation expense 34,615 15,603 26,516 Income tax expense/(benefit) 139,012 (41,741) 104,384 Adjusted net income before income taxes $ 733,580 $ 659,868 $ 589,679 Denominator for adjusted diluted earnings per share: Weighted-average diluted common shares outstanding 111,438,589 111,626,508 114,446,093 Potentially dilutive securities, whose effect would have been anti-dilutive — 361,186 — Adjusted weighted-average diluted common shares outstanding 111,438,589 111,987,694 114,446,093 Adjusted diluted earnings per share before income taxes (b) $ 6.58 $ 5.89 $ 5.15 (b) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by adjusted weighted-average diluted common shares outstanding 52 Table of Contents The following table shows the reconciliation of pre-tax return on common equity to adjusted pre-tax return on common equity (in thousands, except percentages): Year Ended December 31, 2023 2022 2021 (unaudited) Reconciliation of the numerator for adjusted pre-tax return on common equity (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): Net income/(loss) attributable to common stockholders $ 572,922 $ (138,724) $ 408,159 Amortization of debt discounts and issuance costs 54,053 53,254 50,620 Write-off of Russian fleet, net of (recoveries) (67,022) 771,476 — Stock-based compensation expense 34,615 15,603 26,516 Income tax expense/(benefit) 139,012 (41,741) 104,384 Adjusted net income before income taxes $ 733,580 $ 659,868 $ 589,679 Reconciliation of denominator for pre-tax return on common equity to adjusted pre-tax return on common equity: Common shareholders' equity as of beginning of the period $ 5,796,363 $ 6,158,568 $ 5,822,341 Common shareholders' equity as of end of the period $ 6,310,038 $ 5,796,363 $ 6,158,568 Average common shareholders' equity $ 6,053,201 $ 5,977,466 $ 5,990,455 Adjusted pre-tax return on common equity (c) 12.1 % 11.0 % 9.8 % (c) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity 2023 Compared to 2022 Rental of flight equipment revenue During the year ended December 31, 2023, we recorded $2.5 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $91.9 million, as compared to $2.2 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $29.2 million, for the year ended December 31, 2022.
(b) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues 53 The following table shows the reconciliation of the numerator for adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts): Year Ended December 31, 2024 2023 2022 (unaudited) Reconciliation of the numerator for adjusted diluted earnings per share (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): Net income/(loss) attributable to common stockholders $ 372,073 $ 572,922 $ (138,724) Amortization of debt discounts and issuance costs 54,823 54,053 53,254 Write-off of Russian fleet, net of (recoveries) — (67,022) 771,476 Stock-based compensation expense 33,887 34,615 15,603 Income tax expense/(benefit) 105,553 139,012 (41,741) Deemed dividend adjustment 7,869 — — Adjusted net income before income taxes $ 574,205 $ 733,580 $ 659,868 Denominator for adjusted diluted earnings per share: Weighted-average diluted common shares outstanding 111,869,386 111,438,589 111,626,508 Potentially dilutive securities, whose effect would have been anti-dilutive — — 361,186 Adjusted weighted-average diluted common shares outstanding 111,869,386 111,438,589 111,987,694 Adjusted diluted earnings per share before income taxes (c) $ 5.13 $ 6.58 $ 5.89 (c) Adjusted diluted earnings per share before income taxes is adjusted net income before income taxes divided by adjusted weighted-average diluted common shares outstanding 54 The following table shows the reconciliation of pre-tax return on common equity to adjusted pre-tax return on common equity (in thousands, except percentages): Year Ended December 31, 2024 2023 2022 (unaudited) Reconciliation of the numerator for adjusted pre-tax return on common equity (net income/(loss) attributable to common stockholders to adjusted net income before income taxes): Net income/(loss) attributable to common stockholders $ 372,073 $ 572,922 $ (138,724) Amortization of debt discounts and issuance costs 54,823 54,053 53,254 Write-off of Russian fleet, net of (recoveries) — (67,022) 771,476 Stock-based compensation expense 33,887 34,615 15,603 Income tax expense/(benefit) 105,553 139,012 (41,741) Deemed dividend adjustment 7,869 — — Adjusted net income before income taxes $ 574,205 $ 733,580 $ 659,868 Reconciliation of denominator for pre-tax return on common equity to adjusted pre-tax return on common equity: Common shareholders' equity as of beginning of the period $ 6,310,038 $ 5,796,363 $ 6,158,568 Common shareholders' equity as of end of the period $ 6,632,626 $ 6,310,038 $ 5,796,363 Average common shareholders' equity $ 6,471,332 $ 6,053,201 $ 5,977,466 Adjusted pre-tax return on common equity (d) 8.9 % 12.1 % 11.0 % (d) Adjusted pre-tax return on common equity is adjusted net income before income taxes divided by average common shareholders’ equity 2024 Compared to 2023 Rental of flight equipment revenue During the year ended December 31, 2024, we recorded $2.49 billion in rental revenue, which included amortization expense related to initial direct costs, net of overhaul revenue of $21.4 million, as compared to $2.48 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $91.9 million, for the year ended December 31, 2023.
We may also redeem shares of the Series C Preferred Stock at our option under certain other limited conditions. The Series C Preferred Stock ranks on a parity with the Series A and Series B Preferred Stock.
We may also redeem shares of the Series C Preferred Stock at our option under certain other limited conditions.
The following table summarizes our current credit ratings: Rating Agency Long-term Debt Corporate Rating Outlook Date of Last Ratings Action Kroll Bond Ratings A- A- Stable March 24, 2023 Standard and Poor’s BBB BBB Stable January 19, 2024 Fitch Ratings BBB BBB Stable December 19, 2023 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 interest rate applicable to certain of our financings. 49 Table of Contents Results of Operations Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 (in thousands, except share and per share amounts and percentages) Revenues Rental of flight equipment $ 2,477,607 $ 2,214,508 $ 2,003,337 Aircraft sales, trading, and other 207,370 102,794 85,052 Total revenues 2,684,977 2,317,302 2,088,389 Expenses Interest 654,910 492,924 462,396 Amortization of debt discounts and issuance costs 54,053 53,254 50,620 Interest expense 708,963 546,178 513,016 Depreciation of flight equipment 1,068,772 965,955 882,562 Write-off of Russian fleet, net of (recoveries) (67,022) 771,476 — Selling, general, and administrative 186,015 156,855 125,279 Stock-based compensation expense 34,615 15,603 26,516 Total expenses 1,931,343 2,456,067 1,547,373 Income/(Loss) before taxes 753,634 (138,765) 541,016 Income tax (expense)/benefit (139,012) 41,741 (104,384) Net income/(loss) $ 614,622 $ (97,024) $ 436,632 Preferred stock dividends (41,700) (41,700) (28,473) Net income/(loss) attributable to common stockholders $ 572,922 $ (138,724) $ 408,159 Earnings/(loss) per share of common stock Basic $ 5.16 $ (1.24) $ 3.58 Diluted $ 5.14 $ (1.24) $ 3.57 Weighted-average shares of common stock outstanding Basic 111,005,088 111,626,508 114,050,578 Diluted 111,438,589 111,626,508 114,446,093 Other financial data Pre-tax margin 28.1 % (6.0) % 25.9 % Adjusted net income before income taxes (1) $ 733,580 $ 659,868 $ 589,679 Adjusted pre-tax margin (1) 27.3 % 28.5 % 28.2 % Adjusted diluted earnings per share before income taxes (1) $ 6.58 $ 5.89 $ 5.15 Pre-tax return on common equity 11.8 % (3.0) % 8.6 % Adjusted pre-tax return on common equity (1) 12.1 % 11.0 % 9.8 % (1) Adjusted net income before income taxes (defined as net income/(loss) attributable to common stockholders excluding the effects of certain non-cash items, one-time or non-recurring items, such as net write-offs and recoveries related to our former Russian fleet, that are not expected to continue in the future and certain other items), adjusted pre-tax margin (defined as adjusted net income before income taxes divided by total revenues), adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) and adjusted pre-tax return on common equity (defined as adjusted net income before income taxes divided by average common shareholders’ equity) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income/(loss) attributable to common stockholders, pre-tax margin, earnings/(loss) per share, diluted earnings/(loss) per share and pre-tax return on common equity, or any other performance measures derived in accordance with GAAP.
The following table summarizes our current credit ratings, including our short-term ratings for our commercial paper program: Rating Agency Long-term Debt Short-Term Rating Corporate Rating Outlook Date of Last Ratings Action Kroll Bond Ratings A- K-1 A- Stable March 22, 2024 Standard and Poor’s BBB A-2 BBB Stable November 1, 2024 Fitch Ratings BBB F-3 BBB Stable June 4, 2024 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 interest rate applicable to certain of our financings. 51 Results of Operations Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 (in thousands, except share and per share amounts and percentages) Revenues Rental of flight equipment $ 2,487,955 $ 2,477,607 $ 2,214,508 Aircraft sales, trading, and other 245,702 207,370 102,794 Total revenues 2,733,657 2,684,977 2,317,302 Expenses Interest 781,996 654,910 492,924 Amortization of debt discounts and issuance costs 54,823 54,053 53,254 Interest expense 836,819 708,963 546,178 Depreciation of flight equipment 1,143,761 1,068,772 965,955 Write-off of Russian fleet, net of (recoveries) — (67,022) 771,476 Selling, general, and administrative 185,933 186,015 156,855 Stock-based compensation expense 33,887 34,615 15,603 Total expenses 2,200,400 1,931,343 2,456,067 Income/(loss) before taxes 533,257 753,634 (138,765) Income tax (expense)/benefit (105,553) (139,012) 41,741 Net income/(loss) $ 427,704 $ 614,622 $ (97,024) Preferred stock dividends (55,631) (41,700) (41,700) Net income/(loss) attributable to common stockholders $ 372,073 $ 572,922 $ (138,724) Earnings/(loss) per share of common stock Basic $ 3.34 $ 5.16 $ (1.24) Diluted $ 3.33 $ 5.14 $ (1.24) Weighted-average shares of common stock outstanding Basic 111,325,481 111,005,088 111,626,508 Diluted 111,869,386 111,438,589 111,626,508 Other financial data Pre-tax margin 19.5 % 28.1 % (6.0) % Adjusted net income before income taxes (1) $ 574,205 $ 733,580 $ 659,868 Adjusted pre-tax margin (1) 21.0 % 27.3 % 28.5 % Adjusted diluted earnings per share before income taxes (1) $ 5.13 $ 6.58 $ 5.89 Pre-tax return on common equity 7.4 % 11.8 % (3.0) % Adjusted pre-tax return on common equity (1) 8.9 % 12.1 % 11.0 % 11.0 % (1) Adjusted net income before income taxes (defined as net income/(loss) attributable to common stockholders excluding the effects of certain non-cash items, such as non-cash deemed dividends upon redemption of our Series A preferred stock, one-time or non-recurring items that are not expected to continue in the future, such as net write-offs and recoveries related to our former Russian fleet, and certain items, adjusted pre-tax margin (defined as adjusted net income before income taxes divided by total revenues), adjusted diluted earnings per share before income taxes (defined as adjusted net income before income taxes divided by the weighted average diluted common shares outstanding) and adjusted pre-tax return on common equity (defined as adjusted net income before income taxes divided by average common shareholders’ equity) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income/(loss) attributable to common stockholders, pre-tax margin, earnings/(loss) per share, diluted earnings/(loss) per share and pre-tax return on common equity, or any 52 other performance measures derived in accordance with GAAP.
We have a globally diversified customer base comprised of 119 airlines in 62 countries as of December 31, 2023. We continued to maintain a strong lease utilization rate of 99.9% for the year ended December 31, 2023.
We have a globally diversified customer base comprised of 116 airlines in 58 countries as of December 31, 2024. We continued to maintain a strong lease utilization rate of 100.0% for the year ended December 31, 2024.
Liquidity and Capital Resources Overview We ended 2023 with available liquidity of $6.8 billion which was comprised of unrestricted cash of $0.5 billion and undrawn balances under our unsecured revolving credit facility of $6.3 billion.
Liquidity and Capital Resources Overview We ended 2024 with available liquidity of approximately $8.1 billion which was comprised of unrestricted cash of $472.6 million and undrawn balances under our unsecured revolving credit facility of $7.6 billion.
We have $1.5 billion of aircraft in our sales pipeline, which includes $605.1 million of aircraft classified as flight equipment held for sale as of December 31, 2023 and $891.8 million of aircraft subject to letters of intent 4 .
We have $1.1 billion of aircraft in our sales pipeline 3 , which includes $951.2 million of aircraft classified as flight equipment held for sale as of December 31, 2024 and $177.7 million of aircraft subject to letters of intent 4 .
Interest expense Interest expense totaled $546.2 million for the year ended December 31, 2022 compared to $513.0 million for the year ended December 31, 2021. Our interest expense increased due to an increase in our average debt balance and an increase in our composite cost of funds as compared to the prior year.
Interest expense Interest expense totaled $709.0 million for the year ended December 31, 2023 compared to $546.2 million for the year ended December 31, 2022. Our interest expense increased due to an increase in our composite cost of funds to 3.77% as compared to 3.07% in the prior year.
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 certain aircraft portfolios through our Thunderbolt platform, we hold non-controlling interests of approximately 5.0% in two entities.
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 certain aircraft that we have sold through our Thunderbolt platform.
Treasury Rate as of the applicable reset dividend determination date plus a spread of 4.076% per reset period from June 15, 2026 and reset every five years and payable quarterly in arrears. 47 Table of Contents We may redeem shares of the Series B Preferred Stock at our option, in whole or in part, from time to time, on any dividend payment date on or after June 15, 2026, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.
We may redeem shares of the Series B Preferred Stock at our option, in whole or in part, from time to time, on any dividend payment date on or after June 15, 2026, for cash at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends.
These rental payments are a primary driver of our short and long-term operating cash flow. As of December 31, 2023, our minimum future rentals on non-cancellable operating leases for the next 12 months was $2.4 billion. For further detail on our minimum future rentals for 2025 and thereafter, see “Notes to Consolidated Financial Statements” under “Item 8.
These rental payments are a primary driver of our short and long-term operating cash flow. As of December 31, 2024, our minimum future rentals on non-cancellable operating leases for the next 12 months was $2.6 billion. For further detail on our minimum future rentals for 2026 and thereafter, see Note 7.
As of December 31, 2023, we had commitments to purchase 334 aircraft from Airbus and Boeing for delivery through 2028, with an estimated aggregate commitment of $21.7 billion. We have placed 100% of our committed orderbook on long-term leases for aircraft delivering through the end of 2025 and have placed approximately 65% of our entire orderbook.
As of December 31, 2024, we had commitments to purchase 269 aircraft from Airbus and Boeing for delivery through 2029, with an estimated aggregate commitment of $17.1 billion. We have placed 100% of our expected orderbook on long-term leases for aircraft delivering through the end of 2026 and have placed approximately 62% of our entire orderbook.
We ended the year with a total of 463 aircraft in our owned fleet. The net book value of our fleet grew by 6.9% to $26.2 billion as of December 31, 2023 compared to $24.5 billion as of December 31, 2022.
We ended the year with a total of 489 aircraft in our owned fleet. The net book value of our fleet 1 grew by 7.4% to $28.2 billion as of December 31, 2024 compared to $26.2 billion as of December 31, 2023.
Unsecured term financings In 2023, we entered into a $750.0 million unsecured term loan that bears interest at a floating rate of Term SOFR plus a credit spread adjustment of 0.10% plus 1.4% and has a final maturity on November 24, 2026. The term loan contains customary covenants and events of default consistent with our Revolving Credit Facility.
As amended, the term loan bears interest at a floating rate of one-month Term SOFR plus 1.20% plus a credit spread adjustment of 0.10% and has a final maturity on November 24, 2026. The term loan contains customary covenants and events of default consistent with our Revolving Credit Facility.
Lenders held revolving commitments of approximately $7.1 billion that mature on May 5, 2027, commitments totaling $320.0 million that mature on May 5, 2026 and commitments totaling $32.5 million that mature on May 5, 2025.
As of February 13, 2025, lenders held revolving commitments totaling approximately $7.5 billion that mature on May 5, 2028, commitments totaling $25.0 million that mature on May 5, 2027, $210.0 million that mature on May 5, 2026 and commitments totaling $25.0 million that mature on May 5, 2025.
Depreciation expense We recorded $1.1 billion in depreciation expense of flight equipment for the year ended December 31, 2023 compared to $1.0 billion for the year ended December 31, 2022. The increase in depreciation expense for 2023 compared to 2022 is primarily attributable to the growth of our fleet.
Depreciation expense We recorded $1.14 billion in depreciation expense of flight equipment for the year ended December 31, 2024 compared to $1.07 billion for the year ended December 31, 2023. The increase in depreciation expense for 2024 compared to 2023 is primarily attributable to the growth of our fleet, partially offset by aircraft sales activity during the year.
Our purchase agreements with Airbus and Boeing generally provide each of us and the manufacturers with cancellation rights for delivery delays starting at one year after the original contractual delivery date, regardless of cause.
The residual impacts of the Boeing labor strike have impacted and may continue to impact the broader aviation supply chain. Our purchase agreements with Airbus and Boeing generally provide each of us and the manufacturers with cancellation rights for delivery delays starting at one year after the original contractual delivery date, regardless of cause.
Tighter monetary policies in the United States and other countries since early 2022 resulted in rapid interest rate increases over a relatively short period of time and many are predicting that rates may remain elevated.
A shift in monetary policy in the United States and other countries beginning in 2022 resulted in rapid interest rate increases over a relatively short period of time and many are predicting that rates may remain elevated despite rate cuts made in late 2024 by the FOMC.
Our material cash sources include: • Unrestricted cash: We ended 2023 with $460.9 million in unrestricted cash. • Lease cash flows: We ended 2023 with $31.0 billion in committed minimum future rental payments comprised of $16.4 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.6 billion in minimum future rental payments related to aircraft which will deliver between 2024 through 2027.
Our material cash sources include: • Unrestricted cash: We ended 2024 with $472.6 million in unrestricted cash. • Lease cash flows: We ended 2024 with $29.5 billion in committed minimum future rental payments comprised of $18.3 billion in contracted minimum rental payments on the aircraft in our existing fleet and $11.2 billion in minimum future rental payments related to aircraft which will deliver between 2025 through 2029.
During the year ended December 31, 2022, we recorded $48.0 million in gains from the sale of 15 aircraft and $17.9 million in forfeiture of security deposit income from the termination of our leasing activities in Russia in the current year period.
During the year ended December 31, 2022, we recognized approximately $27.3 million in gains from the sale of 6 aircraft with sales proceeds of $252.0 million and $17.9 million in forfeiture of security deposit income from the termination of our leasing activities in Russia.
The increase in our adjusted net income before income taxes primarily relates to the increase in revenues as discussed above, partially offset by the higher interest expense. 2022 Compared to 2021 Rental revenue During the year ended December 31, 2022, we recorded $2.2 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $29.2 million, as compared to $2.0 billion in rental revenue, which included amortization expense related to initial direct costs, net of overhaul revenue of $2.3 million, for the year ended December 31, 2021.
Adjusted net income before income taxes decreased primarily due to higher interest expense, driven by the increase in our composite cost of funds and overall outstanding debt balance, partially offset by the increase in revenue as discussed above. 56 2023 Compared to 2022 Rental of flight equipment revenue During the year ended December 31, 2023, we recorded $2.5 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $91.9 million, as compared to $2.2 billion in rental revenue, which included overhaul revenue, net of amortization expense related to initial direct costs of $29.2 million, for the year ended December 31, 2022.
These dates can change for a variety of reasons, however for the last several years, manufacturing delays have significantly impacted the planned purchases of our aircraft on order with both Airbus and Boeing.
These dates can change for a variety of reasons, however for the last several years, manufacturing delays have significantly impacted the planned purchases of our aircraft on order with both Airbus and Boeing. The FAA has continued to enforce a cap on Boeing’s 737 MAX production until quality control issues are resolved.
We finance the purchase of aircraft and our business operations using available cash balances and internally generated funds, including through cash flows from our operating leases, aircraft sales and trading activity, and debt financings.
We finance the purchase of aircraft and our business operations using our available cash balances and internally generated funds, which includes cash flows from our leases, as well as aircraft sales and debt financing activities.
These investments are accounted for under the cost method of accounting. 48 Table of Contents Credit Ratings Our investment-grade corporate and long-term debt credit ratings help us to lower our cost of funds and broaden our access to attractively priced capital.
Our investment-grade corporate and long-term debt credit ratings help us to lower our cost of funds and broaden our access to attractively priced capital.
However, lease rate increases continue to lag behind interest rate increases. We expect that lease 40 Table of Contents rates will continue to increase as airlines adjust to a persistently higher interest rate environment and our funding advantage relative to our airline customers widens.
We believe that lease rates should continue to increase as airlines adjust to a persistently higher rate environment and our funding advantage relative to our airline customers widens.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+2 added−1 removed5 unchanged
Biggest changeThus, most of our revenue and expenses are denominated in U.S. dollars. Approximately 0.3% and 0.2% of our lease revenues were denominated in foreign currency as of December 31, 2023 and 2022, respectively.
Biggest changeApproximately 0.4% and 0.3% of our lease revenues were denominated in foreign currency as of December 31, 2024 and 2023, respectively. Additionally, some of our net investments in sales-type leases, which represent 0.6% and 0.2% of our total assets as of December 31, 2024 and 2023, respectively, were denominated in foreign currency.
However, many of our lessees are exposed to currency risk due to the fact that they earn revenues in their local currencies while a significant portion of their liabilities and expenses are denominated in U.S. dollars, including their lease payments to us, as well as fuel, debt service, and other expenses.
However, many of our lessees are exposed to currency risk due to the fact that they earn revenues in their local currencies 59 while a significant portion of their liabilities and expenses are denominated in U.S. dollars, including their lease payments to us, as well as fuel, debt service, and other expenses.
For the year ended December 31, 2023, more than 95% of our revenues were derived from customers who have their principal place of business outside the U.S. and most leases designated payment currency is U.S. dollars.
For the year ended December 31, 2024, more than 95% of our revenues were derived from customers who have their principal place of business outside the U.S. and most of our leases’ designated payment currency is U.S. dollars.
If the composite interest rate on our outstanding floating rate debt was to increase by 1.0%, we would expect to incur additional annual interest expense on our existing indebtedness of approximately $29.6 million and $16.3 million as of December 31, 2023 and December 31, 2022, respectively, each on an annualized basis, which would put downward pressure on our operating margins.
If the composite interest rate on our outstanding floating rate debt was to increase by 1.0%, we would expect to incur additional annual interest expense on our existing indebtedness of approximately $42.8 million and $29.6 million as of December 31, 2024 and 2023, respectively, each on an annualized basis, which would put downward pressure on our operating margins.
We have some exposure to changing interest rates as a result of our floating-rate debt, primarily from our Revolving Credit Facility and unsecured bilateral term loans. As of December 31, 2023 and 2022, we had $3.0 billion and $1.6 billion, in floating-rate debt outstanding, respectively.
We have some exposure to changing interest rates as a result of our floating-rate debt, primarily from our Revolving Credit Facility and unsecured term loans. As of December 31, 2024 and 2023, we had $4.3 billion and $3.0 billion, in floating-rate debt outstanding, respectively.
If interest rates remain elevated, which we expect for the near term, we would be obligated to make higher interest payments to our lenders, and higher dividend payments to the holders of our preferred stock.
If interest rates remain elevated, we would be obligated to make higher interest payments to the lenders of our floating-rate debt, and higher dividend payments to the holders of our preferred stock.
Additionally, we have outstanding preferred stock with an aggregate stated amount of $850.0 million, of which $250.0 million will begin paying dividends at a floating rate on March 15, 2024 and the remaining $600.0 million will reset dividends to a new fixed rate based on the then-applicable floating rate after five years from initial issuance and every five years thereafter.
Additionally, we have outstanding preferred stock with an aggregate stated amount of $900.0 million as of December 31, 2024 which will reset the dividends to a new fixed rate based on the then-applicable treasury rate after five years from initial issuance and every five years thereafter.
To partially mitigate the risk of an increasing interest rate environment between the lease signing date and the delivery date of the aircraft, a majority of our forward lease contracts have manufacturer escalation protection and/or interest rate adjusters which would adjust the final lease rate upward or downward based on changes in the consumer price index or certain benchmark interest rates, respectively, at the time of delivery of the aircraft as compared to the lease signing date, subject to an outside limit on such adjustments. 57 Table of Contents 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.
To partially mitigate the risk of an increasing interest rate environment between the lease signing date and the delivery date of the aircraft, a majority of our forward lease contracts have manufacturer escalation protection and/or interest rate adjusters which would adjust the final lease rate upward or downward based on changes in the consumer price index or certain benchmark interest rates, respectively, at the time of delivery of the aircraft as compared to the lease signing date, subject to an outside limit on such adjustments.
Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional details on the fair value of these swaps. 58 Table of Contents
“Fair Value Measurements” in the “Notes to Consolidated Financial Statements” under “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional details on the fair value of these swaps.
Approximately 3.5% and 1.6% of our debt obligations were denominated in foreign currency as of December 31, 2023 and December 31, 2022; however, the exposure of such debt has been effectively hedged as described below.
We periodically assess our unhedged foreign currency risk and may employ hedging strategies in the future to mitigate any potential adverse effects. Approximately 6.1% and 3.5% of our debt obligations were denominated in foreign currency as of December 31, 2024 and December 31, 2023, respectively; however, the exposure of such debt has been effectively hedged. See Note 13.
The ability of our lessees to make lease payments to us in U.S. dollars may be adversely impacted in the event of an appreciating U.S. dollar. In December 2019, we issued C$400.0 million in aggregate principal amount of 2.625% notes due 2024. In November 2023, we issued C$500.0 million in aggregate principal amount of 5.400% notes due 2028.
The ability of our lessees to make lease payments to us in U.S. dollars may be adversely impacted in the event of an appreciating U.S. dollar. 60
Removed
We effectively hedged our foreign currency exposure on these transactions through cross-currency swaps that convert the borrowing rate to fixed U.S. dollar denominated rates of 2.535% and 5.942%, respectively. See Note 11 of “Notes to Consolidated Financial Statements” under “Item 8.
Added
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.
Added
These investments are not currently hedged and require remeasurement as of the end of each period, exposing us to fluctuations in exchange rates that could impact our financial results and cash flows. During the year ended December 31, 2024, we incurred a $5.6 million loss resulting from currency fluctuation based on these investments.

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