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

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

(Exact name of registrant as specified in its charter)

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

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

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

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Class A Common Stock			AL			New York Stock Exchange
3.700% Medium-Term Notes, Series A, due April 15, 2030			AL30			New York Stock Exchange

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

At October 31, 2025, there were 111,765,032 shares of Air Lease Corporation’s Class A common stock outstanding.

This Quarterly Report on Form 10-Q and other publicly available documents may contain or incorporate statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this Form 10-Q and include statements regarding, among other matters, the proposed acquisition (the “Merger”) of Air Lease Corporation pursuant to the Agreement and Plan of Merger, dated September 1, 2025, including any statements regarding the expected closing of the Merger, the ability to complete the Merger, and the expected benefits of the proposed Merger, the state of the airline industry, our ability to access to the capital and debt markets (including any restrictions imposed by the proposed Merger), the impact of Russia’s invasion of Ukraine and the impact of sanctions imposed on Russia, aircraft and engine delivery delays and manufacturing flaws, our aircraft sales pipeline and expectations, changes in inflation and interest rates and other macroeconomic conditions and other factors affecting our financial condition or results of operations. Words such as “can,” “could,” “may,” “predicts,” “potential,” “will,” “projects,” “continuing,” “ongoing,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and “should,” and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements, or industry results to vary materially from our future results, performance or achievements, or those of our industry, expressed or implied in such forward-looking statements. Such factors include, among others:

•the inability to complete the Merger because of the failure to receive, on a timely basis or otherwise, the required approvals by Class A common stockholders;

•the inability to complete the Merger because of the failure to receive, on a timely basis or subject to conditions that are not anticipated, the required approvals by governmental or regulatory agencies in connection with the transactions contemplated by the merger agreement;

•the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

•the risk that the pendency and uncertainty of the Merger disrupts our business and current plans and operations and potential difficulties in employee retention as a result;

•the effect of the announcement of the Merger on our business relationships, operating results and business generally;

•certain restrictions on our business activities resulting from the pendency of the Merger;

•the restrictions or prohibitions under certain covenants in the merger agreement during the pendency of the Merger that may impact our ability to pursue certain business opportunities;

•the risk that our Class A common stock price may decline if the Merger is not consummated;

•the risk that the Merger may involve unexpected costs, liabilities or delays, or the amount of costs, fees, expenses and charges relating to the Merger may be significant;

•our inability to obtain additional capital on favorable terms, or at all, to acquire aircraft from our orderbook, service our debt obligations and refinance maturing debt obligations, including as a result of the restrictions under the merger agreement on our ability to incur additional debt, which may negatively impact our liquidity and ability to maintain our investment grade credit ratings;

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

•the failure of an aircraft or engine manufacturer to meet its contractual obligations to us, including or as a result of labor strikes, aviation supply chain constraints, manufacturing flaws, or technical or other difficulties with aircraft or engines before or after delivery;

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

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

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

•increased competition from other aircraft lessors;

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

•increased tariffs and other restrictions on trade;

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

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

•any additional factors discussed under “Part I — Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, “Part II — Item 1A. Risk Factors” in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025, June 30, 2025, and September 30, 2025, and other Securities and Exchange Commission (“SEC”) filings, including future SEC filings.

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

ITEM 1.    FINANCIAL STATEMENTS

Air Lease Corporation (the “Company”, “AL”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. The Company is principally engaged in purchasing the most modern, fuel-efficient, new technology commercial jet aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”). The Company leases these aircraft to airlines throughout the world with the intention of generating attractive returns on equity. As of September 30, 2025, the Company owned 503 aircraft, managed 50 aircraft and had 228 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its fleet to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee.

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

The accompanying unaudited Consolidated Financial Statements include all adjustments, consisting only of normal, recurring adjustments, which are in the opinion of management necessary to present fairly the Company’s financial position, results of operations and cash flows at September 30, 2025, and for all periods presented. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results expected for the year ending December 31, 2025. These financial statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Certain amounts have been reclassified in the 2024 financial statements to conform to the 2025 presentation.

The Company records as period costs those internal and other costs incurred in connection with identifying, negotiating, and delivering aircraft to the Company’s lessees. Amounts paid by the Company to lessees and/or other parties in connection with originating lease transactions, including any lessor contributions for maintenance events, are capitalized as lease incentives and are amortized over the lease term. Additionally, regarding the extension of leases that contain maintenance reserve provisions, the Company considers maintenance reserves that were previously recorded as revenue and no longer meet the virtual certainty criteria as a function of the extended lease term as lease incentives and capitalizes such costs. The amortization of lease incentives is recorded as a reduction of lease rentals in the Consolidated Statements of Income and the lessor contribution associated is included within Accrued interest and other payables in the Consolidated Balance Sheets.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The new requirements are effective for annual periods beginning after December 15, 2024 and will be applied on a prospective basis. The Company is currently evaluating the impact of ASU 2023-09 on its financial statement disclosures.

In November 2024, FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). In January 2025, the FASB issued Clarifying the Effective Date (“ASU 2025-01”) to add some clarity around the effective date of the guidance. ASU 2024-03 requires disaggregated information for specified categories of expenses, including inventory purchases, employee compensation, depreciation, amortization, and depletion, to be presented in certain expense captions on the face of the income statement.

The new standard is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively, to financial statements issued after the effective date, or retrospectively, to all prior periods presented. The Company is currently evaluating the impact of ASU 2024-03 on its financial statement disclosures.

The Company’s consolidated debt as of September 30, 2025 and December 31, 2024 is summarized below:

As of September 30, 2025, management of the Company believes it is in compliance in all material respects with the covenants in its debt agreements, including minimum consolidated stockholders’ equity, minimum consolidated unencumbered assets, and an interest coverage ratio test. At September 30, 2025 and December 31, 2024, the composite interest rate (excluding amortization of debt discounts and issuance costs) was 4.29% and 4.14%, respectively.

As of September 30, 2025 and December 31, 2024, the Company had $13.9 billion and $16.0 billion in senior unsecured securities outstanding, respectively. The Company did not issue any senior unsecured securities during the nine months ended September 30, 2025.

As of September 30, 2025, the Company did not have any amounts outstanding under its unsecured syndicated revolving credit facility (the “Revolving Credit Facility”). As of December 31, 2024, the Company had $170.0 million outstanding under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are used to finance the Company’s working capital needs in the ordinary course of business and for other general corporate purposes.

In April 2025, the Company amended and extended its Revolving Credit Facility through an amendment that, among other things, (i) added ALC Aircraft Financing Designated Activity Company, an indirect, wholly-owned subsidiary of the Company, as a borrower to the Revolving Credit Facility under a new tranche B revolving commitment totaling $250.0 million, (ii) extended the final maturity date from May 5, 2028 to May 5, 2029 and (iii) amended the total revolving commitments thereunder to approximately $8.2 billion as of May 5, 2025. Borrowings under the Revolving Credit Facility continue to accrue interest at Adjusted Term SOFR (as defined in the Revolving Credit Facility) plus a margin of 1.05% per year. The Company is required to pay a facility fee of 0.20% per year in respect of total commitments under the Revolving Credit Facility. Interest rate and facility fees are subject to changes in the Company’s credit ratings.

In May 2025, the Company entered into a new lender supplement which increased the aggregate capacity of the Revolving Credit Facility by $250.0 million. The additional capacity has a stated maturity date of May 5, 2029.

As of November 3, 2025, the Company had total revolving commitments of approximately $8.4 billion. Lenders held revolving commitments totaling approximately $8.0 billion that mature on May 5, 2029, commitments totaling $125.0 million that mature on May 5, 2028, commitments totaling $25.0 million that mature on May 5, 2027 and commitments totaling $210.0 million that mature on May 5, 2026.

As of September 30, 2025, the Company had outstanding borrowings totaling $600.0 million under two unsecured revolving credit facilities, each with an outstanding balance of $300.0 million. The borrowings bear interest at one-month Term SOFR plus 1.00% and one-month Term SOFR plus 1.05%, respectively, and mature in 2025. As of December 31, 2024, the Company did not have outstanding balances under its other unsecured revolving credit facilities. These facilities are not guaranteed and are available at the sole discretion of the lender, who has the right to modify or terminate the facilities at any time.

In December 2024, the Company entered into a $966.5 million unsecured term loan with a three-year maturity bearing interest at one-month Term SOFR plus a margin of 1.125%, subject to adjustment based on the Company’s credit rating. In April 2025, pursuant to the terms of the loan agreement, the Company exercised its option for additional commitments totaling $33.5 million. The term loan contains customary covenants and events of default consistent with the Company’s Revolving Credit Facility.

In addition, during the nine months ended September 30, 2025, the Company entered into three other unsecured term facilities, with aggregate commitments totaling $550.0 million with terms ranging between one to two years, bearing interest at a floating rate between one-month SOFR plus 1.00% and one-month SOFR plus 1.15% plus a credit spread adjustment of 0.10%.

As of September 30, 2025 and December 31, 2024, the outstanding balance on the Company’s unsecured term financings was $3.9 billion and $3.6 billion, respectively.

As of September 30, 2025, the Company had an outstanding balance of $511.9 million in secured debt financings, and had pledged ten aircraft as collateral, with a net book value of $736.2 million. As of December 31, 2024, the Company had an outstanding balance of $544.6 million in secured debt financings and had pledged ten aircraft as collateral, with a net book value of $772.7 million. All of the Company’s secured obligations as of September 30, 2025 and December 31, 2024 were recourse in nature.

On January 21, 2025, the Company established a commercial paper program under which it may issue unsecured commercial paper up to a total of $2.0 billion outstanding at any time, with maturities of up to 397 days from the date of issue. The net proceeds from the issuance of commercial paper are used for general corporate purposes, which may include, among other things, the purchase of commercial aircraft and the repayment of existing indebtedness. As of September 30, 2025, the Company had an outstanding balance of $1.5 billion under its commercial paper program with a weighted average interest rate of 4.61% and a weighted average maturity of less than one month.

Maturities of debt outstanding as of September 30, 2025 are as follows (in thousands):

The following table summarizes the activities for the Company’s flight equipment subject to operating lease for the nine months ended September 30, 2025:

In June 2022, the Company and certain of its subsidiaries (collectively, the “Plaintiffs”) submitted insurance claims to the insurers (collectively, the “C&P Insurers”) on the Plaintiffs’ contingent and possessed insurance policy (“C&P Policy”) to recover losses relating to aircraft detained in Russia for which the Company recorded a net write-off of its interests in its owned aircraft totaling approximately $760.1 million for the year ended December 31, 2022. On December 20, 2022, the Plaintiffs filed suit in the Los Angeles County Superior Court of the State of California against the C&P Insurers in connection with their previously submitted insurance claims (the “California Litigation”).

During the nine months ended September 30, 2025, the Plaintiffs entered into settlement agreements with all C&P Insurers. As a result, the Company recognized an aggregate of $328.5 million, $339.4 million and $59.7 million in cash insurance settlement proceeds during the three months ended March 31, 2025, June 30, 2025, and September 30, 2025, respectively. All proceeds are recognized under Recoveries of Russian fleet write-off in the Company’s consolidated statement of income and comprehensive income.

As of November 3, 2025, the Company has recovered an aggregate of $823.2 million against its initial $791.0 million write-off of its interests in owned aircraft detained in Russia taken during the first quarter of 2022, comprised of $727.6 million in cash insurance settlement proceeds received from C&P Insurers, $64.7 million in cash insurance settlement proceeds, net of fees, received in December 2023 under Russian airline S7’s insurance policies in respect of four aircraft in the Company’s owned fleet on lease to S7 at the time of Russia’s invasion of Ukraine, and a $30.9 million benefit recorded from the October 2022 return of one Boeing 737-8 MAX aircraft that was not operating and had been in storage in Russia since the 737 MAX grounding.

As of September 30, 2025, the Company had 11 aircraft, with a carrying value of $341.8 million, which were classified as held for sale on the Consolidated Balance Sheets. The Company expects that the majority of the 11 aircraft currently classified as flight equipment held for sale will be sold over the next two quarters. As of September 30, 2025, the Company had an aggregate of $186.9 million in purchase deposits pursuant to sale agreements related to five of the 11 aircraft, which amount is included in Accrued interest and other payables on the Consolidated Balance Sheets.

As of December 31, 2024, the Company had 30 aircraft, with a carrying value of $951.2 million, which were classified as held for sale.

During the nine months ended September 30, 2025, the Company transferred six aircraft from flight equipment subject to operating lease to flight equipment held for sale and completed the sale of 25 aircraft from its held for sale portfolio. The Company ceases recognition of depreciation expense once an aircraft is classified as held for sale.

The following table summarizes the activities of the Company’s flight equipment held for sale for the nine months ended September 30, 2025 based on carrying value:

In April 2025, the Company entered into a supplemental agreement with Boeing to purchase five incremental 737-8 MAX aircraft scheduled to deliver in 2031. In June 2025, the Company entered into an agreement with Airbus to cancel future orders of seven A350F aircraft.

As of September 30, 2025, the Company had contractual commitments to acquire a total of 228 new aircraft from Airbus and Boeing for delivery through 2031, with an estimated aggregate commitment (including adjustments for anticipated inflation) of $13.4 billion. The following table shows the Company’s contractual delivery commitment schedule as of September 30, 2025:

Pursuant to its purchase agreements with Airbus and Boeing, the Company agrees to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, however, for the last several years, manufacturing delays have significantly impacted the planned purchases of the Company’s aircraft on order with both Airbus and Boeing. The Company has agreed to revised contractual delivery dates for its Airbus and Boeing aircraft. As of the date of this filing, Airbus and Boeing have generally met the revised delivery dates, and when delayed, the delays have been generally one or two months. However, going forward, delivery delays beyond the revised delivery dates could increase as to the number of aircraft delayed and/or the length of delays.

The FAA continues to enforce a cap on Boeing’s 737 MAX production until quality control issues are resolved, although the production cap was increased modestly in October 2025. The broader aviation supply chain remains constrained impacting production capacity for both Airbus and Boeing and resulting in delivery delays.

The aircraft purchase commitments discussed above could also be impacted by cancellations. The Company’s purchase agreements with Airbus and Boeing generally provide each of the Company and the manufacturers with cancellation rights for delivery delays starting at one year after the original contractual delivery date, regardless of cause. In addition, the Company’s lease agreements generally provide each of the Company and the lessee with cancellation rights related to certain aircraft delivery delays that typically parallel the cancellation rights in the Company’s purchase agreements.

Generally, Boeing aircraft manufactured in the U.S. and delivered to customers in other countries may be subject to tariffs; however, the trade framework with the E.U. the U.K. and Japan preserves the zero tariff regime on Boeing and Airbus aircraft and parts imported into the U.S., the E.U., the U.K. and Japan, respectively. As of the date of this filing, the Company has no aircraft placed for delivery from its orderbook that are expected to be subject to currently announced tariffs. As of September 30, 2025, approximately 1.6% of the Company’s aircraft by net book value are on lease to lessees located in China, and the Company does not have any scheduled future aircraft deliveries to Chinese airline customers.

The Company’s leases are primarily structured as triple net leases, whereby the lessee is responsible for all operating costs including the costs associated with the importation of aircraft. The Company’s lessees are generally obligated to pay such tariffs to customs authorities. If lessees are unwilling or unable to assume such costs, it could have an adverse impact on demand for commercial aircraft or result in lease cancellations for those of our customers whose aircraft delivery has been delayed by over one year and who hold lease cancellation rights.

Commitments for the acquisition of these aircraft, calculated at an estimated aggregate commitment (including adjustments for anticipated inflation) of approximately $13.4 billion as of September 30, 2025, are as follows:

The Company has made non-refundable deposits on flight equipment purchases of $1.1 billion and $0.8 billion as of September 30, 2025 and December 31, 2024, respectively, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits and may also be exposed to breach of contract claims by its lessees as well as the manufacturers.

As of September 30, 2025, the Company had sales-type leases for 16 aircraft and one engine. As of December 31, 2024, the Company had sales-type leases for 15 aircraft and one engine.

Net investment in sales-type leases is included in the Company’s Consolidated Balance Sheets based on the present value of fixed payments under the contract and the residual value of the underlying asset, discounted at the rate implicit in the lease. The Company’s investment in sales-type leases consisted of the following as of September 30, 2025:

As of September 30, 2025, future minimum lease payments to be received on sales-type leases were as follows:

As of September 30, 2025, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s owned fleet, which have been delivered as of September 30, 2025 are as follows:

Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s two classes of common stock, Class A and Class B non-voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of September 30, 2025, the Company did not have any Class B non-voting common stock outstanding.    

Diluted earnings per share takes into account the vesting of restricted stock units using the treasury stock method. For the three and nine months ended September 30, 2025, and 2024, the Company did not exclude any potentially dilutive securities, whose effect would have been anti-dilutive, from the computation of diluted earnings per share. The Company excluded 1,033,419 and 1,047,068 shares related to restricted stock units for which the performance metric had yet to be achieved as of September 30, 2025 and 2024, respectively.

The following table sets forth the reconciliation of basic and diluted earnings per share:

Other assets consisted of the following as of September 30, 2025 and December 31, 2024:

Accrued interest and other payables consisted of the following as of September 30, 2025 and December 31, 2024:

The Company has three cross-currency swaps related to its Canadian dollar and Euro Medium-Term Notes. The fair value of these swaps as a foreign currency derivative are categorized as a Level 2 measurement in the fair value hierarchy and are measured on a recurring basis. As of September 30, 2025, the estimated fair value of the Company’s foreign currency swaps was, in the aggregate, derivative assets of $45.2 million and derivative liabilities of $5.3 million. As of December 31, 2024, the estimated fair value of the Company’s foreign currency swaps were, in the aggregate, derivative liabilities of $38.8 million. Derivative assets are included in Other assets and derivative liabilities are included in Accrued interest and other payables on the Company’s Consolidated Balance Sheets.

The fair value of debt financing is estimated based on the quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities, which would be categorized as a Level 2 measurement in the fair value hierarchy. The estimated fair value of debt financing as of September 30, 2025 was $20.2 billion compared to a book value of $20.3 billion. The estimated fair value of debt financing as of December 31, 2024 was $20.1 billion compared to a book value of $20.4 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at September 30, 2025, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at September 30, 2025 and December 31, 2024 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.

The Company was authorized to issue up to 500,000,000 shares of Class A common stock, $0.01 par value, at September 30, 2025 and December 31, 2024. As of September 30, 2025 and December 31, 2024, the Company had 111,765,032 and 111,376,884 shares of Class A common stock issued and outstanding, respectively. The Company was authorized to issue up to 10,000,000 shares of Class B non-voting common stock, $0.01 par value at September 30, 2025 and December 31, 2024. The Company did not have any shares of Class B non-voting common stock, $0.01 par value, issued or outstanding as of September 30, 2025 or December 31, 2024.

The Company was authorized to issue up to 50,000,000 shares of preferred stock, $0.01 par value, at September 30, 2025 and December 31, 2024. As of September 30, 2025 and December 31, 2024, the Company 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, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share), 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, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share), and 300,000 shares of 6.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series D (the “Series D Preferred Stock”), $0.01 par value, issued and outstanding with an aggregate liquidation preference of $300.0 million ($1,000 per share).

The following table summarizes the Company’s preferred stock issued and outstanding as of September 30, 2025 (in thousands, except for share amounts and percentages):

On May 3, 2023, the stockholders of the Company approved the Air Lease Corporation 2023 Equity Incentive Plan (the “2023 Plan”). As of September 30, 2025, the number of shares of Class A Common Stock available for new award grants under the 2023 Plan is approximately 3,450,745. The Company has issued restricted stock units (“RSUs”) with four different vesting criteria: those RSUs that vest based on the attainment of book-value goals, those RSUs that vest based on the attainment of total shareholder return (“TSR”) goals, time based RSUs that vest ratably over a time period of three years and RSUs that cliff vest at the end of a one year or two year period.

The Company recorded $9.6 million and $7.9 million of stock-based compensation expense related to RSUs for the three months ended September 30, 2025 and 2024, respectively. The Company recorded $39.9 million and $25.0 million of stock-based compensation expense related to RSUs for the nine months ended September 30, 2025 and 2024, respectively. Of the $39.9 million of stock-based compensation expense recorded for the nine months ended September 30, 2025, the Company recorded a $9.6 million expense related to the acceleration of certain RSUs resulting from the retirement of the Company’s Chairman from his executive role. In addition, the Company also revised the underlying vesting estimates of certain book value RSUs due to increased probability of certain performance criteria being achieved, which also contributed to the increase in stock-based compensation expense during the period.

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

During the nine months ended September 30, 2025, the Company granted 663,475 RSUs of which 103,223 were TSR RSUs and 239,286 were book value RSUs. The following table summarizes the activities for the Company’s unvested RSUs for the nine months ended September 30, 2025:

As of September 30, 2025, there was $42.3 million of unrecognized compensation expense related to unvested stock-based payments granted to employees. Total unrecognized compensation expense will be recognized over a weighted-average remaining period of 1.87 years.

For the nine months ended September 30, 2025, the Company recorded a $9.2 million payroll expense accrual resulting from the retirement of its Chairman from his executive role, which will be payable in substantially equal installments in accordance with the Company’s normal payroll practices through May 2027. The additional payroll expense is included in selling, general and administrative expenses in the Company’s Consolidated Statements of Income, while the liability is included in Accrued interest and other payables on the Company’s Consolidated Balance Sheets.

As of September 30, 2025, the Company managed 50 aircraft across three aircraft management platforms. The Company managed 28 aircraft through the Blackbird investment funds, 21 aircraft through its Thunderbolt platform and one aircraft on behalf of a financial institution.

As of September 30, 2025, the Company managed 28 aircraft on behalf of third-party investors through two investment funds, Blackbird I and Blackbird II. These funds invest in commercial jet aircraft and lease them to airlines throughout the world. The Company provides management services to these funds for a fee. As of September 30, 2025, the Company’s non-controlling interests in each fund were 9.5% and are accounted for under the equity method of accounting. The Company’s investments in these funds aggregated $78.8 million and $71.6 million as of September 30, 2025 and December 31, 2024, respectively, and are included in Other assets on the Consolidated Balance Sheets.

Additionally, the Company continues to manage aircraft that it sells through its Thunderbolt platform. The Thunderbolt platform facilitates the sale of mid-life aircraft to investors while allowing the Company to continue the management of these aircraft for a fee. As of September 30, 2025, the Company managed 21 aircraft across two separate transactions. The Company has non-controlling interests in two of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. The Company’s total investment in aircraft sold through its Thunderbolt platform was $8.6 million and $8.8 million as of September 30, 2025 and December 31, 2024, respectively, and are included in Other assets on the Consolidated Balance Sheets.

During the three and nine months ended September 30, 2025, the Company’s managed platforms received cash insurance settlement proceeds related to certain of their insurance claims related to aircraft detained in Russia. As a result, during the three and nine months ended September 30, 2025, the Company recognized a benefit of $0.8 million and $8.8 million, respectively, related to recoveries of its equity interest in its managed fleet that were written off in 2022, which is included under Recoveries of Russian fleet write-off in its consolidated statement of income and comprehensive income. As of November 3, 2025, two aircraft for which the Company’s managed fleet retain title remain in Russia.

Finally, the Company also manages one aircraft for a financial institution for a fee. The Company does not have any equity interest in this financial institution nor ownership of the aircraft.

Consummation of the Merger is subject to customary closing conditions, including without limitation, (i) the adoption and approval of the Merger Agreement and the transactions contemplated thereby by the affirmative votes of holders of a majority of the outstanding shares of Common Stock at a meeting of the Company’s stockholders, (ii) the expiration or termination of the waiting period applicable to the Merger and the other transactions contemplated thereby (including the Orderbook Transfer (as defined in the Merger Agreement)) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and under certain non-U.S. antitrust and competition laws, and the receipt of approval of the Committee on Foreign Investment in the United States under the Defense Production Act and under certain non-U.S. investment laws, (iii) the absence of any applicable law, judgment, or other legal restraint or prohibition or binding order or determination by any governmental entity (“Legal Restraint”) that prevents, makes illegal or prohibits the consummation of the Merger and the other transactions contemplated by the Merger Agreement, (iv) the accuracy of each party’s representations and warranties (subject to certain qualifications), (v) each party’s performance in all material respects of its obligations under the Merger Agreement and (vi) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) after the date of the Merger Agreement. As described in more detail in “Part II — Item 1. Legal Proceedings”, a lawsuit related to the Merger was filed on October 30, 2025 by a purported Class A common stockholder, however, the plaintiff filed a notice for voluntary dismissal of its claim without prejudice on November 3, 2025.

The Merger Agreement includes customary representations, warranties and covenants of the Company, Parent, and Merger Sub. Among other things, the Company has agreed to customary covenants regarding the operation of the business of the Company and its subsidiaries prior to the Effective Time. The Company is permitted to pay regular quarterly cash dividends up to $0.22 per share of Common Stock, $11.625 per share of Series B Preferred Stock, $10.3125 per share of Series C Preferred Stock, and $15.00 per share of Series D Preferred Stock (which amounts in respect of the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock may be adjusted in accordance with the dividend reset provisions contained in the relevant certificates of designation) pursuant to the Merger Agreement.

The Merger Agreement contains specified termination rights for each of the parties. Upon termination of the agreement under certain conditions, including with respect to the Company’s entry into an agreement with respect to a qualifying “Superior Proposal” (as defined in the Merger Agreement), the Company must pay Parent a $225.0 million termination fee. Parent must pay to the Company a $350.0 million termination fee if either Parent or the Company terminates the Merger Agreement in certain circumstances where the Merger Agreement is terminated due to failure to obtain a required regulatory approval by the End Date (as defined in the Merger Agreement) or due to a Legal Restraint related to a failure to obtain a required regulatory approval.

The Company currently anticipates that the Merger will close in the first half of calendar year 2026, subject to the satisfaction of the remaining customary closing conditions.

On October 31, 2025, the Company’s board of directors approved quarterly cash dividends for the Company’s Class A common stock and Series B, Series C and Series D preferred stock. The following table summarizes the details of the dividends that were declared:

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

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

Air Lease Corporation (the “Company”, “AL”, “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. (“Airbus”) and The Boeing Company (“Boeing”), and leasing those aircraft to airlines throughout the world with the intention of generating 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. 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.

The Company currently anticipates that the Merger will close in the first half of calendar year 2026, subject to the satisfaction or waiver of the customary closing conditions. We currently operate, and until completion of the Merger will continue to operate, independently of Parent. See Note 16 of Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Item 1.01 of our Current Report on Form 8-K filed with the SEC on September 2, 2025 for additional information regarding the proposed Merger.

During the three months ended September 30, 2025, we purchased 13 new aircraft from Airbus and Boeing and sold five aircraft. We ended the third quarter with a total of 503 aircraft in our owned fleet. The net book value of our fleet1 grew by 4.8% to $29.5 billion as of September 30, 2025 compared to $28.2 billion as of December 31, 2024. The weighted average age of our fleet was 4.9 years and the weighted average lease term remaining was 7.2 years as of September 30, 2025. Our managed fleet was comprised of 50 aircraft as of September 30, 2025 compared to 60 aircraft as of December 31, 2024. We have a globally diversified customer base comprised of 108 airlines in 55 countries as of September 30, 2025. We continued to maintain a strong lease utilization rate of 100% for the three months ended September 30, 2025.

As of September 30, 2025, we had commitments to purchase 228 aircraft from Airbus and Boeing for delivery through 2031, with an estimated aggregate commitment of $13.4 billion. We have placed 100% and 96% of our expected orderbook on long-term leases for aircraft delivering through the end of 2026 and 2027, respectively, and have placed approximately 64% of our entire orderbook through 2031. We ended the third quarter of 2025 with $29.3 billion in committed minimum future rental payments, consisting of $19.6 billion in contracted minimum rental payments on the aircraft in our existing fleet and $9.7 billion in minimum future rental payments related to aircraft which will deliver during the last three months of 2025 through 2031.

Our total revenues for the quarter ended September 30, 2025 increased by 5.1% to $725.4 million, compared to the quarter ended September 30, 2024. Our total revenues increased from the prior year primarily due to the continued growth in our fleet and an increase in our portfolio lease yield, partially offset by a decrease in aircraft sales activity. We recorded $35.0 million in gains from the sale of five aircraft for the three months ended September 30, 2025 compared to $49.6 million in gains from the sale of nine aircraft and two sales-type leases for the three months ended September 30, 2024.

We finance the purchase of aircraft and our business with our available cash balances and internally generated funds, which includes cash flows from our leases, as well as aircraft sales and debt financing activities. Our long-term debt financing strategy is focused on raising primarily unsecured debt in the global bank and investment grade capital markets, with limited utilization of government guaranteed export credit or other forms of secured financing, however, pursuant to the Merger Agreement, from September 1, 2025 to May 1, 2026, we are restricted from incurring additional indebtedness, other than borrowings under our existing revolving credit facilities or our commercial paper program without Parent’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed). We ended the third quarter of 2025 with available liquidity of $7.4 billion, which was comprised of unrestricted cash of $452.2 million and approximately $6.9 billion in undrawn balances under our unsecured revolving credit facility, net of $1.5 billion in commercial paper borrowings. As of September 30, 2025, we had total debt outstanding of $20.3 billion, of which 75.7% was at a fixed rate and 97.5% was unsecured, and in the aggregate, our composite cost of funds was 4.29%.

For the three months ended September 30, 2025, we reported net income attributable to common stockholders of $135.4 million, or $1.21 per diluted share, compared to net income attributable to common stockholders of $91.6 million, or $0.82 per diluted share, for the three months ended September 30, 2024. The increase from the prior year period is primarily due to higher rental revenues and a net benefit of $60.5 million from the settlement of insurance claims with certain insurers related to aircraft detained in Russia. This was partially offset by lower sales activity, an increase in our selling, general and administrative expenses due to $8.6 million in costs associated with the merger, and higher interest expense, driven by an increase in our composite cost of funds.

For the three months ended September 30, 2025, we recorded adjusted net income before income taxes2 of $144.5 million, or $1.29 per adjusted diluted share, compared to adjusted net income before income taxes of $140.2 million, or $1.25 per adjusted diluted share, for the three months ended September 30, 2024. Adjusted net income before income taxes increased primarily due to an increase in total revenues as discussed above, partially offset by lower sales activity and higher interest expense.

1 References throughout this Quarterly Report on Form 10-Q to “our fleet” refer to the aircraft included in flight equipment subject to operating leases and do not include aircraft in our managed fleet, flight equipment held for sale or aircraft classified as net investments in sales-type leases unless the context indicates otherwise.

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. Adjusted net income before income taxes and adjusted diluted earnings per share before income taxes are measures of financial and operational performance that are not defined by U.S. Generally Accepted Accounting Principles (“GAAP”). See “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.

We continue to own one of the youngest fleets among aircraft lessors, including some of the most fuel-efficient commercial jet aircraft available. Our fleet, based on net book value, increased by 4.8%, to $29.5 billion as of September 30, 2025, compared to $28.2 billion as of December 31, 2024. During the quarter ended September 30, 2025, we purchased 13 new aircraft from Airbus and Boeing and sold five aircraft. We ended the period with a total of 503 aircraft in our owned fleet. As of September 30, 2025, the weighted average fleet age and weighted average remaining lease term of our fleet were 4.9 years and 7.2 years, respectively. We also managed 50 aircraft as of September 30, 2025.

Our portfolio metrics as of September 30, 2025 and December 31, 2024 are as follows:

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 September 30, 2025 and December 31, 2024:

The following table sets forth our top five lessees by net book value as of September 30, 2025 and December 31, 2024: