Air Lease Corporation (AL) Bundle
A Brief History of H3
As of September 30, 2024, H3 reported an outstanding balance of $551.7 million in secured debt financings, which included the secured term loan. The company had pledged ten aircraft as collateral, with a net book value of $778.9 million. In comparison, as of December 31, 2023, the outstanding balance in secured debt was $305.5 million, with four aircraft pledged as collateral valued at $445.9 million.
In September 2024, H3 issued 300,000 shares of Series D Preferred Stock with a stated value of $1,000 per share, carrying an initial dividend rate of 6.00% through December 15, 2029. The company redeemed all outstanding shares of Series A Preferred Stock on October 17, 2024, at a redemption price of $25.00 per share.
During the third quarter of 2024, H3 purchased 20 new aircraft from Airbus and Boeing and sold nine aircraft, concluding the quarter with a total owned fleet of 485 aircraft. The net book value of the fleet increased by 6.3% to $27.9 billion as of September 30, 2024, compared to $26.2 billion as of December 31, 2023.
The weighted average age of the fleet remained at 4.6 years with a weighted average remaining lease term of 7.1 years. The company has commitments to purchase 287 aircraft from Airbus and Boeing through 2029, with an estimated aggregate commitment of $18.2 billion.
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt Outstanding | $20.3 billion | $19.4 billion |
| Net Book Value of Fleet | $27.9 billion | $26.2 billion |
| Owned Fleet | 485 aircraft | 463 aircraft |
| Managed Fleet | 64 aircraft | 78 aircraft |
| Committed Minimum Future Rentals | $29.7 billion | $31.0 billion |
As of September 30, 2024, H3 had total liquidity of $7.5 billion, including $0.5 billion in unrestricted cash and $6.5 billion in undrawn balances under its unsecured revolving credit facility. The company’s debt financing strategy emphasizes raising unsecured debt in global capital markets, which accounted for 97.3% of total debt.
In terms of financial performance, H3 reported consolidated net income attributable to common stockholders of $279.5 million for the nine months ended September 30, 2024, equating to $2.50 per diluted share, a decrease from $362.3 million or $3.25 per diluted share for the same period in 2023. Adjusted net income before income taxes for the same period was $423.8 million or $3.79 per adjusted diluted share, down from $519.7 million or $4.67 per adjusted diluted share year-over-year.
H3 reported a composite cost of funds of 4.21% as of September 30, 2024, compared to 3.77% as of December 31, 2023. The company maintained a strong lease utilization rate of 100.0% for the quarter.
A Who Owns Air Lease Corporation (AL)
Ownership Structure
As of September 30, 2024, Air Lease Corporation (AL) had the following ownership structure:
| Shareholder Type | Shares Owned | Percentage of Total Shares |
|---|---|---|
| Class A Common Stock | 111,376,884 | 100% |
| Class B Non-Voting Common Stock | 0 | 0% |
Major Institutional Shareholders
Institutional ownership of Air Lease Corporation as of the latest reporting period includes the following major shareholders:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 15,345,000 | 13.76% |
| The Vanguard Group, Inc. | 10,125,000 | 9.09% |
| State Street Corporation | 8,000,000 | 7.16% |
| Franklin Templeton Investments | 7,500,000 | 6.73% |
| Invesco Ltd. | 6,000,000 | 5.38% |
Executive Ownership
Key executives also hold significant shares in the company:
| Executive | Title | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Steven F. Udvar-Házy | Executive Chairman | 5,000,000 | 4.48% |
| John L. Plueger | CEO & President | 2,000,000 | 1.79% |
| Gregory A. Aretakis | CFO | 1,000,000 | 0.90% |
Recent Stock Performance
As of September 30, 2024, Air Lease Corporation reported the following financial performance metrics:
| Metric | Value |
|---|---|
| Market Capitalization | $9.1 billion |
| Stock Price | $81.75 |
| EPS (Earnings Per Share) | $2.51 |
| P/E Ratio (Price/Earnings) | 32.5 |
| Dividend per Share | $0.63 |
Future Shareholder Actions
Upcoming shareholder actions include:
| Action | Date | Details |
|---|---|---|
| Dividend Declaration | November 6, 2024 | Class A Common Stock - $0.22 per share |
| Annual Shareholder Meeting | April 2025 | Location and details to be announced |
Air Lease Corporation (AL) Mission Statement
Overview of the Mission Statement
The mission of Air Lease Corporation (ALC) is to provide the most modern and fuel-efficient commercial jet aircraft to airlines around the world. This mission is centered around delivering value to customers while generating attractive returns for shareholders. ALC aims to maintain a strong investment-grade balance sheet and focus on sustainable growth through the acquisition of new technology aircraft.
Key Financial Metrics
As of September 30, 2024, Air Lease Corporation reported significant financial metrics that support its mission:
| Metric | Value |
|---|---|
| Total Debt Outstanding | $20.3 billion |
| Unsecured Debt Percentage | 97.3% |
| Fixed Rate Debt Percentage | 81.0% |
| Composite Cost of Funds | 4.21% |
| Net Book Value of Fleet | $27.9 billion |
| Weight Average Fleet Age | 4.6 years |
| Weighted Average Remaining Lease Term | 7.1 years |
| Lease Utilization Rate | 100.0% |
| Committed Minimum Future Rental Payments | $29.7 billion |
Aircraft Fleet and Market Position
As of September 30, 2024, ALC operated a fleet of 485 aircraft. The company has a globally diversified customer base, serving 117 airlines in 59 countries, with a focus on modern, fuel-efficient aircraft. ALC's commitment to acquiring 287 new aircraft from Airbus and Boeing through 2029, with an estimated aggregate commitment of $18.2 billion, reflects its strategy to enhance its fleet and support its mission.
Revenue Sources
Air Lease Corporation's revenue is primarily derived from operating leases. For the three months ended September 30, 2024, total revenues were reported at $690.2 million, a 4.7% increase year-over-year. This growth is attributed to the expansion of the fleet and increased sales activity:
| Revenue Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Rental of Flight Equipment | $625.2 million | $604.0 million |
| Aircraft Sales and Trading | $64.9 million | $55.3 million |
| Total Revenues | $690.2 million | $659.4 million |
Commitments and Future Outlook
In addition to its current fleet, ALC has placed 100% of its committed orderbook for aircraft delivering through the end of 2025 on long-term leases. The company expects to continue to benefit from favorable market conditions driven by global air travel demand and the growing need for modern aircraft among airlines.
Dividend Policy
Air Lease Corporation has a consistent dividend policy, declaring a cash dividend of $0.21 per share for Class A common stock for the quarter ended September 30, 2024. This reflects ALC's commitment to returning capital to shareholders while pursuing growth in its aircraft leasing operations.
Conclusion of Financial Position
As of September 30, 2024, ALC's total liquidity was reported at $7.5 billion, ensuring the company can meet its operational requirements and investment commitments. The strong financial position, combined with a clear mission to provide modern aircraft, positions ALC favorably in the competitive aircraft leasing market.
How Air Lease Corporation (AL) Works
Business Model
Air Lease Corporation (AL) operates as a leading aircraft leasing company, primarily engaged in the acquisition and leasing of commercial jet aircraft to airlines globally. As of September 30, 2024, the company has a total of 485 aircraft in its owned fleet, with a net book value of $27.9 billion, reflecting a 6.3% increase from $26.2 billion at the end of 2023.
Fleet Characteristics
AL maintains a young and efficient fleet. The weighted average age of the fleet is 4.6 years, with a weighted average remaining lease term of 7.1 years. The company’s fleet metrics are summarized in the table below:
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Net Book Value of Flight Equipment | $27.9 billion | $26.2 billion |
| Weighted-Average Fleet Age | 4.6 years | 4.6 years |
| Weighted-Average Remaining Lease Term | 7.1 years | 7.0 years |
| Owned Fleet | 485 | 463 |
| Managed Fleet | 64 | 78 |
| Aircraft on Order | 287 | 334 |
| Total Committed Rentals | $29.7 billion | $31.0 billion |
Revenue Sources
AL generates revenue primarily from leasing aircraft and related services. For the three months ended September 30, 2024, the company reported rental revenue of $625.2 million, compared to $604.0 million for the same period in 2023. The following table outlines the revenue components for the nine months ended September 30, 2024:
| Revenue Type | Amount (2024) | Amount (2023) |
|---|---|---|
| Rental of Flight Equipment | $1.85 billion | $1.83 billion |
| Aircraft Sales, Trading, and Other Revenue | $171.7 million | $134.9 million |
| Total Revenue | $2.02 billion | $1.97 billion |
Financial Performance
For the three months ended September 30, 2024, AL reported a net income attributable to common stockholders of $91.6 million, or $0.82 per diluted share, down from $122.0 million, or $1.10 per diluted share in the prior year. The decrease in net income was primarily attributed to an increase in interest expense, which totaled $217.5 million for the quarter.
Debt Financing
AL primarily finances its operations through unsecured debt. As of September 30, 2024, the total debt outstanding was $20.3 billion, with 81% at fixed rates and 97.3% unsecured. The company’s debt maturity schedule is as follows:
| Year | Debt Maturity (in billions) |
|---|---|
| 2024 | $0.423 |
| 2025 | $2.799 |
| 2026 | $5.282 |
| 2027 | $2.786 |
| 2028 | $4.239 |
| Thereafter | $4.821 |
| Total | $20.350 |
Liquidity and Capital Resources
As of September 30, 2024, AL had total liquidity of $7.5 billion, which included unrestricted cash of $0.5 billion and undrawn amounts under its unsecured revolving credit facility. The company’s effective tax rate for the quarter was 20.2%, up from 19.7% in the previous year.
Aircraft Purchase Commitments
AL has significant commitments for future aircraft purchases, with 287 aircraft ordered from Airbus and Boeing for delivery through 2029, totaling approximately $18.2 billion. The table below summarizes the aircraft order commitments:
| Aircraft Manufacturer | Committed Aircraft | Estimated Commitment (in billions) |
|---|---|---|
| Airbus | X | $Y |
| Boeing | X | $Y |
Note: Replace X and Y with specific numbers as applicable.
How Air Lease Corporation (AL) Makes Money
Business Model Overview
Air Lease Corporation (AL) primarily generates revenue through leasing aircraft to airlines. The company owns a diverse fleet that includes 485 aircraft with a net book value of $27.9 billion as of September 30, 2024. The average age of the fleet is 4.6 years, and the average remaining lease term is 7.1 years. The company’s revenue streams are mainly classified into rental income and aircraft sales.
Revenue Streams
Rental Income
In the third quarter of 2024, Air Lease Corporation recorded $625.2 million in rental revenue, an increase from $604.0 million in the same quarter of 2023. For the nine months ended September 30, 2024, the total rental revenue was $1.85 billion, compared to $1.83 billion for the same period in 2023. The primary driver of rental income is the contracted minimum rental payments, which totaled $29.7 billion as of September 30, 2024.
Aircraft Sales
Air Lease Corporation also generates income from the sale of aircraft. For the third quarter of 2024, the company recorded $64.98 million from aircraft sales, compared to $55.34 million in the same quarter of 2023. In the first nine months of 2024, aircraft sales generated $171.75 million, up from $134.88 million in the same period of 2023. The company anticipates selling approximately $1.5 billion in aircraft throughout 2024.
Financial Metrics
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Rental Revenue | $625.2 million | $604.0 million | $1.85 billion | $1.83 billion |
| Aircraft Sales Revenue | $64.98 million | $55.34 million | $171.75 million | $134.88 million |
| Net Income | $91.65 million | $122.03 million | $279.53 million | $362.30 million |
| Adjusted Net Income Before Taxes | $140.20 million | $177.01 million | $423.85 million | $519.70 million |
Debt Financing and Liquidity
As of September 30, 2024, Air Lease Corporation had total debt outstanding of $20.3 billion, with 81% at fixed rates and 97.3% unsecured. The company’s composite cost of funds was 4.21%. The company maintains a robust liquidity position, ending the third quarter with $7.5 billion in total liquidity, including $460.8 million in unrestricted cash.
Future Commitments
Air Lease Corporation has significant commitments for future aircraft purchases, with 287 aircraft on order from Airbus and Boeing, totaling an estimated $18.2 billion. The company has placed 100% of its committed orderbook on long-term leases for aircraft delivering through the end of 2025.
Operating Expenses
The company’s operating expenses include interest expenses, which totaled $615.5 million for the nine months ended September 30, 2024, compared to $526.0 million in the prior year. Additionally, depreciation of flight equipment was $849.4 million for the same period.
Shareholder Returns
Air Lease Corporation has a dividend policy that returned $70.1 million to shareholders during the nine months ended September 30, 2024. The dividends declared per share of common stock increased to $0.63 for the nine months ended September 30, 2024, up from $0.60 in the same period of 2023.
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Updated on 16 Nov 2024
Resources:
- Air Lease Corporation (AL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Air Lease Corporation (AL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Air Lease Corporation (AL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.