Air Lease Corporation Q4 FY2024 earnings call

• Fourth quarter and full-year 2024 financial results were strong with record revenue and fleet net book value. • Purchased 18 new aircraft and sold 14 aircraft during the quarter. • Fleet weighted average age was stable at 4.6 years, and weighted average lease term remaining extended to 7.2 years with 100% utilization. • 2025 delivery expectations: $3 billion to $3.5 billion in new aircraft, with ~$800 million in the first quarter. • Lease extensions on single-aisle and wide-body aircraft with higher lease rates observed. • Mentioned reducing China content but noted profitable China leases. • Interest rates remaining elevated, which will impact margins. • Capital allocation focus on reaching a debt to equity ratio of 2.5 to 1 by the end of 2025. • Donated $500,000 to LA City and County Fire Departments in response to recent fires.

During the fourth quarter, Air Lease Corporation generated revenues of $713 million. Full-year 2024 revenue and ending fleet net book value reached record levels. The company purchased 18 new aircraft for $1.3 billion and sold 14 aircraft for approximately $540 million. The weighted average age of the fleet was 4.6 years, and the weighted average lease term remaining extended to 7.2 years with 100% fleet utilization. For 2025, Air Lease Corporation expects to receive $3 billion to $3.5 billion of new aircraft delivered, with around $800 million anticipated to deliver in the first quarter of 2025, and approximately 80% of these deliveries are Boeing aircraft.

• 2025 new aircraft deliveries expected to be $3 billion to $3.5 billion, with ~$800 million in the first quarter of 2025. • Anticipate debt funding of approximately $2 billion in 2025 including refinancing. • Aim to achieve a debt to equity ratio of 2.5 to 1 by the end of 2025 or earlier. • Expect a modestly sized steady upward trajectory in fleet lease yields each year for the next three to four years.

• Interest rates remaining elevated for a longer period than anticipated. • Potential challenges in Boeing's production efforts affecting aircraft deliveries. • Impact of China lease maturations on margins due to prior lower-yielding leases.

Q: Catherine O'Brien asked about returning to mid-teen adjusted pretax ROEs and timeline.

A: John Plueger said it would take 2 to 3 years, and Gregory Willis added that it depends on lease rates and interest rates.

Q: Terry Ma inquired about net spread margin and lease renewal cadence.

A: Gregory Willis stated margins in 2025 would be similar to 2024, and leases signed in Q4 would roll through 2025, with $5 billion of COVID-era leases rolling off over the next two years.

Q: Jamie Baker asked about aircraft sales and lease portfolio.

A: John Plueger said sales planned around $1.5 billion in 2025, and Steven Hazy mentioned structured vehicles for managed portfolios.

Q: Moshe Orenbuch asked about leverage target and capital deployment.

A: John Plueger said focus is on reaching the debt to equity ratio, then considering options like stock buybacks.

Q: Hillary Cacanando asked about ceasefire impact and interest rates.

A: John Plueger wouldn't comment on ceasefire, and Gregory Willis said the mid-teen target depends on interest rates.

Q: Stephen Trent asked about aircraft supply normalization and tariffs.

A: John Plueger said aircraft supply won't normalize soon, and Steven Hazy discussed tariffs and engine supply constraints.

Q: Ronald Epstein asked about industry equilibrium and older equipment.

A: Steven Hazy said industry equilibrium will take time, and airlines are using older equipment longer.