AIR LEASE CORP (Form: 10-Q, Received: 08/08/2019 16:17:02)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

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

For the quarterly period ended June 30, 2019

☐

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

For the transition period from to

Commission file number 001-35121

AIR LEASE CORPORATION

(Exact name of registrant as specified in its charter)

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

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

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

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


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

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

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

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


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

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

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

At August 7, 2019, there were 111,676,050 shares of Air Lease Corporation’s Class A common stock outstanding.

Table of Contents

Air Lease Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended June 30, 2019

TABLE OF CONTENTS

		Page
Note About Forward-Looking Statements		3
PART I—FINANCIAL INFORMATION
Item 1	Financial Statements	4
	Consolidated Balance Sheets—June 30, 2019 and December 31, 2018 (unaudited)	4
	Consolidated Statements of Income—Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	5
	Consolidated Statement of Shareholders’ Equity—Three and Six Months Ended June 30, 2019 and 2018 (unaudited)	6
	Consolidated Statements of Cash Flows—Six Months Ended June 30, 2019 and 2018 (unaudited)	8
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4	Controls and Procedures	31
PART II—OTHER INFORMATION
Item 1	Legal Proceedings	32
Item 1A	Risk Factors	32
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3	Defaults Upon Senior Securities	32
Item 4	Mine Safety Disclosures	32
Item 5	Other Information	32
Item 6	Exhibits	33
	Signatures	35

Table of Contents

NOTE ABOUT FORWARD-LOOKING STATEMENTS

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

●

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

●

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

●

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

●

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

●

impaired financial condition and liquidity of our lessees;

●

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

●

deterioration of economic conditions in the commercial aviation industry generally;

●

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

●

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

●

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

●

our inability to effectively oversee our managed fleet;

●

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

●

the factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2018, “Part II — Item 1A. Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 and other 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 undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Air Lease Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts)


	June 30, 2019		December 31, 2018
	(unaudited)
Assets
Cash and cash equivalents	$	264,058	$	300,127
Restricted cash		24,044		22,871
Flight equipment subject to operating leases		20,306,921		17,985,324
Less accumulated depreciation		(2,554,720)		(2,278,214)
		17,752,201		15,707,110
Deposits on flight equipment purchases		1,694,765		1,809,260
Other assets		749,280		642,440
Total assets	$	20,484,348	$	18,481,808
Liabilities and Shareholders’ Equity
Accrued interest and other payables	$	453,536	$	382,132
Debt financing, net of discounts and issuance costs		12,859,244		11,538,905
Security deposits and maintenance reserves on flight equipment leases		1,035,754		990,578
Rentals received in advance		124,142		119,526
Deferred tax liability		711,788		643,767
Total liabilities	$	15,184,464	$	13,674,908
Shareholders’ Equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized; 10,000,000 shares of 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (aggregate liquidation preference of $250,000) issued and outstanding at June 30, 2019 and no shares issued or outstanding at December 31, 2018		100		—
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 111,666,126 and 110,949,850 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		1,117		1,110
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding		—		—
Paid-in capital		2,733,948		2,474,238
Retained earnings		2,564,719		2,331,552
Total shareholders’ equity	$	5,299,884	$	4,806,900
Total liabilities and shareholders’ equity	$	20,484,348	$	18,481,808

(See Notes to Consolidated Financial Statements)

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Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(unaudited)
Revenues
Rental of flight equipment	$	463,870	$	393,479	$	919,609	$	771,341
Aircraft sales, trading and other		7,525		4,335		17,837		7,682
Total revenues		471,395		397,814		937,446		779,023
Expenses
Interest		96,824		73,452		186,044		142,395
Amortization of debt discounts and issuance costs		8,712		8,010		17,252		16,032
Interest expense		105,536		81,462		203,296		158,427
Depreciation of flight equipment		171,689		142,600		331,160		278,734
Selling, general and administrative		27,771		21,458		57,473		44,817
Stock-based compensation		5,863		4,885		10,037		8,317
Total expenses		310,859		250,405		601,966		490,295
Income before taxes		160,536		147,409		335,480		288,728
Income tax expense		(32,231)		(32,198)		(69,081)		(62,866)
Net income	$	128,305	$	115,211	$	266,399	$	225,862
Preferred stock dividends		(4,271)		—		(4,271)		—
Net income available to common stockholders	$	124,034	$	115,211	$	262,128	$	225,862

Earnings per share of Class A and Class B common stock:
Basic	$	1.11	$	1.11	$	2.36	$	2.17
Diluted	$	1.10	$	1.04	$	2.33	$	2.04
Weighted-average shares outstanding
Basic		111,371,790		104,003,960		111,196,011		103,876,647
Diluted		112,807,023		112,424,582		112,598,623		112,326,506

Dividends declared per share of Class A common stock	$	0.13	$	0.10	$	0.26	$	0.20

(See Notes to Consolidated Financial Statements)

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Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)


							Class B Non-
				Class A			Voting
	Preferred Stock			Common Stock			Common Stock			Paid-in		Retained
(unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Total
Balance at December 31, 2018	—	$	—	110,949,850	$	1,110	—	$	—	$	2,474,238	$	2,331,552	$	4,806,900
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	—		—	263,218		2	—		—		439		—		441
Issuance of preferred stock	10,000,000		100	—		—	—		—		242,141		—		242,241
Stock-based compensation	—		—	—		—	—		—		4,174		—		4,174
Cash dividends (declared $0.13 per share of Class A common stock)	—		—	—		—	—		—		—		(14,445)		(14,445)
Tax withholding related to vesting of restricted stock units and exercise of stock options	—		—	(94,899)		(1)	—		—		(3,587)		—		(3,588)
Net income	—		—	—		—	—		—		—		138,094		138,094
Balance at March 31, 2019	10,000,000	$	100	111,118,169	$	1,111	—	$	—	$	2,717,405	$	2,455,201	$	5,173,817
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	—		—	547,957		6	—		—		10,791		—		10,797
Issuance of preferred stock	—		—	—		—	—		—		(111)		—		(111)
Dividends declared on preferred stock	—		—	—		—	—		—		—		(4,271)		(4,271)
Stock-based compensation	—		—	—		—	—		—		5,863		—		5,863
Cash dividends (declared $0.13 per share of Class A common stock)	—		—	—		—	—		—		—		(14,516)		(14,516)
Net income	—		—	—		—	—		—		—		128,305		128,305
Balance at June 30, 2019	10,000,000	$	100	111,666,126	$	1,117	—	$	—	$	2,733,948	$	2,564,719	$	5,299,884

(See Notes to Consolidated Financial Statements)

Table of Contents

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands, except share and per share amounts)


							Class B Non-
				Class A			Voting
	Preferred Stock			Common Stock			Common Stock			Paid-in		Retained
(unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Total
Balance at December 31, 2017	—	$	—	103,621,629	$	1,036	—	$	—	$	2,260,064	$	1,866,342	$	4,127,442
Issuance of common stock upon vesting of restricted stock units and upon exercise of options and convertible debt conversion	—		—	514,773		4	—		—		2,632		—		2,636
Stock-based compensation	—		—	—		—	—		—		3,432		—		3,432
Cash dividends (declared $0.10 per share of Class A common stock)	—		—	—		—	—		—		—		(10,397)		(10,397)
Tax withholding related to vesting of restricted stock units and exercise of stock options	—		—	(156,568)		—	—		—		(7,141)		—		(7,141)
Net income	—		—	—		—	—		—		—		110,651		110,651
Balance at March 31, 2018	—	$	—	103,979,834	$	1,040	—	$	—	$	2,258,987	$	1,966,596	$	4,226,623
Issuance of common stock upon vesting of restricted stock units and upon exercise of options and convertible debt conversion	—		—	85,211		1	—		—		1,521		—		1,522
Stock-based compensation	—		—	—		—	—		—		4,885		—		4,885
Cash dividends (declared $0.10 per share of Class A common stock)	—		—	—		—	—		—		—		(10,399)		(10,399)
Net income	—		—	—		—	—		—		—		115,211		115,211
Balance at June 30, 2018	—	$	—	104,065,045	$	1,041	—	$	—	$	2,265,393	$	2,071,408	$	4,337,842

(See Notes to Consolidated Financial Statements)

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Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Six Months Ended
	June 30,
	2019		2018
	(unaudited)
Operating Activities
Net income	$	266,399	$	225,862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment		331,160		278,734
Stock-based compensation		10,037		8,317
Deferred taxes		69,081		62,866
Amortization of debt discounts and issuance costs		17,252		16,032
Amortization of prepaid lease costs		14,851		14,610
Gain on aircraft sales, trading and other activity		(14,924)		(2,185)
Changes in operating assets and liabilities:
Other assets		(127,442)		(47,313)
Accrued interest and other payables		85,218		23,737
Rentals received in advance		4,616		7,331
Net cash provided by operating activities		656,248		587,991
Investing Activities
Acquisition of flight equipment under operating lease		(1,962,211)		(1,402,374)
Payments for deposits on flight equipment purchases		(448,653)		(360,440)
Proceeds from aircraft sales, trading and other activity		249,764		250
Acquisition of aircraft furnishings, equipment and other assets		(175,926)		(141,125)
Net cash used in investing activities		(2,337,026)		(1,903,689)
Financing Activities
Issuance of common stock upon exercise of options		11,236		4,128
Cash dividends paid on Class A common stock		(28,866)		(20,757)
Preferred dividends paid		(4,271)		—
Tax withholdings on stock-based compensation		(3,587)		(7,141)
Net change in unsecured revolving facility		199,000		109,000
Proceeds from debt financings		2,032,137		1,738,665
Payments in reduction of debt financings		(920,723)		(594,706)
Net proceeds from preferred stock issuance		242,130		—
Debt issuance costs		(7,327)		(5,301)
Security deposits and maintenance reserve receipts		142,685		109,007
Security deposits and maintenance reserve disbursements		(16,532)		(44,421)
Net cash provided by financing activities		1,645,882		1,288,474
Net decrease in cash		(34,896)		(27,224)
Cash, cash equivalents and restricted cash at beginning of period		322,998		308,282
Cash, cash equivalents and restricted cash at end of period	$	288,102	$	281,058
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $31,602 and $25,692 at June 30, 2019 and 2018, respectively	$	210,808	$	149,077
Cash paid for income taxes	$	3,291	$	555
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	$	711,432	$	451,048
Cash dividends declared on Class A common stock, not yet paid	$	14,516	$	10,399

(See Notes to Consolidated Financial Statements)

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Air Lease Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Company Background and Overview

Air Lease Corporation (the “Company”, “ALC”, “we”, “our” or “us”) is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”), and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and through our asset-backed securities platform. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. As of June 30, 2019, we owned a fleet of 297 aircraft, managed 64 aircraft and had 343 aircraft on order with aircraft manufacturers.

Note 2. Basis of Preparation and Critical Accounting Policies

The Company consolidates financial statements of all entities in which we have a controlling financial interest, including the accounts of any Variable Interest Entity in which we have a controlling financial interest and for which we are 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 June 30, 2019, and for all periods presented. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the operating results expected for the year ending December 31, 2019. These financial statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recently adopted accounting standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 (“ASU 2016-02”), “Leases (Topic 842).” The amendments in ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. Subsequently, the FASB issued additional ASUs that further clarified ASU 2016-02. The Company adopted the amendments to Accounting Standards Codification (“ASC”) 842 on January 1, 2019 using the Effective Date Method. As a result, the Company continues to disclose comparative reporting periods under the previous accounting guidance, ASC 840. Based on our evaluation of the guidance, the Company noted that lessor accounting is similar to the current model, but the guidance impacted us in scenarios where we are the lessee.

For scenarios where we are the lessee, the Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets under Other assets, and long-term lease obligations under Accrued interest & other payables on the Company’s Consolidated Balance Sheets. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected to exclude recognition of leases with a term of 12 months or less (short-term leases) from the Consolidated Balance Sheets.

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As of January 1, 2019, the Company recognized operating ROU lease assets and obligations in the amounts of $44.6 million and $51.2 million, respectively, on its Consolidated Balance Sheets. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

Note 3. Debt Financing

The Company’s debt financing was comprised of the following at June 30, 2019 and December 31, 2018 (dollars in thousands):


	June 30,		December 31,
	2019		2018
Unsecured
Senior notes	$	10,950,000	$	10,043,445
Revolving credit facilities		801,000		602,000
Term financings		800,250		607,340
Total unsecured debt financing		12,551,250		11,252,785
Secured
Term financings		411,343		371,203
Export credit financing		34,938		38,265
Total secured debt financing		446,281		409,468

Total debt financing		12,997,531		11,662,253
Less: Debt discounts and issuance costs		(138,287)		(123,348)
Debt financing, net of discounts and issuance costs	$	12,859,244	$	11,538,905

The Company’s secured obligations as of June 30, 2019 and December 31, 2018 are summarized below (dollars in thousands):


	June 30,		December 31,
	2019		2018
Nonrecourse	$	149,628	$	167,245
Recourse		296,653		242,223
Total secured debt financing	$	446,281	$	409,468
Number of aircraft pledged as collateral		18		20
Net book value of aircraft pledged as collateral	$	961,104	$	1,132,111

Senior unsecured notes (including Medium-Term Note Program)

As of June 30, 2019, the Company had $11.0 billion in senior unsecured notes outstanding. As of December 31, 2018, the Company had $10.0 billion in senior unsecured notes outstanding.

During the six months ended June 30, 2019, the Company issued approximately $1.75 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $700.0 million due 2024 at a fixed rate of 4.25%, (ii) $750.0 million due 2026 at a fixed rate of 3.75% and (iii) $300.0 million due 2021 that bear interest at a floating rate of three-month LIBOR plus 0.67%.

Unsecured revolving credit facilities

As of June 30, 2019, the total outstanding balance on the Company's unsecured revolving credit facilities was approximately $801.0 million. The total outstanding balance under the Company's unsecured revolving credit facilities was approximately $602.0 million as of December 31, 2018.

In May 2019, the Company amended and extended its committed unsecured revolving credit facility whereby, among other things, the Company extended the final maturity date from May 5, 2022 to May 5, 2023 and, after giving effect to commitments that matured on May 5, 2019, increased the total revolving commitments to approximately $5.8 billion, representing an increase of 26.6% from December 31, 2018, with an interest rate of LIBOR plus 1.05% with a 0.20% facility fee. On July 31, 2019, the Company executed a commitment increase to its unsecured revolving credit

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facility, which increased the aggregate facility capacity by an additional $58.0 million. As of July 31, 2019, lenders held revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on May 5, 2022, commitments totaling approximately $5.0 million that mature on May 5, 2021, and commitments totaling $92.7 million that mature on May 5, 2020.

Maturities

Maturities of debt outstanding as of June 30, 2019 are as follows (in thousands):


Years ending December 31,
2019	$	59,892
2020		1,460,039
2021		1,991,039
2022		2,701,069
2023		2,537,846
Thereafter		4,247,646
Total	$	12,997,531

Note 4. Commitments and Contingencies

As of June 30, 2019, the Company had commitments to acquire a total of 343 new aircraft for delivery through 2024 as follows:


Aircraft Type	2019	2020	2021	2022	2023	Thereafter	Total
Airbus A320/321neo⁽¹⁾	16	27	32	25	25	—	125
Airbus A330-900neo	4	2	5	6	2	—	19
Airbus A350-900/1000	1	3	6	3	2	—	15
Boeing 737-7/8/9 MAX	—	41	48	31	25	5	150
Boeing 787-9/10	6	13	7	8	—	—	34
Total⁽²⁾⁽³⁾	27	86	98	73	54	5	343

(1)	Our Airbus A320/321neo aircraft orders include 56 long-range variants.

(2)	In addition to the aircraft from our orderbook, we have a commitment to purchase one used Airbus A330-300 aircraft from a third party, which is scheduled for delivery in 2019.

(3)

Excluded from the table above are memorandums of understanding (“MOU”) with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft and we have options for an additional 25 A220 aircraft. Also excluded from the table above is an MOU with Boeing, signed in June 2019, to convert existing purchase orders of 15 737 MAX aircraft to five 787-9 aircraft.

Airbus has informed us to expect several months of delivery delays relating to certain aircraft scheduled for delivery in 2019 and 2020. In addition, global aviation authorities have halted operations of the global 737 MAX fleet and Boeing has halted deliveries of such aircraft. Accordingly, we are expecting that the 737 MAX aircraft originally scheduled for delivery to us in 2019 will be delayed. These expected delays have been reflected in our commitment schedules above. Our leases contain lessee cancellation clauses related to aircraft delivery delays, typically for aircraft delays greater than one year. Our purchase agreements contain similar clauses. As of August 8, 2019, none of our lease contracts or purchase agreements were subject to cancellation related to these aircraft delivery delays.

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Commitments for the acquisition of aircraft and other equipment, calculated at an estimated aggregate purchase price (including adjustments for inflation) was approximately $24.1 billion at June 30, 2019, and are due as follows (in thousands):


Years ending December 31,
2019	$	2,744,657
2020		6,469,820
2021		6,741,848
2022		5,034,063
2023		2,896,636
Thereafter		221,130
Total	$	24,108,154

In addition to the Company's commitments, as of June 30, 2019, the Company had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.

We have made non-refundable deposits on the aircraft for which we have commitments to purchase of $1.7 billion and $1.8 billion as of June 30, 2019 and December 31, 2018, respectively, which are subject to manufacturer performance commitments. If we are unable to satisfy our purchase commitments, we may be forced to forfeit our deposits. Further, we would be exposed to breach of contract claims by our lessees and manufacturers.

Note 5. Rental Income

At June 30, 2019, minimum future rentals on non-cancellable operating leases of flight equipment in our fleet, which have been delivered as of June 30, 2019, are as follows (in thousands):


Years ending December 31,
2019 (excluding the six months ended June 30, 2019)	$	967,346
2020		1,899,538
2021		1,803,660
2022		1,672,930
2023		1,480,260
Thereafter		5,633,658
Total	$	13,457,392

Note 6. Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Preferred stock dividends are subtracted from net income in determining net income available to common stockholders. 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 June 30, 2019, we did not have any Class B Non-Voting common stock outstanding.

Diluted earnings per share takes into account the potential conversion of stock options, restricted stock units, and warrants using the treasury stock method and convertible notes using the if-converted method. For the three and six months ended June 30, 2019, 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 976,613 and 951,878 shares related to restricted stock units for which the performance metric had yet to be achieved as of June 30, 2019 and 2018, respectively.

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Basic earnings per share:
Numerator
Net income	$	128,305	$	115,211	$	266,399	$	225,862
Preferred stock dividends		(4,271)		—		(4,271)		—
Net income available to common stockholders	$	124,034	$	115,211	$	262,128	$	225,862
Denominator
Weighted-average common shares outstanding		111,371,790		104,003,960		111,196,011		103,876,647
Basic earnings per share	$	1.11	$	1.11	$	2.36	$	2.17
Diluted earnings per share:
Numerator
Net income	$	128,305	$	115,211	$	266,399	$	225,862
Preferred stock dividends		(4,271)		—		(4,271)		—
Assumed conversion of convertible senior notes		—		1,735		—		3,474
Net income available to common stockholders plus assumed conversions	$	124,034	$	116,946	$	262,128	$	229,336
Denominator
Number of shares used in basic computation		111,371,790		104,003,960		111,196,011		103,876,647
Weighted-average effect of dilutive securities		1,435,233		8,420,622		1,402,612		8,449,859
Number of shares used in per share computation		112,807,023		112,424,582		112,598,623		112,326,506
Diluted earnings per share	$	1.10	$	1.04	$	2.33	$	2.04

Note 7. Fair Value Measurements

Assets and liabilities measured at fair value on a recurring and non-recurring basis

The Company had no assets or liabilities which are measured at fair value on a recurring or non-recurring basis as of June 30, 2019 or December 31, 2018.

Financial instruments not measured at fair value

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 June 30, 2019 was approximately $13.3 billion compared to a book value of $13.0 billion. The estimated fair value of debt financing as of December 31, 2018 was $11.4 billion compared to a book value of $11.7 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at June 30, 2019, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at June 30, 2019 and December 31, 2018 approximates their carrying value as reported on the Consolidated Balance Sheets. The fair value of all these instruments would be categorized as Level 1 in the fair value hierarchy.

Note 8. Shareholders’ Equity

The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at June 30, 2019 and December 31, 2018. As of June 30, 2019 and December 31, 2018, the Company had 111,666,126 and 110,949,850 Class A common shares issued and outstanding, respectively. The Company did not have any shares of Class B non-voting common stock, $0.01 par value, issued or outstanding as of June 30, 2019 and December 31, 2018.

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The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at June 30, 2019 and December 31, 2018. As of June 30, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million. The Company did not have any shares of preferred stock issued or outstanding as of December 31, 2018.

On March 5, 2019, the Company issued 10,000,000 shares of 6.150% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”), $0.01 par value, with a liquidation preference of $25.00 per share. The Company will pay dividends on the preferred stock only when, as and if declared by the board of directors. Dividends will accrue, on a non-cumulative basis, on the stated amount of $25.00 per share at a rate per annum equal to: (i) 6.150% during the first five years and payable quarterly in arrears beginning on June 15, 2019, and (ii) three-month LIBOR plus a spread of 3.65% per annum from March 15, 2024, reset quarterly and payable quarterly in arrears beginning on June 15, 2024.

The Company may redeem shares of the Series A Preferred Stock at its 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. The Company may also redeem shares of the Series A Preferred Stock at the Company’s option under certain other limited conditions.

Note 9. Stock-based Compensation

On May 7, 2014, the stockholders of the Company approved the Air Lease Corporation 2014 Equity Incentive Plan (the “2014 Plan”). Upon approval of the 2014 Plan, no new awards may be granted under the Amended and Restated 2010 Equity Incentive Plan (the “2010 Plan”). As of June 30, 2019, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) remaining under the 2014 Plan was approximately 5,236,334, which includes 236,334 shares which were previously reserved for issuance under the 2010 Plan. Stock Options are generally granted for a term of 10 years and generally vest ratably over a three-year period. The Company has issued 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-or two-year period. The Company has two types of book value RSUs; those that vest ratably over a three-year period if the performance condition has been met, and those that cliff-vest at the end of a three-year period if the performance condition has been met. For the book value RSUs that cliff-vest at the end of a three-year period, the number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the percentage change in the Company's book value per share at the end of the vesting period. At each reporting period, the Company reassesses the probability of the performance condition being achieved and a stock-based compensation expense is recognized based upon management’s assessment. Book value RSUs for which the performance metric has not been met are forfeited. The TSR RSUs cliff-vest at the end of a three-year period. The number of TSR RSUs that will ultimately vest is based upon the percentile ranking of the Company’s TSR among a peer group. The number of shares that will ultimately vest will range from 0% to 200% of the RSUs initially granted depending on the extent to which the TSR metric is achieved.

The Company recorded $5.9 million and $4.9 million of stock-based compensation expense related to RSUs for the three months ended June 30, 2019 and 2018, respectively. The Company recorded $10.0 million and $8.3 million of stock-based compensation expense related to RSUs for the six months ended June 30, 2019 and 2018, respectively.

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Stock Options

A summary of stock option activity for the six months ended June 30, 2019 follows:


				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)⁽¹⁾
Balance at December 31, 2018	2,620,295	$	20.40	1.49	$	25,697
Granted	—	$	—	—	$	—
Exercised	(573,806)	$	20.00	—	$	9,905
Forfeited/canceled	—	$	—	—	$	—
Balance at June 30, 2019	2,046,489	$	20.52	1.00	$	42,616
Vested and exercisable as of June 30, 2019	2,046,489	$	20.52	1.00	$	42,616

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

As of June 30, 2019, all of the Company’s outstanding employee stock options had fully vested and there were no unrecognized compensation costs related to outstanding stock options as of June 30, 2019. As a result, there was no stock-based compensation expense related to Stock Options for the three and six months ended June 30, 2019 and 2018.

The following table summarizes additional information regarding exercisable and vested stock options at June 30, 2019:


	Stock Options Exercisable
	and Vested
		Weighted-
		Average
	Number of	Remaining Life
Range of exercise prices	Shares	(in years)
$20.00	1,926,489	0.95
$28.80	120,000	1.82
$20.00 - $28.80	2,046,489	1.00

Restricted Stock Units

Compensation cost for stock awards is measured at the grant date based on fair value and recognized over the vesting period. The fair value of 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 TSR RSUs 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.

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During the six months ended June 30, 2019, the Company granted 670,279 RSUs of which 139,895 are TSR RSUs. The following table summarizes the activities for our unvested RSUs for the six months ended June 30, 2019:


	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2018	1,055,325	$	41.66
Granted	670,279	$	39.64
Vested	(252,674)	$	35.11
Forfeited/canceled	(168,579)	$	29.67
Unvested at June 30, 2019	1,304,351	$	43.44
Expected to vest after June 30, 2019	1,395,739	$	43.29

As of June 30, 2019, there was $35.7 million of unrecognized compensation cost related to unvested stock-based payments granted to employees. Total unrecognized compensation cost will be recognized over a weighted-average remaining period of 2.04 years.

Note 10. Investments

The Company entered into an agreement with a co-investment vehicle arranged by Napier Park Global Capital (US) LP to participate in two joint ventures and formed Blackbird Capital I, LLC and Blackbird Capital II, LLC for the purpose of investing in commercial aircraft and leasing them to airlines around the globe. We also provide management services to these joint ventures for a fee based upon aircraft assets under management. The Company’s non-controlling interests in each joint venture is 9.5% and are accounted for as investments under the equity method of accounting. The Company’s investment in these joint ventures was $45.0 million and $40.6 million as of June 30, 2019 and December 31, 2018, respectively, and is recorded in other assets on the Consolidated Balance Sheets. As of June 30, 2019, the Company’s total unfunded commitment to Blackbird Capital II, LLC was $30.5 million.

On August 1, 2018, we entered into an agreement to sell 18 aircraft to Thunderbolt Aircraft Lease Limited II (“Thunderbolt II”), an asset-backed securities platform which will facilitate the sale and continued management of aircraft assets to investors. The Company’s non-controlling interest in Thunderbolt II is 5.1% and it is accounted for as an investment under the cost method of accounting. All of the aircraft in Thunderbolt II's portfolio will be managed by the Company. During the six months ended June 30, 2019, we completed the sale of three aircraft from our operating lease portfolio to Thunderbolt II. We expect the sale of the remaining three aircraft to be completed in 2019. The Company's investment in Thunderbolt II was $5.4 million as of June 30, 2019 and December 31, 2018, and is recorded in other assets on the Consolidated Balance Sheets.

Note 11. Flight Equipment Held for Sale

As of June 30, 2019, we had three aircraft, with a carrying value of $106.0 million, which were held for sale and included in Flight equipment subject to operating leases on the Consolidated Balance Sheets. We expect the sale of all three aircraft to be completed in 2019. We cease recognition of depreciation expense once an aircraft is classified as held for sale. As of December 31, 2018, we had six aircraft classified as held for sale, with a carrying value of $241.6 million.

Note 12. Subsequent Events

On August 8, 2019, our board of directors approved a quarterly cash dividend of $0.13 per share on our outstanding Class A common stock. The dividend will be paid on October 4, 2019 to holders of record of our Class A common stock as of September 13, 2019. Our board of directors also approved a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock, which will be paid on September 15, 2019 to holders of record of our Series A Preferred Stock as of August 31, 2019.

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

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

Overview

Air Lease Corporation is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as Boeing and Airbus, and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. In addition to our leasing activities, we sell aircraft from our operating lease portfolio to third-parties, including other leasing companies, financial services companies, airlines and through our asset-backed securities platform. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our owned fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by the gains from our aircraft sales, trading and other activities and our management fees.

During the six months ended June 30, 2019, we purchased and took delivery of 27 aircraft from our new order pipeline, purchased one aircraft in the secondary market and sold six aircraft, ending the period with a total of 297 aircraft with a net book value of $17.8 billion. The weighted average lease term remaining on our operating lease portfolio was 7.2 years and the weighted average age of our owned fleet was 3.7 years as of June 30, 2019. Our fleet grew by 13.0% based on net book value of $17.8 billion as of June 30, 2019 compared to $15.7 billion as of December 31, 2018. In addition, we had a managed fleet of 64 aircraft as of June 30, 2019, compared to a managed fleet of 61 aircraft as of December 31, 2018. We have a globally diversified customer base comprised of 100 airlines in 57 countries. As of August 8, 2019, all aircraft in our operating lease portfolio, except for one aircraft, were subject to lease agreements.

In June 2019, we entered into memorandums of understanding (“MOU”) with Airbus to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft, and we have options for an additional 25 A220 aircraft. In addition, we entered into an MOU with Boeing to convert existing purchase orders of 15 737 MAX aircraft to five 787-9 aircraft. As of June 30, 2019, we had commitments to purchase 343 aircraft from Airbus and Boeing for delivery through 2024, with an estimated aggregate commitment of $24.1 billion. We ended the second quarter of 2019 with $28.7 billion in committed minimum future rental payments and placed 77% of our committed order book on long-term leases for aircraft delivering through 2021. This includes $13.5 billion in contracted minimum rental payments on the aircraft in our existing fleet and $15.2 billion in minimum future rental payments related to aircraft which will be delivered during the remainder of 2019 through 2023.

In 2019, we raised $3.4 billion in debt to finance the growth of our fleet and refinance existing debt maturities, increasing our liquidity position to $5.3 billion. During the first six months of 2019, we have issued $1.75 billion in Medium-Term Notes, with maturities ranging between 2021 and 2026 and that bear interest at fixed rates between 3.75% and 4.25%, and floating rate notes that bear interest at three-month LIBOR plus 0.67%. In May 2019, we amended and extended our unsecured revolving credit facility and, including commitment increases executed through August 8, 2019, we increased our unsecured revolving credit facility by an aggregate of $1.3 billion to $5.9 billion and extended the final maturity date to 2023 while maintaining our pricing with an interest rate of LIBOR plus 1.05% and a facility fee of 0.20%. We ended the second quarter of 2019 with total debt outstanding, net of discounts and issuance costs, of $12.9 billion, of which 82.1% was at a fixed rate and 96.6% of which was unsecured. Our composite cost of funds was 3.49% as of June 30, 2019.

Our total revenues for the quarter ended June 30, 2019 increased by 18.5% to $471.4 million, compared to the quarter ended June 30, 2018. This increase was principally driven by the continued growth of our fleet. Our net income available to common stockholders for the quarter ended June 30, 2019 was $124.0 million compared to $115.2 million for the quarter ended June 30, 2018. Our diluted earnings per share for the quarter ended June 30, 2019 was $1.10 compared to $1.04 for the quarter ended June 30, 2018. The increase in net income available to common stockholders in the second quarter of 2019 as compared to 2018 was primarily due to the continued growth of our fleet.

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Our adjusted net income before income taxes excludes the effects of certain non-cash items, one-time or non-recurring items, that are not expected to continue in the future and certain other items. Our adjusted net income before income taxes for the three months ended June 30, 2019 was $170.8 million or $1.51 per diluted share, compared to $160.3 million or $1.44 per diluted share for the three months ended June 30, 2018. The increase in our adjusted net income before income taxes is primarily driven by the continued growth of our fleet. Our adjusted pre-tax profit margin for the three months ended June 30, 2019 was 36.2% compared to 40.3% for the three months ended June 30, 2018. Adjusted net income before income taxes, adjusted pre-tax profit margin and adjusted diluted earnings per share before income taxes are measures of financial and operational performance that are not defined by U.S. generally accepted accounting principles (“GAAP”). See Note 1 under the “Results of Operations” table for a discussion of adjusted net income before income taxes, adjusted pre-tax profit margin and adjusted diluted earnings per share before income taxes as non-GAAP measures and reconciliation of these measures to net income available to common stockholders.

Our Fleet

Portfolio metrics of our fleet as of June 30, 2019 and December 31, 2018 are as follows:


	June 30, 2019		December 31, 2018

Aggregate fleet net book value	$	17.8 billion	$	15.7 billion
Weighted-average fleet age⁽¹⁾		3.7 years		3.8 years
Weighted-average remaining lease term⁽¹⁾		7.2 years		6.8 years

Owned fleet		297		275
Managed fleet		64		61
Aircraft on order⁽²⁾		343		372
Aircraft purchase options⁽³⁾		50		50
Total		754		758

Current fleet contracted rentals	$	13.4 billion	$	11.8 billion
Committed fleet rentals	$	15.2 billion	$	13.9 billion
Total committed rentals	$	28.6 billion	$	25.7 billion

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

(2)

Excluded from the table above are MOUs with Airbus, signed in June 2019, to launch the A321 XLR aircraft and to order the A220 aircraft. Through these MOUs, we have the right to purchase 27 A321 XLR aircraft, 23 A321neo aircraft and 50 A220 aircraft and we have options for an additional 25 A220 aircraft. Also excluded from the table above is an MOU with Boeing, signed in June 2019, to convert existing purchase orders of 15 737 MAX aircraft to five 787-9 aircraft.

(3)

As of June 30, 2019, we had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft, which does not include options to purchase an additional 25 Airbus A220-300 aircraft pursuant to an MOU executed in June 2019. As of December 31, 2018, we had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft.

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The following table sets forth the net book value and percentage of the net book value of our flight equipment subject to operating lease in the indicated regions based on each airline’s principal place of business as of June 30, 2019 and December 31, 2018 (in thousands, except percentages):


	June 30, 2019				December 31, 2018
	Net Book				Net Book
Region	Value		% of Total		Value		% of Total
Europe	$	5,106,432	28.7	%	$	4,692,341	29.9	%
Asia (excluding China)		4,288,426	24.2	%		3,846,785	24.5	%
China		3,076,195	17.3	%		2,663,903	17.0	%
The Middle East and Africa		2,216,317	12.5	%		1,952,900	12.4	%
Central America, South America and Mexico		1,275,240	7.2	%		1,078,900	6.9	%
Pacific, Australia and New Zealand		960,922	5.4	%		714,397	4.5	%
U.S. and Canada		833,441	4.7	%		757,884	4.8	%
Total	$	17,756,973	100.0	%	$	15,707,110	100.0	%

The following table sets forth the number of aircraft we owned by aircraft type as of June 30, 2019 and December 31, 2018:


	June 30, 2019			December 31, 2018
	Number of			Number of
Aircraft type	Aircraft	% of Total		Aircraft	% of Total
Airbus A319-100	1	0.3	%	1	0.4	%
Airbus A320-200	33	11.1	%	35	12.7	%
Airbus A320-200neo	9	3.0	%	6	2.2	%
Airbus A321-200	34	11.6	%	34	12.4	%
Airbus A321-200neo	23	7.7	%	14	5.1	%
Airbus A330-200	14	4.7	%	15	5.4	%
Airbus A330-300	6	2.0	%	5	1.8	%
Airbus A330-900neo	5	1.7	%	1	0.4	%
Airbus A350-900	9	3.0	%	6	2.2	%
Boeing 737-700	4	1.4	%	4	1.4	%
Boeing 737-800	96	32.3	%	98	35.6	%
Boeing 737-8 MAX	15	5.1	%	14	5.1	%
Boeing 767-300ER	1	0.3	%	1	0.4	%
Boeing 777-200ER	1	0.3	%	1	0.4	%
Boeing 777-300ER	24	8.1	%	24	8.7	%
Boeing 787-9	21	7.1	%	15	5.4	%
Embraer E190	1	0.3	%	1	0.4	%
Total⁽¹⁾	297	100.0	%	275	100.0	%

(1)	As of June 30, 2019 and December 31, 2018, we had three aircraft held for sale and six aircraft held for sale, respectively.

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As of June 30, 2019, we had commitments to acquire a total of 343 new aircraft for delivery as follows:


Aircraft Type	2019	2020	2021	2022	2023	Thereafter	Total
Airbus A320/321neo⁽¹⁾	16	27	32	25	25	—	125
Airbus A330-900neo	4	2	5	6	2	—	19
Airbus A350-900/1000	1	3	6	3	2	—	15
Boeing 737-7/8/9 MAX	—	41	48	31	25	5	150
Boeing 787-9/10	6	13	7	8	—	—	34
Total⁽²⁾⁽³⁾	27	86	98	73	54	5	343

(1)	Our Airbus A320/321neo aircraft orders include 56 long-range variants.

(2)	In addition to the aircraft from our orderbook, we have a commitment to purchase one used Airbus A330-300 aircraft from a third party, which is scheduled for delivery in 2019.

(3)

In addition to our commitments, as of June 30, 2019, we had options to acquire up to five Airbus A350-1000 aircraft and 45 Boeing 737-8 MAX aircraft. Deliveries of these aircraft are scheduled to commence in 2023 and continue through 2024.

Our lease placements are progressing in line with expectations. The following table shows the number of new aircraft scheduled to be delivered as of June 30, 2019, along with the lease placements of such aircraft as of August 8, 2019:


	Number of	Number
Delivery Year	Aircraft	Leased	% Leased
2019	27	27	100.0	%
2020	86	83	96.5	%
2021	98	52	53.1	%
2022	73	24	32.9	%
2023	54	4	7.4	%
Thereafter	5	—	—	%
Total	343	190

Aircraft Industry and Sources of Revenues

Our revenues are principally derived from operating leases with scheduled and charter airlines. In each of the last four calendar years, we derived more than 95% of our 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.

Demand for air travel has consistently grown in terms of both passenger traffic and number of aircraft in service. The International Air Transport Association (“IATA”) reported that passenger traffic for the first six months of 2019 grew 4.7% compared to the same period in 2018. The number of aircraft in service has grown steadily and the number of leased aircraft in the global fleet has increased. The long-term outlook for aircraft demand remains robust due to increased passenger traffic and the need to replace aging aircraft.

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In March 2019, aviation authorities worldwide suspended the operations of the Boeing 737 MAX aircraft. Accordingly, Boeing has temporarily halted deliveries of all Boeing 737 MAX aircraft, and has informed us to expect several months of delivery delays until Boeing is able to resolve this matter. As of June 30, 2019, we owned and leased 15 Boeing 737 MAX aircraft, and all of our leases contain Hell or High Water provisions, which require the airline to continue to make payments under the lease, irrespective of any difficulties in which the lessees may encounter. In addition, we are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of and the delivery delays associated with Boeing 737 MAX aircraft that we own and have on order.

The success of the commercial airline industry is linked to the strength of global economic development, which may be negatively impacted by macroeconomic conditions and geopolitical and policy risks. Nevertheless, across a variety of global economic conditions, the leasing industry has remained resilient over time. We remain optimistic about the long-term growth prospects for air transportation. We see a growing demand for aircraft leasing in the broader industry and a role for us in helping airlines modernize their fleets to support the growth of the airline industry. However, with the growth in aircraft leasing worldwide, we are witnessing an increase in competition among aircraft lessors resulting in more variation in lease rates.

Liquidity and Capital Resources

Overview

We finance the purchase of aircraft and our business with available cash balances, internally generated funds, including aircraft sales and trading activity, and debt financings. We have structured ourselves with the goal to maintain investment-grade credit metrics and our debt financing strategy has focused on funding our business on an unsecured basis. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another. In addition, we may, to a limited extent, utilize export credit financing or other forms of secured financing in support of our new aircraft deliveries.

We ended the second quarter of 2019 with total debt outstanding, net of discounts and issuance costs, of $12.9 billion compared to $11.5 billion as of December 31, 2018. Our unsecured debt increased to $12.6 billion as of June 30, 2019 from $11.3 billion as of December 31, 2018. Our unsecured debt as a percentage of total debt increased to 96.6% as of June 30, 2019 from 96.5% as of December 31, 2018. We also issued 10,000,000 shares of 6.150% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A (the "Series A Preferred Stock"), $0.01 par value, with a liquidation preference of $25.00 per share during the first half of 2019.

We increased our cash flows provided by operating activities by 11.6% or $68.3 million, to $656.2 million for the six months ended June 30, 2019 as compared to $588.0 million for the six months ended June 30, 2018. The increase in our cash flow provided by operating activities is due to the increase in our net income and growth of our fleet. Our cash flow used in investing activities was $2.3 billion for the six months ended June 30, 2019, which resulted primarily from the purchase of aircraft, partially offset by proceeds from our sales and trading activity. Our cash flow provided by financing activities was $1.6 billion for the six months ended June 30, 2019, which resulted primarily from the issuance of unsecured notes and the issuance of preferred stock during the first six months of 2019, partially offset by the repayment of outstanding debt.

We ended the second quarter of 2019 with available liquidity of $5.3 billion which is comprised of unrestricted cash of $264.1 million and an undrawn balance under our committed unsecured revolving credit facility of $5.1 billion. We believe that we have sufficient liquidity to satisfy the operating requirements of our business through the next twelve months.

Our financing plan for the next twelve months is focused on funding the purchase of aircraft, including the increased aircraft deliveries we expect in 2019, and our business with available cash balances, internally generated funds, including through aircraft sales and trading activities, and debt financings. Our debt financing plan continues to focus on raising unsecured debt in the global bank and investment grade capital markets. In addition, we may utilize, to a limited extent, export credit financing in support of our new aircraft deliveries.

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We are in compliance in all material respects with the covenants in our debt agreements. 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 costs of certain financings. Our liquidity plans are subject to a number of risks and uncertainties, including those described in our Annual Report on Form 10-K for the year ended December 31, 2018 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

Debt

Our debt financing was comprised of the following at June 30, 2019 and December 31, 2018 (in thousands, except percentages):


	June 30, 2019			December 31, 2018

Unsecured
Senior notes	$	10,950,000		$	10,043,445
Revolving credit facilities		801,000			602,000
Term financings		800,250			607,340
Total unsecured debt financing		12,551,250			11,252,785
Secured
Term financings		411,343			371,203
Export credit financing		34,938			38,265
Total secured debt financing		446,281			409,468

Total debt financing		12,997,531			11,662,253
Less: Debt discounts and issuance costs		(138,287)			(123,348)
Debt financing, net of discounts and issuance costs	$	12,859,244		$	11,538,905
Selected interest rates and ratios:
Composite interest rate⁽¹⁾		3.49	%		3.46	%
Composite interest rate on fixed-rate debt⁽¹⁾		3.49	%		3.42	%
Percentage of total debt at fixed-rate		82.07	%		86.41	%

(1)	This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs.

Senior unsecured notes (including Medium-Term Note Program)

As of June 30, 2019, we had $11.0 billion in senior unsecured notes outstanding. As of December 31, 2018, we had $10.0 billion in senior unsecured notes outstanding.

During the six months ended June 30, 2019, we issued approximately $1.75 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $700.0 million due 2024 at a fixed rate of 4.25%, (ii) $750.0 million due 2026 at a fixed rate of 3.75% and (iii) $300.0 million due 2021 that bear interest at a floating rate of three-month LIBOR plus 0.67%.

Unsecured revolving credit facilities

As of June 30, 2019, the total outstanding balance on our unsecured revolving credit facilities was approximately $801.0 million. The total outstanding balance under our unsecured revolving credit facilities was approximately $602.0 million as of December 31, 2018.

In May 2019, we amended and extended our committed unsecured revolving credit facility whereby, among other things, we extended the final maturity date from May 5, 2022 to May 5, 2023 and, after giving effect to commitments that matured on May 5, 2019, increased the total revolving commitments to approximately $5.8 billion, representing an increase of 26.6% from December 31, 2018, with an interest rate of LIBOR plus 1.05% with a 0.20% facility fee. On July 31, 2019, the Company executed a commitment increase to its unsecured revolving credit facility, which increased the aggregate facility capacity by an additional $58.0 million. As of July 31, 2019, lenders held revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on

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May 5, 2022, commitments totaling approximately $5.0 million that mature on May 5, 2021, and commitments totaling $92.7 million that mature on May 5, 2020.

As of June 30, 2019, borrowings under the committed unsecured revolving credit facility will generally bear interest at either (a) LIBOR plus a margin of 1.05% per year or (b) an alternative base rate plus a margin of 0.05% per year, subject, in each case, to increases or decreases based on declines in the credit ratings for our debt. We are required to pay a facility fee of 0.20% per year (also subject to increases or decreases based on declines in the credit ratings for our debt) in respect of total commitments under the committed unsecured revolving credit facility. Borrowings under the committed unsecured revolving credit facility are used to finance our working capital needs in the ordinary course of business and for other general corporate purposes.

Preferred equity

On March 5, 2019, we issued 10,000,000 shares of 6.150% Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”), $0.01 par value, with a liquidation preference of $25.00 per share. We will pay dividends on the preferred stock only when, as and if declared by the board of directors. Dividends will accrue, on a non-cumulative basis, on the stated amount of $25.00 per share at a rate per annum equal to: (i) 6.15% during the first five years and payable quarterly in arrears beginning on June 15, 2019, and (ii) three-month LIBOR plus a spread of 3.65% per annum from March 15, 2024, reset quarterly and payable quarterly in arrears beginning on June 15, 2024.

We may redeem shares of the Series A Preferred Stock at our option, in whole or in part, from time to time, on or after March 15, 2024, for cash at a redemption price equal to $25.00 per share, plus any declared and unpaid dividends to, but excluding, the redemption date, without accumulation of any undeclared dividends. We may also redeem shares of the Series A Preferred Stock at our option under certain other limited conditions.

On May 8, 2019, our board of directors approved a quarterly cash dividend of $0.427083 per share on our outstanding Series A Preferred Stock, which was paid on June 15, 2019 to holders of record of our Series A Preferred Stock as of May 31, 2019.

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. In July 2019, Fitch Ratings reaffirmed its issuer and senior unsecured debt ratings and outlook. 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	December 14, 2018
Standard and Poor's	BBB	BBB	Stable	December 18, 2018
Fitch Ratings	BBB	BBB	Stable	July 15, 2019

While a ratings downgrade would not result in a default under any of our debt agreements, it could adversely affect our ability to issue debt and obtain new financings, or renew existing financings, and it would increase the cost of our financings.

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Results of Operations

The following table presents our historical operating results for the three and six month periods ended June 30, 2019 and 2018 (in thousands, except per share amounts and percentages):


	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(unaudited)
Revenues
Rental of flight equipment	$	463,870		$	393,479		$	919,609		$	771,341
Aircraft sales, trading and other		7,525			4,335			17,837			7,682
Total revenues		471,395			397,814			937,446			779,023
Expenses
Interest		96,824			73,452			186,044			142,395
Amortization of debt discounts and issuance costs		8,712			8,010			17,252			16,032
Interest expense		105,536			81,462			203,296			158,427
Depreciation of flight equipment		171,689			142,600			331,160			278,734
Selling, general and administrative		27,771			21,458			57,473			44,817
Stock-based compensation		5,863			4,885			10,037			8,317
Total expenses		310,859			250,405			601,966			490,295
Income before taxes		160,536			147,409			335,480			288,728
Income tax expense		(32,231)			(32,198)			(69,081)			(62,866)
Net income	$	128,305		$	115,211		$	266,399		$	225,862
Preferred stock dividends		(4,271)			—			(4,271)			—
Net income available to common stockholders	$	124,034		$	115,211		$	262,128		$	225,862

Earnings per share of Class A and B common stock
Basic	$	1.11		$	1.11		$	2.36		$	2.17
Diluted	$	1.10		$	1.04		$	2.33		$	2.04

Other financial data
Pre-tax profit margin		34.1	%		37.1	%		35.8	%		37.1	%
Adjusted net income before income taxes⁽¹⁾	$	170,840		$	160,304		$	358,498		$	313,077
Adjusted pre-tax profit margin⁽¹⁾		36.2	%		40.3	%		38.2	%		40.2	%
Adjusted diluted earnings per share before income taxes⁽¹⁾	$	1.51		$	1.44		$	3.18		$	2.82
Pre-tax return on common equity (trailing twelve months)		14.6	%		15.4	%		14.6	%		15.4	%
Adjusted pre-tax return on common equity (trailing twelve months)⁽¹⁾		15.7	%		16.7	%		15.7	%		16.7	%

(1)

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

Management and our board of directors use adjusted net income before income taxes, adjusted pre-tax profit margin, adjusted diluted earnings per share before income taxes and adjusted pre-tax return on common equity to assess our consolidated financial and operating performance. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they

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

The following tables show the reconciliation of net income available to common stockholders to adjusted net income before income taxes and adjusted pre-tax profit margin (in thousands, except percentages):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted net income before income taxes and adjusted pre-tax profit margin:
Net income available to common stockholders	$	124,034		$	115,211		$	262,128		$	225,862
Amortization of debt discounts and issuance costs		8,712			8,010			17,252			16,032
Stock-based compensation		5,863			4,885			10,037			8,317
Provision for income taxes		32,231			32,198			69,081			62,866
Adjusted net income before income taxes	$	170,840		$	160,304		$	358,498		$	313,077

Total revenues	$	471,395		$	397,814		$	937,446		$	779,023
Adjusted pre-tax profit margin⁽¹⁾		36.2	%		40.3	%		38.2	%		40.2	%

(1)	Adjusted pre-tax profit margin is adjusted net income before income taxes divided by total revenues

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The following table shows the reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes (in thousands, except share and per share amounts):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(unaudited)

Reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes:
Net income available to common stockholders	$	124,034	$	115,211	$	262,128	$	225,862
Amortization of debt discounts and issuance costs		8,712		8,010		17,252		16,032
Stock-based compensation		5,863		4,885		10,037		8,317
Provision for income taxes		32,231		32,198		69,081		62,866
Adjusted net income before income taxes	$	170,840	$	160,304	$	358,498	$	313,077
Assumed conversion of convertible senior notes		—		1,735		—		3,474
Adjusted net income before income taxes plus assumed conversions	$	170,840	$	162,039	$	358,498	$	316,551
Weighted-average diluted common shares outstanding		112,807,023		112,424,582		112,598,623		112,326,506
Adjusted diluted earnings per share before income taxes	$	1.51	$	1.44	$	3.18	$	2.82

The following table shows the reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity (in thousands, except percentages):


	Trailing Twelve Months
	June 30,
	2019			2018
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity:
Net income available to common stockholders	$	547,101		$	796,152
Amortization of debt discounts and issuance costs		33,926			30,057
Stock-based compensation		19,198			19,044
Provision for income taxes		135,518			(187,641)
Adjusted net income before income taxes	$	735,743		$	657,612

Common shareholders' equity as of beginning of the period	$	4,337,842		$	3,558,204
Common shareholders' equity as of end of the period	$	5,049,884		$	4,337,842
Average common shareholders' equity	$	4,693,863		$	3,948,023

Adjusted pre-tax return on common equity		15.7	%		16.7	%

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Three months ended June 30, 2019, compared to the three months ended June 30, 2018

Rental revenue

As of June 30, 2019, we owned 297 aircraft with a net book value of $17.8 billion and recorded $463.9 million in rental revenue for the quarter then ended, which included $2.1 million in amortization expense related to initial direct costs, which is net of overhaul revenue. In the prior year, as of June 30, 2018, we owned 271 aircraft with a net book value of $14.9 billion and recorded $393.5 million in rental revenue for the quarter ended June 30, 2018, which included $1.8 million in amortization expense related to initial direct costs, which is net of overhaul revenue. The increase in rental revenue was primarily due to the increase in net book value of our operating lease portfolio to $17.8 billion as of June 30, 2019 from $14.9 billion as of June 30, 2018.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $7.5 million for the three months ended June 30, 2019 compared to $4.3 million for the three months ended June 30, 2018. The increase was primarily attributable to the increase in revenue relating to other activities, as we did not sell any aircraft from our operating lease portfolio in either period.

Interest expense

Interest expense totaled $105.5 million for the three months ended June 30, 2019 compared to $81.5 million for the three months ended June 30, 2018. The increase was primarily due to an increase in our aggregate debt balance. We expect that our interest expense will increase as our average debt balance outstanding continues to increase. Interest expense will also be impacted by changes in our composite cost of funds.

Depreciation expense

We recorded $171.7 million in depreciation expense of flight equipment for the three months ended June 30, 2019 compared to $142.6 million for the three months ended June 30, 2018. The increase in depreciation expense for the three months ended June 30, 2019, compared to the three months ended June 30, 2018, is primarily attributable to the acquisition of additional aircraft during the last twelve months.

Selling, general and administrative expenses

We recorded selling, general and administrative expenses of $27.8 million for the three months ended June 30, 2019 compared to $21.5 million for the three months ended June 30, 2018. Selling, general and administrative expense as a percentage of total revenue increased to 5.9% for the three months ended June 30, 2019 compared to 5.4% for the three months ended June 30, 2018. Selling, general and administrative expenses increased due in part to increased transactional expenses incurred during the period. As we continue to add new aircraft to our portfolio, we expect over the long-term, selling, general and administrative expense to decrease as a percentage of our revenue.

Taxes

The effective tax rate was 20.1% and 21.8% for the three months ended June 30, 2019 and 2018, respectively. Changes in the tax rate were primarily driven by variances in permanent items.

Net income available to common stockholders

For the three months ended June 30, 2019, we reported consolidated net income available to common stockholders of $124.0 million, or $1.10 per diluted share, compared to a consolidated net income available to common stockholders of $115.2 million, or $1.04 per diluted share, for the three months ended June 30, 2018. Net income available to common stockholders increased in the second quarter of 2019 as compared to 2018, primarily due to the continued growth of our fleet, partially offset by increases in our interest expense and selling, general and administrative expenses.

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Adjusted net income before income taxes

For the three months ended June 30, 2019, we recorded adjusted net income before income taxes of $170.8 million, or $1.51 per diluted share, compared to an adjusted net income before income taxes of $160.3 million, or $1.44 per diluted share, for the three months ended June 30, 2018. Our adjusted net income before income taxes increased primarily due to the continued growth of our fleet, partially offset by increases in our interest expense and selling, general and administrative expenses.

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

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Six months ended June 30, 2019, compared to the six months ended June 30, 2018

Rental revenue

As of June 30, 2019, we owned 297 aircraft with a net book value of $17.8 billion and recorded $919.6 million in rental revenue for the six months then ended, which included overhaul revenue, net of amortization expense related to initial direct costs, of $15.9 million. In the prior year, as of June 30, 2018, we owned 271 aircraft with a net book value of $14.9 billion and recorded $771.3 million in rental revenue for the six months ended June 30, 2018, which included overhaul revenue, net of amortization of initial direct costs, of $2.7 million. The increase in rental revenue was primarily due to the increase in net book value of our operating lease portfolio to $17.8 billion as of June 30, 2019 from $14.9 billion as of June 30, 2018.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $17.8 million for the six months ended June 30, 2019 compared to $7.7 million for the six months ended June 30, 2018. During the six months ended June 30, 2019, we recorded $1.6 million in gains from the sale of six aircraft from our operating lease portfolio. During the six months ended June 30, 2018, we did not sell any aircraft from our operating lease portfolio.

Interest expense

Interest expense totaled $203.3 million for the six months ended June 30, 2019 compared to $158.4 million for the six months ended June 30, 2018. The increase was primarily due to an increase in our aggregate debt balance. We expect that our interest expense will increase as our average debt balance outstanding continues to increase. Interest expense will also be impacted by changes in our composite cost of funds.

Depreciation expense

We recorded $331.2 million in depreciation expense of flight equipment for the six months ended June 30, 2019 compared to $278.7 million for the six months ended June 30, 2018. The increase in depreciation expense for the six months ended June 30, 2019, compared to the six months ended June 30, 2018, is primarily attributable to the acquisition of additional aircraft during the last twelve months.

Selling, general and administrative expenses

We recorded selling, general and administrative expenses of $57.5 million for the six months ended June 30, 2019 compared to $44.8 million for the six months ended June 30, 2018. Selling, general and administrative expense as a percentage of total revenue increased to 6.1% for the six months ended June 30, 2019 compared to 5.8% for the six months ended June 30, 2018. Selling, general and administrative expenses increased due in part to increased transactional expenses incurred during the period. As we continue to add new aircraft to our portfolio, we expect over the long-term, selling, general and administrative expense to decrease as a percentage of our revenue.

Taxes

The effective tax rate was 20.6% and 21.8% for the six months ended June 30, 2019 and 2018, respectively. Changes in the tax rate were primarily driven by variances in permanent items.

Net income available to common stockholders

For the six months ended June 30, 2019, we reported consolidated net income available to common stockholders of $262.1 million, or $2.33 per diluted share, compared to a consolidated net income available to common stockholders of $225.9 million, or $2.04 per diluted share, for the six months ended June 30, 2018. Net income available to common stockholders increased in the second quarter of 2019 as compared to 2018, primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

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Adjusted net income before income taxes

For the six months ended June 30, 2019, we recorded adjusted net income before income taxes of $358.5 million, or $3.18 per diluted share, compared to an adjusted net income before income taxes of $313.1 million, or $2.82 per diluted share, for the six months ended June 30, 2018. Our adjusted net income before income taxes increased primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

Contractual Obligations

Our contractual obligations as of June 30, 2019, are as follows (in thousands):


	2019		2020		2021		2022		2023		Thereafter		Total
Long-term debt obligations	$	59,892	$	1,460,039	$	1,991,039	$	2,701,069	$	2,537,846	$	4,247,646	$	12,997,531
Interest payments on debt outstanding⁽¹⁾		234,546		437,462		382,222		318,434		227,101		397,865		1,997,630
Purchase commitments		2,744,657		6,469,820		6,741,848		5,034,063		2,896,636		221,130		24,108,154
Operating leases		2,484		6,881		7,052		6,509		6,393		37,617		66,936
Total	$	3,041,579	$	8,374,202	$	9,122,161	$	8,060,075	$	5,667,976	$	4,904,258	$	39,170,251

(1)Future interest payments on floating rate debt are estimated using floating rates in effect at June 30, 2019.

The above table does not include any dividends we may pay on our Series A Preferred Stock or common stock.

Off-Balance Sheet Arrangements

We have not established any unconsolidated entities for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. We have, however, from time to time established subsidiaries and created partnership arrangements or trusts for the purpose of leasing aircraft or facilitating borrowing arrangements, all of which are consolidated. We have investments in two joint ventures in which we own 9.5% of the equity of each joint venture. We account for our investment in these joint ventures using the equity method of accounting due to our level of influence and involvement in the joint ventures. We also have a non-controlling interest in Thunderbolt Aircraft Lease Limited II of 5.1% and it is accounted for as an investment under the cost method of accounting.

Critical Accounting Policies

Our critical accounting policies reflecting management’s estimates and judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2018. We have reviewed recently adopted accounting pronouncements and determined that the adoption of such pronouncements is not expected to have a material impact, if any, on our Consolidated Financial Statements. Accordingly, there have been no material changes to critical accounting policies in the six months ended June 30, 2019.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in value of a financial instrument, caused by fluctuations in interest rates and foreign exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. We are exposed to the market risks described below.

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Interest Rate Risk

The nature of our business exposes us to market risk arising from changes in interest rates. Changes, both increases and decreases, in our cost of borrowing, as reflected in our composite interest rate, directly impact our net income. Our lease rental stream is generally fixed over the life of our leases, whereas we have used floating-rate debt to finance a significant portion of our aircraft acquisitions. As of June 30, 2019 and December 31, 2018, we had $2.3 billion and $1.6 billion in floating-rate debt outstanding, respectively. If interest rates increase, we would be obligated to make higher interest payments to our lenders. If we incur significant fixed-rate debt in the future, increased interest rates prevailing in the market at the time of the incurrence of such debt would also increase our interest expense. If our composite interest rate were to increase by 1.0%, we would expect to incur additional interest expense on our existing indebtedness of approximately $23.3 million and $15.9 million as of June 30, 2019 and December 31, 2018, respectively, each on an annualized basis, which would put downward pressure on our operating margins. Further, as of June 30, 2019, 82.1% of our total debt incurred interest at a fixed rate.

We also have interest rate risk on our forward lease placements. This is caused by us setting a fixed lease rate in advance of the delivery date of an aircraft. The delivery date is when a majority of the financing for an aircraft is arranged. We partially mitigate the risk of an increasing interest rate environment between the lease signing date and the delivery date of the aircraft by having interest rate adjusters in a majority of our forward lease contracts which would adjust the final lease rate upward if certain benchmark interest rates are higher at the time of delivery of the aircraft than at the lease signing date.

Foreign Exchange Rate Risk

We attempt to minimize currency and exchange risks by entering into aircraft purchase agreements and a majority of lease agreements and debt agreements with U.S. dollars as the designated payment currency. Thus, most of our revenue and expenses are denominated in U.S. dollars. As of June 30, 2019 and December 31, 2018, approximately 0.7% of our lease revenues were denominated in foreign currency. As our principal currency is the U.S. dollar, fluctuations in the U.S. dollar as compared to other major currencies should not have a significant impact on our future operating results.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

We have evaluated, under the supervision and with the participation of management, including the Certifying Officers, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of June 30, 2019. Based on that evaluation, our Certifying Officers have concluded that our disclosure controls and procedures were effective at June 30, 2019.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2019 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those discussed under “Part I—Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2018 and “Part II—Item 1A. Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
3.1	Restated Certificate of Incorporation of Air Lease Corporation.	S-1	333-171734	3.1	January 14, 2011

3.2	Fourth Amended and Restated Bylaws of Air Lease Corporation.	8-K	001-35121	3.1	March 27, 2018

3.3	Certificate of Designations with respect to the 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, of Air Lease Corporation, dated March 4, 2019, filed with the Secretary of State of Delaware and effective on March 4, 2019.	8-A	001-35121	3.2	March 4, 2019

4.1	Form of Stock Certificate representing the 6.150% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A.	8-A	001-35121	4.2	March 4, 2019

10.1	Fifth Amendment and Extension Agreement, dated May 3, 2019, to the Second Amended and Restated Credit Agreement, dated as of May 5, 2014 among Air Lease Corporation, as Borrower, the several lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.	8-K	001-35121	10.1	May 9, 2019

10.2	New Lender Supplement, dated April 5, 2019, to the Second Amended and Restated Credit Agreement, dated as of May 5, 2014, among Air Lease Corporation, as Borrower, the several lenders from time to time parties thereto, and JP Morgan Chase Bank, N.A., as Administrative Agent.	10-Q	001-35121	10.5	May 9, 2019

10.3	Commitment Increase Supplement, dated July 31, 2019, to the Second Amended and Restated Credit Agreement, among Air Lease Corporation, as Borrower, the several lenders from time to time parties thereto, and JP Morgan Chase Bank, N.A., as Administrative Agent.				Filed herewith

10.4†	Amendment No. 11 to the Airbus A350 XWB Family Purchase Agreement, dated May 15, 2019, by and between Air Lease Corporation and Airbus S.A.S.				Filed herewith

10.5†	Amendment and Restatement Agreement of Letter Agreement No. 1 to Amendment No. 10 to the Airbus A350 Family Purchase Agreement, dated April 26, 2019, by and between Air Lease Corporation and Airbus S.A.S.				Filed herewith

10.6†	Supplemental Agreement No. 23 to Purchase Agreement No. PA-03791, dated June 26, 2019, by and between Air Lease Corporation and The Boeing Company.				Filed herewith

10.7†	Supplemental Agreement No. 12 to Purchase Agreement No. PA-03659, dated April 26, 2019, by and between Air Lease Corporation and The Boeing Company.				Filed herewith

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10.8†	Supplemental Agreement No. 13 to Purchase Agreement No. PA-03659, dated June 26, 2019, by and between Air Lease Corporation and The Boeing Company.				Filed herewith

10.9§	Employment Agreement between Air Lease Corporation Hong Kong Limited and Jie Chen, effective June 6, 2019.	8-K	001-35121	10.1	June 7, 2019

10.10§	Letter Agreement between Air Lease Corporation and Jie Chen, dated June 5, 2019.	8-K	001-35121	10.2	June 7, 2019

10.11§	Tax Equalization Understanding between Air Lease Corporation and Jie Chen, dated June 5, 2019.	8-K	001-35121	10.3	June 7, 2019

10.12§	Air Lease Corporation Non-Employee Director Compensation (as amended May 8, 2019).				Filed herewith

31.1	Certification of the Chief Executive Officer and President Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				Filed herewith

31.2	Certification of the Executive Vice President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				Filed herewith

32.1	Certification of the Chief Executive Officer and President Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).				Furnished herewith

32.2	Certification of the Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).				Furnished herewith

101.INS	XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH	XBRL Taxonomy Extension Schema

101.CAL	XBRL Taxonomy Extension Calculation Linkbase

101.DEF	XBRL Taxonomy Extension Definition Linkbase

101.LAB	XBRL Taxonomy Extension Label Linkbase

101.PRE	XBRL Taxonomy Extension Presentation Linkbase

104	The cover page from Air Lease Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in Inline XBRL


†	Portions of the referenced exhibit have been omitted pursuant to Item 601(b) of Regulation S-K because it (i) is not material and (ii) would be competitively harmful if publicly disclosed.
§	Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AIR LEASE CORPORATION

August 8, 2019	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President
	(Principal Executive Officer)

August 8, 2019	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

Exhibit 10.3

Execution Version

COMMITMENT INCREASE SUPPLEMENT

SUPPLEMENT, dated as of July 31, 2019, to the Second Amended and Restated Credit Agreement, dated as of May 5, 2014, as amended by the First Amendment dated as of June 1, 2015, by the Second Amendment dated as of the May 27, 2016, by the Third Amendment and Extension Agreement dated as of May 2, 2017, by the Fourth Amendment and Extension Agreement dated as of May 2, 2018, by the Fifth Amendment and Extension Agreement dated as of May 3, 2019 and as further amended, supplemented or otherwise modified from time to time (the “Credit Agreement”) among AIR LEASE CORPORATION, a Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as administrative agent (the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Credit Agreement provides in Section 2.1(d) thereof that any Lender may increase its Commitment under the Credit Agreement with the consent of the Borrower and the Administrative Agent by executing and delivering to the Borrower and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned now desires to increase its Commitment under the Credit Agreement;

NOW, THEREFORE, the undersigned hereby agrees as follows:

1. The undersigned agrees that, on the date this Supplement is accepted by the Borrower and the Administrative Agent (or on such other date as may be agreed upon among the undersigned, the Borrower and the Administrative Agent), its Commitment shall be increased by $58,000,000 from $10,000,000 to $68,000,000.

2. The undersigned hereby confirms and agrees that the Termination Date in respect of its Commitment is May 5, 2023.

3. Terms defined in the Credit Agreement shall have their defined meanings when used herein.

[Remainder of page left blank intentionally.]

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.


	CIT BANK, N.A.


	By:	/s/ Jean-Pierre Knight
		Name: Jean-Pierre Knight
		Title: Managing Director

[Signature Page to CIT Bank Commitment Increase Supplement]


Accepted and agreed to as of
the date first written above:


AIR LEASE CORPORATION


By:	/s/ Gregory B. Willis
	Name: Gregory B. Willis
	Title: Executive Vice President and Chief Financial Officer

[Signature Page to CIT Bank Commitment Increase Supplement]


Accepted and agreed to as of
the date first written above:

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:	/s/ Cristina Caviness
	Name: Cristina Caviness
	Title: Vice President

[Signature Page to CIT Bank Commitment Increase Supplement]

EXHIBIT 10.4

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE
IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE
REGISTRANT IF PUBLICLY DISCLOSED

AMENDMENT N°11

TO THE AIRBUS A350 FAMILY PURCHASE AGREEMENT

BETWEEN

Airbus S.A.S.

as Seller

and

AIR LEASE CORPORATION

as Buyer


Air Lease Corporation – Amendment N°11 to the A350 Family PA	Private & Confidential
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AMENDMENT N°11 TO THE

AIRBUS A350 FAMILY PURCHASE AGREEMENT

This amendment N°11 (the “Amendment N°11”) dated 15th May 2019 is made

BETWEEN:

AIRBUS S.A.S., a société par actions simplifiée, created and existing under French law having its registered office at 2, rond-point Emile Dewoitine, 31700 Blagnac, France (the "Seller"),

and

AIR LEASE CORPORATION, a corporation organised and existing under the laws of the State of Delaware, U.S.A., having its principal place of business at 2000 Avenue of the Stars, Suite 1000N, Los Angeles, California 90067, U.S.A. (the “Buyer”).

The Buyer and Seller together are referred to as the “Parties”.

WHEREAS:

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

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

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

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

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

F. On 25 May 2016, the Buyer and the Seller entered into an Amendment N°5 to the


Air Lease Corporation – Amendment N°11 to the A350 Family PA	Private & Confidential
Ref. CLC-CT1902127

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Purchase Agreement in order to [*].

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

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

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

J. On June 1 2018, the Buyer and the Seller entered into an Amendment N°9 to the Purchase Agreement in order to [*].

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

L. In conjunction with the Buyer’s and the Seller’s agreement in paragraph K above, the Buyer and the Seller have entered into an amendment N° 5 to the A330 Agreement dated as of 31 December 2018 to provide for [*].

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

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

N. The Buyer and the Seller now wish to enter into this Amendment N°11 in order to [*], pursuant to the terms and conditions defined herein.

The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Amendment N°11. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Agreement.

NOW IT IS HEREBY AGREED AS FOLLOWS:


Air Lease Corporation – Amendment N°11 to the A350 Family PA	Private & Confidential
Ref. CLC-CT1902127

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1. [*]

2 [*]

3 [*]

4 [*]

5. INCONSISTENCY AND CONFIDENTIALITY

5.1 In the event of any inconsistency between the terms and conditions of the Agreement and those of this Amendment N°11, the latter shall prevail to the extent of such inconsistency, whereas the part of the Agreement not concerned by such inconsistency shall remain in full force and effect.

5.2 This Amendment N°11 reflects the understandings, commitments, agreements, representations and negotiations related to the matters set forth herein whatsoever, oral and written, and may not be varied except by an instrument in writing of even date herewith or subsequent hereto executed by the duly authorised representatives of both Parties.

5.3 This Amendment N°11 shall be treated by both Parties as confidential and shall not be released in whole or in part to any third party without the prior consent of the other Party except as may be required by law, or to professional advisors for the implementation hereof.

6. COUNTERPARTS

This Amendment N°11 may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

7. LAW AND JURISDICTION

The provisions of Clause 22.6 of the Agreement shall apply to this Amendment N°11 as if the same were set out in full herein, mutatis mutandis.


Air Lease Corporation – Amendment N°11 to the A350 Family PA	Private & Confidential
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IN WITNESS WHEREOF this Amendment N°11 was entered into the day and year first above written.


Agreed and Accepted		Agreed and Accepted

For and on behalf of		For and on behalf of


AIR LEASE CORPORATION		AIRBUS S.A.S.


/s/ Grant Levy		/s/ Benoît de Saint-Exupéry

By: Grant Levy		By: Benoît de Saint-Exupéry

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


Air Lease Corporation – Amendment N°11 to the A350 Family PA	Private & Confidential
Ref. CLC-CT1902127

5/6

APPENDIX 1

DELIVERY SCHEDULE


CAC ID	Aircraft Rank	Scheduled Delivery Month	Aircraft Type
[*]	[*]	[*]-17	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]-24	[*]


Air Lease Corporation – Amendment N°11 to the A350 Family PA	Private & Confidential
Ref. CLC-CT1902127

6/6

EXHIBIT 10.5

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE
IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE
REGISTRANT IF PUBLICLY DISCLOSED

AMENDMENT AND RESTATEMENT AGREEMENT OF

LETTER AGREEMENT N°1 TO AMENDMENT N°10

TO THE AIRBUS A350 FAMILY PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

and

AIR LEASE CORPORATION

as Buyer


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

1 / 9

This amendment and restatement agreement of Letter Agreement N°1 to Amendment N°10 to the Purchase Agreement (hereinafter referred to as the "Restatement Agreement") is entered into as of April 26, 2019, between

AIRBUS S.A.S., a Société par Actions Simplifée organised and existing under the laws of the Republic of France, having its registered office at 2, Rond-Point Emile Dewoitine, 31700 Blagnac, France (the "Seller"),

and

AIR LEASE CORPORATION, a corporation organised and existing under the laws of the State of Delaware, U.S.A, having its principal place of business at 2000 Avenue of the Stars, Suite 1000N, Los Angeles, California 90067, U.S.A (the “Buyer”).

The Buyer and the Seller together are referred to as the “Parties”.

WHEREAS:

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

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

H. On 31 July 2017, the Buyer and the Seller entered into an Amendment N°7 to the


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

2 / 9

Purchase Agreement in order to [*].

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

J. On June 1 2018, the Buyer and the Seller entered into an Amendment N°9 to the Purchase Agreement in order to [*].

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

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

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

N. The Buyer and the Seller now wish to amend and restate the Original Letter Agreement in order to cancel and replace clause 4 of the Original Letter Agreement.

NOW IT IS HEREBY AGREED AS FOLLOWS:


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

3 / 9

1 DEFINITIONS AND INTERPRETATION

1.1 Except as otherwise defined in this Restatement Agreement, all words and expressions defined in the Revised Letter Agreement (including definitions incorporated by reference to another document) shall have the same respective meanings when used in this Restatement Agreement.

1.2 In this Restatement Agreement, the following words and expressions shall, except where the context otherwise requires, have the following respective meanings:

Original Letter Agreement means the Letter Agreement N°1 to Amendment N°10 to the Purchase Agreement, dated 31 December 2018 and entered into between the Buyer and the Seller.

Revised Letter Agreement means the Original Letter Agreement, as amended and restated pursuant to this Restatement Agreement.

Restatement Agreement means this amendment and restatement agreement (including the Schedule 1).

2 AMENDMENT AND RESTATEMENT

With effect from the date of this Restatement Agreement, the Original Letter Agreement shall be amended and restated in the form set out in Schedule 1 to this Restatement Agreement.

3 MISCELLANEOUS

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

4. INCONSISTENCY AND CONFIDENTIALITY

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

4.2 This Restatement Agreement reflects the understandings, commitments, agreements, representations and negotiations related to the matters set forth herein whatsoever, oral and written, and may not be varied except by an instrument in writing of even date herewith or subsequent hereto executed by the duly authorised representatives of both Parties.

4.3 This Restatement Agreement shall be treated by both Parties as confidential and shall not be released in whole or in part to any third party without the prior consent of the other Party except as may be required by law, or to professional advisors for


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

4 / 9

the implementation hereof.

5. COUNTERPARTS

This Restatement Agreement may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

6. LAW AND JURISDICTION

This Restatement Agreement is governed by and shall be construed in accordance with the laws of the State of New York.

The provisions of Clause 22.6 of the Agreement shall apply to this Restatement Agreement as if the same were set out in full herein, mutatis mutandis.


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

5 / 9

SCHEDULE 1

FORM OF AMENDED AND RESTATED LETTER AGREEMENT N°1

TO AMENDMENT N°10 TO PURCHASE AGREEMENT


AIR LEASE CORPORATION
2000 Avenue of the Stars, Suite 1000N
Los Angeles, California 90067, U.S.A.
31 December 2018

	31 December 2018

Subject: Amendment No. 10 Additional Matters

AIR LEASE CORPORATION (the “Buyer") and AIRBUS S.A.S. (the “Seller") have entered into an Amendment N° 10 dated even date herewith (the “Amendment”) to the A350XWB Family Purchase Agreement dated 01 February 2013 (the "Agreement") which covers, among other things, (i) [*] and (ii) [*].

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

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


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

6 / 9

1. [*]

2. [*]

3. [*]

4. [*]

5. [*]

6. [*]

7. Assignment

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


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

7 / 9

8. Confidentiality

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

9. Counterparts

This Letter Agreement may be signed in separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument.

10. Law and Jurisdiction

The provisions of Clause 22.6 of the Agreement shall apply to this Amendment N° 10 as if the same were set out in full herein, mutatis mutandis.


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

8 / 9

IN WITNESS WHEREOF this Restatement Agreement was entered into the day and year first above written.


Agreed and Accepted		Agreed and Accepted

For and on behalf of		For and on behalf of


AIR LEASE CORPORATION		AIRBUS S.A.S.


/s/ Grant Levy		/s/ Benoît de Saint-Exupéry

By: Grant Levy		By: Benoît de Saint-Exupéry

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


Air Lease Corporation – A350XWB Family Purchase Agreement	Private & Confidential
Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10
Ref. CLC-CT1900913

9 / 9

EXHIBIT 10.6

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED

Supplemental Agreement No. 23

Purchase Agreement No. 03791

between

THE BOEING COMPANY

and

AIR LEASE CORPORATION

THIS SUPPLEMENTAL AGREEMENT is entered into as of June 26, 2019 (Supplemental Agreement No. 23) by and between THE BOEING COMPANY (Boeing) and AIR LEASE CORPORATION (Customer).

WHEREAS, Boeing and Customer have entered into Purchase Agreement No. 03791 dated as of July 3, 2012 as amended and supplemented (Purchase Agreement) relating to the purchase and sale of Model 737-8 and 737-9 Aircraft; and

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to reflect [*]; and

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to document [*].

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

1. TABLE OF CONTENTS.

The Table of Contents is deleted in its entirety and replaced by a new Table of Contents, provided as Enclosure 1, and incorporated into the Purchase Agreement. The new Table of Contents reflects the revisions set forth in this Supplemental Agreement No. 23.

2. TABLES.

Table 1F is deleted in its entirety, replaced by a revised Table 1F provided hereto as Enclosure 2 and is incorporated into the Purchase Agreement by this reference. This new Table 1F reflects [*].

HAZ-PA-03791

SA-23

BOEING PROPRIETARY

3. LETTER AGREEMENTS.

3.1 Letter Agreement HAZ-PA-03791-LA-1208090R8, entitled “Special Matters for 737-8 and 737-9 Aircraft,” is deleted in its entirety, and replaced with a revised Letter Agreement HAZ-PA-03791-LA-1208090R9, entitled “Special Matters for 737-8 and 737-9 Aircraft,” which is provided as Enclosure 3 to this Supplemental Agreement No. 23, and incorporated into the Purchase Agreement.

3.2 Letter Agreement HAZ-PA-03791-LA-1208078R6, entitled “Advance Payment Matters,” is deleted in its entirety, and replaced with a revised Letter Agreement HAZ-PA-03791-LA-1208078R7, entitled “Advance Payment Matters,” which is provided as Enclosure 4 to this Supplemental Agreement No. 23, and incorporated into the Purchase Agreement.

4. CONTINGENCY.

This Supplemental Agreement No. 23 is contingent on Customer executing Letter Agreement No. 6-1169-MVL-057 and Supplemental Agreement No. 13 under Purchase Agreement 3659.

5. [*]

6. MISCELLANEOUS.

6.1 [*]

6.2 All terms used but not defined in this Supplemental Agreement No. 23 will have the same meaning as such terms have in the Purchase Agreement.

6.3 This Supplemental Agreement No. 23 will become effective upon execution and receipt by both parties of both this Supplemental Agreement No. 23 and fulfillment of the contingencies described in Article 4 on or before June 28, 2019, after which date this Supplemental Agreement No. 23 will be null and void and have no force or effect.

EXECUTED IN DUPLICATE as of the day and year first above written.

THE BOEING COMPANY		AIR LEASE CORPORATION

By:	/s/ Michael Lombardi	By:	/s/ Grant Levy

Its:	Attorney‑In‑Fact	Its:	Executive Vice President

Attachments

HAZ-PA-03791

SA-23

BOEING PROPRIETARY

Enclosure 1

TABLE OF CONTENTS


ARTICLES		SA No.
Article 1.	Quantity, Model and Description	SA-4
Article 2.	Delivery Schedule
Article 3.	Price
Article 4.	Payment
Article 5.	Additional Terms

TABLES
1A	737-8 Block A Aircraft Information Table [*]	SA-22
1B	737-9 Block B Aircraft Information Table [*]	SA-22
1C	737-8 Block C Aircraft Information Table [*]	SA-22
1D	737-8 Block D Aircraft Information Table [*]	SA-22
1E	737-8 Block E Aircraft Information Table [*]	SA-14
1F	737-7 Block F Aircraft Information Table [*]	SA-23
1G	737-8 Block G Aircraft Information Table [*]	SA-18
1H1	737-8 Block H1 Aircraft Information Table [*]	SA-18
1H2	737-8 Block H2 Aircraft Information Table [*]	SA-18
1H3	737-8 Block H3 Aircraft Information Table [*]	SA-18
1H4	737-8 Block H4 Aircraft Information Table [*]	SA-18
1H5	737-8 Block H5 Aircraft Information Table [*]	SA-18

EXHIBITS
A1	HAZ/[*] 737-8 Aircraft Configuration	SA-16
A2	HAZ/[*] 737-8 Aircraft Configuration	SA-16
A3	HAZ/[*] 737-8 Aircraft Configuration	SA-16
A4	HAZ/[*] 737-8 Aircraft Configuration	SA-16
A5	HAZ/[*] 737-8 Aircraft Configuration	SA-16
A6	HAZ/[*] 737-9 Aircraft Configuration	SA-19
A7	HAZ/[] 737-8 Aircraft Configuration []	SA-21
A8	HAZ/[] 737-8 Aircraft Configuration []	SA-21

HAZ-PA-03791

SA-23

BOEING PROPRIETARY

Enclosure 1

TABLE OF CONTENTS

A9	HAZ/[] 737-8 Aircraft Configuration []	SA-21
A10	HAZ/[] 737-8 Aircraft Configuration []	SA-21
A11	HAZ/[] 737-8 Aircraft Configuration []	SA-21
A12	HAZ/[] 737-8 Aircraft Configuration []	SA-21
A13	HAZ/[] 737-9 Aircraft Configuration []	SA-21
A14	HAZ/[] 737-9 Aircraft Configuration []	SA-21
A15	HAZ 737-8 [] Aircraft Configuration []	SA-21
A16	HAZ 737-9 [] Aircraft Configuration []	SA-21
B	Aircraft Delivery Requirements and Responsibilities

SUPPLEMENTAL EXHIBITS
AE1	Escalation Adjustment - Airframe and Optional Features
BFE1	BFE Variables	SA-9
CS1	Customer Support Variables
EE1	[*], Engine Warranty and Patent Indemnity
SLP1	Service Life Policy Components

LETTER AGREEMENTS		SA No.
LA-1208077	AGTA Matters
LA-1208078R7	Advance Payment Matters	SA-23
LA-1208079R2	[*]	SA-18
LA-1208080	Assignment of Customer’s Interest to a Subsidiary or Affiliate
LA-1208081	Other Matters
LA-1208082	Demonstration Flight Waiver
LA-1208083R4	[*]	SA-17
LA-1208084	Leasing Matters
LA-1208085	Liquidated Damages for Non-Excusable Delay
LA-1208086	Loading of Customer Software
LA-1208087R1	Open Matters for 737-8 and 737-9 Aircraft	SA-4
LA-1208088	Performance Matters

HAZ-PA-03791

SA-23

BOEING PROPRIETARY

Enclosure 1

TABLE OF CONTENTS

LETTER AGREEMENTS		SA No.
LA-1208089R1	[*]	SA-4
LA-1208090R9	Special Matters for 737-8 and 737-9 Aircraft	SA-23
LA-1208091	AGTA Term Revisions for 737-8 and 737-9 Aircraft
LA-1208092	[*]
LA-1208958	[*]
LA-1208963	[*]	SA-4
LA-1209052	Delivery Flexibility
LA-1300032	[*]	SA-4
LA-1400773	[*]	SA-4
LA-1401489	[*]	SA-4
LA-1701519	Special Matters Related to [*]	SA-10
LA-1701714	Special Matters for 737-7 Aircraft	SA-14
LA-1704831	Special Matters Relating to [*]	SA-14
LA-1704362	[*]	SA-15
LA-1805016	[*]	SA-18
LA-1805303	[*]	SA-18

HAZ-PA-03791

iii

SA-23

BOEING PROPRIETARY

Enclosure 2

Table 1F To

Purchase Agreement No. PA-03791

737-7 Block F [*] Aircraft Delivery, Description, Price and Advance Payments


Airframe Model/MTOW:			737-7	145,000 pounds		Detail Specification:		D019A008-N (6/10/2016)
Engine Model/Thrust:			CFMLEAP - 1B21	23,000 pounds		Airframe Price Base Year/Escalation Formula:		[*]		[*]
Airframe Price:				[*]		Engine Price Base Year/Escalation Formula:		[*]		[*]
Optional Features:				[*]
Sub-Total of Airframe and Features:				[*]		Airframe Escalation Data:
Engine Price (Per Aircraft):				[*]		Base Year Index (ECI):		[*]
Aircraft Basic Price (Excluding BFE/SPE):				[*]		Base Year Index (CPI):		[*]
Buyer Furnished Equipment (BFE) Estimate:				[*]
Seller Purchased Equipment (SPE) Estimate:				[*]

Deposit per Aircraft:				[*]

		Manufacturer	Escalation			Escalation Estimate	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
Delivery	Number of	Serial	Factor	Lessee	P.A.	Adv Payment Base	[*]	[*]	[*]	[*]
Date	Aircraft	No.	(Airframe)		Exhibit A	Price Per A/P	[*]	[*]	[*]	[*]
[*]-2022			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]-2022			[*]			[*]	[*]	[*]	[*]	[*]
Total:	2

[*]

Manufacturer serial number is subject to change due to production changes.

HAZ-PA-03791 101124-1F.TXT

Boeing Proprietary

SA-23

Page 1

Enclosure 3

The Boeing Company

P.O. Box 3707

Seattle, WA 98124-2207

HAZ-PA-03791-LA-1208090R9

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Subject: Special Matters for 737-8 and 737-9 Aircraft

Reference: Purchase Agreement No. PA-03791 (Purchase Agreement) between The Boeing Company (Boeing) and Air Lease Corporation (Customer) relating to Model 737-8 and 737-9 aircraft (Aircraft)

This letter agreement (Letter Agreement) cancels and supersedes all previous versions with an acceptance date prior to the acceptance date indicated below and amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement.

1. Credit Memoranda. In consideration of Customer’s purchase of the Aircraft, at the time of delivery of each such Aircraft or [*], unless otherwise noted, Boeing will provide to Customer the following credit memoranda:

1.1 Basic Credit Memorandum. Boeing will issue to Customer a basic credit memorandum (Basic Credit Memorandum) at delivery of each Aircraft or [*] in an amount shown in the table immediately below for the respective minor model [*].


Basic Credit Memorandum
		Model Type
Aircraft Block	[*]	737-8 Aircraft	737-9 Aircraft	737-9 [*]	737-8 [*]
Block A	[*]	[*]	[*]	[*]	[*]
Block B	[*]	[*]	[*]	[*]	[*]
Block C	[*]	[*]	[*]	[*]	[*]
Block D	[*]	[*]	[*]	[*]	[*]
Block E	[*]	[*]	[*]	[*]	[*]
Block G	[*]	[*]	[*]	[*]	[*]
Block H	[*]	[*]	[*]	[*]	[*]

1.2 Leasing Credit Memorandum. Customer expressly intends to lease the Aircraft and [*] to a third party or parties (Lessee or Lessees) who are in the commercial airline business as aircraft operators. As an additional consideration and incentive for

SA-23

Page 1

BOEING PROPRIETARY

Enclosure 3

entering into a lease for the Aircraft and [*] prior to delivery of each such Aircraft or [*], Boeing will issue to Customer a leasing credit memorandum (Leasing Credit Memorandum) in an amount shown in the table immediately below for the respective Aircraft or [*] minor model and [*]. Customer will not be permitted to assign this Leasing Credit Memorandum without the prior written consent of Boeing.

Leasing Credit Memorandum
		Model Type
Aircraft Block	[*]	737-8 Aircraft	737-9 Aircraft	737-9	737-8
Block A	[*]	[*]	[*]	[*]	[*]
Block B	[*]	[*]	[*]	[*]	[*]
Block C	[*]	[*]	[*]	[*]	[*]
Block D	[*]	[*]	[*]	[*]	[*]
Block E	[*]	[*]	[*]	[*]	[*]
Block G	[*]	[*]	[*]	[*]	[*]
Block H	[*]	[*]	[*]	[*]	[*]

1.3 [*]

1.4 [*]

1.5 [*]

1.6 [*]

1.7 [*]

1.8 [*]

1.9 [*]

1.10 [*]

1.11 [*]

HAZ-PA-03791-LA-1208090R9

Special Matters for 737-8 and 737-9 Aircraft

SA-23

Page 2

BOEING PROPRIETARY

Enclosure 3

1.12 [*]

1.13 [*]

1.14 [*]

1.15 [*]

1.16 [*]

1.17 [*]

1.18 [*]

1.19 [*]

1.20 [*]

1.21 [*]

1.22 [*]

1.23 [*]

1.24 [*]

1.25 [*]

1.26 [*]

1.27 [*]

1.28 [*]

1.29 [*]

1.30 [*]

1.31 [*]

1.32 [*]

1.33 [*]

1.34 [*]

1.35 [*]

HAZ-PA-03791-LA-1208090R9

Special Matters for 737-8 and 737-9 Aircraft

SA-23

Page 3

BOEING PROPRIETARY

Enclosure 3

1.36 [*]

1.37 Escalation of Credit Memoranda. Unless otherwise noted, the amounts of the Credit Memoranda stated in [*] will be escalated from the base year indicated to the scheduled month of the respective Aircraft or [*] delivery pursuant to the Airframe Escalation formula set forth in the Purchase Agreement applicable to such Aircraft or [*]. The Credit Memoranda may, at the election of Customer, be (i) applied against the Aircraft Price of the respective Aircraft or [*] at the time of delivery, or (ii) used for the purchase of other Boeing goods and services (but shall not be applied to advance payments).

2. Assignment.

Unless otherwise noted herein, the Credit Memoranda described in this Letter Agreement are provided as a financial accommodation to Customer and in consideration of Customer’s taking title to the Aircraft and [*] at time of delivery and leasing the Aircraft and [*]. This Letter Agreement cannot be assigned, in whole or in part, without the prior written consent of Boeing.

3. Confidentiality.

Customer understands and agrees that the information contained herein represents confidential business information of Boeing and has value precisely because it is not available generally or to other parties. Customer agrees to limit the disclosure of its contents to (a) its directors and officers, (b) employees of Customer with a need to know the contents for performing its obligations (including, without limitation, those employees performing accounting, finance, administration and other functions necessary to finance and purchase, deliver or lease the Aircraft) and who understand they are not to disclose its contents to any other person or entity (other than those to whom disclosure is permitted by this paragraph 3) without the prior written consent of Boeing and (c) any auditors, financial advisors, attorneys and independent contractors of Customer who have a need to know such information and have signed a confidentiality agreement in the same form and substance similar to this paragraph 3. Customer shall be fully responsible to Boeing for compliance with such obligations.

HAZ-PA-03791-LA-1208090R9

Special Matters for 737-8 and 737-9 Aircraft

SA-23

Page 4

BOEING PROPRIETARY

Enclosure 3

Very truly yours,

THE BOEING COMPANY

By	/s/ Michael Lombardi

Its	Attorney-in-fact

ACCEPTED AND AGREED TO this

Date:	June 26, 2019

AIR LEASE CORPORATION

By	/s/ Grant Levy

Its	Executive Vice President

HAZ-PA-03791-LA-1208090R9

Special Matters for 737-8 and 737-9 Aircraft

SA-23

Page 5

BOEING PROPRIETARY

Enclosure 4

The Boeing Company

P.O. Box 3707

Seattle, WA 98124-2207

HAZ-PA-03791-LA-1208078R7

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Subject: Advance Payment Matters

Reference: Purchase Agreement No. PA-03791 (Purchase Agreement) between The Boeing Company (Boeing) and Air Lease Corporation (Customer) relating to Model 737-8 and 737-9 aircraft (Aircraft)

The Purchase Agreement incorporates the terms and conditions of HAZ-AGTA between Boeing and Customer. This Letter Agreement modifies certain terms and conditions of the AGTA with respect to the Aircraft.

1. Deferred Advance Payment Schedule.

1.1 Notwithstanding the Aircraft advance payment schedule provided in Table 1 of the Purchase Agreement, Customer may elect to pay an alternative fixed advance payment schedule for the Aircraft, as set forth below (Alternative Advance Payment Schedule).

[*]

1.2 [*]

2. [*]

3. [*]

4. [*]

SA-23

Page 1

BOEING PROPRIETARY

Enclosure 4

5. Assignment.

Notwithstanding any other provisions of the Purchase Agreement, the rights and obligations described in this Letter Agreement are provided to Customer in consideration of Customer taking title to the Aircraft at the time of delivery and leasing the Aircraft and cannot be assigned in whole or, in part.

6. Confidential Treatment.

Customer understands and agrees that the information contained herein represents confidential business information of Boeing and has value precisely because it is not available generally or to other parties. Customer agrees to limit the disclosure of its contents to (a) its directors and officers, (b) employees of Customer with a need to know the contents for performing its obligations (including, without limitation, those employees performing accounting, finance, administration and other functions necessary to finance and purchase, deliver or lease the Aircraft) and who understand they are not to disclose its contents to any other person or entity (other than those to whom disclosure is permitted by this paragraph 6) without the prior written consent of Boeing and (c) any auditors, financial advisors, attorneys and independent contractors of Customer who have a need to know such information and have signed a confidentiality agreement in the same form and substance similar to this paragraph 6. Customer shall be fully responsible to Boeing for compliance with such obligations.

Very truly yours,

THE BOEING COMPANY

By	/s/ Michael Lombardi

Its	Attorney-in-fact

ACCEPTED AND AGREED TO this

Date:	June 26, 2019

AIR LEASE CORPORATION

By	/s/ Grant Levy

Its	Executive Vice President

HAZ-PA-03791-LA-1208078R7

Advance Payment Matters

SA-23

Page 2

BOEING PROPRIETARY

The Boeing Company

P.O. Box 3707

Seattle, WA 98124 2207

6-1169-MVL-057

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Subject: [*]

Attention: Grant Levy, Executive Vice President

Reference: (a) Purchase Agreement No. PA-03791 (Purchase Agreement) between The Boeing Company (Boeing) and Air Lease Corporation (Customer) relating to Model 737 aircraft

[*]

This letter agreement will be interpreted under and governed by the laws of the state of Washington, U.S.A., except that Washington’s choice of law rules will not be invoked for the purpose of applying the law of another jurisdiction.

The information contained herein represents confidential business information and has value precisely because it is not available generally or to other parties. Customer will limit the disclosure of its contents to (a) its directors and officers, (b) employees of Customer with a need to know the contents for performing its obligations (including, without limitation, those employees performing accounting, finance, administration and other functions necessary to finance and purchase, deliver or lease the Aircraft) and who understand they are not to disclose its contents to any other person or entity (other than those to whom disclosure is permitted by this paragraph 3) without the prior written consent of Boeing and (c) any auditors, financial advisors, attorneys and independent contractors of Customer who have a need to know such information and have signed a confidentiality agreement in the same form and substance similar to this paragraph.


		Page 1

BOEING PROPRIETARY


ACCEPTED AND AGREED TO this

Date:	June 26, 2019

AIR LEASE CORPORATION			THE BOEING COMPANY

By:	/s/ Grant Levy	By:	/s/ Michael Lombardi

Name:	Grant Levy	Name:	Michael Lombardi

Title:	Executive Vice President	Title:	Attorney-In-Fact


6-1169-MVL-057		Page 2

BOEING PROPRIETARY

EXHIBIT 10.7

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED

Supplemental Agreement No. 12

Purchase Agreement No. PA-03659

between

The Boeing Company

and

Air Lease Corporation

This Supplemental Agreement is entered into as of April 26, 2019, (Supplemental Agreement No. 12) by and between THE BOEING COMPANY (Boeing) and AIR LEASE CORPORATION (Customer);

All terms used but not defined in this Supplemental Agreement No. 12 have the same meaning as in the Purchase Agreement;

WHEREAS, Boeing and Customer have entered into Purchase Agreement No. PA-03659 dated as of October 31, 2011 (the Purchase Agreement) relating to the purchase and sale of Model 787-9 aircraft and Model 787-10 aircraft; and

WHEREAS, Boeing and Customer agree to [*]; and

WHEREAS, Boeing and Customer agree to [*].

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

1. TABLE OF CONTENTS.

The Table of Contents of the Purchase Agreement is deleted in its entirety and replaced by a new Table of Contents, provided as Enclosure 1 to this Supplemental

HAZ-PA-03659		SA-12
		i
	BOEING PROPRIETARY

Agreement No. 12 which reflects the revisions set forth in this Supplemental Agreement No. 12.

2. TABLE 1.

a. Table 1C to Purchase Agreement No. PA-03659, 787-10 Block A Aircraft Delivery, Description, Price and Advance Payments Rolls Royce Engines is deleted in its entirety and replaced by a revised Table 1C to Purchase Agreement No. PA-03659, 787-10 Block A Aircraft Delivery, Description, Price and Advance Payments Rolls Royce Engines provided as Enclosure 2 to this Supplemental Agreement No. 12 to reflect [*].

b. Table 1C to Purchase Agreement No. PA-03659, 787-10 Block A Aircraft Delivery, Description, Price and Advance Payments General Electric Engines is deleted in its entirety and replaced by a revised Table 1C to Purchase Agreement No. PA-03659, 787-10 Block A Aircraft Delivery, Description, Price and Advance Payments General Electric Engines provided as Enclosure 3 to this Supplemental Agreement No. 12 to reflect [*].

c. Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments Rolls Royce Engines is deleted in its entirety and replaced by a revised Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments Rolls Royce Engines provided as Enclosure 4 to this Supplemental Agreement No. 12 to reflect [*].

d. Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments General Electric Engines is deleted in its entirety and replaced by a revised Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments General Electric Engines provided as Enclosure 5 to this Supplemental Agreement No. 12 to reflect [*].

3. LETTER AGREEMENTS.

Letter Agreement LA-1104720R7, Advance Payment Matters, is deleted in its entirety and replaced by a revised Letter Agreement LA-1104720R8, Advance Payment Matters, provided as Enclosure 6 to this Supplemental Agreement No. 12, which reflects [*].

4. PAYMENT CONSIDERATIONS.

[*]

5. MISCELLANEOUS.

HAZ-PA-03659		SA-12
		ii
	BOEING PROPRIETARY

documents that are listed in the Sections above are incorporated into this Supplemental Agreement by this reference.

b. This Supplemental Agreement will become effective upon execution and receipt by both Parties on or before April 28, 2019, after which date this Supplemental Agreement will be null and void and have no force or effect.

EXECUTED IN DUPLICATE as of the day and year first above written.


THE BOEING COMPANY		AIR LEASE CORPORATION

BY:	/s/ Michael Lombardi	BY:	/s/ Grant Levy

ITS:	Attorney-In-Fact	ITS:	Executive Vice President

HAZ-PA-03659		SA-12
		iii
	BOEING PROPRIETARY

Enclosure 1

PURCHASE AGREEMENT NUMBER PA-03659

between

THE BOEING COMPANY

and

Air Lease Corporation

Relating to Boeing Model 787-9 and 787-10 Aircraft

PA 3659

SA-12

Enclosure 1

TABLE OF CONTENTS


ARTICLES
Article 1.	Quantity, Model, Description and Inspection	SA-2
Article 2.	Delivery Schedule	SA-2
Article 3.	Price	SA-2
Article 4.	Payment	SA-2
Article 5.	Additional Terms	SA-2


TABLE
1A.	787-9 Block A Aircraft Information Table	SA-8
1B.	787-9 Block B Aircraft Information Table	SA-7
1C.	787-10 Block A Aircraft Information Table	SA-12
1D.	787-9 Block C Aircraft Information Table	SA-6
1E.	787-9 Block D Aircraft Information Table	SA-11
1F.	787-9 Block E Aircraft Information Table	SA-12


EXHIBIT
A1.	HAZ[*] 787-9 Aircraft Configuration	SA-7
A2.	HAZ[*] 787-9 Aircraft Configuration	SA-7
A3.	HAZ[*] 787-9 Aircraft Configuration	SA-8
A4.	HAZ[*] 787-9 Aircraft Configuration	SA-11
B.	Aircraft Delivery Requirements and Responsibilities	SA-2


SUPPLEMENTAL EXHIBITS
AE1.	Escalation Adjustment Airframe and Optional Features	SA-2
BFE1.	BFE Variables	SA-7
CS1.	Customer Support Document	SA-10
EE1.	[*], Engine Warranty and Patent Indemnity –General Electric Engines	SA-2
EE1.	[*], Engine Warranty and Patent Indemnity – Rolls Royce Engines	SA-2
SLP1.	Service Life Policy Components	SA-2

PA 3659

SA-12

Enclosure 1


LETTER AGREEMENTS
LA-1104716R1	[*]	SA-2
LA-1104717R1	Demonstration Flight Waiver	SA-2
LA-1104718R1	[*]	SA-2
LA-1104719R1	Other Matters	SA-2
LA-1104720R8	Advance Payment Matters	SA-12
LA-1104721R1	[*]	SA-2
LA-1104722R1	Assignment of Customer’s Interest to a Subsidiary or Affiliate	SA-2
LA-1104724	e-Enabling Software Matters
LA-1104725R1	[*]	SA-2
LA-1104726R1	Special Matters relating to COTS Software and End User License Agreements	SA-2
LA-1104727R2	AGTA Matters	SA-2
LA-1104728R1	Leasing Matters for 787 Aircraft	SA-2
LA-1104729R1	Liquidated Damages – Non-Excusable Delay	SA-2
LA-1104730R5	Open Configuration Matters	SA-10
LA-1104731R1	Performance Guarantees – 787-9 Block A Aircraft	SA-2
LA-1104733R1	Special Terms - Seats and In-flight Entertainment	SA-2
LA-1104734R2	Special Matters – 787-9 Block A Aircraft	SA-6
LA-1300863	Performance Guarantees – 787-10 Block A Aircraft	SA-2
LA-1300864R3	Performance Guarantees – 787-9 Block B, C, D, and E Aircraft	SA-10
LA-1301080R5	Special Matters – 787-9 Blocks B, C, D, and E Aircraft	SA-11
LA-1301081R1	Special Matters – 787-10 Block A Aircraft	SA-10
LA-1301082R2	[*]	SA-7
LA-1301083	Promotional Support – 787-10 Aircraft	SA-2
LA-1301084	[*]	SA-2
LA-1302043R1	[*]	SA-10
LA-1302348R1	[*]	SA-2
LA-1601083	Special Matters Relating to In-Seat IFE [*]	SA-7
LA-1605597	[*]	SA-9
LA-1805142	[*]	SA-10
LA-1805362	Model 787 Post‑Delivery Software and Data Loading	SA-10

PA 3659

SA-12

Enclosure 2

Table 1C To

Purchase Agreement No. PA-03659

787-10 Block A Aircraft Delivery, Description, Price and Advance Payments

Rolls Royce Trent 1000-J Engines

Airframe Model/MTOW:

787-10

553000 pounds

Detail Specification:

787B1-3806-E (5/10/2013)

Engine Model/Thrust:

TRENT1000-J

74100 pounds

Airframe Price Base Year/Escalation Formula:

[*]

Airframe Price:

[*]

Engine Price Base Year/Escalation Formula:

[*]

Optional Features:

[*]

Sub-Total of Airframe and Features:

[*]

Airframe Escalation Data:

Engine Price (Per Aircraft):

[*]

Base Year Index (ECI):

[*]

Aircraft Basic Price (Excluding BFE/SPE):

[*]

Base Year Index (CPI):

[*]

Buyer Furnished Equipment (BFE) Estimate:

[*]

Engine Escalation Data:

In-Flight Entertainment (IFE) Estimate:

[*]

Base Year Index (ECI):

[*]

Base Year Index (CPI):

[*]

Refundable Deposit/Aircraft at Proposal Accept:

[*]

Manufacturer's

Optional

P.A.

Escalation

Escalation Estimate

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Number of

Serial

Lessee

Features

Exhibit

Engine

Factor

Adv Payment Base

[*]

Date

Aircraft

Number

Price

Selection

Price

(Airframe)

(Engine)

Price Per A/P

[*]

[*]-2020

[*]

[*]-2022

[*]

		SA-12
HAZ-PA-03659 63946-1F.TXT	Boeing Proprietary	Page 1

Enclosure 2

Table 1C To

Purchase Agreement No. PA-03659

787-10 Block A Aircraft Delivery, Description, Price and Advance Payments

Rolls Royce Trent 1000-J Engines

Manufacturer's

Optional

P.A.

Escalation

Escalation Estimate

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Number of

Serial

Lessee

Features

Exhibit

Engine

Factor

Adv Payment Base

[*]

Date

Aircraft

Number

Price

Selection

Price

(Airframe)

(Engine)

Price Per A/P

[*]

Total:

[*]

		SA-12
HAZ-PA-03659 63946-1F.TXT	Boeing Proprietary	Page 2

Enclosure 3

Table 1C To

Purchase Agreement No. PA-03659

787-10 Block A Aircraft Delivery, Description, Price and Advance Payments

General Electric Engines

Airframe Model/MTOW:

787-10

553000 pounds

Detail Specification:

787B1-3806-E (5/10/2013)

Engine Model/Thrust:

GENX-1B74/75

74100 pounds

Airframe Price Base Year/Escalation Formula:

[*]

Airframe Price:

[*]

Engine Price Base Year/Escalation Formula:

[*]

Optional Features:

[*]

Sub-Total of Airframe and Features:

[*]

Airframe Escalation Data:

Engine Price (Per Aircraft):

[*]

Base Year Index (ECI):

[*]

Aircraft Basic Price (Excluding BFE/SPE):

[*]

Base Year Index (CPI):

[*]

Buyer Furnished Equipment (BFE) Estimate:

[*]

Engine Escalation Data:

In-Flight Entertainment (IFE) Estimate:

[*]

Base Year Index (ECI):

[*]

Base Year Index (CPI):

[*]

Refundable Deposit/Aircraft at Proposal Accept:

[*]

Manufacturer's

Optional

P.A.

Escalation

Escalation Estimate

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Number of

Serial

Lessee

Features

Exhibit

Engine

Factor

Adv Payment Base

[*]

Date

Aircraft

Number

Price

Selection

Price

(Airframe)

(Engine)

Price Per A/P

[*]

[*]-2019

[*]

[*]-2022

[*]

		SA-12
HAZ-PA-03659 63946-1F.TXT	Boeing Proprietary	Page 1

Enclosure 3

Table 1C To

Purchase Agreement No. PA-03659

787-10 Block A Aircraft Delivery, Description, Price and Advance Payments

General Electric Engines

Manufacturer's

Optional

P.A.

Escalation

Escalation Estimate

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Number of

Serial

Lessee

Features

Exhibit

Engine

Factor

Adv Payment Base

[*]

Date

Aircraft

Number

Price

Selection

Price

(Airframe)

(Engine)

Price Per A/P

[*]

Total:

[*]

		SA-12
HAZ-PA-03659 63946-1F.TXT	Boeing Proprietary	Page 2

Enclosure 4

Table 1F To

Purchase Agreement No. PA-03659

787-9 Block E Aircraft Delivery, Description, Price and Advance Payments

Rolls-Royce Engines

Airframe Model/MTOW:

787-9

560,000 pounds

Detail Specification:

787B1-4102-V (11/10/2017)

Engine Model/Thrust:

TRENT1000-J

74,400 pounds

Airframe Price Base Year/Escalation Formula:

[*]

Airframe Price:

[*]

Engine Price Base Year/Escalation Formula1:

[*]

Optional Features:

[*]

Sub-Total of Airframe and Features:

[*]

Airframe Escalation Data:

Engine Price (Per Aircraft)1:

[*]

Base Year Index (ECI):

[*]

Aircraft Basic Price (Excluding BFE/SPE):

[*]

Base Year Index (CPI):

[*]

Buyer Furnished Equipment (BFE) Estimate:

[*]

Engine Escalation Data:

In-Flight Entertainment (IFE) Estimate:

[*]

Base Year Index (ECI):

[*]

LIFT Seats Provided by Boeing (Estimate):

[*]

Base Year Index (CPI):

[*]

Deposit per Aircraft:

[*]

Number

Escalation

Manufacturer

P.A.

Escalation Estimate

Engine

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Factor

Serial

Lessee

Adv Payment Base

Thrust

Price2

Baseyear3

[*]

Date

Aircraft

(Airframe)

(Engine)

Number

Price Per A/P

Selection

[*]

[*]-2020

[*]

[*]-2022

[*]

Total:

[*]

Note: Serial numbers are provided as guidance only and are subject to change.

		SA-12
HAZ-PA-03659 110418-1F.TXT	Boeing Proprietary	Page 1

Enclosure 5

Table 1F To

Purchase Agreement No. PA-03659

787-9 Block E Aircraft Delivery, Description, Price and Advance Payments

General Electric Engines

Airframe Model/MTOW:

787-9

560,000 pounds

Detail Specification:

787B1-4102-V (11/10/2017)

Engine Model/Thrust:

GENX-1B74/75

74,100 pounds

Airframe Price Base Year/Escalation Formula:

[*]

Airframe Price:

[*]

Engine Price Base Year/Escalation Formula1:

[*]

Optional Features:

[*]

Sub-Total of Airframe and Features:

[*]

Airframe Escalation Data:

Engine Price (Per Aircraft)1:

[*]

Base Year Index (ECI):

[*]

Aircraft Basic Price (Excluding BFE/SPE):

[*]

Base Year Index (CPI):

[*]

Buyer Furnished Equipment (BFE) Estimate:

[*]

Engine Escalation Data:

In-Flight Entertainment (IFE) Estimate:

[*]

Base Year Index (ECI):

[*]

LIFT Seats Provided by Boeing (Estimate):

[*]

Base Year Index (CPI):

[*]

Deposit per Aircraft:

[*]

Number

Escalation

Manufacturer

P.A.

Escalation Estimate

Engine

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Factor

Serial

Lessee

Adv Payment Base

Thrust

Price2

Baseyear3

[*]

Date

Aircraft

(Airframe)

(Engine)

Number

Price Per A/P

Selection

[*]

[*]-2020

[*]

[*]-2022

[*]

Total:

[*]

Note: Serial numbers are provided as guidance only and are subject to change.

		SA-12
HAZ-PA-03659 110415-1F.TXT	Boeing Proprietary	Page 1

Enclosure 6

		The Boeing Company P.O. Box 3707 Seattle, WA 98124‑2207

HAZ-PA-03659-LA-1104720R8

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Subject: Advance Payment Matters

Reference: Purchase Agreement No. PA-03659 (Purchase Agreement) between The Boeing Company (Boeing) and Air Lease Corporation (Customer) relating to Model 787-9 and 787-10 aircraft (collectively, the Aircraft)

This letter agreement (Letter Agreement) cancels and supersedes letter agreement HAZ-PA-03659-LA-1104720R7 and amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement.

The Purchase Agreement incorporates the terms and conditions of HAZ-AGTA (AGTA) between Boeing and Customer. This Letter Agreement modifies certain terms and conditions of the AGTA with respect to the Aircraft.

1. Alternative Fixed Advance Payment Schedule.

1.1 Notwithstanding the Aircraft advance payment schedule provided in Table 1 of the Purchase Agreement Customer may elect to pay an alternative fixed advance payment schedule for the respective Aircraft, as set forth in the table below (Alternative Fixed Advance Payment Schedule).

1.2 Alternative Fixed Advance Payment Schedule – 787-9 Block A Aircraft.

[*]

1.3 Alternative Fixed Advance Payment Schedule – 787-9 Block B Aircraft.

[*]

1.4 Alternative Fixed Advance Payment Schedule – 787-9 Block C, 787-9 Block D Aircraft, and 787-9 Block E Aircraft.[*]

1.5 Alternative Fixed Advance Payment Schedule – 787-10 Block A Aircraft

[*]

HAZ-PA-03659-LA-1104720R8		SA-12
Advance Payment Matters		LA Page 1
	BOEING PROPRIETARY

Enclosure 6

1.6 [*]

2. [*]

3. [*]

4. [*]

5. Confidentiality.

Customer understands and agrees that the information contained herein represents confidential business information of Boeing and has value precisely because it is not available generally or to other parties. Customer agrees to limit the disclosure of its contents to (a) its directors and officers, (b) employees of Customer with a need to know the contents for performing its obligations (including, without limitation, those employees performing accounting, finance, administration and other functions necessary to finance and purchase, deliver or lease the Aircraft) and who understand they are not to disclose its contents to any other person or entity (other than those to whom disclosure is permitted by this paragraph 5), without the prior written consent of Boeing and (c) any auditors, financial advisors, attorneys and independent contractors of Customer who have a need to know such information and have signed a confidentiality agreement in the same form and substance similar to this paragraph 5. Customer shall be fully responsible to Boeing for compliance with such obligations.

6. Assignment.

Notwithstanding any other provisions of the Purchase Agreement, the rights and obligations described in this Letter Agreement are provided to Customer in consideration of Customer’s taking title to the Aircraft at the time of delivery and leasing the Aircraft and cannot be assigned in whole or, in part.

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters treated above, please indicate your acceptance and approval below.


HAZ-PA-03659-LA-1104720R8		SA-12
Advance Payment Matters		LA Page 2
	BOEING PROPRIETARY

Enclosure 6

Very truly yours,


THE BOEING COMPANY

By	/s/ Michael Lombardi

Its	Attorney-In-Fact

ACCEPTED AND AGREED TO this

Date:	April 26, 2019

AIR LEASE CORPORATION

By	/s/ Steven F. Udvar-Házy

Its	Chairman


HAZ-PA-03659-LA-1104720R8		SA-12
Advance Payment Matters		LA Page 3
	BOEING PROPRIETARY

EXHIBIT 10.8

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED

Supplemental Agreement No. 13

Purchase Agreement No. PA-03659

between

The Boeing Company

and

Air Lease Corporation

This Supplemental Agreement is entered into as of June 26, 2019, (Supplemental Agreement No. 13) by and between THE BOEING COMPANY (Boeing) and AIR LEASE CORPORATION (Customer);

All terms used but not defined in this Supplemental Agreement No. 13 have the same meaning as in the Purchase Agreement;

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to add one (1) incremental 787-9 Block E Aircraft in [*]; and

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to [*]; and

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to incorporate a letter agreement governing Boeing’s purchase of Cabin Systems Equipment; and

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to [*].


HAZ-PA-03659		SA-13
	BOEING PROPRIETARY	i

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

1. TABLE OF CONTENTS.

The Table of Contents of the Purchase Agreement is deleted in its entirety and replaced by a new Table of Contents, provided as Enclosure 1 to this Supplemental Agreement No. 13 which reflects the revisions set forth in this Supplemental Agreement No. 13.

2. TABLE 1.

a. Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments Rolls Royce Engines is deleted in its entirety and replaced by a revised Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments Rolls Royce Engines provided as Enclosure 2 to this Supplemental Agreement No. 13 to reflect [*].

b. Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments General Electric Engines is deleted in its entirety and replaced by a revised Table 1F to Purchase Agreement No. PA-03659, 787-9 Block E Aircraft Delivery, Description, Price and Advance Payments General Electric Engines provided as Enclosure 3 to this Supplemental Agreement No. 13 to reflect [*].

3. SUPPLEMENTAL EXHIBITS.

a. Supplemental Exhibit CS1 to Purchase Agreement Number PA-03659 is deleted in its entirety and replaced by a revised Supplemental Exhibit CS1 to Purchase Agreement Number PA-03659, provided as Enclosure 4 to this Supplemental Agreement No. 13, which reflects [*].

4. LETTER AGREEMENTS.

a. Letter Agreement LA-1301080R5, Special Matters - 787-9 Blocks B, C, D and E Aircraft, is deleted in its entirety and replaced by a revised Letter Agreement LA-1301080R6, Special Matters - 787-9 Blocks B, C, D and E Aircraft, provided as Enclosure 5 to this Supplemental Agreement No. 13, which reflects the amendment necessary to add one (1) 787-9 Block E Aircraft.

b. Letter Agreement HAZ-PA-03659-LA-1901662, Installation of Cabin Systems Equipment, provided as Enclosure 6 to this Supplemental Agreement No. 13 is hereby incorporated into the Purchase Agreement by this reference. This revised letter agreement governs the terms of Boeing’s purchase of Cabin Systems Equipment for the Aircraft.


HAZ-PA-03659		SA-13
	BOEING PROPRIETARY	ii

c. Letter Agreement HAZ-PA-03659-LA-1104720R8, Advance Payment Matters, is deleted in its entirety and replaced by a revised Letter Agreement HAZ-PA-03659-LA-1104720R9, Advance Payment Matters, provided as Enclosure 7 to this Supplemental Agreement No. 13, which addresses the addition of one (1) 787-9 Block E Aircraft.

5. PAYMENT CONSIDERATIONS.

[*]

6. MISCELLANEOUS.

a. The Purchase Agreement is amended as set forth above, and all other terms and conditions of the Purchase Agreement remain unchanged and are in full force and effect. Any Tables of Contents, Tables, Supplemental Exhibits, Letter Agreements or other documents that are listed in the Sections above are incorporated into this Supplemental Agreement by this reference.

b. This Supplemental Agreement will become effective upon execution and receipt by both parties of both this Supplemental Agreement No. 13 and Supplemental Agreement No. 23 under Purchase Agreement 3791 on or before June 28, 2019, after which date this Supplemental Agreement will be null and void and have no force or effect.

EXECUTED IN DUPLICATE as of the day and year first above written.

THE BOEING COMPANY		AIR LEASE CORPORATION


BY:	/s/ Michael Lombardi	BY:	/s/ Grant Levy

ITS:	Attorney-In-Fact	ITS:	Executive Vice President


HAZ-PA-03659		SA-13
	BOEING PROPRIETARY	iii

Enclosure 1

PURCHASE AGREEMENT NUMBER PA-03659

between

THE BOEING COMPANY

and

Air Lease Corporation

Relating to Boeing Model 787-9 and 787-10 Aircraft


PA 3659		SA-13

Enclosure 1

TABLE OF CONTENTS


ARTICLES
Article 1.	Quantity, Model, Description and Inspection	SA-2
Article 2.	Delivery Schedule	SA-2
Article 3.	Price	SA-2
Article 4.	Payment	SA-2
Article 5.	Additional Terms	SA-2

TABLE
1A.	787-9 Block A Aircraft Information Table	SA-8
1B.	787-9 Block B Aircraft Information Table	SA-7
1C.	787-10 Block A Aircraft Information Table	SA-12
1D.	787-9 Block C Aircraft Information Table	SA-6
1E.	787-9 Block D Aircraft Information Table	SA-11
1F.	787-9 Block E Aircraft Information Table	SA-13

EXHIBIT
A1.	HAZ[*] 787-9 Aircraft Configuration	SA-7
A2.	HAZ[*] 787-9 Aircraft Configuration	SA-7
A3.	HAZ[*] 787-9 Aircraft Configuration	SA-8
A4.	HAZ[*] 787-9 Aircraft Configuration	SA-11
B.	Aircraft Delivery Requirements and Responsibilities	SA-2

SUPPLEMENTAL EXHIBITS
AE1.	Escalation Adjustment Airframe and Optional Features	SA-2
BFE1.	BFE Variables	SA-7
CS1.	Customer Support Document	SA-13
EE1.	[*], Engine Warranty and Patent Indemnity –General Electric Engines	SA-2
EE1.	[*], Engine Warranty and Patent Indemnity – Rolls Royce Engines	SA-2
SLP1.	Service Life Policy Components	SA-2


PA 3659		SA-13

Enclosure 1


LETTER AGREEMENTS
LA-1104716R1	[*]	SA-2
LA-1104717R1	Demonstration Flight Waiver	SA-2
LA-1104718R1	[*]	SA-2
LA-1104719R1	Other Matters	SA-2
LA-1104720R9	Advance Payment Matters	SA-13
LA-1104721R1	[*]	SA-2
LA-1104722R1	Assignment of Customer’s Interest to a Subsidiary or Affiliate	SA-2
LA-1104724	e-Enabling Software Matters
LA-1104725R1	[*]	SA-2
LA-1104726R1	Special Matters relating to COTS Software and End User License Agreements	SA-2
LA-1104727R2	AGTA Matters	SA-2
LA-1104728R1	Leasing Matters for 787 Aircraft	SA-2
LA-1104729R1	Liquidated Damages – Non-Excusable Delay	SA-2
LA-1104730R5	Open Configuration Matters	SA-10
LA-1104731R1	Performance Guarantees – 787-9 Block A Aircraft	SA-2
LA-1104733R1	Special Terms - Seats and In-flight Entertainment	SA-2
LA-1104734R2	Special Matters – 787-9 Block A Aircraft	SA-6
LA-1300863	Performance Guarantees – 787-10 Block A Aircraft	SA-2
LA-1300864R3	Performance Guarantees – 787-9 Block B, C, D, and E Aircraft	SA-10
LA-1301080R6	Special Matters – 787-9 Blocks B, C, D, and E Aircraft	SA-13
LA-1301081R1	Special Matters – 787-10 Block A Aircraft	SA-10
LA-1301082R2	[*]	SA-7
LA-1301083	Promotional Support – 787-10 Aircraft	SA-2
LA-1301084	[*]	SA-2
LA-1302043R1	[*]	SA-10
LA-1302348R1	[*]	SA-2
LA-1601083	Special Matters Relating to In-Seat IFE [*]	SA-7
LA-1605597	[*]	SA-9
LA-1805142	[*]	SA-10
LA-1805362	Model 787 Post‑Delivery Software and Data Loading	SA-10
LA-1901662	Installation of Cabin Systems Equipment	SA-13


PA 3659		SA-13

Enclosure 2

Table 1F To

Purchase Agreement No. PA-03659

787-9 Block E Aircraft Delivery, Description, Price and Advance Payments

Rolls-Royce Engines


Airframe Model/MTOW:	787-9	560,000 pounds	Detail Specification:	787B1-4102-V (11/10/2017)
Engine Model/Thrust:	TRENT1000-J	74,400 pounds	Airframe Price Base Year/Escalation Formula:		[*]	[*]
Airframe Price:		[*]	Engine Price Base Year/Escalation Formula1:		[*]	[*]
Optional Features:		[*]
Sub-Total of Airframe and Features:		[*]	Airframe Escalation Data:
Engine Price (Per Aircraft)1:		[*]	Base Year Index (ECI):		[*]
Aircraft Basic Price (Excluding BFE/SPE):		[*]	Base Year Index (CPI):		[*]
Buyer Furnished Equipment (BFE) Estimate:		[*]	Engine Escalation Data:
In-Flight Entertainment (IFE) Estimate:		[*]	Base Year Index (ECI):		[*]
LIFT Seats Provided by Boeing (Estimate):		[*]	Base Year Index (CPI):		[*]
Deposit per Aircraft:		[*]

Number

Escalation

Manufacturer

P.A.

Escalation Estimate

Engine

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Factor

Serial

Lessee

Adv Payment Base

Thrust

Price2

Baseyear3

[*]

Date

Aircraft

(Airframe)

(Engine)

Number

Price Per A/P

Selection

[*]

[*]-2020

[*]

[*]-2020

[*]

Total:

[*]

Note: Serial numbers are provided as guidance only and are subject to change.


		SA-13
HAZ-PA-03659 110418-1F.txt	Boeing Proprietary	Page 1

Enclosure 3

Table 1F To

Purchase Agreement No. PA-03659

787-9 Block E Aircraft Delivery, Description, Price and Advance Payments

General Electric Engines


Airframe Model/MTOW:	787-9	560,000 pounds	Detail Specification:	787B1-4102-V (11/10/2017)
Engine Model/Thrust:	GENX-1B74/75	74,100 pounds	Airframe Price Base Year/Escalation Formula:		[*]	[*]
Airframe Price:		[*]	Engine Price Base Year/Escalation Formula1:		[*]	[*]
Optional Features:		[*]
Sub-Total of Airframe and Features:		[*]	Airframe Escalation Data:
Engine Price (Per Aircraft)1:		[*]	Base Year Index (ECI):		[*]
Aircraft Basic Price (Excluding BFE/SPE):		[*]	Base Year Index (CPI):		[*]
Buyer Furnished Equipment (BFE) Estimate:		[*]	Engine Escalation Data:
In-Flight Entertainment (IFE) Estimate:		[*]	Base Year Index (ECI):		[*]
LIFT Seats Provided by Boeing (Estimate):		[*]	Base Year Index (CPI):		[*]
Deposit per Aircraft:		[*]

Number

Escalation

Manufacturer

P.A.

Escalation Estimate

Engine

Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):

Delivery

Factor

Serial

Lessee

Adv Payment Base

Thrust

Price2

Baseyear3

[*]

Date

Aircraft

(Airframe)

(Engine)

Number

Price Per A/P

Selection

[*]

Total:

[*]

Note: Serial numbers are provided as guidance only and are subject to change.


		SA-13
HAZ-PA-03659 110415-1F.txt	Boeing Proprietary	Page 1

Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

between

THE BOEING COMPANY

And

Air Lease Corporation

Supplemental Exhibit CS1 to Purchase Agreement Number PA-03659

This document contains:


Part 1	Boeing Maintenance and Flight Training Programs; Operations Engineering Support
Part 2	Field and Engineering Support Services
Part 3	Technical Information and Materials
Part 4	Alleviation or Cessation of Performance
Part 5	Protection of Proprietary Information and Proprietary Materials


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	BOEING PROPRIETARY	SA-13

Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

PART 1: BOEING MAINTENANCE AND FLIGHT TRAINING

PROGRAMS; OPERATIONS ENGINEERING SUPPORT

1. Boeing Training Programs.

Boeing will provide maintenance training, cabin attendant training, and flight training programs to support the introduction of the Aircraft into service as provided in this Supplemental Exhibit CS1.

1.1 Customer is awarded [*] points (Training Points). At any time before twenty-four (24) months after delivery of Customer’s last Aircraft (Training Program Period) Customer may exchange Training Points for any of the training courses described on Attachment A at the point values described on Attachment A or for other training Boeing may identify at specified point values. At the end of the Training Program Period any unused Training Points will expire.

1.2 In addition to the training provided in Article 1.1, Boeing will provide to Customer the following training and services:

1.2.1 Flight dispatcher model specific instruction; one (1) class of six (6) students (1 aircraft); Flight dispatcher model specific instruction; two (2) classes of six (6) students (> 2 aircraft);

1.2.2 performance engineer model specific instruction in Boeing’s regularly scheduled courses; schedules are published yearly.

1.2.3 Additional Flight Operations Services:

(i) Boeing flight crew personnel to assist in ferrying the first Aircraft to Customer’s main base;

(ii) Instructor pilots for sixty (60) Man Days (as defined in Article 5.4, below) for revenue service training assistance (1 aircraft); Instructor pilots for ninety (90) Man Days (as defined in Article 5.4, below) for revenue service training assistance (> 2 aircraft);

(iii) an instructor pilot to visit Customer six (6) months after revenue service training to review Customer’s flight crew operations for a two (2) week period.

If any part of the training described in this Article 1.2 is not completed by Customer within twenty-four (24) months after the delivery of the last Aircraft, Boeing will have no obligation to provide such training.


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Enclosure 4

2. Training Schedule and Curricula.

2.1 Customer and Boeing will together conduct planning conferences approximately twelve (12) months before the scheduled delivery month of the first Aircraft of a model to define and schedule the maintenance, flight training and cabin attendant training programs. At the conclusion of each planning conference the parties will document Customer’s course selection, training schedule, and, if applicable, Training Point application and remaining Training Point balance.

2.2 Customer may also request training by written notice to Boeing identifying desired courses, dates and locations. Within fifteen (15) days of Boeing’s receipt of such request Boeing will provide written response to Customer confirming whether the requested courses are available at the times and locations requested by Customer.

3. Location of Training.

3.1 Boeing will conduct all flight and maintenance training at any of its or its wholly-owned subsidiaries’ training facilities equipped for the Aircraft. Customer shall decide on the location or mix of locations for training, subject to space being available in the desired courses at the selected training facility on the dates desired. Notwithstanding the above, dispatcher and performance engineering training will only be conducted at the Boeing Seattle training campus.

3.2 If requested by Customer, Boeing will conduct the classroom portions of the maintenance and flight training (except for the dispatcher and performance engineering training courses) at a mutually acceptable alternate training site, subject to the following conditions:

3.2.1 Customer will provide acceptable classroom space, simulators (as necessary for flight training) and training equipment required to present the courses;

3.2.2 Customer will pay Boeing’s then current per diem for Boeing instructor for each day, or fraction thereof, that the instructor is away from his home location, including travel time;

3.2.3 Customer will reimburse Boeing for the actual costs of round-trip transportation for Boeing's instructors and the shipping costs of training Materials which must be shipped between the primary training facility and the alternate training site;

3.2.4 Customer will be responsible for all taxes, fees, duties, licenses, permits and similar expenses incurred by Boeing and its employees as a result of Boeing providing training at the alternate site or incurred as a result of Boeing providing revenue service training; and

3.2.5 those portions of training that require the use of training devices not available at the alternate site will be conducted at Boeing’s facility or at some other alternate site. Customer will be responsible for additional expenses, if any, which result from the use of such alternate site.


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Enclosure 4

4. Training Materials.

Training Materials will be provided for each student. Training Materials may be used only for either (i) the individual student’s reference during Boeing provided training and for review thereafter or (ii) Customer’s provision of training to individuals directly employed by the Customer.

5. Additional Terms and Conditions.

5.1 All training will reflect an airplane configuration defined by (i) Boeing’s standard configuration specification for 787 aircraft, (ii) Boeing’s standard configuration specification for the minor model of 787 aircraft selected by Customer, and (iii) any Optional Features selected by Customer from Boeing’s standard catalog of Optional Features. Upon Customer’s request, Boeing may provide training customized to reflect other elements of Customer’s Aircraft configuration subject to a mutually acceptable price, schedule, scope of work and other applicable terms and conditions.

5.2 All training will be provided in the English language. If translation is required, Customer will provide interpreters.

5.3 Customer will be responsible for all expenses of Customer’s personnel except that in the Puget Sound region of Washington State Boeing will transport Customer’s personnel between their local lodgings and Boeing’s training facility. If Boeing determines that training will be provided in Charleston, South Carolina, Boeing will evaluate providing transportation services at that site. If in the future Boeing offers transportation services in Charleston, South Carolina, such services will be provided to Customer consistent with Boeing’s then-current policies in place regarding transportation services.

5.4 Boeing flight instructor personnel will not be required to work more than five (5) days per week, or more than eight (8) hours in any one twenty-four (24) hour period (Man Day), of which not more than five (5) hours per eight (8) hour workday will be spent in actual flying. These foregoing restrictions will not apply to ferry assistance or revenue service training services, which will be governed by FAA rules and regulations.

5.5 Normal Line Maintenance is defined as line maintenance that Boeing might reasonably be expected to furnish for flight crew training at Boeing’s facility, and will include ground support and Aircraft storage in the open, but will not include provision of spare parts. Boeing will provide Normal Line Maintenance services for any Aircraft while the Aircraft is used for flight crew training at Boeing’s facility in accordance with the Boeing Maintenance Plan (Boeing document D6-82076) and the Repair Station Operation and Inspection Manual (Boeing document D6-25470). Customer will provide such services if flight crew training is conducted elsewhere. Regardless of the location of such training, Customer will be responsible for providing all maintenance items (other than those included in Normal Line Maintenance) required during the training, including, but not limited to, fuel, oil, landing fees and spare parts.


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Enclosure 4

5.6 If the training is based at Boeing’s facility and the Aircraft is damaged during such training, Boeing will make all necessary repairs to the Aircraft as promptly as possible. Customer will pay Boeing’s reasonable charge, including the price of parts and materials, for making the repairs. If Boeing’s estimated labor charge for the repair exceeds Twenty-five Thousand U.S. Dollars ($25,000), Boeing and Customer will enter into an agreement for additional services before beginning the repair work.

5.7 If the flight training is based at Boeing’s facility, several airports in the surrounding area may be used, at Boeing’s option. Unless otherwise agreed in the flight training planning conference, it will be Customer’s responsibility to make arrangements for the use of such airports.

5.8 If Boeing agrees to make arrangements on behalf of Customer for the use of airports for flight training, Boeing will pay on Customer’s behalf any landing fees charged by any airport used in conjunction with the flight training. At least thirty (30) days before flight training, Customer will provide Boeing an open purchase order against which Boeing will invoice Customer for any landing fees Boeing paid on Customer’s behalf. The invoice will be submitted to Customer approximately sixty (60) days after flight training is completed, when all landing fee charges have been received and verified. Customer will pay the invoiced amount to Boeing within thirty (30) days of the date of the invoice.

5.9 If requested by Boeing, in order to provide the flight training or ferry flight assistance, Customer will make available to Boeing an Aircraft after delivery to familiarize Boeing instructor or ferry flight crew personnel with such Aircraft. If flight of the Aircraft is required for any Boeing instructor or ferry flight crew member to maintain an FAA license for flight proficiency or landing currency, Boeing will be responsible for the costs of fuel, oil, landing fees and spare parts attributable to that portion of the flight.


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	BOEING PROPRIETARY	SA-13

Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

PART 2: FIELD AND ENGINEERING SUPPORT SERVICES

1. Field Service Representation.

Boeing will furnish field service representation to advise Customer with respect to the maintenance and operation of the Aircraft (Field Service Representatives).

1.1 Field Service representation will be available at or near Customer’s main maintenance or engineering facility beginning before the scheduled delivery month of the first Aircraft and ending twelve (12) months after delivery of the last Aircraft covered by a specific purchase agreement.

1.2 When a Field Service Representative is positioned at Customer’s facility, Customer will provide, at no charge to Boeing, suitable furnished office space and office equipment, including internet capability for electronic access of data, at the location where Boeing is providing Field Service Representatives. As required, Customer will assist each Field Service Representative with visas, work permits, customs, mail handling, identification passes and formal introduction to local airport authorities.

1.3 Boeing’s Field Service Representatives are assigned to various airports and other locations around the world. Whenever Customer’s Aircraft are operating through any such airport, the services of Boeing’s Field Service Representatives are available to Customer.

2. Engineering Support Services.

2.1 Boeing will, if requested by Customer, provide technical advisory assistance from the Seattle area or at a base designated by Customer as appropriate for any Aircraft or Boeing Product (as defined in Part 1 of Exhibit C of the AGTA). Technical advisory assistance, provided, will include:

2.1.1 Analysis of the information provided by Customer to determine the probable nature and cause of operational problems and suggestion of possible solutions.

2.1.2 Analysis of the information provided by Customer to determine the nature and cause of unsatisfactory schedule reliability and the suggestion of possible solutions.

2.1.3 Analysis of the information provided by Customer to determine the nature and cause of unsatisfactory maintenance costs and the suggestion of possible solutions.

2.1.4 Analysis and commentary on Customer’s engineering releases relating to structural repairs not covered by Boeing’s Structural Repair Manual including those repairs requiring advanced composite structure design.


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Enclosure 4

2.1.5 Analysis and commentary on Customer’s engineering proposals for changes in, or replacement of, systems, parts, accessories or equipment manufactured to Boeing’s detailed design. Boeing will not analyze or comment on any major structural change unless Customer’s request for such analysis and comment includes complete detailed drawings, substantiating information (including any information required by applicable government agencies), all stress or other appropriate analyses, and a specific statement from Customer of the substance of the review and the response requested.

2.1.6 Maintenance Engineering. Boeing will provide the following Maintenance Engineering support:

2.1.6.1 Maintenance Planning Assistance. Upon request, Boeing will provide (i) one (1) on-site visit to Customer’s main base to assist with maintenance program development and to provide consulting related to maintenance planning and (ii) one (1) on site visit to Customer's main base to assist with the development of their ETOPS maintenance program and to provide consultation related to ETOPS maintenance planning. Consultation with Customer will be based on ground rules and requirements information provided in advance by Customer.

2.1.6.2 GSE/Shops/Tooling Consulting. Upon request, Boeing will provide one (1) on-site visit to Customer’s main base to provide consulting and data for ground support equipment, maintenance tooling and requirements for maintenance shops. Consultation with Customer will be based on ground rules and requirements information provided in advance by Customer.

2.1.6.3 Maintenance Engineering Evaluation. Upon request, Boeing will provide one (1) on-site visit to Customer’s main base to evaluate Customer’s maintenance and engineering organization for conformance with industry best practices. The result of which will be documented by Boeing in a maintenance engineering evaluation presentation. Customer will be provided with a copy of the maintenance engineering evaluation presentation. Consultation with Customer will be based on ground rules and requirements information provided in advance by Customer.

2.1.7 Operations Engineering Support. Boeing will provide the following Flight Operations Engineering support:

2.1.7.1 Assistance with the analysis and preparation of performance data to be used in establishing operating practices and policies for Customer’s operation of Aircraft.

2.1.7.2 Assistance with interpretation of the minimum equipment list, the definition of the configuration deviation list and the analysis of individual Aircraft performance.

2.1.7.3 Assistance with solving operational problems associated with delivery and route-proving flights.


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	BOEING PROPRIETARY	SA-13

Enclosure 4

2.1.7.4 Information regarding significant service items relating to Aircraft performance or flight operations.

2.1.7.5 If requested by Customer, Boeing will provide operations engineering support during the ferry flight of an Aircraft. Such support will be provided from the Puget Sound area or from an alternate location, at Boeing’s sole discretion.

2.1.7.6 Assistance in developing an Extended Twin Operations (ETOPs) plan for regulatory approval.

2.2 Boeing will, if requested by Customer, perform work on an Aircraft after delivery but prior to the initial departure flight or upon the return of the Aircraft to Boeing’s facility prior to completion of that flight. The following conditions will apply to Boeing’s performance:

2.2.1 Boeing may rely upon the commitment authority of the Customer’s personnel requesting the work.

2.2.2 As title and risk of loss has passed to Customer, the insurance provisions of Article 8.2 of the AGTA apply.

2.2.3 The provisions of the Boeing warranty in Part 2 of Exhibit C of the AGTA apply.

2.2.4 Customer will pay Boeing for requested work not covered by the Boeing warranty, if any.

2.2.5 The DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions in Article 11 of Part 2 of Exhibit C of the AGTA apply.

2.3 Boeing may, at Customer’s request, provide services other than those described in Articles 2.1 and 2.2 of this Part 2 of Supplemental Exhibit CS1 for an Aircraft after delivery, which may include, but not be limited to, retrofit kit changes (kits and/or information), training, flight services, maintenance and repair of Aircraft (Additional Services). Such Additional Services will be subject to a mutually acceptable price, schedule, scope of work and other applicable terms and conditions. The DISCLAIMER AND RELEASE and the EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions in Article 11 of Part 2 of Exhibit C of the AGTA and the insurance provisions in Article 8.2 of the AGTA will apply to any such work. Title to and risk of loss of any such Aircraft will always remain with Customer.


HAZ-PA-03659-CS1		CS1 Page 8
	BOEING PROPRIETARY	SA-13

Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

PART 3: TECHNICAL INFORMATION AND MATERIALS

1. General.

Materials are defined as any and all items that are created by Boeing or a third party, which are provided directly or indirectly from Boeing and serve primarily to contain, convey or embody information. Materials may include either tangible embodiments (for example, documents or drawings), or intangible embodiments (for example, software and other electronic forms) of information but excludes Aircraft Software. Aircraft Software is defined as software that is installed on and used in the operation of the Aircraft.

Customer Information is defined as that data provided by Customer to Boeing which falls into one of the following categories: (i) aircraft operational information (including, but not limited to, flight hours, departures, schedule reliability, engine hours, number of aircraft, aircraft registries, landings, and daily utilization and schedule interruptions for Boeing model aircraft); (ii) summary and detailed shop findings data; (iii) aircraft readiness log data; (iv) non-conformance reports; (v) line maintenance data; (vi) airplane message data; (vii) scheduled maintenance data; and (viii) service bulletin incorporation.

Upon execution by Customer of Boeing’s standard form Customer Services General Terms Agreement and Supplemental Agreement for Electronic Access and, as required, the applicable Boeing licensed software order, Boeing will provide to Customer through electronic access certain Materials to support the maintenance and operation of the Aircraft. Such Materials will, if applicable, be prepared generally in accordance with Aerospace Industries Association Specification 1000D (S1000D) and Air Transport Association of America (ATA) iSpec 2200, entitled “Information Standards for Aviation Maintenance.” Materials not covered by iSpec 2200 will be provided in a structure suitable for the Material’s intended use. Materials will be in English and in the units of measure used by Boeing to manufacture an Aircraft.

2. Materials Planning Conferences.

Customer and Boeing will conduct planning conferences approximately twelve (12) months before the scheduled delivery month of the first Aircraft in order to mutually determine (i) the Materials to be furnished to Customer in support of the Aircraft, (ii) the Customer Information to be furnished by Customer to Boeing, (iii) additional information related to certain Boeing furnished Materials, including but not limited to: delivery timing, delivery method and revision information, all of which shall be recorded in a worksheet (Document Worksheet) (iv) the update cycles of the Customer Information to be furnished to Boeing, (v) any Customer preparations necessary for Customer’s transmittal of Customer Information to Boeing, and (vi) any Customer preparations necessary for Customer’s electronic access to the Materials.


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	BOEING PROPRIETARY	SA-13

Enclosure 4

3. Technical Data and Maintenance Information.

Boeing will provide technical data and maintenance information equivalent to that traditionally provided in the following manuals and documents. The format for this data and information is not yet determined in all cases. Whenever possible Boeing will provide such data and information through electronic access or other means, both at its sole discretion.

(i) Flight Operations Information.

Airplane Flight Manual (AFM)

Dispatch Deviation Guide (DDG)

ETOPS Guide Vol. III (Operational Guidelines and Methods)

Flight Attendant Manual (FAM)

Flight Crew Operations Manual and Quick Reference Handbook (FCOM/QRH)

Flight Crew Training Manual (FCTM)

Flight Management Computer (FMC) Supplementary Data Document

Jet Transport Performance Methods (JTPM)

Performance Engineer’s Tool (PET)

Weight and Balance Manual (Chapter 1, Control and Loading) (WBM)

(ii) Maintenance Information.

Aircraft Maintenance Manual (Part 1) (AMM)

Systems Description Section (SDS)

Aircraft Maintenance Manual (Part 2) (AMM)

Practices and Procedures

Baggage Cargo Loading Manual (BCLM)

Boeing Component Maintenance Manual (BCMM)

Component Service Bulletins (CSB)

Engineering Design Data – Assembly and Installation Drawings

Engineering Design Data – Assembly and Installation Drawings Bill of Materials

Fault Isolation Manual (FIM)

Fault Reporting Manual (FRM)

Live Animal Carriage Document (LACD)

Maintenance Implementation Document (MID)

Power Plant Buildup Manual (except Rolls Royce)Maintenance Tips (MTIP)

Markers and Stencils


HAZ-PA-03659-CS1		CS1 Page 10
	BOEING PROPRIETARY	SA-13

Enclosure 4

Nondestructive Test Manual (NDT)

Profile Drawings

Remote Certification Service Bulletin

Service Bulletins (SB)

a. Service Bulletin Information Notices (IN)

Service Letters (SL)

Standard Overhaul Practices Manual Chapter 20 (SOPM)

Standard Wiring Practices Manual Chapter 20 (SWPM)

Structural Repair Manual (SRM)

Systems Schematics (SSM)

Validation Copy Service Bulletin

Wiring Diagrams (WDM)

(iii) Maintenance Planning.

Airplane Maintenance Inspection Intervals (AMII)

Configuration, Maintenance and Procedures (CMP) for ETOPS

ETOPS Guide Vol. II (Maintenance Program Guidelines)

Maintenance Planning Data (Sections 1-8) (MPD)

Maintenance Planning Data (Section 9)

787 Airworthiness Limitations (AWL)

Maintenance Planning Data (Section 9)

787 Certification Maintenance Requirements (CMR)

Maintenance Planning Data (Section 9)

787 Airworthiness Limitations - Line Number Specific (AWLLNS)

Maintenance Planning Data (Section 9)

787 Special Compliance Items (SCI)

Maintenance Review Board Report (MRBR)

Maintenance Task Cards and Index (TASK)

(iv) Spares Information.

Illustrated Parts Catalog Data (IPD)

Product Standards Books(PSDS)

(v) Airplane & Airport Information.

Airplane Characteristics for Airport Planning (ACAP)

Airplane Rescue and Fire Fighting Information (ARFF)

Airplane Recovery Document (ARD)

Engine Ground Handling Document (EGH)

ETOPS Guide Vol. 1 (CMP Supplement)


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	BOEING PROPRIETARY	SA-13

Enclosure 4

GSE Tooling Drawings (3D Model, bill of Material, 2D Drawings and Drawing Notes)

Illustrated Tool and Equipment Manual (ITEM)

Maintenance Facility and Equipment Planning Document (MFEPD)

Special Tool and Ground Handling Index (IND)

(vi) Shop Maintenance.

Component Maintenance Manual /Overhaul Manual (CMM/OHM) Index

Product Support Supplier Directory (PSSD)

Supplier’s Component Maintenance Manuals (SCMM)

Supplier Product Support and Assurance Agreements Document (Vols. 1 & 2) (PSAA)

Supplier Service Bulletins (SSB)

4. Advance Representative Materials.

Boeing will select all advance representative Materials from available sources and whenever possible will provide them through electronic access. Such advance Materials will be for advance planning purposes only.

5. Customized Materials.

All customized Materials will reflect the configuration of each Aircraft as delivered.

6. Revisions.

6.1 The schedule for updating certain Materials will be identified in the planning conference. Such updates will reflect changes to Materials developed by Boeing.

6.2 If Boeing receives written notice that Customer intends to incorporate, or has incorporated, any Boeing service bulletin in an Aircraft, Boeing will update Materials reflecting the effects of such incorporation into such Aircraft.

7. Supplier Technical Data.

7.1 For supplier-manufactured programmed airborne avionics components and equipment classified as Seller Furnished Equipment (SFE) which contain computer software designed and developed in accordance with Radio Technical Commission for Aeronautics Document No. RTCA/DO-178B dated December 1, 1992 (with an errata issued on March 26, 1999), or later as available, Boeing will request that each supplier of the components and equipment make software documentation available to Customer.

7.2 The provisions of this Article will not be applicable to items of BFE.


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Enclosure 4

7.3 Boeing will furnish to Customer a document identifying the terms and conditions of the product support agreements between Boeing and its suppliers requiring the suppliers to fulfill Customer’s requirements for information and services in support of the Aircraft.

8. Buyer Furnished Equipment Data.

Boeing will incorporate BFE maintenance information into the customized Materials provided Customer makes the information available to Boeing at least six (6) months prior to the scheduled delivery month of each Aircraft. Boeing will incorporate such BFE maintenance information into the Materials prior to delivery of each Aircraft reflecting the configuration of that Aircraft as delivered. For BFE maintenance information provided less than six (6) months before delivery, Boeing will incorporate such BFE maintenance information at the earliest revision cycle. Upon Customer’s request, Boeing may provide update service after delivery to such information subject to the terms of Part 2, Article 2.3 relating to Additional Services. Customer agrees to furnish all BFE maintenance information in Boeing’s standard digital format.

9. Customer’s Shipping Address.

From time to time Boeing may furnish certain Materials or updates to Materials by means other than electronic access. Customer will specify a single address and Customer shall promptly notify Boeing of any change to that address. Boeing will pay the reasonable shipping costs of the Materials. Customer is responsible for any customs clearance charges, duties, and taxes.


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Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

PART 4: ALLEVIATION OR CESSATION OF PERFORMANCE

Boeing will not be required to provide any services, training or other things at a facility designated by Customer if any of the following conditions exist:

1. a labor stoppage or dispute in progress involving Customer; or

2. wars or warlike operations, riots or insurrections in the country where the facility is located; or

3. any condition at the facility which, in the opinion of Boeing, is detrimental to the general health, welfare or safety of its personnel or their families; or

4. the United States Government refuses permission to Boeing personnel or their families to enter into the country where the facility is located, or recommends that Boeing personnel or their families leave the country.

After the location of Boeing personnel at the facility, Boeing further reserves the right, upon the occurrence of any of such events, to immediately and without prior notice to Customer relocate its personnel and their families.

Boeing will not be required to provide any Materials at a facility designated by Customer if the United States Government refuses permission to Boeing to deliver Materials to the country where the facility is located.


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Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

PART 5: PROTECTION OF PROPRIETARY INFORMATION AND PROPRIETARY MATERIALS

1. General.

All Materials provided by Boeing to Customer and not covered by a Boeing CSGTA or other agreement between Boeing and Customer defining Customer’s right to use and disclose the Materials and included information will be covered by and subject to the terms of the AGTA as amended by the terms of the Purchase Agreement. Title to all Materials containing, conveying or embodying confidential, proprietary or trade secret information (Proprietary Information) belonging to Boeing or a third party (Proprietary Materials), will at all times remain with Boeing or such third party. Customer will treat all Proprietary Materials and all Proprietary Information in confidence and use and disclose the same only as specifically authorized in the AGTA as amended by the terms of the Purchase Agreement.

2. License Grant.

2.1 Boeing grants to Customer a worldwide, non-exclusive, non-transferable license to use and disclose Proprietary Materials in accordance with the terms and conditions of the AGTA as amended by the terms of the Purchase Agreement. Customer is authorized to make copies of Materials (except for Materials bearing the copyright legend of a third party), and all copies of Proprietary Materials will belong to Boeing and be treated as Proprietary Materials under the AGTA as amended by the terms of the Purchase Agreement. Customer will preserve all proprietary legends, and all copyright notices on all Materials and insure the inclusion of those legends and notices on all copies.

2.2 Customer grants to Boeing a perpetual, world-wide, non-exclusive license to use and disclose Customer Information or derivative works thereof in Boeing data and information products and services provided indicia identifying Customer Information as originating from Customer is removed from such Customer Information.

3. Use of Proprietary Materials and Proprietary Information.

Customer is authorized to use Proprietary Materials and Proprietary Information for the purpose of: (a) operation, maintenance, repair, or modification of Customer’s Aircraft for which the Proprietary Materials and Proprietary Information have been specified by Boeing and (b) development and manufacture of training devices and maintenance tools for use by Customer.

4. Providing of Proprietary Materials to Contractors.

Customer is authorized to provide Proprietary Materials to Customer’s contractors for the sole purpose of maintenance, repair, or modification of Customer’s Aircraft for which the Proprietary Materials have been specified by Boeing. In addition, Customer


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Enclosure 4

may provide Proprietary Materials to Customer’s contractors for the sole purpose of developing and manufacturing training devices and maintenance tools for Customer’s use. Before providing Proprietary Materials to its contractor, Customer will first obtain a written agreement from the contractor by which the contractor agrees (a) to use the Proprietary Materials only on behalf of Customer, (b) to be bound by all of the restrictions and limitations of this Part 5, and (c) that Boeing is a third party beneficiary under the written agreement. Customer agrees to provide copies of all such written agreements to Boeing upon request and be liable to Boeing for any breach of those agreements by a contractor. A sample agreement acceptable to Boeing is attached as Appendix VII to the AGTA.

5. Providing of Proprietary Materials and Proprietary Information to Regulatory Agencies.

5.1 When and to the extent required by a government regulatory agency having jurisdiction over Customer or an Aircraft, Customer is authorized to provide Proprietary Materials and to disclose Proprietary Information to the agency for use in connection with Customer’s operation, maintenance, repair, or modification of such Aircraft. Customer agrees to take all reasonable steps to prevent the agency from making any distribution, disclosure, or additional use of the Proprietary Materials and Proprietary Information provided or disclosed. Customer further agrees to notify Boeing immediately upon learning of any (a) distribution, disclosure, or additional use by the agency, (b) request to the agency for distribution, disclosure, or additional use, or (c) intention on the part of the agency to distribute, disclose, or make additional use of Proprietary Materials or Proprietary Information.

5.2 In the event of an Aircraft or Aircraft systems-related incident, the Customer may suspend, or block access to Customer Information pertaining to its Aircraft or fleet. Such suspension may be for an indefinite period of time.


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	BOEING PROPRIETARY	SA-13

Enclosure 4

787 CUSTOMER SUPPORT DOCUMENT

ATTACHMENT A

787 TRAINING POINTS MENU

		Class*
Flight Training	Per Class Student Maximum	Total Points Per Class*
787 Pilot Type Rating Course – FAA ***	2	17
787 Pilot Shortened Type Rating Course – FAA (STAR) ***	2	9
787 Pilot Additional Type Rating – EASA ***	2	19
787 Pilot Prior Experience Course - EASA ***	2	11
777 to 787 Pilot Differences Course ***	2	6
787 Pilot Recurrent Course ***	2	6
787 Pilot Type Rating Course during Non-social Sessions / *	2	15
787 Pilot Shortened Type Rating Course (STAR) during Non-social Sessions / *	2	8
777 to 787 Pilot Differences Course during Non-social Sessions / *	2	5
787 Pilot Recurrent Course during Non-social Sessions / *	2	5
Additional 787 Four Hour Simulator Session (with or without Boeing instructor) ***	2	1
Additional 787 Ground School Training Day (with or without FTD) ***	2	1


Cabin Crew/Door Training	Per Class Student Maximum	Total Points Per Class
787 Cabin Safety Training (includes Exits/Door Training)	12	2
787 Emergency Exits/Doors Training Course	12	1


Maintenance Training	Per Class Student Maximum	Total Points Per Class
787 General Familiarization Course (instructor-led)	24	3
787 Avionics/Airframe/Powerplant/Electrical Systems Course (Ramp and Transit)	16	18
787 Avionics/Airframe/Powerplant/Electrical Systems Line & Base or Regulatory (B1/B2) ME/AV Course (without field trips)	16	30
787 Regulatory Mechanical (B1) ME Course (without field trips)	16	30
787 Regulatory Avionics (B2) AV Course (without field trips)	16	24
787 Engine Run-Up Course ***	3	2
787 Aircraft Rigging Course (without field trip)	10	6
787 Fiber Optics Course ***	9	4
787-8/-9 to 787-10 (GE) Aircraft Differences Line & Base Maintenance Course	16	2
787-8/-9 to 787-10 (RR) Aircraft Differences Line & Base Maintenance Course	16	4


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Enclosure 4


787 Aircraft Structural Repair Courses	Per Class Student Maximum	Total Points Per Class*
787 Boeing Structural Repair Manual Course	16	4
787 Composite Repair for Technicians Course ***	8	10
787 Composite Repair for Engineers with Practical Application Course ***	8	10
787 Composite Repair & Design for Engineers Course (no lab)	16	7
787 Damage and Repair Non-Destructive Inspection Course ***	8	4
787 Composite Repair for Inspectors Course ***	8	4
787 Quick Composite Repair Course ***	8	3

*Points per Class are based upon training conducted according to Boeing’s standard training courses. Extended or modified courses will require point adjustment to reflect altered work statement or duration.

**Non‑social Sessions are those in which any part of the session falls between midnight and 06:00 A.M. local time. To qualify for this discount all simulator sessions for a given course must be scheduled as Non‑social Sessions.

***Courses must be taught at a Boeing facility.


CBT Products
Flight
Initial Transition CBT	4 points/crew first year + 2 points/crew each additional year for 4 years or 72 points first year + 22 points each additional year for 4 years - unlimited use
STAR CBT	3 points/crew first year + 1 point/crew each additional year for 4 years or 54 points first year + 19 points each additional year for 4 years unlimited use
787 Cabin Safety Training CBT	20 points first year + 3 points each additional year for 4 years unlimited use
Maintenance
Line and Base Systems CBT (excludes Line Oriented Scenarios)	410 points per year for unlimited use

The courses and products listed in this Attachment A are subject to change from time to time as new courses are added and courses are removed. Boeing reserves the right to change course offering at its own discretion.


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Enclosure 5

The Boeing Company

P.O. Box 3707

Seattle, WA 98124-2207

HAZ-PA-03659-LA-1301080R6

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, California 90067

Subject: Special Matters – 787-9 Blocks B, C, D, and E Aircraft

This letter agreement (Letter Agreement) cancels and supersedes letter agreement HAZ-PA-03659-LA-1301080R5 and amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement. This Letter Agreement applies only to [*].

1. Credit Memoranda.

1.1 Basic Credit Memorandum. At the time of delivery of each 787-9 Aircraft, Boeing will issue to Customer a Basic Credit Memorandum in the following amount:

Applicable Aircraft	Amount (U.S. Dollars)	Base Year
787-9 Block B Aircraft	[*]	[*]
787-9 Block C Aircraft	[*]	[*]
787-9 Block D Aircraft	[*]	[*]
787-9 Block E Aircraft	[*]	[*]

1.2 Leasing Credit Memorandum. Customer expressly intends to lease the Aircraft to a third party or parties (Lessee or Lessees) who is/are in the commercial airline business as aircraft operator(s). As an incentive for and in consideration of Customer entering into a lease for the 787-9 Aircraft prior to delivery of the 787-9 Aircraft to be leased, in accordance with the requirements set forth in the Purchase Agreement, Boeing will issue to Customer a Leasing Credit Memorandum, which under no circumstances may be assigned, in the following amount: [*]

1.3 [*]

Applicable Aircraft	Amount (U.S. Dollars)	Base Year
787-9 Block B Aircraft	[*]	[*]
787-9 Block C Aircraft	[*]	[*]
787-9 Block D Aircraft	[*]	[*]

1.4 [*]

1.5 [*]


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	BOEING PROPRIETARY

Enclosure 5

1.6 [*]

1.7 [*]

1.8 [*]

1.9 [*]

1.10 [*]

1.11 [*]

1.12 [*]

1.13 [*]

1.14 [*]

1.15 [*]

1.16 [*]

1.17 [*]

2. Escalation of Credit Memoranda.

Unless otherwise noted, the amounts of the Credit Memoranda stated in [*] and will be escalated to the scheduled month of the respective 787-9 Block B, C, D, and E Aircraft delivery pursuant to the Airframe Escalation formula set forth in the Purchase Agreement applicable to the Aircraft. The Credit Memoranda are stated in U.S. Dollars and may, at the election of Customer, be (i) applied against the Aircraft Price of the respective Aircraft at the time of delivery, or (ii) used for the purchase of other Boeing goods and services (but shall not be applied to advance payments).

3. [*]

4. [*]

5. [*]

6. [*]

7. [*]

8. Confidentiality.


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Enclosure 5

to finance and purchase, deliver or lease the Aircraft) and who understand they are not to disclose its contents to any other person or entity (other than those to whom disclosure is permitted by this paragraph 8), without the prior written consent of Boeing and (c) any auditors, financial advisors, attorneys and independent contractors of Customer who have a need to know such information and have signed a confidentiality agreement in the same form and substance similar to this paragraph 8. Customer shall be fully responsible to Boeing for compliance with such obligations.


Very truly yours,

THE BOEING COMPANY


By	/s/ Michael Lombardi

Its	Attorney-In-Fact

ACCEPTED AND AGREED TO this

Date:	June 26, 2019

AIR LEASE CORPORATION


By	/s/ Grant Levy

Its	Executive Vice President


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	BOEING PROPRIETARY

The Boeing Company

P.O. Box 3707

Seattle, WA 98124 2207

Enclosure 6

HAZ-PA-03659-LA-1901662

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Subject: Installation of Cabin Systems Equipment

Reference: Purchase Agreement No. PA-03659 (Purchase Agreement) between The Boeing Company (Boeing) and Air Lease Corporation (Customer) relating to Model 787 aircraft (Aircraft)

This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement will have the same meaning as in the Purchase Agreement.

Customer has requested that Boeing install in the Aircraft the In‑Flight Entertainment and communications systems described in Attachment A to this Letter Agreement (collectively referred to as Cabin Systems Equipment or CSE). CSE is BFE that Boeing purchases for Customer and that is identified in the Detail Specification for the Aircraft.

1. Customer Responsibilities.

1.1 Customer will select the CSE suppliers (Supplier(s)) and system configuration) from among those identified in the Option(s) listed in Attachment A to this Letter Agreement, on or before the dates identified by Boeing.

1.2 Customer will enter into initial agreements with their selected Suppliers, or otherwise cause the selected Suppliers, to actively participate with Customer and Boeing in meetings, including but not limited to the Initial Technical Coordination Meeting (ITCM), to ensure that Supplier's functional system specifications meet Customer's and Boeing's respective requirements. Such functional system specifications define functionality to which Boeing will test prior to delivery but are not a guarantee of functionality at delivery.

1.3 Customer will enter into final agreements with the selected Suppliers that will:

1.3.1 include the actual statement of work as defined at the ITCM. Final agreements will also include price, warranty, training, product support following Aircraft delivery (including spares support), and any other special business arrangements required by Customer;


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Enclosure 6

1.3.2 require Supplier to assist the seat suppliers in the preparation of seat assembly functional test plans and procedures and coordinate integration testing; and

1.3.3 require Supplier to comply with Boeing’s type design and type certification data development and protection requirements where the Supplier has type design/certification responsibility. The requirements will require Suppliers to (i) maintain type design/certificate data for the life of such type certificate for all type design and (ii) entitle Boeing to access, review, and receive such type design/certification data. These requirements will be provided to Customer upon request.

2. Boeing Responsibilities.

2.1 Boeing will:

2.1.1 perform the Project Manager functions stated in Attachment B;

2.1.2 provide Aircraft interface requirements to Suppliers;

2.1.3 assist Suppliers in the development of CSE system specifications and approve such specifications;

2.1.4 [*]

2.1.5 coordinate the resolution of technical issues with Suppliers; and

2.1.6 obtain FAA certification of the Aircraft with the conforming CSE installed therein.

3. Software.

CSE systems may contain software of the following two types:

3.1 Certification Software. The software required to functionally test, operate and certify the CSE systems on the Aircraft is the Certification Software and is part of the CSE.

3.2 Customer's Software. The software which is defined by the Customer to support specified features and appearance is Customer's Software and is not part of the CSE.

3.2.1 Customer is solely responsible for specifying Customer's Software functional and performance requirements and ensuring that Customer's Software meets such requirements. Customer and Customer's Software supplier will have total responsibility for the writing, certification, modification, revision, or correction of any of Customer's Software. Boeing will not perform the functions and obligations described in Article 1.2 above, or the Project Manager's functions described in Attachment B, for Customer's Software.


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Enclosure 6

3.2.2 The omission of any Customer's Software or the lack of any functionality of Customer's Software will not be a valid condition for Customer's rejection of the Aircraft at the time of Aircraft delivery.

3.2.3 Boeing has no obligation to approve any documentation to support Customer's Software certification. Boeing will only review and operate Customer's Software if in Boeing's reasonable opinion such review and operation is necessary to certify the CSE on the Aircraft.

3.2.4 Boeing will not be responsible for obtaining FAA certification for Customer's Software.

4. Changes.

Any changes to CSE may only be made by and between Boeing and the Supplier. Customer requested changes to the CSE specification after execution of this Letter Agreement will be made in writing directly to Boeing for approval and for coordination by Boeing with the Supplier. Any such change to the configuration of the Aircraft will be subject to price and offerability through Boeing’s master change or other process for amendment of the Purchase Agreement. Any Supplier price increase or decrease resulting from such change will be negotiated between Customer and Supplier.

5. Supplier Defaults.

Boeing will notify Customer in a timely manner in the event of a default by a Supplier under the Supplier's purchase order with Boeing. Within fifteen (15) days of Customer's receipt of such notification, Boeing and Customer will agree on an alternate Supplier or other course of action. If Boeing and Customer are unable to agree on an alternate Supplier or course of action within such time, the remedies available to Boeing in Article 6 will apply.

6. Exhibits B and C to the AGTA.

CSE is deemed to be BFE for the purposes of Exhibit B, Customer Support Document, and Exhibit C, the Product Assurance Document, of the AGTA.

7. Boeing’s Remedies.

[*]

8. Price and Payment.

[*]


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Enclosure 6

9. Customer's Indemnification of Boeing.

THE PROVISIONS OF AGTA, EXHIBIT A, BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT, “INDEMNIFICATION OF BOEING” WILL APPLY TO CSE.

10. Title and Risk of Loss.

Title to CSE will remain with Boeing from the time that Boeing receives title to the CSE until the Aircraft title is transferred to Customer. Risk of loss will remain with the entity that is in possession of the CSE prior to Aircraft delivery.

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters contained herein, please indicate your acceptance and approval below.


ACCEPTED AND AGREED TO this

Date:	June 26, 2019

AIR LEASE CORPORATION		THE BOEING COMPANY

By:	/s/ Grant Levy	By:	/s/ Michael Lombardi

Name:	Grant Levy	Name:	Michael V. Lombardi

Title:	Executive Vice President	Title:	Attorney-In-Fact


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Enclosure 6

ATTACHMENT A

CABIN SYSTEMS EQUIPMENT

The following optional features (Option(s)) describe(s) the items of equipment that under the terms and conditions of this Letter Agreement are considered to be CSE. Each such Option is fully described in the Detail Specification as described in Exhibit A to the Purchase Agreement. Final configuration will be based on Customer acceptance of any or all Options listed below.

Option Request Number and Title

[*]

		5
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Enclosure 6

ATTACHMENT B

PROJECT MANAGER

1. Project Management.

Boeing will perform the following functions for the CSE. Boeing will have authority to make day‑to‑day management decisions, and decisions on technical details which in Boeing's reasonable opinion do not significantly affect form, fit, function, cost, or aesthetics. Boeing will be responsible for:

(i) managing the development of all program schedules;

(ii) evaluating Supplier's program management and developmental plans to meet Boeing’s production schedule;

(iii) defining program metrics and status requirements;

(iv) scheduling and conducting program design and schedule reviews with Customer and Suppliers, as needed;

(v) monitoring compliance with schedules;

(vi) evaluating and approving any recovery plans or plan revisions which may be required of either Suppliers or Customer;

(vii) managing the joint development of the CSE system specification; and

(viii) leading the development of a joint CSE project management plan (Project Plan).

2. System Integration.

Boeing's performance as Project Manager will include the functions of systems integrator (Systems Integrator). As Systems Integrator Boeing will perform the following functions:

(i) as required, assist Suppliers in defining their system specifications for the CSE, approve such specifications and develop an overall system functional specification;

		6
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Enclosure 6

(ii) ensure the Project Plan includes sufficient Supplier testing, Supplier sub‑system testing, and an overall CSE system acceptance test; and

(iii) organize and conduct technical coordination meetings with Customer and Supplier(s) to review responsibilities, functionality, Aircraft installation requirements and overall program schedule, direction and progress.

		7
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Enclosure 7

The Boeing Company

P.O. Box 3707

Seattle, WA 98124-2207

HAZ-PA-03659-LA-1104720R9

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Subject: Advance Payment Matters

This letter agreement (Letter Agreement) cancels and supersedes letter agreement HAZ-PA-03659-LA-1104720R8 and amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement.

1. Alternative Fixed Advance Payment Schedule.

1.2 Alternative Fixed Advance Payment Schedule – 787-9 Block A Aircraft. [*]

1.3 Alternative Fixed Advance Payment Schedule – 787-9 Block B Aircraft. [*]

1.4 Alternative Fixed Advance Payment Schedule – 787-9 Block C, 787-9 Block D Aircraft, and 787-9 Block E Aircraft.[*]

1.5 Alternative Fixed Advance Payment Schedule – 787-10 Block A Aircraft

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Enclosure 7

1.6 [*]

2. [*]

3. [*]

4. [*]

5. Confidentiality.

Customer understands and agrees that the information contained herein represents confidential business information of Boeing and has value precisely because it is not available generally or to other parties. Customer agrees to limit the disclosure of its contents to (a) its directors and officers, (b) employees of Customer with a need to know the contents for performing its obligations (including, without limitation, those employees performing accounting, finance, administration and other functions necessary to finance and purchase, deliver or lease the Aircraft) and who understand they are not to disclose its contents to any other person or entity (other than those to whom disclosure is permitted by this paragraph 5), without the prior written consent of Boeing and (c) any auditors, financial advisors, attorneys and independent contractors of Customer who have a need to know such information and have signed a confidentiality agreement in the same

HAZ-PA-03659-LA-1104720R9

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Enclosure 7

form and substance similar to this paragraph 5. Customer shall be fully responsible to Boeing for compliance with such obligations.

6. Assignment.

Notwithstanding any other provisions of the Purchase Agreement, the rights and obligations described in this Letter Agreement are provided to Customer in consideration of Customer’s taking title to the Aircraft at the time of delivery and leasing the Aircraft and cannot be assigned in whole or, in part.

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters treated above, please indicate your acceptance and approval below.


Very truly yours,

THE BOEING COMPANY

By	/s/ Michael Lombardi

Its	Attorney-In-Fact

ACCEPTED AND AGREED TO this

Date:	June 26, 2019

AIR LEASE CORPORATION

By	/s/ Grant Levy

Its	Executive Vice President

HAZ-PA-03659-LA-1104720R9

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Exhibit 10.12

Air Lease Corporation

Non-Employee Director Compensation

(As amended May 8, 2019)


Retainers
Annual Board Retainer:	$	80,000

Committee Member Retainer:
Audit	$	15,000
Compensation	$	10,000
Nominating and Corporate Governance	$	10,000

Additional Committee Chair Retainer:
Audit	$	20,000
Compensation	$	10,000
Nominating and Corporate Governance	$	10,000

Lead Director Retainer:	$	50,000

Directors receive annual retainer fees quarterly on the date of the Board Meeting in the applicable quarter, paid in cash.

Non-employee directors may be paid conditional meeting fees in the event that there are periods of unexpected and increased participation required by the non-employee directors, and a per diem fee in certain circumstances. A non-employee director will receive a meeting fee of $1,500 per meeting (i) if he or she attends a number of Board meetings in excess of the number of scheduled meetings plus two additional Board meetings during the applicable calendar year or (ii) if he or she attends during the applicable year a number of meetings of a committee on which he or she serves, in excess of the number of scheduled meetings plus two additional meetings of that committee for that year.

Non-employee directors may be paid a per diem fee of $2,500 for non-ordinary course Board or committee activity (excluding any educational events) subject to the approval of the Board of Directors, the Chairman of the Board or the Lead Director of the Board.

As a matter of policy, a director may elect to receive all or a portion of the cash compensation in the form of outright shares of the Company’s Class A Common Stock. The number of outright shares issued in lieu of cash compensation is determined by dividing the cash compensation by, the fair market value of a share of the Company’s Class A Common Stock on the date of grant (rounded down to the next whole share) based on the closing price on the date of grant. Outright shares issued in lieu of Board cash compensation are issued as of the same date as the quarterly cash payment is made.

Non-Employee Director Equity Program

Annual Equity Grant: An annual grant of Restricted Stock Units (“:Annual Director Grant”) is to be made each year on the date of the Annual Meeting of Stockholders, with a value of $180,000.

Alternatively, annually a Director may elect to defer the receipt of the shares of his or her vested Annual Director Grant beyond the one-year vesting period. Directors may elect to defer receipt of his or her shares until separation from service or alternatively, may elect a deferral period of 5 years or 10 years from the date of grant, provided that shares will be distributed upon a separation from service, a change of control or at death, if earlier than the elected deferral date. Deferred RSUs receive dividend equivalent rights which are reinvested in additional RSUs based on the market price of the Company’s Class A Common Stock on the date the dividends are paid.

Initial Equity Grant: For a director who becomes a member of the Board of Directors on or after the date of grant of the Annual Equity Grant, a grant of Restricted Stock Units (“Initial Director Grant”) is to be made on the date of the first meeting of the Board of Directors which is held when the new director is a member of the Board, with a value of $180,000. A new director will then be eligible to receive an Annual Equity Grant in the calendar year after the year when the director joins the Board.

Terms of Annual Grant and Initial Grant Director Restricted Stock Units

The number of Restricted Stock Units is determined by dividing the value of the grant by the closing price of Air Lease Corporation Class A Common Stock on the date of grant (rounded down to the next whole share). The restricted stock units will vest in full on the first anniversary of the date of grant, unless the director terminates service prior to such date. If termination of service is in connection with a change of control before the first anniversary date of the grant date, the Restricted Stock Unit will vest in full upon such termination of service. If the Board service of a non-employee director terminates for any reason other than a change in control, the Restricted Stock Units will vest on a prorated daily basis according to the number of days between the grant date and termination of service divided by 365. Each RSU entitles a Director to receive on the vesting date one share of the Company’s Class A Common Stock unless a Director elects to defer the receipt of the shares beyond the vesting date as described above.

EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND PRESIDENT
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John L. Plueger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Air Lease Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2019


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

EXHIBIT 31.2

CERTIFICATION OF THE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory B. Willis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Air Lease Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2019


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

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND PRESIDENT PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Air Lease Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2019 (the “Report”), I, John L. Plueger, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2019
	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President (Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION OF THE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Air Lease Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2019 (the “Report”), I, Gregory B. Willis, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(i)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 8, 2019
	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)