AIR LEASE CORP (Form: 10-Q, Received: 05/07/2020 16:30:40)

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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 March 31, 2020

☐

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 May 6, 2020, there were 113,643,462 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 March 31, 2020

TABLE OF CONTENTS

		Page
Note About Forward-Looking Statements		3
PART I—FINANCIAL INFORMATION
Item 1	Financial Statements	4
	Consolidated Balance Sheets—March 31, 2020 and December 31, 2019 (unaudited)	4
	Consolidated Statements of Income and Comprehensive Income—Three Months Ended March 31, 2020 and 2019 (unaudited)	5
	Consolidated Statement of Shareholders’ Equity—Three Months Ended March 31, 2020 and 2019 (unaudited)	6
	Consolidated Statements of Cash Flows—Three Months Ended March 31, 2020 and 2019 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4	Controls and Procedures	33
PART II—OTHER INFORMATION
Item 1	Legal Proceedings	34
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3	Defaults Upon Senior Securities	36
Item 4	Mine Safety Disclosures	36
Item 5	Other Information	36
Item 6	Exhibits	37
	Signatures	39

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:

●

the extent to which the coronavirus (“COVID-19”) pandemic and measures taken to contain its spread ultimately impact our business, results of operation and financial condition;

●

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, including or as a result of technical or other difficulties with aircraft before or after delivery, resulting in our inability to deliver the aircraft to our lessees;

●

other factors affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, including natural disasters, pandemics (such as COVID-19) and measures taken to contain its spread, and governmental actions; 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, 2019, “Part II — Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and other SEC filings, including future SEC filings.

The factors noted above and the risks included in our other SEC filings may be increased or intensified as a result of the COVID-19 pandemic, including if there is a resurgence of the COVID-19 virus after the initial outbreak subsides. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. See the risk factor in “Part II — Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, “The coronavirus (COVID-19) pandemic and related efforts to mitigate the pandemic have impacted our business, and the extent to which the COVID-19 pandemic and measures taken to contain its spread ultimately impact our business will depend on future developments, which are highly uncertain and are difficult to predict.” 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)


	March 31, 2020		December 31, 2019
	(unaudited)
Assets
Cash and cash equivalents	$	732,719	$	317,488
Restricted cash		20,662		20,573
Flight equipment subject to operating leases		21,976,429		21,286,154
Less accumulated depreciation		(2,754,068)		(2,581,817)
		19,222,361		18,704,337
Deposits on flight equipment purchases		1,576,508		1,564,188
Other assets		1,130,095		1,102,569
Total assets	$	22,682,345	$	21,709,155
Liabilities and Shareholders’ Equity
Accrued interest and other payables	$	491,251	$	516,497
Debt financing, net of discounts and issuance costs		14,414,621		13,578,866
Security deposits and maintenance reserves on flight equipment leases		1,122,957		1,097,061
Rentals received in advance		134,779		143,692
Deferred tax liability		782,368		749,495
Total liabilities	$	16,945,976	$	16,085,611
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 March 31, 2020 and December 31, 2019, respectively		100		100
Class A common stock, $0.01 par value; 500,000,000 shares authorized; 113,639,911 and 113,350,267 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		1,136		1,134
Class B non-voting common stock, $0.01 par value; authorized 10,000,000 shares; no shares issued or outstanding		—		—
Paid-in capital		2,775,640		2,777,601
Retained earnings		2,962,368		2,846,106
Accumulated other comprehensive loss		(2,875)		(1,397)
Total shareholders’ equity	$	5,736,369	$	5,623,544
Total liabilities and shareholders’ equity	$	22,682,345	$	21,709,155

(See Notes to Consolidated Financial Statements)

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Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except share and per share amounts)


	Three Months Ended
	March 31,
	2020		2019
	(unaudited)
Revenues
Rental of flight equipment	$	496,687	$	455,739
Aircraft sales, trading and other		14,700		10,312
Total revenues		511,387		466,051
Expenses
Interest		107,541		89,220
Amortization of debt discounts and issuance costs		10,528		8,540
Interest expense		118,069		97,760
Depreciation of flight equipment		188,895		159,471
Selling, general and administrative		28,322		29,702
Stock-based compensation		4,429		4,174
Total expenses		339,715		291,107
Income before taxes		171,672		174,944
Income tax expense		(34,521)		(36,850)
Net income	$	137,151	$	138,094
Preferred stock dividends		(3,844)		—
Net income available to common stockholders	$	133,307	$	138,094

Other Comprehensive Loss:
Change in foreign currency translation adjustment		23,477		—
Change from current period hedged transaction		(25,386)		—
Total tax benefit on other comprehensive loss		431		—
Other Comprehensive (loss)/income available for common stockholders, net of tax		(1,478)		—
Total comprehensive income available for common stockholders	$	131,829	$	138,094

Earnings per share of Class A and Class B common stock:
Basic	$	1.17	$	1.24
Diluted	$	1.17	$	1.23
Weighted-average shares outstanding
Basic		113,471,945		111,018,279
Diluted		113,785,028		112,380,856

Dividends declared per share of Class A common stock	$	0.15	$	0.13

(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-							Accumulated
				Class A			Voting							Other
	Preferred Stock			Common Stock			Common Stock			Paid-in		Retained		Comprehensive
(unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Income		Total
Balance at December 31, 2019	10,000,000	$	100	113,350,267	$	1,134	—	$	—	$	2,777,601	$	2,846,106	$	(1,397)	$	5,623,544
Issuance of common stock upon vesting of restricted stock units and upon exercise of options	—		—	480,978		4	—		—		2,021		—		—		2,025
Dividends declared on preferred stock	—		—	—		—	—		—		—		(3,844)		—		(3,844)
Stock-based compensation	—		—	—		—	—		—		4,429		—		—		4,429
Cash dividends (declared $0.15 per share of Class A common stock)	—		—	—		—	—		—		—		(17,045)		—		(17,045)
Change in foreign currency translation adjustment and from current period hedged transactions	—		—	—		—	—		—		—		—		(1,478)		(1,478)
Tax withholding related to vesting of restricted stock units and exercise of stock options	—		—	(191,334)		(2)	—		—		(8,411)		—		—		(8,413)
Net income	—		—	—		—	—		—		—		137,151		—		137,151
Balance at March 31, 2020	10,000,000	$	100	113,639,911	$	1,136	—	$	—	$	2,775,640	$	2,962,368	$	(2,875)	$	5,736,369

							Class B Non-							Accumulated
				Class A			Voting							Other
	Preferred Stock			Common Stock			Common Stock			Paid-in		Retained		Comprehensive
(unaudited)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Income		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

(See Notes to Consolidated Financial Statements)

Table of Contents

Air Lease Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended
	March 31,
	2020		2019
	(unaudited)
Operating Activities
Net income	$	137,151	$	138,094
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of flight equipment		188,895		159,471
Stock-based compensation		4,429		4,174
Deferred taxes		33,302		36,825
Amortization of debt discounts and issuance costs		10,528		8,540
Amortization of prepaid lease costs		10,454		7,180
Gain on aircraft sales, trading and other activity		(5,554)		(17,167)
Changes in operating assets and liabilities:
Other assets		(88,411)		(93,788)
Accrued interest and other payables		(47,858)		20,789
Rentals received in advance		(8,913)		(2,869)
Net cash provided by operating activities		234,023		261,249
Investing Activities
Acquisition of flight equipment under operating lease		(511,232)		(725,300)
Payments for deposits on flight equipment purchases		(174,589)		(305,284)
Proceeds from aircraft sales, trading and other activity		65,070		247,264
Acquisition of aircraft furnishings, equipment and other assets		(51,576)		(111,162)
Net cash used in investing activities		(672,327)		(894,482)
Financing Activities
Issuance of common stock upon exercise of options		2,025		440
Cash dividends paid on Class A common stock		(17,003)		(14,421)
Preferred dividends paid		(3,844)		—
Tax withholdings on stock-based compensation		(8,413)		(3,587)
Net change in unsecured revolving facility		495,000		225,000
Proceeds from debt financings		1,449,873		995,779
Payments in reduction of debt financings		(1,093,268)		(896,098)
Net proceeds from preferred stock issuance		-		242,241
Debt issuance costs		(2,902)		(2,455)
Security deposits and maintenance reserve receipts		50,083		73,145
Security deposits and maintenance reserve disbursements		(17,927)		(11,567)
Net cash provided by financing activities		853,624		608,477
Net increase/(decrease) in cash		415,320		(24,756)
Cash, cash equivalents and restricted cash at beginning of period		338,061		322,998
Cash, cash equivalents and restricted cash at end of period	$	753,381	$	298,242
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest, including capitalized interest of $13,261 and $16,226 at March 31, 2020 and 2019, respectively	$	141,060	$	137,481
Cash paid for income taxes	$	2,149	$	25
Supplemental Disclosure of Noncash Activities
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment	$	191,318	$	298,962
Cash dividends declared on Class A common stock, not yet paid	$	17,046	$	14,445

(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. The Company is principally engaged in purchasing new commercial jet transport aircraft directly from manufacturers, such as The Boeing Company (“Boeing”) and Airbus S.A.S (“Airbus”). The Company leases these aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of March 31, 2020, the Company owned a fleet of 300 aircraft in its operating lease portfolio, managed 82 aircraft and had 399 aircraft on order with aircraft manufacturers. In addition to its leasing activities, the Company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and other investors. The Company also provides fleet management services to investors and owners of aircraft portfolios for a management fee.

Note 2. Basis of Preparation and Critical Accounting Policies

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

The accompanying unaudited Consolidated Financial Statements include all adjustments, consisting only of normal, recurring adjustments, which are in the opinion of management necessary to present fairly the Company’s financial position, results of operations and cash flows at March 31, 2020, and for all periods presented. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results expected for the year ending December 31, 2020. These financial statements and related notes 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, 2019.

Note 3. Recently Issued Accounting Standards

On April 10, 2020, the Financial Accounting Standards Board (“FASB”) issued a question-and-answer document regarding accounting for lease concessions and other effects of the coronavirus (“COVID-19”) pandemic. The document clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under Leases ASC 842. The Company has chosen to continue accounting for lease concessions in accordance with lease modification accounting guidance in Topic 842.

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Note 4. Debt Financing

The Company’s consolidated debt as of March 31, 2020 and December 31, 2019 (dollars in thousands):


	March 31,		December 31,
	2020		2019
Unsecured
Senior notes	$	12,834,333	$	12,357,811
Term financings		877,950		883,050
Revolving credit facility		515,000		20,000
Total unsecured debt financing		14,227,283		13,260,861
Secured
Term financings		322,320		428,824
Export credit financing		29,947		31,610
Total secured debt financing		352,267		460,434

Total debt financing		14,579,550		13,721,295
Less: Debt discounts and issuance costs		(164,929)		(142,429)
Debt financing, net of discounts and issuance costs	$	14,414,621	$	13,578,866

The Company’s secured obligations as of March 31, 2020 and December 31, 2019 are summarized below (dollars in thousands):


	March 31,		December 31,
	2020		2019
Nonrecourse	$	120,381	$	128,460
Recourse		231,886		331,974
Total secured debt financing	$	352,267	$	460,434
Number of aircraft pledged as collateral		12		15
Net book value of aircraft pledged as collateral	$	652,351	$	890,693

Senior unsecured notes (including Medium-Term Note Program)

As of March 31, 2020, the Company had $12.8 billion in senior unsecured notes outstanding. As of December 31, 2019, the Company had $12.4 billion in senior unsecured notes outstanding.

During the three months ended March 31, 2020, the Company issued $1.4 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $750.0 million due 2025 at a fixed rate of 2.30% and (ii) $650.0 million due 2030 at a fixed rate of 3.00%.

Unsecured revolving credit facilities

The Company has an unsecured revolving credit facility with JPMorgan Chase Bank, N.A. as agent (the “Revolving Credit Facility”). During the quarter ended March 31, 2020, the Company increased the aggregate capacity of the Revolving Credit Facility by $250.0 million to $6.1 billion. The total amount outstanding under the Revolving Credit Facility was $515.0 million and $20.0 million as of March 31, 2020 and December 31, 2019, respectively.

As of March 31, 2020, borrowings under the 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. The Company is 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 the Company’s debt) in respect of total commitments under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are used to finance the Company’s working capital needs in the ordinary course of business and for other general corporate purposes.

On May 5, 2020, commitments totaling $92.7 million of the Revolving Credit Facility matured. Lenders hold revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0

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million that mature on May 5, 2022 and commitments totaling $5.0 million that mature on May 5, 2021. As of May 7, 2020, after giving effect to the commitments that matured on May 5, 2020, the aggregate capacity of the Revolving Credit Facility was approximately $6.0 billion.

Maturities

Maturities of debt outstanding as of March 31, 2020 are as follows (in thousands):


Years ending December 31,
2020	$	319,372
2021		2,049,294
2022		2,751,269
2023		2,988,154
2024		1,534,552
Thereafter		4,936,909
Total	$	14,579,550

Note 5. Commitments and Contingencies

As of March 31, 2020, updated through May 7, 2020, the Company had commitments to acquire a total of 399 new aircraft for delivery through 2026 as follows:


	Estimated Delivery Years
Aircraft Type	2020	2021	2022	2023	2024	Thereafter	Total
Airbus A220-300⁽¹⁾	—	—	8	13	10	19	50
Airbus A320/321neo⁽²⁾	13	24	26	26	29	36	154
Airbus A330-900neo	—	3	7	5	—	—	15
Airbus A350-900/1000	3	3	6	2	6	—	20
Boeing 737-7/8/9 MAX	2	28	24	42	30	—	126
Boeing 787-9/10	8	6	8	10	2	—	34
Total	26	64	79	98	77	55	399

(1)	In addition to the Company’s commitments, as of March 31, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028.

(2)	Our Airbus A320/321neo aircraft orders include 47 long-range variants and 29 extra long-range variants.

Pursuant to the Company’s purchase agreements with Boeing and Airbus for new aircraft, the Company and each manufacturer agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, and in the last several years manufacturing delays have significantly impacted the Company’s actual delivery dates. For several years, the Company has experienced delivery delays for certain of its Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) began on March 10, 2019, and remains in effect. As a result, Boeing has temporarily halted production and delivery of all 737 MAX aircraft and our new 737 MAX aircraft have been significantly delayed. Lifting of the grounding is subject to the approval of global regulatory authorities and the Company is unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic. The Company is currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of, and the delivery delays associated with the 737 MAX aircraft that the Company owns or has on order, which could result in changes to the commitment table.

The ongoing COVID-19 pandemic has caused delivery delays and is expected to continue to cause delays of aircraft in the Company’s orderbook. As discussed in further detail in Note 13, “Subsequent Events,” the COVID-19 pandemic has resulted in numerous travel restrictions and business shutdowns, including a temporary closure of final aircraft assembly facilities for each of Boeing and Airbus. Given the dynamic nature of the ongoing COVID-19 pandemic, the Company is in ongoing discussions with Boeing and Airbus to determine the impact and duration of delivery delays. However, the Company is not yet able to determine the impact of the delivery delays, and as such, the delivery dates listed above could materially change.

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The aircraft purchase commitments discussed above also could be impacted by lease cancellation. The Company’s leases typically provide that the Company and the airline customer each have a cancellation right related to certain aircraft delivery delays. Our purchase agreements with Boeing and Airbus also generally provide that the Company and the manufacturer each have cancellation rights that typically are parallel with the Company’s cancellation rights in its leases. Our leases and our purchase agreements with Boeing and Airbus typically provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause.

Commitments for the acquisition of these aircraft, calculated at an estimated aggregate purchase price (including adjustments for anticipated inflation) of approximately $26.8 billion at March 31, 2020, updated through May 7, 2020, are due as follows (in thousands):


Years ending December 31,
2020	$	2,206,538
2021		4,900,832
2022		6,519,111
2023		6,171,228
2024		4,456,237
Thereafter		2,542,133
Total	$	26,796,079

The Company has made non-refundable deposits on the aircraft for which the Company has commitments to purchase of $1.6 billion as of March 31, 2020 and December 31, 2019, respectively, which are subject to manufacturer performance commitments. If the Company is unable to satisfy its purchase commitments, the Company may be forced to forfeit its deposits. Further, the Company would be exposed to breach of contract claims by our lessees and manufacturers.

Note 6. Rental Income

At March 31, 2020, minimum future rentals on non-cancellable operating leases of flight equipment in the Company’s fleet, which have been delivered as of March 31, 2020, are as follows (in thousands):


Years ending December 31,
2020 (excluding the three months ended March 31, 2020)	$	1,533,739
2021		1,987,225
2022		1,864,731
2023		1,666,500
2024		1,521,571
Thereafter		5,656,114
Total	$	14,229,880

Note 7. Earnings Per Share

Basic net earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if the effect of including these shares would be anti-dilutive. The Company’s two classes of common stock, Class A and Class B Non-Voting, have equal rights to dividends and income, and therefore, basic and diluted earnings per share are the same for each class of common stock. As of March 31, 2020, the Company did not have any Class B Non-Voting common stock outstanding.

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Diluted net 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 months ended March 31, 2020, 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 990,100 and 940,470 shares related to restricted stock units for which the performance metric had yet to be achieved as of March 31, 2020 and 2019, respectively.

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


	Three Months Ended March 31,
	2020		2019

Basic earnings per share:
Numerator
Net income	$	137,151	$	138,094
Preferred stock dividends		(3,844)		—
Net income available to common stockholders	$	133,307	$	138,094
Denominator
Weighted-average common shares outstanding		113,471,945		111,018,279
Basic earnings per share	$	1.17	$	1.24
Diluted earnings per share:
Numerator
Net income	$	137,151	$	138,094
Preferred stock dividends		(3,844)		—
Net income available to common stockholders	$	133,307	$	138,094
Denominator
Number of shares used in basic computation		113,471,945		111,018,279
Weighted-average effect of dilutive securities		313,083		1,362,577
Number of shares used in per share computation		113,785,028		112,380,856
Diluted earnings per share	$	1.17	$	1.23

Note 8. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring and Non-recurring Basis

The Company had a cross-currency swap related to its Canadian dollar notes issued in December 2019. The fair value of the swap as a foreign currency exchange derivative is categorized as a Level 2 measurement in the fair value hierarchy and is measured on a recurring basis. As of March 31, 2020, the estimated fair value of the foreign currency exchange derivative liability was $19.9 million. As of December 31, 2019, the estimated fair value of the foreign currency exchange derivative asset was $5.4 million.

Financial Instruments Not Measured at Fair Values

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 March 31, 2020 was approximately $13.1 billion compared to a book value of $14.6 billion. The estimated fair value of debt financing as of December 31, 2019 was $14.1 billion compared to a book value of $13.7 billion.

The following financial instruments are not measured at fair value on the Company’s Consolidated Balance Sheets at March 31, 2020, but require disclosure of their fair values: cash and cash equivalents and restricted cash. The estimated fair value of such instruments at March 31, 2020 and December 31, 2019 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.

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Note 9. Shareholders’ Equity

The Company was authorized to issue 500,000,000 shares of Class A common stock, $0.01 par value, at March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, the Company had 113,639,911 and 113,350,267 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 March 31, 2020 and December 31, 2019.

The Company was authorized to issue 50,000,000 shares of preferred stock, $0.01 par value, at March 31, 2020 and December 31, 2019. As of March 31, 2020 and December 31, 2019, the Company had 10,000,000 shares of preferred stock issued and outstanding with an aggregate liquidation preference of $250.0 million.

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 Series A 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 3.650% 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 10. 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 March 31, 2020, the number of stock options (“Stock Options”) and restricted stock units (“RSUs”) authorized under the 2014 Plan is approximately 4,948,064. Stock Options are generally granted for a term of 10 years and 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 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 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 $4.4 million and $4.2 million of stock-based compensation expense related to RSUs for the three months ended March 31, 2020 and 2019, respectively.

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Stock Options

A summary of stock option activity for the three months ended March 31, 2020 follows:


				Remaining	Aggregate
		Exercise		Contractual Term	Intrinsic Value
	Shares	Price		(in years)	(in thousands)⁽¹⁾
Balance at December 31, 2019	364,153	$	22.90	0.75	$	8,965
Granted	—	$	—	—	$	—
Exercised	(101,200)	$	20.00	—	$	1,460
Forfeited/canceled	—	$	—	—	$	—
Balance at March 31, 2020	262,953	$	24.02	0.62	$	306
Vested and exercisable as of March 31, 2020	262,953	$	24.02	0.62	$	306

(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.

All of the Company’s outstanding employee stock options had fully vested as of June 30, 2013. As of March 31, 2020 there were no unrecognized compensation costs related to outstanding stock options. For the three months ended March 31, 2020 and 2019 there were no stock-based compensation expenses related to Stock Options.

The following table summarizes additional information regarding outstanding exercisable and vested stock options at March 31, 2020:



	Stock Options Exercisable
	and Vested
		Weighted-
		Average
	Number of	Remaining Life
Range of exercise prices	Shares	(in years)
$20.00	142,953	0.24
$28.80	120,000	1.07
$20.00 - $28.80	262,953	0.62

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 book value and time based 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.

During the three months ended March 31, 2020, the Company granted 527,246 RSUs of which 143,237 are TSR RSUs. The following table summarizes the activities for our unvested RSUs for the three months ended March 31, 2020:


	Unvested Restricted Stock Units
		Weighted-Average
	Number of	Grant-Date
	Shares	Fair Value
Unvested at December 31, 2019	1,254,904	$	43.62
Granted	527,246	$	45.85
Vested	(379,778)	$	47.54
Forfeited/canceled	—	$	—
Unvested at March 31, 2020	1,402,372	$	43.40
Expected to vest after March 31, 2020	1,499,715	$	43.26

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As of March 31, 2020, there was $41.7 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 2.14 years.

Note 11. Aircraft Under Management

As of March 31, 2020, we managed 82 aircraft across three aircraft management platforms. We managed 52 aircraft through our Thunderbolt platform, 26 aircraft through the Blackbird investment funds and four on behalf of a financial institution.

We managed 26 aircraft on behalf of third-party investors, through two investment funds, Blackbird I and Blackbird II. These funds invest in commercial aircraft and lease them to airlines throughout the world. We provide management services to these funds for a fee. As of March 31, 2020, the Company's non-controlling interests in each fund is 9.5% and are accounted for under the equity method of accounting. The Company’s investment in these funds aggregated $48.5 million and $46.5 million as of March 31, 2020 and December 31, 2019, respectively, and is included in Other assets on the Consolidated Balance Sheets. We continue to source aircraft investment opportunities for Blackbird II. As of March 31, 2020, Blackbird II has remaining equity capital commitments to acquire up to approximately $1.2 billion in aircraft assets, for which we have committed to fund up to $29.1 million related to these potential investments.

Additionally, we continue to manage aircraft that we sell through our Thunderbolt platform. As of March 31, 2020, we managed 52 aircraft sold across three separate transactions. We have non-controlling interests in two of these entities of approximately 5.0%, which are accounted for under the cost method of accounting. During the period ending March 31, 2020, we completed the sale of three aircraft from our operating lease portfolio through our Thunderbolt platform. The Company’s total investment in aircraft sold through our Thunderbolt platform was $9.9 million as of March 31, 2020 and December 31, 2019, and is included in Other assets on the Consolidated Balance Sheets.

Note 12. Flight Equipment Held for Sale

As of March 31, 2020, we had five aircraft, with a carrying value of $175.1 million, which were held for sale and included in Other assets on the Consolidated Balance Sheets. These aircraft will be sold through our Thunderbolt platform and we expect the sale of all five aircraft to be completed in 2020. We cease recognition of depreciation expense once an aircraft is classified as held for sale. As of December 31, 2019, we had eight aircraft classified as held for sale, with a carrying value of $249.6 million.

Note 13. Subsequent Events

Dividend Distribution

On May 6, 2020, our board of directors approved a quarterly cash dividend of $0.15 per share on our outstanding Class A common stock. The dividend will be paid on July 9, 2020 to holders of record of our Class A common stock as of June 5, 2020. 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 June 15, 2020 to holders of record of our Series A Preferred Stock as of May 31, 2020.

COVID-19 Pandemic

On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by WHO. On March 11, 2020, WHO characterized the COVID-19 outbreak as a pandemic. The COVID-19 pandemic has resulted in governmental authorities around the world implementing numerous measures to try to contain the virus, such as travel bans and restrictions, border closures, quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns (subject to exceptions for certain essential operations and businesses). These measures, coupled with a decrease in consumer spending on travel as a result of COVID-19, have materially impacted airline traffic and operations throughout the world, including for our airline customers. It is unclear how long these restrictions will remain in place and they may remain in place in some form for an extended period of time. Aircraft manufacturers and suppliers also have been impacted, including causing the temporary closure of Boeing and Airbus’ final assembly facilities and also closures of various facilities across their supply chain. As the virus has spread in March and April, the relatively limited impacts the Company saw in Asia in the early part of the year have accelerated and are now occurring throughout the rest of the world, with a rapid decline in global air travel.

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Beginning in the first quarter of 2020 and continuing in the second quarter, the Company began receiving requests from most of its customers for accommodations such as deferral of lease payments or other lease concessions. The Company evaluates such requests on a case-by-case basis and has worked out accommodation arrangements with approximately 46% of its lessees, generally in the form of partial lease deferrals for payments due in the first and second quarter of 2020, typically with a short-term repayment period, with the majority of the deferrals repaid by the end of this year. In many cases, lease extensions were also negotiated as part of the deferral accommodations. The Company remains in active discussions with its other airline customers and may continue to provide accommodation arrangements on a case-by-case basis.

While lease deferrals may delay our receipt of cash, we generally recognize the lease revenue during the period even if a deferral is provided to the lessee, unless we determine collection is not reasonably assured. We monitor all lessees with past due lease payments and discuss relevant operational and financial issues facing those lessees in order to determine an appropriate course of action. In addition, if collection is not reasonably assured, we will not recognize rental income for amounts due under our lease contracts and will recognize revenue for such lessees on a cash basis.

Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of COVID-19 on its business, results of operations and financial condition for the foreseeable future.

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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 (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 other investors. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our 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.

COVID-19 Pandemic

On January 30, 2020, the spread of the COVID-19 outbreak was declared a Public Health Emergency of International Concern by the World Health Organization (“WHO”). On March 11, 2020, WHO characterized the COVID-19 outbreak as a pandemic. The COVID-19 pandemic has resulted in governmental authorities around the world implementing numerous measures to try to contain the virus, such as travel bans and restrictions, border closures, quarantines, shelter-in-place or total lock-down orders and business limitations and shutdowns (subject to exceptions for certain essential operations and businesses). It is unclear how long these restrictions will remain in place and they may remain in place in some form for an extended period of time. These measures, coupled with a decrease in consumer spending on travel as a result of COVID-19, have materially impacted airline traffic and operations throughout the world, including for our airline customers. Aircraft manufacturers and suppliers also have been impacted, including causing the temporary closure of Boeing and Airbus’ final assembly facilities and also closures of various facilities across their supply chain.

In January and February of 2020, the primary impact of the virus was limited to Asia. As the virus has spread in March and April, the relatively limited impacts we saw in Asia in the early part of the year have accelerated and are now occurring throughout the rest of the world, with a rapid decline in global air travel.

Beginning in the first quarter of 2020 and continuing in the second quarter, we began receiving requests from our customers for accommodations such as deferral of lease payments or other lease concessions. As of May 7, 2020, most of our lessees have requested some form of rental relief. We evaluate such requests on a case-by-case basis and have worked out accommodation arrangements with approximately 46% of our lessees, generally in the form of partial lease deferrals for payments due in the first and second quarter of 2020, typically with a short-term repayment period, with the majority of the deferrals repaid by the end of this year. In many cases, lease extensions were also negotiated as part of the deferral accommodations. As of May 7, 2020, the Company has agreed to defer approximately $124.6 million in lease payments which represents approximately 6% of our total revenue for fiscal year 2019. We remain in active discussions with our other airline customers and expect to continue to provide accommodation arrangements on a case-by-case basis.

Our collection rate during the first quarter of 2020 and the month of April 2020 was 90% and 86%, respectively. Collection rate is defined as the sum of cash collected from lease rentals and maintenance reserves, and includes cash recovered from outstanding receivables from previous periods, as a percentage of the total contracted receivables due for the period. The collection rate is calculated after giving effect to lease deferral arrangements made as of May 7, 2020. Our lease utilization rate for the period ended March 31, 2020 was 99.7%. For the month of April 2020, our lease utilization rate was 99.8%. The lease utilization rate is calculated based on the number of days each aircraft was subject to a lease or letter of intent during the period, weighted by the net book value of the aircraft. It is possible that our collection rate or lease utilization rate could decline in the near future as a result of accommodation arrangements we

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have made or could make in the future, including providing additional lease concessions to airline customers already receiving a concession or if our airline customers do not make their lease payments even absent lease concessions.

Depending on the severity and longevity of the COVID-19 pandemic, the efforts taken to reduce its spread and the possibility of a resurgence of COVID-19, some of our lessees may return aircraft to us before the return date in their lease agreement or experience insolvency or initiate bankruptcy or similar proceedings that result in aircraft being returned to us. If this occurs, we may not be able to reposition the aircraft with other airlines as quickly as we have historically been able to do or we may incur increased costs in repositioning such aircraft. As a result, our revenues and collection rates would decline. In addition, as of March 31, 2020, we had commitments to purchase 399 aircraft from Airbus and Boeing for delivery through 2026, and we had placed approximately 84% of our committed order book on long-term leases for aircraft delivering through 2022. The impact of the COVID-19 pandemic on airlines could result in the cancellation of leases that we have in place for our committed orderbook or a decline in the number of aircraft in our order book that we can place into leases prior to their delivery. If we are not able to place aircraft from our orderbook into leases prior to delivery, it may cause a downward pressure on our lease rates or require us to sell aircraft in our fleet sooner than anticipated.

COVID-19 has disrupted some of our operations. While our employees are working remotely, due to travel restrictions and business limitations and shutdowns, some transitions of our aircraft from one lessee to another lessee have been delayed. Some planned aircraft sales have been delayed or terminated as a result of business limitations and shutdowns. We expect these disruptions to continue and they could worsen. We also expect that demand for used aircraft will decline in the near-term and that we will sell fewer used aircraft in 2020 and perhaps 2021 than we initially planned to sell.

We also experienced delivery delays related to COVID-19. While the commitment table in Note 5, “Commitments and Contingencies” above and the discussion of “Our Fleet” below reflects our current delivery expectations, we are in ongoing discussions with Boeing and Airbus to determine the extent and duration of delivery delays. The delays could result in a cancellation of leases for those aircraft. Pursuant to such contractual provisions, we are in discussions with lessees who are considering cancelling a small number of our 737 MAX leases with us. Given the dynamic nature of the ongoing COVID-19 pandemic, we are not yet able to determine the full impact of the delivery delays, and we expect such delivery dates could materially change, and as a result, our future growth will be negatively impacted.

COVID-19 has caused disruption in the financial markets and have caused volatility and uncertainty in the bond market. We finance the purchase of aircraft and our business with available cash balances, internally generated funds, including through aircraft sales and trading activity, and debt financings. As of March 31, 2020, we had an undrawn balance of $5.6 billion under our committed unsecured revolving credit facility with JPMorgan Chase Bank, N.A. as agent, which reflects our recent increase in our facility size by $250.0 million in March 2020. We believe we continue to have access to the unsecured debt capital markets, although we have not accessed this market since January 2020 when we issued $1.4 billion in aggregate principal amount of Medium-Term Notes. We could also seek to enter into more secured debt financings, including financings supported through the Export-Import Bank of the United States or other export credit agencies (“ECAs”) to fund future aircraft deliveries from our orderbook. Our liquidity is discussed below in more detail under “Liquidity and Capital Resources.”

While we cannot currently reasonably estimate the extent to which the COVID-19 pandemic and measures taken to contain its spread will ultimately impact our business, we believe the airline industry will eventually recover and aircraft travel will return to historical levels over the long term. We believe we are well positioned to offer solutions for airlines, because we can offer the ability to lease younger, more fuel-efficient aircraft at a time when airlines will be focused on managing costs.

As the COVID-19 pandemic and efforts to mitigate its spread continue, we expect our business, results of operations and financial condition to be negatively impacted, and could have a larger impact on our results of operations for the second quarter and remainder of this year than has been reflected in our first quarter results for 2020. Depending on the severity and longevity of the COVID-19 pandemic, the related efforts taken to reduce its spread, and the possibility of a resurgence of COVID-19, the COVID-19 pandemic could have a material, adverse impact on future revenue growth, liquidity and cash flow. Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our business, results of operations and financial condition for the foreseeable future.

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First Quarter Overview

During the three months ended March 31, 2020, we purchased and took delivery of eight aircraft from our new order pipeline, purchased one aircraft in the secondary market and sold three aircraft from our held for sale portfolio ending the period with a total of 300 aircraft with a net book value of $19.2 billion. The weighted average lease term remaining on our operating lease portfolio was 7.2 years and the weighted average age of our fleet was 3.7 years as of March 31, 2020. Our fleet grew by 2.8% based on net book value of $19.2 billion as of March 31, 2020, compared to $18.7 billion as of December 31, 2019. In addition, we had a managed fleet of 82 aircraft as of March 31, 2020, compared to a managed fleet of 83 aircraft as of December 31, 2019. We had a globally diversified customer base comprised of 108 airlines in 61 countries. As of May 7, 2020, all aircraft, except for two aircraft, in our operating lease portfolio, were subject to letters of intent or lease agreements.

During the first three months of 2020, we entered into supplemental agreements with Boeing to convert nine Boeing 737 MAX to three Boeing 787-9 aircraft. As of March 31, 2020, we had commitments to purchase 399 aircraft from Airbus and Boeing for delivery through 2026, with an estimated aggregate commitment of $26.8 billion. We ended the first quarter of 2020 with $28.8 billion in committed minimum future rental payments and placed approximately 84% of our committed order book on long-term leases for aircraft delivering through 2022. This includes $14.2 billion in contracted minimum rental payments on the aircraft in our existing fleet and $14.6 billion in minimum future rental payments related to aircraft which will be delivered during the remainder of 2020 through 2024.

In November 2019, we entered into an agreement to sell 19 aircraft through our Thunderbolt platform to investors. Our Thunderbolt platform facilitates the sale of mid-life aircraft to investors while allowing to continue the management of these aircraft for a fee. Through this transaction, we retained a non-controlling interest of approximately 5.0% in the entity. During the three months ended March 31, 2020, we sold a total of three aircraft into our Thunderbolt platform for proceeds of approximately $65.2 million. As of March 31, 2020, we completed the sales of 14 of the 19 aircraft and expect to complete the sale of the remaining five aircraft in 2020. As of March 31, 2020 these five aircraft were classified as held for sale and included in Other assets on our Consolidated Balance Sheets

During the first three months of 2020, we issued $1.4 billion in Medium-Term Notes, with maturities ranging between 2025 and 2030 and that bear interest at fixed rates between 2.30% and 3.00%. In addition, we increased the aggregate capacity of our committed unsecured revolving credit facility by $250.0 million to $6.1 billion, ending the quarter with total liquidity of $6.3 billion. We ended the first quarter of 2020 with total debt outstanding, net of discounts and issuance costs, of $14.4 billion, of which 86.4% was at a fixed rate and 97.6% of which was unsecured. Our composite cost of funds was 3.16% as of March 31, 2020.

Our total revenues for the quarter ended March 31, 2020 increased by 9.7% to $511.4 million, compared to the quarter ended March 31, 2019. This increase was principally driven by the continued growth of our fleet, partially offset by a lower amount of end of lease revenue recognized as compared to the same period in 2019. Our net income available to common stockholders for the quarter ended March 31, 2020 was $133.3 million compared to $138.1 million for the quarter ended March 31, 2019. Our diluted earnings per share for the quarter ended March 31, 2020 was $1.17 compared to $1.23 for the quarter ended March 31, 2019. The decrease in net income available to common stockholders in the first quarter of 2020 as compared to 2019 was primarily due to the decrease in the amount of end of lease revenue recognized.

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 March 31, 2020 was $182.8 million or $1.61 per diluted share, compared to $187.7 million or $1.67 per diluted share for the three months ended March 31, 2019. The decrease in our adjusted net income before income taxes was primarily due to the decrease in the amount of end of lease revenue recognized. Our adjusted pre-tax profit margin for the three months ended March 31, 2020 was 35.7% compared to 40.3% for the three months ended March 31, 2019. 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.

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Our Fleet

Portfolio metrics of our fleet as of March 31, 2020 and December 31, 2019 are as follows:


	March 31, 2020		December 31, 2019

Aggregate fleet net book value	$	19.2 billion	$	18.7 billion
Weighted-average fleet age⁽¹⁾		3.7 years		3.5 years
Weighted-average remaining lease term⁽¹⁾		7.2 years		7.2 years

Owned fleet⁽²⁾		300		292
Managed fleet⁽²⁾		82		83
Aircraft on order		399		413
Aircraft purchase options⁽³⁾		25		70
Total		806		858

Current fleet contracted rentals	$	14.2 billion	$	14.1 billion
Committed fleet rentals	$	14.6 billion	$	15.0 billion
Total committed rentals	$	28.8 billion	$	29.1 billion

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

(2)

As of March 31, 2020 and December 31, 2019, we had five and eight aircraft, respectively, classified as flight equipment held for sale which are included in Other assets on the Consolidated Balance Sheet. All of these aircraft are excluded from the owned fleet count and included in our managed fleet count.

(3)	As of March 31, 2020, we had options to acquire up to 25 Airbus A220 aircraft. As of December 31, 2019, we had options to acquire up to 45 Boeing 737-8 MAX aircraft, that have since expired without being exercised, and up to 25 Airbus A220 aircraft.

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 March 31, 2020 and December 31, 2019 (in thousands, except percentages):


	March 31, 2020				December 31, 2019
	Net Book				Net Book
Region	Value		% of Total		Value		% of Total
Europe	$	5,624,068	29.2	%	$	5,438,775	29.0	%
Asia (excluding China)		5,316,199	27.7	%		4,985,525	26.7	%
China		2,878,482	15.0	%		2,930,752	15.7	%
The Middle East and Africa		2,326,758	12.1	%		2,242,215	12.0	%
Central America, South America and Mexico		1,106,317	5.8	%		1,116,814	6.0	%
U.S. and Canada		986,031	5.1	%		996,398	5.3	%
Pacific, Australia and New Zealand		984,506	5.1	%		993,858	5.3	%
Total	$	19,222,361	100.0	%	$	18,704,337	100.0	%

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The following table sets forth the number of aircraft we owned by aircraft type as of March 31, 2020 and December 31, 2019:


	March 31, 2020			December 31, 2019
	Number of			Number of
Aircraft type	Aircraft	% of Total		Aircraft	% of Total
Airbus A319-100	1	0.3	%	1	0.3	%
Airbus A320-200	21	7.0	%	21	7.2	%
Airbus A320-200neo	15	5.0	%	13	4.5	%
Airbus A321-200	28	9.3	%	28	9.6	%
Airbus A321-200neo	39	13.1	%	35	12.0	%
Airbus A330-200	12	4.0	%	12	4.1	%
Airbus A330-300	8	2.7	%	7	2.4	%
Airbus A330-900neo	7	2.3	%	7	2.4	%
Airbus A350-900	10	3.3	%	10	3.4	%
Boeing 737-700	4	1.3	%	4	1.4	%
Boeing 737-800	85	28.4	%	85	29.1	%
Boeing 737-8 MAX	15	5.0	%	15	5.1	%
Boeing 767-300ER	—	—	%	1	0.3	%
Boeing 777-200ER	1	0.3	%	1	0.3	%
Boeing 777-300ER	24	8.0	%	24	8.2	%
Boeing 787-9	23	7.7	%	23	8.0	%
Boeing 787-10	6	2.0	%	4	1.4	%
Embraer E190	1	0.3	%	1	0.3	%
Total	300	100.0	%	292	100.0	%

As of March 31, 2020, updated through May 7, 2020, the Company had commitments to acquire a total of 399 new aircraft for delivery through 2026 as follows:


	Estimated Delivery Years
Aircraft Type	2020	2021	2022	2023	2024	Thereafter	Total
Airbus A220-300⁽¹⁾	—	—	8	13	10	19	50
Airbus A320/321neo⁽²⁾	13	24	26	26	29	36	154
Airbus A330-900neo	—	3	7	5	0	—	15
Airbus A350-900/1000	3	3	6	2	6	—	20
Boeing 737-7/8/9 MAX	2	28	24	42	30	—	126
Boeing 787-9/10	8	6	8	10	2	—	34
Total	26	64	79	98	77	55	399

(1)	In addition to the Company’s commitments, as of March 31, 2020, the Company had options to acquire up to 25 Airbus A220 aircraft. If exercised, deliveries of these aircraft are scheduled to commence in 2023 and continue through 2028.

(2)	Our Airbus A320/321neo aircraft orders include 47 long-range variants and 29 extra long-range variants.

Aircraft Delivery Delays

Pursuant to our purchase agreements with Boeing and Airbus for new aircraft, we and each manufacturer agree to contractual delivery dates for each aircraft ordered. These dates can change for a variety of reasons, and in the last several years manufacturing delays have significantly impacted our actual delivery dates. For several years, we have experienced delivery delays for certain of our Airbus orderbook aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. The worldwide grounding of the Boeing 737 MAX aircraft (“737 MAX”) began on March 10, 2019, and remains in effect. As a result, Boeing has temporarily halted production and delivery of all 737 MAX aircraft and our new 737 MAX aircraft have been significantly delayed. Lifting of the grounding is subject to the approval of global regulatory authorities and we are unable to speculate as to when this may occur. Even after the grounding is lifted, Boeing’s ability to deliver 737 MAX aircraft may be impacted as a result of the COVID-19 pandemic. We are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of, and the delivery delays associated with the 737 MAX aircraft that we own or have on order, which could result in changes to the commitment table.

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The ongoing COVID-19 pandemic has caused delivery delays of aircraft in our orderbook and is expected to continue to cause delays of aircraft. As discussed in further detail above in “COVID-19 Pandemic,” the pandemic has resulted in numerous travel restrictions and business shutdowns, including the temporary closure of final aircraft assembly facilities for each of Boeing and Airbus. Given the dynamic nature of the ongoing COVID-19 pandemic, we are in ongoing discussions with Boeing and Airbus to determine the impact and duration of delivery delays. However, we are not yet able to determine the impact of the delivery delays, and as such, the delivery dates listed above could materially change.

The aircraft purchase commitments discussed above also could be impacted by lease cancellation. Our leases typically provide that we and our airline customer each have a cancellation right related to certain aircraft delivery delays. Our purchase agreements with Boeing and Airbus also generally provide that the Company and the manufacturer each have cancellation rights that typically are parallel with our cancellation rights in our leases. Our leases and our purchase agreements with Boeing and Airbus generally provide for cancellation rights starting at one year after the original contractual delivery date, regardless of cause. Pursuant to such contractual provisions, we are in discussions with lessees who are considering cancelling a small number of 737 MAX leases with us.

The following table, which is subject to change based on Airbus and Boeing delivery delays, shows the number of new aircraft scheduled to be delivered as of March 31, 2020. As noted above, we expect delivery delays for all aircraft deliveries in our orderbook, including Boeing 737 MAX delivery delays after the grounding of such aircraft is lifted. We are currently in discussions with Boeing and Airbus to determine the extent and duration of delivery delays, but given the dynamic nature of the ongoing COVID-19 pandemic, we are not yet able to determine the full impact of the delivery delays.


	Number of	Number
Delivery Year	Aircraft	Leased	% Leased
2020	26	26	100.0	%
2021	64	62	96.9	%
2022	79	54	68.4	%
2023	98	34	34.7	%
2024	77	10	13.0	%
Thereafter	55	—	—	%
Total	399	186

Aircraft Industry and Sources of Revenues

Our revenues are principally derived from operating leases with scheduled and charter airlines throughout the world. As of March 31, 2020, we have a globally diversified customer base comprised of 108 airlines in 61 different countries, with over 95% of our business revenues from airlines domiciled outside of the U.S., and we anticipate that most of our revenues in the future will be generated from foreign customers.

Performance of the commercial airline industry is linked to global economic health and development, which may be negatively impacted by economic disruption, macroeconomic conditions and geopolitical and policy risks, among other factors. COVID-19 has caused significant disruption to the commercial airline industry resulting in a meaningful decline in air travel demand and subsequent flight cancellations, negatively impacting airlines, aircraft manufacturers, and other related businesses. The International Air Transport Association (“IATA”) reported that, primarily due to COVID-19, passenger traffic fell 22% year-over-year for the first three months of 2020 and 53% year-over-year for March 2020 and IATA expects airline passenger volumes to fall 48% in 2020 as compared to 2019.

We expect a significant increase in financial difficulties for our airline customers through 2020 and perhaps longer, including the need for lease deferrals or other lease concessions, requests to return aircraft early or defaults. We expect increased airline reorganizations, liquidations, or other forms of bankruptcies, which may include our aircraft customers and result in the early return of aircraft or changes in our lease terms. As of the date of this filing, we had six aircraft across three airlines which were subject to various forms of insolvency proceedings.

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Approximately 75% of the net book value of our fleet are leased to flag carriers or airlines that have some form of governmental ownership; however, this does not guarantee our ability to collect contractual rent payments. We believe that having a large portion of the net book value of our fleet on lease with flag carriers or airlines with some form of governmental ownership, coupled with the overall quality of our aircraft and security deposits and maintenance reserves under our leases will help mitigate our customer risk.

We expect the aviation industry to recover over time from the impact of COVID-19, and in the long-term we remain optimistic. While we believe some aircraft lessors may consolidate or cease operations as a result of the pandemic, we believe the overall aircraft leasing industry has remained resilient over time across a variety of global economic conditions and remain optimistic about the long-term fundamentals of our business. As a result of the COVID-19 pandemic, some airlines have accelerated their plans to retire older, less fuel-efficient aircraft that have higher maintenance costs in the current environment, and we anticipate that airlines will continue to accelerate the retirement of this type of aircraft, ultimately increasing demand for newer aircraft over time. We also anticipate that when airlines need to add new aircraft to their fleet, they will increasingly elect to lease aircraft instead of purchasing aircraft to reduce capital requirements and manage other operating expenses, and that we will benefit from that trend.

We and airlines around the world have continued to experience delivery delays from Boeing and Airbus, from which we have 399 aircraft on order as of March 31, 2020, as discussed above in “Our Fleet.” The Airbus delays and the 737 MAX grounding have impacted the growth of our company as well as the growth of our airline customers, passenger growth and airline profitability and we expect this to continue. The impact of COVID-19 has also resulted in temporary closures and lower production rates and deliveries for both Boeing and Airbus, which is expected to cause further delivery delays.

The worldwide grounding of the 737 MAX began on March 10, 2019, and remains in effect. As a result, Boeing has temporarily halted production and delivery of all 737 MAX aircraft. Since March of 2019, airlines affected by this grounding have had to adjust flight schedules or cancel flights, back fill aircraft with other aircraft types or keep older aircraft in service longer. These operational changes and the uncertainty of when the 737 MAX aircraft will return to service and when Boeing will resume deliveries have impacted the profitability of certain airlines.

As of March 31, 2020, we owned and leased 15 737 MAX aircraft and we have 126 737 MAX aircraft on order. Lifting of the grounding is subject to global regulatory authorities and we are unable to speculate as to when this may occur. Because of this uncertainty, we have curtailed our leasing of MAX aircraft in our orderbook aircraft since the grounding. With respect to the 15 737 MAX aircraft we own and lease, our airline customers are obligated to continue to make payments under the lease, irrespective of any difficulties in which the lessees may encounter, including an aircraft fleet grounding. Some of our airline customers for these 15 737 MAX aircraft lease payments are in arrears.

We expect that if the grounding continues for an extended time, or if there are significant 737 MAX delivery delays even after the grounding is lifted as a result of the impact of the COVID-19 pandemic, some of our customers may seek to cancel their lease contracts with us. We are in discussions with lessees who are considering cancelling a small number of 737 MAX leases with us. It is unclear at this point if we will cancel some of our 737 MAX delivery positions with Boeing or attempt to find replacement lessees. We are currently in discussions with Boeing regarding the mitigation of possible damages resulting from the grounding of and the delivery delays associated with the 737 MAX aircraft that we own and have on order.

For several years, Airbus has also had delivery delays for certain of its aircraft, primarily the A321neo aircraft and, to a lesser extent, A330neo aircraft. Those delays are continuing and have worsened. Airbus has told us to continue to expect several months of delivery delays relating to such aircraft scheduled to deliver through 2022. These delays also have impacted airline operations and the profitably of certain airlines.

Further as it relates to Airbus aircraft, in October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new aircraft imported from Europe, including Airbus aircraft. The U.S. government has recently made statements and taken certain actions that have led to, and may lead to, further changes to U.S. and international trade policies, including recently imposed tariffs affecting certain products exported by a number of U.S. trading partners, such as Europe and China. In response, many U.S. trading partners, including Europe and China, have imposed or proposed new or higher tariffs on U.S. products. We are currently monitoring the impact of this announcement on our future Airbus deliveries to U.S. customers. We cannot predict what further actions may ultimately be taken with respect

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to tariffs or trade relations between the U.S. and U.S. trading partners. Accordingly, it is difficult to predict exactly how, and to what extent, such actions may impact our business, or the business of our lessees or aircraft manufacturers. Any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for aircraft, increase the cost of aircraft components, further delay production, impact the competitive position of certain aircraft manufacturers or prevent aircraft manufacturers from being able to sell aircraft in certain countries. Our leases are primarily structured as triple net leases, whereby the lessee is responsible for all operating costs including taxes, insurance, and aircraft maintenance.

Given the impact of COVID-19 on our industry, it is unclear at this time how competition within the aircraft leasing industry will evolve or change in the coming months and what the corresponding impact on lease rates will be as a result of the change in the competitive landscape, COVID-19, trade matters, the aircraft delays from Airbus and Boeing or other items.

Liquidity and Capital Resources

Overview

We finance the purchase of aircraft and our business with available cash balances, internally generated funds, including through 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. We currently have an undrawn balance of $5.6 billion under our revolving credit facility, which does not condition our ability to borrow on the lack of a material adverse effect to us or the general economy. Unsecured financing provides us with operational flexibility when selling or transitioning aircraft from one airline to another. We also have the ability to seek debt financing secured by our assets, as well as financings supported through the Export-Import Bank of the United States and other export credit agencies for future aircraft deliveries. Additionally, we only have approximately $319.4 million in debt maturities for the remainder of 2020, which serves to limit our near-term financing needs. Aircraft delivery delays as a product of the COVID-19 pandemic and the 737 MAX grounding are expected to further reduce our debt financing needs this year and potentially beyond. We continue to monitor COVID-19 and its impact on our overall liquidity position and outlook.

We ended the first quarter of 2020 with total debt outstanding, net of discounts and issuance costs, of $14.4 billion compared to $13.6 billion as of December 31, 2019. Our unsecured debt increased to $14.2 billion as of March 31, 2020 from $13.3 billion as of December 31, 2019. Our unsecured debt as a percentage of total debt increased to 97.6% as of March 31, 2020 from 96.6% as of December 31, 2019.

Our cash flows provided by operating activities decreased by 10.4% or $27.2 million, to $234.0 million for the three months ended March 31, 2020 as compared to $261.2 million for the three months ended March 31, 2019. The decrease in our cash flow provided by operating activities is due to an increase in deferred lease payments during the quarter as a result of the COVID-19 pandemic. Our cash flow used in investing activities was $672.3 million for the three months ended March 31, 2020, 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 $853.6 million for the three months ended March 31, 2020, which resulted primarily from the issuance of unsecured notes partially offset by the repayment of outstanding debt. We expect the impact of COVID-19, including as a result of rent deferrals and other lease concessions made or that we may make in the future to our customers, will continue to have negative impact on cash flow from operating activities.

We ended the first quarter of 2020 with available liquidity of $6.3 billion which is comprised of unrestricted cash of $732.7 million and an available borrowing capacity under our committed unsecured revolving credit facility of $5.6 billion. We believe that we have sufficient liquidity to satisfy the operating requirements of our business through the next 12 months. A key component of the ongoing liquidity available to us is our committed unsecured revolving credit facility, for which the substantial majority of the commitments mature in 2023. Our committed unsecured revolving credit facility is syndicated across 53 financial institutions from around various regions of the world, diversifying our reliance on any individual lending institution. We continue to utilize our committed unsecured revolving credit facility in the normal course of business.

The ultimate impact the COVID-19 pandemic may have on our business, results of operations and financial condition over the next 12 months is currently uncertain and will depend on certain developments, including, among

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others, the impact of the COVID-19 pandemic on our airline customers and the magnitude and duration of the pandemic. We currently believe that our cash on hand, current debt arrangements and general ability to access the capital markets will be sufficient to finance our operations and fund our debt service requirements and capital expenditures, including aircraft acquisition over the next 12 months. We also have the ability to seek debt financing secured by our assets, as well as financings supported through the Export-Import Bank of the United States and other export credit agencies, or ECAs for future aircraft deliveries.

As of March 31, 2020, we were in compliance in all material respects with the covenants contained in our debt agreements. A ratings downgrade will not result in a default under any of our debt agreements, but 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, 2019, and in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

Debt

Our debt financing was comprised of the following at March 31, 2020 and December 31, 2019 (in thousands, except percentages):


	March 31, 2020			December 31, 2019
Unsecured
Senior notes	$	12,834,333		$	12,357,811
Term financings		877,950			883,050
Revolving credit facility		515,000			20,000
Total unsecured debt financing		14,227,283			13,260,861
Secured
Term financings		322,320			428,824
Export credit financing		29,947			31,610
Total secured debt financing		352,267			460,434

Total debt financing		14,579,550			13,721,295
Less: Debt discounts and issuance costs		(164,929)			(142,429)
Debt financing, net of discounts and issuance costs	$	14,414,621		$	13,578,866
Selected interest rates and ratios:
Composite interest rate⁽¹⁾		3.16	%		3.34	%
Composite interest rate on fixed-rate debt⁽¹⁾		3.31	%		3.39	%
Percentage of total debt at fixed-rate		86.41	%		88.40	%

(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 March 31, 2020, we had $12.8 billion in senior unsecured notes outstanding. As of December 31, 2019, we had $12.4 billion in senior unsecured notes outstanding.

During the three months ended March 31, 2020, we issued $1.40 billion in aggregate principal amount of Medium-Term Notes comprised of (i) $750.0 million due 2025 at a fixed rate of 2.30% and (ii) $650.0 million due 2030 at a fixed rate of 3.00%.

Unsecured revolving credit facility

We have an unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as agent. During the quarter ended March 31,2020, we increased the aggregate capacity of our unsecured revolving credit facility by $250.0 million to $6.1 billion. As of March 31, 2020, the total outstanding balance on our unsecured revolving credit facility was approximately $515.0 million. The total outstanding balance under our unsecured revolving credit facility was approximately $20.0 million as of December 31, 2019.

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On May 5, 2020, commitments totaling $92.7 million of our committed unsecured revolving credit facility matured. Lenders hold revolving commitments totaling approximately $5.5 billion that mature on May 5, 2023, commitments totaling $245.0 million that mature on May 5, 2022 and commitments totaling $5.0 million that mature on May 5, 2021. As of May 7, 2020, after giving effect to the commitments that matured on May 5, 2020, the aggregate capacity of our committed unsecured revolving credit facility was approximately $6.0 billion.

As of March 31, 2020, borrowings under our 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 our unsecured revolving credit facility. Borrowings under our 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 Series A 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 3.650% 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 February 14, 2020, our board of directors also approved a cash dividend of $0.384375 per share on our outstanding Series A Preferred Stock, which was paid on March 15, 2020 to holders of record of our Series A Preferred Stock as of February 29, 2020.

Potential Impact of LIBOR Transition

As of March 31, 2020, we had approximately $2.0 billion of floating rate debt outstanding that used LIBOR as the applicable reference rate to calculate the interest on such debt. Additionally, our Series A Preferred Stock will in the future accrue dividends at a floating rate determined by reference to LIBOR, if available. The Chief Executive of the U.K. Financial Conduct Authority (the “FCA”), which regulates LIBOR, has announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. That announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Moreover, it is possible that LIBOR will be discontinued or modified prior to 2021. The U.S. Federal Reserve and the Bank of England have begun publishing a Secured Overnight Funding Rate and a reformed Sterling Overnight Index Average, respectively, which are currently intended to serve as alternative reference rates to LIBOR. At this time, however, it is not possible to predict the establishment of any market-accepted alternative reference rates or any other reforms to LIBOR and the effect of any such changes.

Furthermore, due to the uncertainty surrounding the discontinuation of LIBOR and the effects resulting therefrom, financial market participants have yet to establish standard fallback provisions governing the calculation of floating rate interest and dividends in the event LIBOR is unavailable. The lack of a market practice and inconsistency in fallback provisions is reflected across our floating rate debt and Series A Preferred Stock and the discontinuation of LIBOR could lead to unexpected outcomes that may vary between our various debt and equity securities that reference LIBOR to determine the rate in which interest or dividends, as applicable, accrue. For example, if LIBOR is discontinued, the various fallback provisions contained in our floating rate debt agreements could lead to such debt bearing interest at, among other things, a rate of interest equal to the interest rate last in effect for which LIBOR was determinable, a floating rate determined in reference to a predetermined fallback reference rate or an alternative reference rate to be

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agreed upon by the parties to such agreement, and a rate of interest representative of the cost to applicable lenders of funding their participation in the debt.

If the rate used to calculate interest on our outstanding floating rate debt that currently uses LIBOR and our Series A Preferred Stock were to increase by 1.0% either as a result of an increase in LIBOR or the result of the use of an alternative reference rate determined under the fallback provisions in the applicable debt if LIBOR is discontinued, we would expect to incur additional interest expense on such indebtedness as of March 31, 2020 of approximately $19.8 million on an annualized basis. Further, if LIBOR is discontinued and there is no acceptable alternative reference rate, some of our floating rate debt, including certain senior unsecured notes issued under our Medium-Term Note Program, may effectively become fixed rate debt. As a result, the cost of this debt would increase to us if and as interest rates decreased.

While we do not expect the potential impact of any LIBOR transition to have a material effect on our financial results based on our currently outstanding debt, uncertainty as to the nature of potential changes to LIBOR, fallback provisions, alternative reference rates or other reforms could adversely impact our interest expense on our floating rate debt that currently uses LIBOR as the applicable reference rate and our Series A Preferred Stock. In addition, any alternative reference rates to LIBOR may result in interest or dividend payments that do not correlate over time with the payments that would have been made on our indebtedness or Series A Preferred Stock, respectively, if LIBOR was available in its current form. Further, the discontinuance or modification of LIBOR and uncertainty of an alternative reference rate may result in the increase in the cost of future indebtedness, which could have a material adverse effect on our financial condition, cash flow and results of operations. We intend to closely monitor the financial markets and the use of fallback provisions and alternative reference rates in 2020 in anticipation of the discontinuance or modification of LIBOR by the end of 2021.

Credit ratings

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-	Negative	March 26, 2020
Standard and Poor's	BBB	BBB	Negative	April 10, 2020
Fitch Ratings	BBB	BBB	Negative	March 23, 2020

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 month periods ended March 31, 2020 and 2019 (in thousands, except per share amounts and percentages):


	Three Months Ended March 31,
	2020			2019
	(unaudited)
Revenues
Rental of flight equipment	$	496,687		$	455,739
Aircraft sales, trading and other		14,700			10,312
Total revenues		511,387			466,051
Expenses
Interest		107,541			89,220
Amortization of debt discounts and issuance costs		10,528			8,540
Interest expense		118,069			97,760
Depreciation of flight equipment		188,895			159,471
Selling, general and administrative		28,322			29,702
Stock-based compensation		4,429			4,174
Total expenses		339,715			291,107
Income before taxes		171,672			174,944
Income tax expense		(34,521)			(36,850)
Net income	$	137,151		$	138,094
Preferred stock dividends		(3,844)			—
Net income available to common stockholders	$	133,307		$	138,094

Earnings per share of Class A and B common stock
Basic	$	1.17		$	1.24
Diluted	$	1.17		$	1.23

Other financial data
Pre-tax profit margin		33.6	%		37.5	%
Adjusted net income before income taxes⁽¹⁾	$	182,785		$	187,658
Adjusted pre-tax profit margin⁽¹⁾		35.7	%		40.3	%
Adjusted diluted earnings per share before income taxes⁽¹⁾	$	1.61		$	1.67
Pre-tax return on common equity (trailing twelve months)		13.8	%		14.7	%
Adjusted pre-tax return on common equity (trailing twelve months)⁽¹⁾		14.9	%		15.9	%

(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 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 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

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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
	March 31,
	2020			2019
	(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	$	133,307		$	138,094
Amortization of debt discounts and issuance costs		10,528			8,540
Stock-based compensation		4,429			4,174
Provision for income taxes		34,521			36,850
Adjusted net income before income taxes	$	182,785		$	187,658

Total revenues	$	511,387		$	466,051
Adjusted pre-tax profit margin⁽¹⁾		35.7	%		40.3	%

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

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
	March 31,
	2020		2019
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted diluted earnings per share before income taxes:
Net income available to common stockholders	$	133,307	$	138,094
Amortization of debt discounts and issuance costs		10,528		8,540
Stock-based compensation		4,429		4,174
Provision for income taxes		34,521		36,850
Adjusted net income before income taxes	$	182,785	$	187,658
Weighted-average diluted common shares outstanding		113,785,028		112,380,856
Adjusted diluted earnings per share before income taxes	$	1.61	$	1.67

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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 March 31,
	2020			2019
	(unaudited)
Reconciliation of net income available to common stockholders to adjusted pre-tax return on common equity:
Net income available to common stockholders	$	570,376		$	538,278
Amortization of debt discounts and issuance costs		38,679			33,224
Stock-based compensation		21,000			18,220
Provision for income taxes		146,235			135,485
Adjusted net income before income taxes	$	776,290		$	725,207

Common shareholders’ equity as of beginning of the period	$	4,923,817		$	4,226,623
Common shareholders’ equity as of end of the period		5,486,369			4,923,817
Average common shareholders' equity	$	5,205,093		$	4,575,220

Adjusted pre-tax return on common equity		14.9	%		15.9	%

Three months ended March 31, 2020, compared to the three months ended March 31, 2019

Rental revenue

As of March 31, 2020, we owned 300 aircraft with a net book value of $19.2 billion and recorded $496.7 million in rental revenue for the quarter then ended, which included $5.5 million in amortization expense related to initial direct costs, which is net of overhaul revenue. In the prior year, as of March 31, 2019, we owned 280 aircraft with a net book value of $16.3 billion and recorded $455.7 million in rental revenue for the quarter ended March 31, 2019, which included overhaul revenue, net of amortization expense related to initial direct costs, of $18.0 million. This increase was principally driven by the continued growth of our fleet, partially offset by a reduction in end of lease revenue recognized in the period as compared to prior year. In the prior period, we recognized $20.2 million of end of lease revenue in connection with an airline bankruptcy whereas we did not recognize end of lease revenue in the current period.

Aircraft sales, trading and other revenue

Aircraft sales, trading and other revenue totaled $14.7 million for the three months ended March 31, 2020 compared to $10.3 million for the three months ended March 31, 2019. During the quarter ended March 31, 2020, we recorded $1.6 million in gains from the sale of three aircraft from our held for sale portfolio and $5.9 million in other revenue from the forfeiture of security deposits. During the quarter ended March 31, 2019, we recorded $3.6 million in gains from the sale of six aircraft from our operating lease portfolio. As noted above, we expect the COVID-19 pandemic to have an adverse impact on demand for used aircraft and that we will sell fewer used aircraft in 2020 and potentially 2021 than we initially planned to sell.

Interest expense

Interest expense totaled $118.1 million for the three months ended March 31, 2020 compared to $97.8 million for the three months ended March 31, 2019. The increase was primarily due to an increase in our aggregate debt balance partially offset by a decrease in our composite interest rate. 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 $188.9 million in depreciation expense of flight equipment for the three months ended March 31, 2020 compared to $159.5 million for the three months ended March 31, 2019. The increase in depreciation expense for the

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three months ended March 31, 2020, compared to the three months ended March 31, 2019, is primarily attributable to the acquisition of additional aircraft in our operating fleet during the last twelve months.

Selling, general and administrative expenses

We recorded selling, general and administrative expenses of $28.3 million for the three months ended March 31, 2020 compared to $29.7 million for the three months ended March 31, 2019. Selling, general and administrative expense as a percentage of total revenue decreased to 5.5% for the three months ended March 31, 2020 compared to 6.4% for the three months ended March 31, 2019. 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 21.1% for the three months ended March 31, 2020 and 2019, 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 March 31, 2020, we reported consolidated net income available to common stockholders of $133.3 million, or $1.17 per diluted share, compared to a consolidated net income available to common stockholders of $138.1 million, or $1.23 per diluted share, for the three months ended March 31, 2019. Net income available to common stockholders decreased in the first quarter of 2020 as compared to 2019, principally driven by a reduction in end of lease revenue, partially offset by the continued growth of our fleet.

Adjusted net income before income taxes

For the three months ended March 31, 2020, we recorded adjusted net income before income taxes of $182.8 million, or $1.61 per diluted share, compared to an adjusted net income before income taxes of $187.7 million, or $1.67 per diluted share, for the three months ended March 31, 2019. Our adjusted net income before income taxes decreased principally driven by a reduction in end of lease revenue, partially offset by the continued growth of our fleet.

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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Contractual Obligations

Our contractual obligations as of March 31, 2020, are as follows (in thousands):


	2020		2021		2022		2023		2024		Thereafter		Total
Long-term debt obligations	$	319,372	$	2,049,294	$	2,751,269	$	2,988,154	$	1,534,552	$	4,936,909	$	14,579,550
Interest payments on debt outstanding⁽¹⁾		327,433		433,416		373,547		290,823		210,269		446,761		2,082,249
Purchase commitments⁽²⁾		2,206,538		4,900,832		6,519,111		6,171,228		4,456,237		2,542,133		26,796,079
Operating leases		5,188		7,059		6,506		6,387		4,545		33,045		62,730
Total	$	2,858,531	$	7,390,601	$	9,650,433	$	9,456,592	$	6,205,603	$	7,958,848	$	43,520,608

(1)Future interest payments on floating rate debt are estimated using floating rates in effect at March 31, 2020.

(2)Purchase commitments reflect our estimate of future Boeing and Airbus aircraft deliveries based on information currently available to us. The actual delivery dates of such aircraft and expected time for payment of such aircraft may differ from our estimates and could be further impacted by ongoing COVID-19 pandemic and the length of the grounding and the pace at which Boeing can deliver aircraft following the lifting of the 737 MAX grounding, among other factors. Purchase commitments include only the costs of aircraft in our committed order book and do not include costs of aircraft that we have the option to purchase or have the right to purchase through memorandums of understanding or letters of intent.

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 non-controlling interests in two investment funds in which we own 9.5% of the equity of each fund. We account for our interest in these funds under the equity method of accounting due to our level of influence and involvement in the funds. Also, we manage aircraft that we have sold through our Thunderbolt platform. In connection with the sale of these aircraft portfolios through our Thunderbolt platform, we hold non-controlling interests of approximately 5.0% in two entities. These investments are accounted for 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, 2019. 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 three months ended March 31, 2020.

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.

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

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significant portion of our aircraft acquisitions. As of March 31, 2020 and December 31, 2019, we had $2.0 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 $19.8 million and $15.9 million as of March 31, 2020 and December 31, 2019, respectively, each on an annualized basis, which would put downward pressure on our operating margins. Further, as of March 31, 2020, 86.4% 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. Approximately 1.0% and 0.7% of our lease revenues were denominated in foreign currency as of March 31, 2020 and December 31, 2019, respectively. 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.

In December 2019, we issued C$400.0 million in aggregate principal amount of 2.625% notes due 2024. We effectively hedged our foreign currency exposure on this transaction through a cross-currency swap that converts the borrowing rate to a fixed 2.535% U.S. dollar denominated rate. See Note 8 of Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details on the fair value of the swap.

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 March 31, 2020. Based on that evaluation, our Certifying Officers have concluded that our disclosure controls and procedures were effective at March 31, 2020.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2020 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

Other than stated below, 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, 2019.

The coronavirus (COVID-19) pandemic and related efforts to mitigate the pandemic have impacted our business, and the extent to which the COVID-19 pandemic and measures taken to contain its spread ultimately impact our business will depend on future developments, which are highly uncertain and are difficult to predict.

The global pandemic resulting from the coronavirus (“COVID-19”) pandemic has disrupted some of our operations and the operations of our lessees beginning in the first quarter of 2020. The COVID-19 pandemic has resulted in governmental authorities around the world implementing numerous measures to try to contain the virus, such as travel bans and restrictions, border closures, quarantines, shelter in place or total lock-down orders and business limitations and shutdowns (subject to exceptions for certain essential operations and businesses). These measures may remain in place for a significant amount of time. These measures, coupled with a decrease in consumer spending on travel as a result of the COVID-19 pandemic, have materially impacted airline traffic and operations throughout the world as well as our operations and the operations of our lessees and aircraft manufacturers and suppliers, including causing the temporary closure of Boeing and Airbus’ final assembly facilities. As the virus has spread in the last few months, the relatively limited impacts we saw in Asia in the early part of the year have accelerated and are now occurring throughout the rest of the world, with a rapid deterioration of global air travel. As a result of the spread of the COVID-19 pandemic, we may experience financial losses due to a number of operational factors, including but not limited to:

●

lease deferments, lease abatements and aircraft return requests from our lessees;

●

impairment or delay in our ability to remarket aircraft or otherwise re-lease aircraft on a timely basis at favorable rates;

●

default, bankruptcy or reorganization of our lessees;

●

default, bankruptcy or reorganization of airlines generally, which would place pressure on aircraft values and lease rates generally;

●

further delays in delivery of aircraft in our orderbook from Boeing and Airbus, including due to delays or bankruptcies of Boeing and Airbus suppliers;

●

cancellations of, or a decline in, placements of aircraft in our orderbook for long-term leases;

●

increased costs of borrowing, including if our credit ratings are ultimately downgraded;

●

delays and other adverse impacts on our plans to grow the size of our operating fleet;

●

reduced sale proceeds received in aircraft sales due to weaker market demand; and

●

charges recognized by us or some of our lessees as a result of the measures implemented to contain the spread of COVID-19, including impairment of aircraft and engines and other long-lived assets.

These factors may remain prevalent for a significant period of time and may continue to adversely affect our business, results of operations and financial condition even after the COVID-19 pandemic has subsided. In addition, if a resurgence of the COVID-19 virus occurs after the initial outbreak subsides, these factors will be exacerbated.

As of May 7, 2020, most of our lessees have requested some form of rental relief. We evaluate such requests on a case-by-case basis and have worked out accommodation arrangements with approximately 46% of our lessees. We remain in active discussions with a number of our airline customers for accommodation arrangements, such as lease payment deferrals and other lease concessions. As of May 7, 2020, the Company has agreed to defer approximately $124.6 million in lease payments, which represents approximately 6% of our total revenue for fiscal year 2019. So far,

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such solutions have generally been in the form of partial lease deferrals for payments due in the first and second quarter of 2020, typically with a short-term repayment period, with the majority of the deferrals granted so far repaid by the end of this year. In many cases, lease extensions were also negotiated as part of the deferral accommodations. We remain in active discussions with our other airline customers and may continue to provide accommodation arrangements on a case-by-case basis. While a majority of our customers are flag carriers or have some form of governmental ownership, depending on the severity and longevity of the COVID-19 pandemic, the efforts taken to reduce its spread and the possibility of a resurgence of the COVID-19 pandemic, some of our lessees may still experience insolvency or initiate bankruptcy or similar proceedings. If this occurs, we may not be able to reposition the aircraft with other lessors and it could result in a significant decrease in our revenue and cash position. In addition, as of March 31, 2020, we had commitments to purchase 399 aircraft from Airbus and Boeing for delivery through 2026, and we had placed approximately 84% of our committed order book on long-term leases for aircraft delivering through 2022. The impact of the COVID-19 pandemic on airlines could result in the cancellation of leases that we have in place for our committed orderbook or a decline in the number of aircraft in our order book that we can place into leases prior to their delivery. If we are not able to place aircraft from our orderbook into leases prior to delivery, it may cause a downward pressure on our lease rates or require us to sell aircraft in our fleet sooner than anticipated.

We also expect delivery delays for all aircraft deliveries in our orderbook, including 737 MAX delivery delays after the grounding of such aircraft is lifted. We are currently in discussions with Boeing and Airbus to determine the extent and duration of delivery delays. The delays could result in cancellation of leases for those aircraft. We are in discussions with lessees who are considering cancelling a small number of our 737 MAX leases with us. If our customers cancel leases for aircraft that have been delayed, we typically have a cancellation right with the aircraft manufacturer that parallels our lessee’s cancellation rights. Given the dynamic nature of the ongoing COVID-19 pandemic, we are not yet able to determine the full impact of the delivery days.

While we currently expect delays in delivery of new aircraft from our orderbook, we will be required to raise additional capital to finance these deliveries and our access to and cost of financing depends on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. As a result of COVID-19, in March and April of 2020, S&P, Fitch and Kroll each changed their outlook on our long-term issuer and senior unsecured debt ratings from “stable” to “negative.” Such change in outlook may ultimately lead to a downgrade in our credit rating. If our credit ratings are downgraded, or general market conditions were to ascribe higher risk to our rating levels, our industry, or us, our access to capital and the cost of any debt financing will be further negatively impacted. In addition, the terms of future debt agreements could include more restrictive covenants, or require incremental collateral, which may further restrict our business operations or be unavailable due to our covenant restrictions then in effect. There is no guarantee that debt financings will be available in the future to fund our orderbook deliveries, or that such financing will be available on terms consistent with our historical agreements or expectations. Although we have sufficient liquidity to satisfy the operating requirements of our business through the next 12 months, the availability of certain sources is contingent upon our ability to continue to satisfy covenants contained in our debt agreements.

We have also experienced delays and terminations of some planned aircraft sales as a result of business limitations and shutdowns resulting from the pandemic. We also expect that demand for used aircraft will decline in the near-term and that we will sell fewer used aircraft in 2020 and perhaps 2021 than we initially planned to sell. This decline in demand for used aircraft may also result in impairment charges to the aircraft in our fleet.

As this situation is ongoing and the duration and severity of the COVID-19 pandemic is uncertain at this time, it is difficult to forecast the eventual long-term impacts on our future operating results or financial condition. We expect the COVID-19 pandemic will negatively impact our financial results, including having a larger impact on our results of operations for the second quarter and remainder of this year than has been reflected in our first quarter results for 2020. Depending on the severity and longevity of the COVID-19 pandemic, the related efforts taken to reduce its spread, and the possibility of a resurgence of the COVID-19 pandemic, we could recognize a significant adverse impact to our liquidity position due to lease deferrals and other lease concessions and a significant reduction in aircraft sales. Our earnings could also be adversely impacted by decreased revenue from airlines if airlines are forced to cease operations, decreased market prices for aircraft sales and lower volumes of aircraft sales. The extent to which the coronavirus pandemic and measures taken to contain its spread ultimately impact our business will depend on future developments, which are highly uncertain and are difficult to predict.

The spread of COVID-19 has also caused us to modify our business practices, including transitioning all of our employees to work remotely, restricting employee travel, and cancelling physical participation events and conferences.

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We may take further actions as may be required by government authorities or as we determine are in the best interests of our employees.

The COVID-19 pandemic is emerging as one of the largest disruptions to the airline industry in decades. There are no comparable recent events that provide guidance as to the long-term effect the COVID-19 pandemic may have, and, as a result, the ultimate impact of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the impacts on our business, our operations or the global economy as a whole. Even after the COVID-19 pandemic has subsided, we may continue to experience negative impacts to our financial results due to COVID-19’s global economic impact, including the availability of credit generally and our ability to obtain capital on favorable terms, adverse impacts on our liquidity, increases in our borrowing costs, decreases in consumer discretionary spending and any recession that has occurred or may occur in the future. Risks related to our ability to obtain capital on favorable terms and increased costs of borrowing are more fully described in our risk factors titled, “Our success depends in large part on our ability to obtain capital on favorable terms to finance our growth through the purchase of aircraft and to repay or refinance our outstanding debt obligations as they mature. If we are not able to obtain capital on terms acceptable to us, or at all, it would significantly impact our ability to compete effectively in the commercial aircraft leasing market and would negatively affect our financial condition, cash flow and results of operations ” and “An increase in our borrowing costs would negatively affect our financial condition, cash flow and results of operations” under “Risk Factors - Risks Relating to our Business” in our Annual Report on Form 10-K for the year ended December 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	Description of Capital Stock	10-K	001-35121	4.1	February 14, 2020

10.1	New Lender Supplement, dated March 5, 2020, 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				Filed herewith

10.2†	Supplemental Agreement No. 25 to Purchase Agreement No. PA-03791, dated February 28, 2020, by and between Air Lease Corporation and The Boeing Company				Filed herewith

10.3†	Supplemental Agreement No. 15 to Purchase Agreement No. PA-03659, dated February 28, 2020, by and between Air Lease Corporation and The Boeing Company				Filed herewith

10.4†	Amendment No. 13 to A350XWB Family Purchase Agreement, dated February 21, 2020, by and between Air Lease Corporation and Airbus S.A.S.				Filed herewith

10.5	Form of Indemnification Agreement with Company directors and Section 16 officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended), adopted February 13, 2020				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

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		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date

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

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 March 31, 2020, 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

May 7, 2020	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President
	(Principal Executive Officer)

May 7, 2020	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

EXHIBIT 10.1

EXECUTION VERSION

NEW LENDER SUPPLEMENT

SUPPLEMENT, dated as of March 5, 2020, 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 May 27, 2016, by the Third Amendment dated as of May 2, 2017, by the Fourth Amendment dated as of May 2, 2018, by the Fifth Amendment 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(c) thereof that any bank, financial institution or other entity may become a party to the Credit Agreement with the consent of the Borrower and the Administrative Agent (which consent of the Administrative Agent shall not be unreasonably withheld) 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 become a party to the Credit Agreement;

NOW, THEREFORE, the undersigned hereby agrees as follows:

1. The undersigned agrees to be bound by the provisions of the Credit Agreement, and agrees that it shall, 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), become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a Commitment of $125,000,000.

2. The undersigned (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements most recently delivered pursuant to Sections 6.1(a) and (b) thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it has made and will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, without limitation, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to Section 2.15(e) of the Credit Agreement.

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

4. The address for notices for the undersigned for the purposes of the Credit Agreement is as follows:

CIBC Bank USA

120 S. LaSalle Street

Chicago, IL 60603

Attention: Samir D. Desai

Telephone: 312-564-1246

Email: Samir.Desai@CIBC.com

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

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.

	CIBC BANK USA

	By:	/s/ Samir D. Desai
		Name: Samir D. Desai
		Title: Managing Director

[Signature Page to CIBC New Lender 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: Chief Financial Officer

[Signature Page to CIBC New Lender 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 CIBC New Lender Supplement]

EXHIBIT 10.2

CERTAIN IDENTIFIED INFORMATION MARKED BY [*] 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. 25

Purchase Agreement No. 03791

between

THE BOEING COMPANY

and

AIR LEASE CORPORATION

THIS SUPPLEMENTAL AGREEMENT is entered into as of February 28, 2020 (Supplemental Agreement No. 25) 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 [*]; and

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

HAZ-PA-03791	1	SA-25

	BOEING PROPRIETARY

[*]

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. 25.

2. TABLES.

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

2.2 Table 1B is deleted in its entirety, replaced by a revised Table 1B provided hereto as Enclosure 3 and is incorporated into the Purchase Agreement by this reference. This new Table 1B reflects [*].

2.3 Table 1C is deleted in its entirety, replaced by a revised Table 1C provided hereto as Enclosure 4 and is incorporated into the Purchase Agreement by this reference. This new Table 1C [*].

2.4 Table 1H5 is deleted in its entirety, replaced by a revised Table 1H5 provided hereto as Enclosure 5 and is incorporated into the Purchase Agreement by this reference. This new Table 1H5 [*].

3. EXHBITS.

3.1 Exhibit A19, HAZ/[*] 737-8 Aircraft Configuration [*], provided as Enclosure 6 to this Supplemental Agreement No. 25, is incorporated into the Purchase Agreement. This Exhibit A19 defines the configuration for the 737-8 Aircraft to be leased to [*] in Table 1A.

3.2 Exhibit A20, HAZ/[*] 737-8 Aircraft Configuration [*], provided as Enclosure 7 to this Supplemental Agreement No. 25, is incorporated into the Purchase Agreement. This Exhibit A20 defines the configuration for the 737-8 Aircraft to be leased to [*] in Table 1A.

3.3 Exhibit A21, HAZ/[*] 737-8 Aircraft Configuration [*], provided as Enclosure 8 to this Supplemental Agreement No. 25, is incorporated into the Purchase Agreement. This Exhibit A21 defines the configuration for the 737-8 Aircraft to be leased to [*] in Table 1A.

3.4 Exhibit A22, HAZ/[*] 737-9 Aircraft Configuration [*], provided as Enclosure 9 to this Supplemental Agreement No. 25, is incorporated into the Purchase Agreement. This Exhibit A22 defines the configuration for the 737-9 Aircraft to be leased to [*] in Table 1B.

4. LETTER AGREEMENTS.

4.1 Letter Agreement HAZ-PA-03791-LA-1208078R8, entitled “Advance Payment Matters,” is deleted in its entirety, and replaced with a revised Letter Agreement HAZ-PA-03791-LA-1208078R9, entitled “Advance Payment Matters,” which is provided

HAZ-PA-03791	2	SA-25

	BOEING PROPRIETARY

as Enclosure 10 to this Supplemental Agreement No. 25, and incorporated into the Purchase Agreement.

5. CONTINGENCY.

This Supplemental Agreement No. 25 is contingent on Customer executing Supplemental Agreement No. 15 under Purchase Agreement 3659.

6. [*]

INTENTIONALLY LEFT BLANK

HAZ-PA-03791	3	SA-25

	BOEING PROPRIETARY

7. MISCELLANEOUS.

7.1 [*]

7.3 All terms used but not defined in this Supplemental Agreement No. 25 will have the same meaning as such terms have in the Purchase Agreement.

7.4 This Supplemental Agreement No. 25 will become effective upon execution and receipt by both parties of both this Supplemental Agreement No. 25 and fulfillment of the contingencies described in Article 5 on or before February 28, 2020, after which date this Supplemental Agreement No. 25 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/ Sydney Bard	By:	/s/ Grant Levy

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

HAZ-PA-03791	4	SA-25

	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-25
1B	737-9 Block B Aircraft Information Table [*]	SA-25
1C	737-8 Block C Aircraft Information Table [*]	SA-25
1D	737-8 Block D Aircraft Information Table [*]	SA-24
1E	737-8 Block E Aircraft Information Table [*]	SA-14
1F	737-7 Block F Aircraft Information Table [*]	SA-24
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-25

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	i	SA-25

	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 Baseline Aircraft Configuration [*]	SA-21
A16	HAZ 737-9 Baseline Aircraft Configuration [*]	SA-21
A17	HAZ/[] 737-8 Aircraft Configuration []	SA-24
A18	HAZ/[] 737-8 Aircraft Configuration []	SA-24
A19	HAZ/[] 737-8 Aircraft Configuration []	SA-25
A20	HAZ/[] 737-8 Aircraft Configuration []	SA-25
A21	HAZ/[] 737-8 Aircraft Configuration []	SA-25
A22	HAZ/[] 737-9 Aircraft Configuration []	SA-25
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-1208078R9	Advance Payment Matters	SA-25
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

HAZ-PA-03791	ii	SA-25

	BOEING PROPRIETARY

Enclosure 1

TABLE OF CONTENTS


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
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	[*]
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-24
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-25

	BOEING PROPRIETARY

Enclosure 2

Table 1A

to Purchase Agreement No. PA-03791

737-8 Block A [*] Aircraft Delivery, Description, Price and Advance Payments

Airframe Model/MTOW:			737-8	181200 pounds		Detail Specification:			D019A007-B (5/18/2012)
Engine Model/Thrust:			CFM-LEAP-1B	0 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:				[*]

Refundable Deposit/Aircraft at Proposal Accept:				[*]

		Manufacturer	Escalation			Escalation Estimate	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
Delivery	Number of	Serial	Factor		P.A.	Adv Payment Base	[*]	[*]	[*]	[*]
Date	Aircraft	No.	(Airframe)	Lessee	Exhibit A	Price Per A/P	[*]	[*]	[*]	[*]
[*]-2018	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
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[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]

HAZ-PA-03791 60521, 63035	Boeing Proprietary	SA-25
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[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]

HAZ-PA-03791 60521, 63035	Boeing Proprietary	SA-25
		Page 2 of 3

[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]-2022			[*]			[*]	[*]	[*]	[*]	[*]
Total:	63


[*]

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

HAZ-PA-03791 60521, 63035	Boeing Proprietary	SA-25
		Page 3 of 3

Enclosure 3

Table 1B

to Purchase Agrement No. PA-03791

737-9 Block B [*] Aircraft Delivery, Description, Price and Advance Payments

Airframe Model/MTOW:			737-9	194700 pounds		Detail Specification:			D019A007-B (5/18/2012)
Engine Model/Thrust:			CFM-LEAP-1B	0 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:				[*]

Refundable Deposit/Aircraft at Proposal Accept:				[*]

		Manufacturer	Escalation			Escalation Estimate	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
Delivery	Number of	Serial	Factor		P.A.	Adv Payment Base	[*]	[*]	[*]	[*]
Date	Aircraft	No.	(Airframe)	Lessee	Exhibit A	Price Per A/P	[*]	[*]	[*]	[*]
[*]-2019	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]

HAZ-PA-03791 60522-1F.TXT	Boeing Proprietary	SA-25
		Page 1 of 2

[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]-2022			[*]			[*]	[*]	[*]	[*]	[*]
Total:	19

[*]

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

HAZ-PA-03791 60522-1F.TXT	Boeing Proprietary	SA-25
		Page 2 of 2

Enclosure 4

Table 1C

to Purchase Agreement No. PA-03791

737-8 Block C [*] Aircraft Delivery, Description, Price and Advance Payments

Airframe Model/MTOW:			737-8	181,200 pounds		Detail Specification:			D019A008-J (1/16/2015)
Engine Model/Thrust:			CFMLEAP-1B25	25,000 pounds		Airframe Price Base Year/Escalation Formula:			[*]	[*]
Airframe Price:				[*]		Engine Price Base Year/Escalation Formula:			[*]	[*]
Estimated 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:				[*]

Refundable Deposit/Aircraft at Proposal Accept:				[*]

		Manufacturer	Escalation			Escalation Estimate	Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
Delivery	Number of	Serial	Factor		P.A.	Adv Payment Base	[*]	[*]	[*]	[*]
Date	Aircraft	No.	(Airframe)	Lessee	Exhibit A	Price Per A/P	[*]	[*]	[*]	[*]
[*]-2019	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1		[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]		[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]

HAZ-PA-03791 73166-1F.TXT	Boeing Proprietary	SA-25
		Page 1 of 2

[*]	1		[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]		[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]	1		[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]		[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]-2022			[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
Total:	8

[*]
* Manufacturer serial number is subject to change due to production changes.
[*]

HAZ-PA-03791 73166-1F.TXT	Boeing Proprietary	SA-25
		Page 2 of 2

Enclosure 5

Table 1H5 To

Purchase Agreement No. PA-03791

737-8 Block H5 [*] Aircraft Delivery, Description, Price and Advance Payments


Airframe Model/MTOW:	737-8	181,200 pounds	Detail Specification:	D019A008-R (12/8/2017)
Engine Model/Thrust:	CFMLEAP-1B27	26,400 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:		[*]
[*] Provided by Boeing (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	[*]	[*]	[*]	[*]
[*]-2023	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]

HAZ-PA-03781 109141-1F.txt	Boeing Proprietary	SA-25
		Page 1

[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]	[*]
[*]			[*]			[*]	[*]	[*]	[*]	[*]
[*]-2024			[*]			[*]	[*]	[*]	[*]	[*]
Total:	10

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


[*]

HAZ-PA-03781 109141-1F.txt	Boeing Proprietary	SA-25
		Page 2

Enclosure 6

HAZ/[*] 737-8 AIRCRAFT CONFIGURATION [*]

between

THE BOEING COMPANY

and

AIR LEASE CORPORATION

Exhibit A19

to Purchase Agreement Number PA-03791

HAZ-PA-03791-EXA19		EXA Page 1
	Boeing Proprietary
		SA-25

Enclosure 6

Exhibit A19

AIRCRAFT CONFIGURATION

Dated February 28, 2020

relating to

BOEING MODEL 737-8 AIRCRAFT

The Detail Specification is [*]. The Detail Specification provides further description of Customer’s configuration set forth in this Exhibit A. Such Detail Specification will be comprised of Boeing Configuration Specification [*]. Boeing will furnish to Customer copies of the Detail Specification, which copies will reflect [*].

HAZ-PA-03791-EXA19		EXA Page 2
	Boeing Proprietary
		SA-25

Boeing Proprietary

Exhibit A19 To
Boeing Purchase Agreement

Customer:	HAZ-Air Lease Corporation [*]
Model:	737-8
Base Date:	[*]

PA No. 3791 SA-25
Exhibit A19 ([*] 737-8)	Boeing Proprietary	Page 1 of 1

Enclosure 7

HAZ/[*] 737-8 AIRCRAFT CONFIGURATION [*]

between

THE BOEING COMPANY

and

AIR LEASE CORPORATION

Exhibit A20

to Purchase Agreement Number PA-03791


HAZ-PA-03791-EXA20		EXA Page 1
	Boeing Proprietary
		SA-25

Enclosure 7

Exhibit A20

AIRCRAFT CONFIGURATION

Dated February 28, 2020

relating to

BOEING MODEL 737-8 AIRCRAFT


HAZ-PA-03791-EXA20		EXA Page 2
	Boeing Proprietary
		SA-25

Boeing Proprietary

Exhibit A20 To
Boeing Purchase Agreement

Customer:	HAZ-Air Lease Corporation [*]
Model:	737-8
Base Date:	[*]

PA No. 3791 SA-25
Exhibit A20 ([*] 737-8)	Boeing Proprietary	Page 1 of 1

Enclosure 8

HAZ/[*] 737-8 AIRCRAFT CONFIGURATION [*]

between

THE BOEING COMPANY

and

AIR LEASE CORPORATION

Exhibit A21

to Purchase Agreement Number PA-03791

HAZ-PA-03791-EXA21		EXA Page 1
	Boeing Proprietary
		SA-25

Enclosure 8

Exhibit A21

AIRCRAFT CONFIGURATION

Dated February 28, 2020

relating to

BOEING MODEL 737-8 AIRCRAFT

HAZ-PA-03791-EXA21		EXA Page 2
	Boeing Proprietary
		SA-25

Boeing Proprietary

Exhibit A21 To
Boeing Purchase Agreement

Customer:	HAZ-Air Lease Corporation [*]
Model:	737-8
Base Date:	[*]

PA No. 3791 SA-25
Exhibit A21 ([*] 737-8)	Boeing Proprietary	Page 1 of 1

Enclosure 9

HAZ/[*] 737-9 AIRCRAFT CONFIGURATION [*]

between

THE BOEING COMPANY

and

AIR LEASE CORPORATION

Exhibit A22

to Purchase Agreement Number PA-03791

HAZ-PA-03791-EXA22		EXA Page 1
	Boeing Proprietary
		SA-25

Enclosure 9

Exhibit A22

AIRCRAFT CONFIGURATION

Dated February 28, 2020

relating to

BOEING MODEL 737-9 AIRCRAFT

HAZ-PA-03791-EXA22		EXA Page 2
	Boeing Proprietary
		SA-25

	Exhibit A22 To
	Boeing Purchase Agreement

Customer:	HAZ-Air Lease Corporation [*]
Model:	737-9
Base Date:	[*]

PA No. 3791 SA-25
Exhibit A22 ([*] 737-9)	Boeing Proprietary	Page 1 of 1

Enclosure 10

The Boeing Company

P.O. Box 3707

Seattle, WA 98124 2207

HAZ-PA-03791-LA-1208078R9

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)

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.

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. [*]

5. Assignment.

		SA-25
		Page 1
	BOEING PROPRIETARY

Enclosure 10

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/ Sydney Bard

Its	Attorney-in-fact

ACCEPTED AND AGREED TO this

Date:	February 28, 2020

AIR LEASE CORPORATION

By	/s/ Grant Levy

Its	Executive Vice President


HAZ-PA-03791-LA-1208078R9		SA-25
Advance Payment Matters		Page 2
	BOEING PROPRIETARY

EXHIBIT 10.3

Supplemental Agreement No. 15

Purchase Agreement No. PA-03659

between

The Boeing Company

and

Air Lease Corporation

This Supplemental Agreement is entered into as of February 28, 2020 (Supplemental Agreement No. 15) by and between THE BOEING COMPANY (Boeing) and AIR LEASE CORPORATION (Customer);

All terms used but not defined in this Supplemental Agreement No. 15 have the same meaning as in the Purchase Agreement;

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

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement to add three (3) 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 [*]; and.

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

WHEREAS, Boeing and Customer desire to [*];

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

Page i

BOEING PROPRIETARY

WHEREAS, Boeing and Customer desire to amend the Purchase Agreement 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 Agreement No. 15 which reflects the revisions set forth in this Supplemental Agreement No. 15.

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. 15 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. 15 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. 15 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. 15 to reflect [*].

3. SUPPLEMENTAL EXHIBITS

a. Exhibit A5, HAZ/[*] 787-10 Aircraft Configuration, provided as Enclosure 6 to this Supplemental Agreement No. 15 is hereby incorporated into the Purchase Agreement to identify the configuration applicable to 787-10 Block A Aircraft to be delivered for lease to [*].

b. Exhibit A6, HAZ/[*] 787-10 Aircraft Configuration, provided as Enclosure 7 to this Supplemental Agreement No. 15 is hereby incorporated into the Purchase Agreement to identify the configuration applicable to 787-10 Block A Aircraft to be delivered for lease to [*].

HAZ-PA-03659-SA-15

Page ii

BOEING PROPRIETARY

c. 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 8 to this Supplemental Agreement No. 15, which reflects [*].

4. LETTER AGREEMENTS.

a. Letter Agreement HAZ-PA-03659-LA-1104720R10, Advance Payment Matters, is deleted in its entirety and replaced by a revised Letter Agreement HAZ-PA-03659-LA-1104720R11, Advance Payment Matters, provided as Enclosure 9 to this Supplemental Agreement No. 15, which addresses the addition of three (3) 787-9 Block E Aircraft.

b. Letter Agreement LA-1301080R7, Special Matters - 787-9 Blocks B, C, D and E Aircraft, is deleted in its entirety and replaced by a revised Letter Agreement LA-1301080R8, Special Matters - 787-9 Blocks B, C, D and E Aircraft, provided as Enclosure 10 to this Supplemental Agreement No. 15, which reflects the amendments necessary to add three (3) 787-9 Block E Aircraft.

5. PAYMENT CONSIDERATIONS.

[*]

HAZ-PA-03659-SA-15

Page iii

BOEING PROPRIETARY

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. 15 and Supplemental Agreement No. 25 under Purchase Agreement 3791 on or before February 28, 2020 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/ Sydney Bard	BY:	/s/ Grant Levy

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

HAZ-PA-03659-SA-15

Page iv

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-15

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-15
1D.	787-9 Block C Aircraft Information Table	SA-8
1E.	787-9 Block D Aircraft Information Table	SA-11
1F.	787-9 Block E Aircraft Information Table	SA-15

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
A5.	HAZ/[*] 787-10 Aircraft Configuration	SA-15
A6.	HAZ/[*] 787-10 Aircraft Configuration	SA-15
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-15
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-15

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-1104720R11	Advance Payment Matters	SA-15
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-1301080R8	Special Matters – 787-9 Blocks B, C, D, and E Aircraft	SA-15
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-15

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)

4Q12 External Fcst

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

[*]

[*]-2021

[*]

HAZ-PA-03659 63946-1F.TXT		SA-15
	Boeing Proprietary	Page 1

[*]

[*]-2023

[*]

Total:

[*]

HAZ-PA-03659 63946-1F.TXT		SA-15
	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)

4Q12 External Fcst

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*

[*]

HAZ-PA-03659 63946-1F.TXT		SA-15
	Boeing Proprietary	Page 1

[*]

[*]-2023

[*]

Total:

[*]

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

HAZ-PA-03659 63946-1F.TXT		SA-15
	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)

4Q17 External Fcst

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):

[*]

Deposit per Aircraft:

[*]

Base Year Index (CPI):

[*]

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

[*]

[*]-2021

[*]

Total:

[*]

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

HAZ-PA-03659 110418-1F.txt		SA-15
	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)

4Q17 External Fcst

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):

[*]

Deposit per Aircraft:

[*]

Base Year Index (CPI):

[*]

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

[*]

[*]-2021

[*]

Total:

[*]

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

HAZ-PA-03659 110415-1F.txt		SA-15
	Boeing Proprietary	Page 1

Enclosure 6

HAZ/[*] 787-10 AIRCRAFT CONFIGURATION

between

THE BOEING COMPANY

and

Air Lease Corporation

Exhibit A5

to Purchase Agreement Number PA-03659

HAZ-PA-03659-EXA5		Page 1
	BOEING PROPRIETARY	SA-15

Enclosure 6

Exhibit A5

AIRCRAFT CONFIGURATION

Dated February 28, 2020

relating to

BOEING MODEL 787-10 AIRCRAFT

The Detail Specification is Boeing document number [*]. The Detail Specification provides further description of the configuration set forth in this Exhibit A5. Such Detail Specification will be comprised of Boeing configuration specification [*]. As soon as practicable, Boeing will furnish to Customer copies of the Detail Specification, which copies will reflect [*].

HAZ-PA-03659-EXA5		Page 2
	BOEING PROPRIETARY	SA-15

Boeing Proprietary

Exhibit A5 To

Boeing Purchase Agreement

HAZ/[*] 787-10

[*]

PA No. 3659		Page 1 of 1
Exhibit A5 ([*] 787-10)	Boeing Proprietary	SA-15

Enclosure 7

HAZ/[*] 787-10 AIRCRAFT CONFIGURATION

between

THE BOEING COMPANY

and

Air Lease Corporation

Exhibit A6

to Purchase Agreement Number PA-03659

HAZ-PA-03659-EXA6		Page 1
	BOEING PROPRIETARY	SA-15

Enclosure 7

Exhibit A6

AIRCRAFT CONFIGURATION

Dated February 28, 2020

relating to

BOEING MODEL 787-10 AIRCRAFT

The Detail Specification is Boeing document number [*]. The Detail Specification provides further description of the configuration set forth in this Exhibit A6. Such Detail Specification will be comprised of Boeing configuration specification [*]. As soon as practicable, Boeing will furnish to Customer copies of the Detail Specification, which copies will reflect [*].

HAZ-PA-03659-EXA6		Page 2
	BOEING PROPRIETARY	SA-15

Boeing Proprietary

Exhibit A6 To

Boeing Purchase Agreement

HAZ/[*] 787-10

[*]

PA No. 3659		Page 1 of 1
Exhibit A6 ([*] 787-10)	Boeing Proprietary	SA-15

Enclosure 8

787 CUSTOMER SUPPORT DOCUMENT

between

THE BOEING COMPANY

And

Air Lease Corporation

Supplemental Exhibit CS1-1 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

HAZ-PA-03659-CS1-1		CS1-1 Page 1
	BOEING PROPRIETARY	SA-15

Enclosure 8

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.

1.1 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.

HAZ-PA-03659-CS1-1		CS1-1 Page 2
	BOEING PROPRIETARY	SA-15

Enclosure 8

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.

HAZ-PA-03659-CS1-1		CS1-1 Page 3
	BOEING PROPRIETARY	SA-15

Enclosure 8

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.

HAZ-PA-03659-CS1-1		CS1-1 Page 4
	BOEING PROPRIETARY	SA-15

Enclosure 8

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.

HAZ-PA-03659-CS1-1		CS1-1 Page 5
	BOEING PROPRIETARY	SA-15

Enclosure 8

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.

HAZ-PA-03659-CS1-1		CS1-1 Page 6
	BOEING PROPRIETARY	SA-15

Enclosure 8

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.

HAZ-PA-03659-CS1-1		CS1-1 Page 7
	BOEING PROPRIETARY	SA-15

Enclosure 8

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-CS1-1		CS1-1 Page 8
	BOEING PROPRIETARY	SA-15

Enclosure 8

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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Enclosure 8

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

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Enclosure 8


	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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Enclosure 8

	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 8

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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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 8

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 8

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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787 CUSTOMER SUPPORT DOCUMENT

ATTACHMENT A

787 TRAINING POINTS MENU


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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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 9

The Boeing Company

P.O. Box 3707

Seattle, WA 98124 2207

HAZ-PA-03659-LA-1104720R11

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-1104720R10 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

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Enclosure 9

[*]

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.

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Enclosure 9

Very truly yours,

THE BOEING COMPANY

By	/s/ Sydney Bard

Its	Attorney-In-Fact

ACCEPTED AND AGREED TO this

Date:	February 28, 2020

AIR LEASE CORPORATION

By	/s/ Grant Levy

Its	Executive Vice President

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Enclosure 10

The Boeing Company

P.O. Box 3707

Seattle, WA 98124 2207

HAZ-PA-03659-LA-1301080R8

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-1301080R7 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 [*]

1.4 [*]

1.5 [*]

1.6 [*]

1.7 [*]

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Enclosure 10

1.8 [*]

1.9 [*]

1.10 [*]

1.11 [*]

1.12 [*]

1.13 [*]

1.14 [*]

1.15 [*]

1.16 [*]

1.17 [*]

1.18 [*]

1.19 [*]

1.20 [*]

1.21 [*]

1.22 [*]

1.23 [*]

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 10

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 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/ Sydney Bard

Its	Attorney-In-Fact

ACCEPTED AND AGREED TO this

Date:	February 28, 2020

AIR LEASE CORPORATION

By	/s/ Grant Levy

Its	Executive Vice President

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EXHIBIT 10.4

AMENDMENT N° 13

TO THE

A350 FAMILY PURCHASE AGREEMENT

BETWEEN

AIRBUS S.A.S.

as Seller

and

AIR LEASE CORPORATION

As Buyer

Amendment Nº13 to the ALC A350 Family PA
Ref. CLC - CT2000388	Page 1/6

AMENDMENT N° 13 TO THE

A350 FAMILY PURCHASE AGREEMENT

This amendment N° 13 (the “Amendment N° 13”) dated 21 February 2020 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” and individually as a “Party”.

WHEREAS:

A. The Buyer and the Seller have signed a purchase agreement with reference CLC-CT1103521 on 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 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

Amendment Nº13 to the ALC A350 Family PA
Ref. CLC - CT2000388	Page 2/6

Purchase Agreement in order to [*].

J. On 01 June 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. [*], 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 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) [*].

N. On 26 April, 2019, the Buyer and the Seller entered into an Amendment and Restatement Agreement of Letter Agreement N°1 to Amendment N°10 in order to cancel and replace Clause 4 of the Original Letter Agreement.

O. On 15 May, 2019, the Buyer and the Seller entered into an Amendment N°11 in order to [*].

P. On 20 December, 2019, the Buyer and the Seller entered into an Amendment N°12 in order to (i) provide the terms under which the Seller shall manufacture and sell and the Buyer shall purchase one (1) incremental A350-900 aircraft, [*].

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

Q. The Parties now wish to enter into this Amendment N° 13 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° 13. 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:

Amendment Nº13 to the ALC A350 Family PA
Ref. CLC - CT2000388	Page 3/6

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° 13, 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° 13 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° 13 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° 13 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° 13 as if the same were set out in full herein, mutatis mutandis.

Amendment Nº13 to the ALC A350 Family PA
Ref. CLC - CT2000388	Page 4/6

IN WITNESS WHEREOF this Amendment N° 13 was entered into the day and year first above written.

For and on behalf of	For and on behalf of

AIR LEASE CORPORATION	AIRBUS S.A.S.

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

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

Amendment Nº13 to the ALC A350 Family PA
Ref. CLC - CT2000388	Page 5/6

APPENDIX 1

Delivery Schedule

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

Amendment Nº13 to the ALC A350 Family PA
Ref. CLC - CT2000388	Page 6/6

EXHIBIT 10.5

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of [_____], 20[__] by and between Air Lease Corp., a Delaware corporation (the “Company”), and [_____] (“Indemnitee”). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering the subject matter of this Agreement.

RECITALS

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, Indemnitee may be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (the “DGCL”) and the DGCL expressly provides that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

WHEREAS, the Fourth Amended and Restated Bylaws of the Company (the “Bylaws”) and the Restated Certificate of Incorporation of the Company (the “Certificate of Incorporation” and, together with the Bylaws, the “Organizational Documents”) require indemnification of the officers and directors of the Company to the fullest extent authorized by the DGCL;

WHEREAS, in order to attract and retain qualified individuals, the Company maintains on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities;

WHEREAS, the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions, while at the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

WHEREAS, the uncertainties relating to such insurance and to indemnification may increase the difficulty of attracting and retaining such person;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, the Organizational Documents and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, this Agreement is a supplement to and in furtherance of the Organizational Documents and any resolutions adopted pursuant thereto, as well as any rights of Indemnitee under any directors’ and officers’ liability

insurance policy, and this Agreement shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. Indemnitee agrees to serve as an [officer/director] of the Company, at the request of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any existing or future written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as an [officer/director] of the Company, by the Organizational Documents and the DGCL. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an [officer/director] of the Company, as provided in Section 16 hereof.

Section 2. Definitions. As used in this Agreement:

(a) References to “agent” shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

(b) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

i. Acquisition of Stock by Third Party. The acquisition by any Person or Group of Beneficial Ownership of 35% or more (on a fully diluted basis) of either (A) the then outstanding shares of all classes of common stock of the Company, taking into account as outstanding for this purpose such common stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise or settlement of any similar right to acquire such common stock (the “Outstanding Company Common Stock”), or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Agreement, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by the Company or any Affiliate, (II) any acquisition directly from the Company, (III) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate or (IV) any acquisition by any Person pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (iv) of this Section 2(b);

ii. Change in Board of Directors. Individuals who, on the date of this Agreement, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date of this Agreement, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination), shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

iii. Liquidiation. A complete dissolution or liquidation of the Company;

iv. Corporate Transactions. The consummation of a merger, consolidation, statutory share exchange, a sale or other disposition of all or substantially all of the assets of the Company or similar form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), in each case, unless immediately following such Business Combination: (A) more than 50% of the total voting power of (x) the entity resulting from such Business Combination (the “Surviving Company”) or (y) if applicable, the ultimate parent

corporation that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the directors of the Surviving Company (the “Parent Company”) is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no Person or Group (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company), is or becomes the beneficial owner, directly or indirectly, of 35% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least two-thirds of the members of the board of directors of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination.

For purposes of this Section 2(b), the following terms shall have the following meanings:

(A “Beneficial Ownership” shall have the meaning given in Rule 13d-3 promulgated under the Exchange Act.

(B) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(D) “Person” shall mean an individual or a corporation, association, partnership, limited liability company, joint venture, organization, business, trust, or any other entity or organization, including a government or any subdivision or agency thereof.

(c) “Corporate Status” describes the status of a person who is or was a director, trustee, partner, managing member, officer, employee or, agent or fiduciary of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.

(d) “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(e) “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

(f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees and other costs of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements, obligations or expenses of the types customarily incurred in connection with, or as a result of, prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a deponent or witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) expenses incurred in connection with recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee is ultimately determined to be entitled to such indemnification, advancement or Expenses or insurance recovery, as the case may be, and (iii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, the Organizational Documents or under any directors’ and officers’ liability insurance policies maintained by the Company, by litigation or otherwise. The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable in the good faith judgment of such counsel shall be presumed conclusively to be reasonable.

(g) “Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(h) The term “Proceeding” shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, regulatory or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of Indemnitee’s Corporate Status or by reason of any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee’s part while acting pursuant to Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.

(i) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor, by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and, subject to Section 11(c), amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that Indemnitee’s conduct was unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Organizational Documents, vote of the Company’s stockholders or disinterested directors or applicable law.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court (as hereinafter defined) or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness, is or was made (or asked) to respond to discovery requests or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

Section 8. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to, or is threatened to be made a party to, or a participant in any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) by reason of Indemnitee’s Corporate Status.

(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

i. to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 9. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment in connection with any claim involving Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy that may be adopted by the Board or a committee of the Board; or

(c) except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board

authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) such payment arises in connection with any mandatory counterclaim or cross-claim brought or raised by Indemnitee in any Proceeding (or any part of any Proceeding) or (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

Section 10. Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee or any Proceeding initiated by Indemnitee with the prior approval of the Board as provided in Section 9(c), and such advancement shall be made as soon as possible but in any event no later than twenty (20) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. The Company shall, in accordance with such request for advancement (but without duplication), either (i) pay such Expenses on behalf of Indemnitee, or (ii) reimburse Indemnitee for such Expenses. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. In accordance with Section 14(d), advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced (without interest) by the Company pursuant to this Section 10, if and only to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required other than the execution of this Agreement. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9.

Section 11. Procedure for Notification and Defense of Claim.

(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power, to the extent that doing so is consistent with the exercise of the Indemnitee’s rights under the federal and state Constitutions. The Company shall provide Indemnitee with such information and cooperation as Indemnitee may reasonably require, to the extent that doing so is consistent with the Company’s obligation to cooperate with regulatory or law enforcement agencies.

(b) The Company shall be entitled to participate in the defense of any Proceeding entitled to indemnification under this Agreement or to assume the defense thereof, with counsel chosen by the Company and reasonably satisfactory to Indemnitee (not to be unreasonably withheld) upon delivery to Indemnitee of written notice of the Company’s election to do so; provided, however, that if Indemnitee believes, after consultation with counsel selected by Indemnitee, that (i) the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict of interest, (ii) the named parties in such Proceeding (including any impleaded parties) include both the Company and Indemnitee and the Indemnitee concludes that there may be one or more legal defense available to him that are different from or in addition to those available to the Company, or (iii) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel that is selected by Indemnitee and approved by the Company (which approval shall not be unreasonably delayed, conditioned or withheld) (but not more than one law firm plus, if applicable, local counsel in respect of any particular Proceeding), and all Expenses related to such separate counsel shall be borne by the Company.

(c) The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Proceeding pursuant to which the Indemnitee is entitled to indemnification and that is effected without the Company’s prior written consent, which shall not be unreasonably withheld; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of the Indemnitee for amounts paid in settlement if an Independent Counsel has approved the settlement. The Company shall not settle any Proceeding pursuant to which the Indemnitee is entitled to indemnification in any manner that would impose any Expenses, claims, liabilities and/or damages on the Indemnitee without the Indemnitee’s prior written consent.

Section 12. Procedure Upon Application for Indemnification.

(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, the common stockholders of the Company by the affirmative vote of the holders of a majority in voting power of the Company’s outstanding common stock, present in person or represented by proxy; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys’ fees and disbursements) incurred by or on behalf of Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(c)If the Company disputes a portion of the amounts for which indemnification is requested, the undisputed portion shall be paid and only the disputed portion withheld pending resolution of any such dispute.

Section 13. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b) Subject to Section 14(e), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected with reasonable care by or on behalf of the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e) The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 14. Remedies of Indemnitee.

(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the penultimate sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by or on behalf of Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement (i) shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Organizational Documents, any agreement, a vote of stockholders or a resolution of directors, or otherwise and (ii) shall be interpreted independently of, and without reference to, any other such rights to which Indemnitee may at any time be entitled. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by

Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Organizational Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) In the event of any payment made by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.

Section 16. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as an officer and director of the Company and of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company, or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding (including any appeal thereof) commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto. The indemnification and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. The Company shall require and shall cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to, by written agreement, expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

Section 17. Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the

fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 18. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is serving at the request of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Organizational Documents, any directors’ and officers’ insurance maintained by the company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

Section 19. Section 409A. If Indemnitee’s right to payment or reimbursement of indemnification or expenses pursuant to this Agreement would not be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) pursuant to Treasury Regulation Section 1.0409A-1(b)(10), then (a) the payment or reimbursement of indemnification and expenses provided or advanced to or for Indemnitee pursuant to this Agreement in one taxable year shall not affect the amount of indemnification and expenses provided or advanced to or for Indemnitee in any other taxable year, (b) any reimbursement to Indemnitee of expenses under this Agreement shall be paid to Indemnitee on or before the last day of Indemnitee’s taxable year following the taxable year in which the expense was incurred and (c) the right to advancement, reimbursement or payment of indemnification and expenses under this Agreement may not be liquidated or exchanged for any other benefit. In addition, to the extent that this Agreement is subject to Section 409A of the Code, this Agreement shall be interpreted and enforced so as to avoid any tax, penalty or interest under Section 409A of the Code. For purposes of this Section 19, expenses shall be deemed to include in addition to those items included in the definition thereof in Section 2, any liability, loss, judgment, fine and amounts paid in settlement.

Section 20. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 21. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

Section 22. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed or (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed:

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to

Air Lease Corp.

2000 Avenue of the Stars, Suite 1000N

Los Angeles, CA 90067

Attention: General Counsel

or to any other address as may have been furnished to Indemnitee by the Company.

Section 23. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 24. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court of Chancery of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

Section 25. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 26. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.


AIR LEASE CORP.				INDEMNITEE


By:				By:
Name:				Name:
Office:				Address:

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: May 7, 2020


	/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: May 7, 2020


	/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 March 31, 2020 (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: May 7, 2020
	/s/ John L. Plueger
	John L. Plueger
	Chief Executive Officer and President (Principal Executive Officer)

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

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 March 31, 2020 (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: May 7, 2020
	/s/ Gregory B. Willis
	Gregory B. Willis
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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