Air Lease Corporation 2017 Investor Day May 24, 2017
Forward Looking Statements & Non-GAAP Measures Statements in this presentation that are not historical facts are hereby identified as “forward-looking statements,” including any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance that are not historical facts and may be forward-looking. 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. Accordingly, 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 them. We wish to caution you that our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors, including the following: 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 respective debts mature; Impaired financial condition and liquidity of our lessees; • • Deterioration of economic conditions, generally, and especially in the commercial aviation industry; Increased maintenance, operating or other expenses or changes in the timing thereof; • Changes in law and the regulatory environment, and in government fiscal and monetary policies, domestic and foreign; • • Our inability to effectively deploy the net proceeds from our capital raising activities; and Potential natural disasters, terrorist attacks and the risk of loss of aircraft and the amount of our insurance coverage, if any, relating thereto. • We also refer you to the documents the Company files from time to time with the Securities and Exchange Commission (“SEC”), specifically the Company’s most recent Annual Report on Form 10-K, which contains and identifies important factors that could cause the actual results for the Company on a consolidated basis to differ materially from expectations and any subsequent documents the Company files with the SEC. 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, and, therefore, you are cautioned not to place undue reliance on such statements. Further, 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. If any such risks or uncertainties develop, our business, results of operation and financial condition could be adversely affected. You may obtain copies of the Company’s most recent Annual Report on Form 10-K and the other documents it files with the SEC for free by visiting EDGAR on the SEC website at www.sec.gov. This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any of the Company’s securities. Any offering of the Company’s securities may be made only by means of a prospectus and related prospectus supplement. In addition to financial results prepared in accordance with U.S. generally accepted accounting principles, or GAAP, this presentation contains certain non-GAAP financial measures. Management believes that in addition to using GAAP results in evaluating our business, it can also be useful to measure results using certain non-GAAP financial measures. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with their most direct comparable GAAP financial results set forth in the Appendix section. 2
Overview John L. Plueger Chief Executive Officer
Driving superior results ALC M Manage gement t and B Boa oard align gned w with th i investor tors, h hol olding g ~10% 10% of of ou outs tsta tanding g com ommon on s stoc tock 26 26 200+ 200+ 353 353 Avg. years of commercial Airline relationships in 70 Modern aircraft on order aviation experience among countries 1 with manufacturers 1 sr. management team $184 millio million 18.8% 18.8% $24 billion $24 bil lion Assets per employee 3 Adjusted Pre-Tax Return on Contracted and committed $19 millio million n Equity (“ROE”) 2 fleet rentals 1 Revenue per employee 3 1 As of March 31, 2017; 2 TTM as of March 31, 2017; Adjusted Return on Equity Before Income Taxes is calculated as the trailing twelve month Adjusted Net Income Before Income Taxes divided by average shareholders’ equity. Adjusted Net Income Before Income Taxes is a non-GAAP financial measure. See appendix for a reconciliation to its most directly comparable GAAP measure. 3 For the fiscal year ended December 31, 2016 4
Business highlights $12. $12.6 b 6 billion on f fleet 1 1 with $27. $27.6 b 6 billion on of of aircraft on on or order aft 2 Scale 50 man anag aged ed ai aircr craf GROW GR OWTH 72% 72% of f or orderbook ook placed aced o on long ter erm l leas eases es through 2020 a 2020 and $24 b $24 billion on in Visibility co contract acted ren ental als Leveragin ing a air irlin line a and OEM r rela latio tionship ips to to driv ive growth th a and profita itability ility Opportunity Substa tantia tial liq l liquid idity ity and relia liable le a access to to capita ital m l markets ts Liquidity Inves estmen ent g grad ade cap e capital al struct cture ( (S& S&P: P: BBB / Fitch ch: B BBB / Kroll: A-) Ratings ity 3 18.8% a adj djusted pr d pre-tax r retur urn o n on n equity Returns Note: As of March 31, 2017 unless otherwise noted, 1 Aggregate fleet net book value 2 Includes 31 managed aircraft as of March 31, 2017 plus 19 Thunderbolt aircraft; 3 TTM as of March 31, 2017; Adjusted Return on Equity Before Income Taxes is calculated as the trailing twelve month Adjusted Net Income Before Income Taxes divided by average shareholders’ equity. Adjusted Net Income Before Income Taxes is a non-GAAP financial measure. See appendix for a reconciliation to its most directly comparable GAAP measure. 5
Air Lease strategy has remained unchanged since inception You oung, g, Lon ong g mode odern leas eases es ai aircraf craft Low Lo Lead Leading ng lev everag erage manag anagem ement ent team eam >$12b $12bn >$24bn >$24b $0 $0 7 year years 5 year years Aggreg egat ate e fleet eet n net et b book val alue as e as Project ected ed ag aggreg egat ate e fleet eet n net et of of Ma Marc rch 31, 31, 2017 2017 book ook v value 6
ALC owns a fleet of young aircraft Assuming no sales, ALC’s fleet age will remain well under 5 years through 2022 1 2017 2017 2019 2019 2022 2022 >8 years, >8 years, >8 years, 12% 12% 13% <8 years, <8 years, <8 years, 88% 87% 88% Averag erage Fl e Fleet eet Age: e: Averag erage Fl e Fleet eet Age: e: Averag erage Fl e Fleet eet Age: e: z 3.7 ye 3. 7 years 3. 3.9 ye 9 years 4. 4.1 ye 1 years 1 Assumes that ALC purchases and receives aircraft on order based on the current anticipated delivery schedule 7 Note: Percentages based on net book value
Aircraft placements remain strong Select aircraft placements announced in 2017 (1) 787-9 with Aeromexico (5) 787-9s with China Southern Widebody (2) 787-9s with Air Canada (1) 787-9 with LOT Polish (1) A350-900 with Sichuan (2) A330-900neos with Air Mauritius (1) 787-9 with Air New Zealand Narrowbody (7) A321neo LRs with Aer Lingus (8) 737 MAX 9 with Primera Air Nordic (2) 737 MAX 8 with MIAT Mongolian 8
Globally diversified customer base Long standing relationships with over 200 airlines spanning 70 countries 9
ALC’s management business Source of contingent and opportunity capital A risk management tool 19 ma 19 manage ged airc rcra raft Broadens key relationships 12 ma 12 manage ged airc rcra raft Opens a new sales channel for mid-life aircraft Allows ALC to retain customer 19 ma 19 manage ged airc rcra raft relationships as aircraft age Goal i Go is to c compli liment our s strategy wh y while e expanding R ROE OE 10 Note: 31 managed aircraft as of March 31, 2017 plus 19 Thunderbolt aircraft
Airlines are expected to need 39,620 new airplanes between 2016 and 2035 – valued at ~$5.9 trillion Airplane deliveries: 39,620 Market value: $5,930B 2016 - 2035 2016 - 2035 Airp irpla lane T Type Value ue ALC Primary M Market: $5, $5,600B 600B 2% 2% Regional jets $110B $110B 4% 4% 28,140 21% 21% Sin ingle le-ais isle le $3, $3,000B 000B 30,000 Small ll w wid ide-bo body dy $1,350B $1, 350B $5.9T 51% 51% 51% 51% 20,000 9,100 Mediu ium w wid ide-bo body dy $1,250B $1, 250B 2,380 23% 23% 23% 23% 10,000 Large wide-body $220B $220B 0 Wor orld Tota Total $5,930B $5, 930B Regional Single- Wide- RJ Single Aisle jets aisle body Small Twin Aisle Medium Twin Aisle 6% 6% 71% 71% 23% 23% Large Twin Aisle 11 Source: Boeing, Current Market Outlook, 2016
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