Air Lease Corporation Announces Fourth Quarter and Fiscal Year 2013 Results

Los Angeles, California, February 27, 2014 — Air Lease Corporation (ALC) (NYSE: AL) announced today financial results for the
quarter and fiscal year ended December 31, 2013.

Highlights
Air Lease Corporation reports another consecutive quarter of fleet, revenue and profitability growth:
• Diluted EPS increased 45% to $0.55 per share for the three months ended December 31, 2013 compared to $0.38 per share for the three months ended December 31, 2012. Diluted EPS increased 41% to $1.80 per share for the year ended December 31, 2013 compared to $1.28 per share for the year ended December 31, 2012.
• Revenues increased 28% to $243 million for the three months ended December 31, 2013 compared to $190 million for the three months ended December 31, 2012. Revenues increased 31% to $859 million for the year ended December 31, 2013 compared to $656 million for the year ended December 31, 2012.
• Income before taxes increased 48% to $91 million with a pretax margin of 37% for the three months ended December 31, 2013 compared to income before taxes of $61 million with a pretax margin of 32% for the three months ended December 31, 2012. Income before taxes increased 44% to $293 million with a pretax margin of 34% for the year ended December 31, 2013 compared to income before taxes of $204 million with a pretax margin of 31% for the year ended December 31, 2012.
• Successfully placed all new aircraft deliveries through 2015.
• Recorded $18.9 million in gains on aircraft sales, trading and other activity for the year ended December 31, 2013.
• Completed our debut investment grade senior unsecured notes offering in November 2013 issuing $700 million of public bonds with a coupon of 3.375%, maturing in 2019.
• Our Board of Directors declared a quarterly cash dividend of $0.03 per share on our outstanding common stock.

“ALC grew all of its key operating metrics in 2013. We punctuated the year by recording the Company’s highest pretax operating margin to date of 37.3% in the fourth quarter. Our fleet remains very young with long leases attached to a globally diversified group of airlines, which strongly enhances the Company’s credit profile. Another year of global traffic growth over 5% has generated strong demand for our future aircraft deliveries and positions the Company very well to continue to help airlines modernize aging aircraft fleets,” said Steven F. Udvár-Hazy, Chairman and Chief Executive Officer of Air Lease Corporation.

“Our fleet of aircraft continues to be 100% leased with a stable portfolio lease rate factor and our customers are performing well overall. Having now profitably placed all of our new aircraft deliveries through 2015, our focus turns to 2016 where we begin transitioning to our strong order book of new generation aircraft including A321 NEO, A350, Boeing 737 Max, and Boeing 787 aircraft.” said John L. Plueger, President and Chief Operating Officer of Air Lease Corporation.

Fleet Growth
As of December 31, 2013, we owned 193 aircraft in our operating lease portfolio and we leased the aircraft to a globally diversified customer base of 79 airlines in 47 countries. During the fiscal year ended December 31, 2013, we delivered 34 aircraft from our new order pipeline, plus six incremental aircraft acquired in the secondary market. During the quarter ended December 31, 2013, we delivered 11 aircraft from our new order pipeline, plus two incremental aircraft acquired in the secondary market. In addition, we sold an aircraft from our operating lease portfolio and we had an insured loss of one aircraft during the quarter ended December 31, 2013.
Below are portfolio metrics of our fleet as of December 31, 2013 and December 31, 2012:
December 31, 2013
Fleet size 193 Weighted-average fleet age(1) 3.7 years Weighted-average remaining lease term(1) 7.1 years Aggregate fleet net book value $ 7.6 billion

Debt Financing Activities
We ended 2013 with total debt outstanding of $5.9 billion as compared to $4.4 billion in 2012. This included total unsecured debt of $4.3 billion, as compared to $2.6 billion in 2012. Since our inception, we have built a globally diversified 43 member banking group, which has provided us in excess of $4.4 billion in financing and we have successfully accessed the debt capital markets for $3.3 billion in unsecured financing. In 2013, we increased our unsecured debt as a percentage of total debt to 73.5%, as compared to 60.2% in 2012. Our fixed rate debt, as a percentage of total debt, increased to 62.0%, as compared to 53.9% in 2012. Additionally, we have reduced our composite cost of funds to 3.60%, as compared to 3.94% in 2012.

During the fiscal year ended December 31, 2013, we raised $2.6 billion in debt financing. This was comprised principally of $1.3 billion in senior unsecured notes and $957.0 million in additional capacity under our Syndicated Unsecured Revolving Credit Facility, which now totals $2.0 billion.

In the fourth quarter 2013, we raised $1.2 billion in debt financing. This was comprised principally of $885.0 million in senior unsecured notes and $300 million in additional capacity under our Syndicated Unsecured Revolver.

Our financing strategy remains focused on raising unsecured debt in the global bank and capital markets. In May 2013, the Company received a corporate credit rating of A- from Kroll Bond Ratings, followed by a second investment grade corporate credit rating of BBB- from S&P with a stable outlook in August 2013, further broadening our access to attractively priced capital.