AIR Lease Corp.

Rental & Leasing Services • Industrials • Los Angeles, CA, United States • AL (NYQ)

310 553 0555 2000 Avenue of the Stars, Los Angeles, CA 90067, United States

Quarter: Q4 2026 Reported: November 28, 2025 Sentiment: Neutral

Air Lease Corporation, an aircraft leasing company, engages in the purchase and leasing of commercial jet aircraft to airlines in the Asia Pacific, Europe, the Middle East, Africa, Mexico, Central America, South America, the United States, and Canada. It also sells aircraft to third parties, including other leasing companies, financial services companies, airlines, and other investors. In addition, the company provides fleet management services to investors and owners of aircraft portfolios. As of June 30, 2025, it owned 495 aircraft; managed 53 aircraft; and 241 aircraft on order with aircraft manufacturers. Air Lease Corporation was incorporated in 2010 and is headquartered in Los Angeles, California.

Analysis Summary

AIR LEASE CORP (AL) is navigating a complex period centered on its proposed merger with Sumisho Air Lease Corporation, a new holding company backed by Sumitomo Corporation, SMBC Aviation Capital, Apollo Capital Management, and Brookfield Asset Management. The company has provided detailed financial projections, last updated on August 29, 2025, which underpin the merger valuation.

Detailed Financial Performance Breakdown (Based on August 29, 2025 Projections):
For fiscal year 2026, AL projects revenues of $3,112 million, an estimated increase of 2.6% from the 2025 projection of $3,034 million. Adjusted Net Income to Common is forecasted at $594 million, a significant 14.0% rise from the 2025 estimate of $521 million (excluding non-recurring Russia insurance proceeds). Adjusted Earnings per Share (EPS) is expected to reach $5.16 in 2026, up 13.7% from $4.54 in 2025. The Net Book Value of Flight Equipment is projected to grow to $30.1 billion in 2026 from $29.6 billion in 2025, with total assets increasing to $34.5 billion from $33.9 billion. Adjusted Return on Average Common Equity (ROACE) is projected to remain stable at 7.7% in 2026. These projections assume robust gain on sale margins for aircraft, with $1.5 billion in annual aircraft sales at 13% assumed gains.

Strategic Initiatives and Business Segment Analysis:
The primary strategic focus is the successful completion of the merger, which will integrate AL into a larger, well-capitalized structure under the consortium of equity investors. The financial projections are built on a bottom-up, aircraft-level analysis, incorporating contracted rental rates for the existing fleet and placed orderbook, and assuming lease rates on extensions and unplaced orders align with recent, improved market conditions post-COVID-19. This indicates a healthy underlying business model and strong demand for aircraft leasing services.

Management Commentary and Forward Guidance:
Management's latest 'Air Lease Projections' for 2025-2032 serve as forward guidance, anticipating an improving interest rate environment and persistent favorable market conditions, without major disruptions in the aviation sector. Key assumptions include maintaining current GAAP depreciation policies, adhering to a 2.50x adjusted net debt/equity target, and benefiting from declining interest rates on new debt issuances. The long-term outlook aims for a gradual expansion of ROACE to 9.4% by 2032, driven by sustained profitability and continued investment in the asset base. These projections were critical inputs for J.P. Morgan's financial analyses and opinion regarding the merger consideration.

Competitive Positioning and Market Trends:
The projections reflect a positive market environment, characterized by "marked improvement in market conditions since the COVID-19 pandemic" and the ability to achieve robust gain on sale margins. The strategic merger with a powerful consortium of investors is expected to enhance AL's competitive positioning, providing greater financial resources and market reach in the global aircraft leasing industry.

Risk Factors and Concerns Raised:
The most prominent concerns are the multiple shareholder lawsuits filed in Delaware and New York. These complaints allege materially misleading and/or incomplete disclosures in the Definitive Proxy Statement, specifically regarding financial projections, J.P. Morgan's analyses, post-transaction employment discussions, and potential conflicts of interest involving legal and financial advisors. While AL denies the allegations and believes them to be without merit, it is voluntarily issuing supplemental disclosures to address these claims, avoid nuisance, and prevent potential delays to the merger vote. Furthermore, the inherent uncertainty and subjectivity of the long-term financial projections, along with broader economic, industry, and regulatory risks, remain significant cautionary factors. The document also notes that the projections do not account for major disruptions in the aviation sector.

Key Highlights

• AIR LEASE CORP (AL) is proceeding with a merger to become an indirect wholly-owned subsidiary of Sumisho Air Lease Corporation, formed by Sumitomo, SMBC AC, Apollo, and Brookfield.
• Multiple shareholder lawsuits have been filed alleging misleading/incomplete disclosures in the merger proxy statement.
• AL is voluntarily providing supplemental disclosures to address lawsuit allegations and facilitate the merger, while denying their merit.
• Latest financial projections (August 29, 2025) for 2026 estimate revenues of $3.112 billion (+2.6% YoY) and adjusted EPS of $5.16 (+13.7% YoY).
• J.P. Morgan's analysis indicated the merger consideration of $65.00 per share is within its implied equity value ranges.
• Projections assume an improving interest rate environment, persistent favorable market conditions, and robust aircraft sale margins.
• Long-term ROACE is projected to gradually expand to 9.4% by 2032, reflecting sustained profitability and asset investment.

Financial Metrics

eps

5.16

YoY: 13.7%

revenue

3112 million

YoY: 2.6%

guidance

net income

594 million

YoY: 14.0%

Stock Performance (90 Days)

Data through Dec 26, 2025

Layoff Events

Earnings Calls

Positive Signals

• Merger agreement with a consortium of strong, well-capitalized equity investors.
• Positive financial projections for future years, indicating expected growth in revenue, net income, and EPS.
• Company's proactive approach to address legal challenges through voluntary supplemental disclosures to ensure merger progression.
• J.P. Morgan's financial analysis supporting the merger consideration within its valuation ranges.
• Projections based on assumptions of improving interest rate environment and persistent favorable market conditions post-COVID-19.

Risks & Concerns

— Multiple shareholder lawsuits alleging materially misleading and/or incomplete disclosures in the merger proxy statement.
— Inherent uncertainty and subjectivity of financial projections, which may not be realized.
— Potential for actual results to differ materially from projections due to business, industry, regulatory, and economic conditions.
— Risk of major disruptions in the aviation sector, which are not contemplated in the projections.
— Reliance on non-GAAP financial measures in projections, which are not prepared in accordance with GAAP or SEC guidelines for public disclosure.