AIR LEASE CORP: Results of Operations and Financial Condition, Significant Impairment (Form 8-K)

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Item 2.02 Results of Operations and Financial Condition.

The information set forth in Section 2.06 of this Current Report on Form 8-K is incorporated by reference into this Section 2.02.

Item 2.06. Material deficiencies.

United States, European Union, UK and others have imposed, and may continue to impose, economic sanctions and export controls against certain industry sectors and parties Russia in the context of the ongoing conflict between Russia and Ukraine. As stated earlier, Airline rental company (the “Company”) had approximately 3.4% of its net book value fleet under lease to customers in Russia from March 31, 2022.

In response to the sanctions, the Company terminated the lease of all aircraft leased to Russian airlines. The Company has determined that it is unlikely to repossess the aircraft that have not been returned and remain in Russia, representing 21 aircraft in the Company-owned fleet and six aircraft in the Company-managed fleet. On April 19, 2022in connection with the preparation and review of the Company’s quarterly financial statements for the quarter ended March 31, 2022the company has determined that it plans to record a write-off of its interests in its owned and managed fleet that remain in Russiatotaling approximately $802.4 million. The Company does not expect that the write-off of these assets will result in material future cash outlays for the Company. The Company is vigorously pursuing insurance claims to recover losses related to these aircraft.

The Company’s financial information provided in this report is an estimate and subject to change. The Company’s financial closing procedures for the quarter ended
March 31, 2022 have not yet been completed and there can be no assurance that the Company’s final results for this period will not differ from these estimates.

Forward-looking statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the company’s current expectations or forecasts of future events. All statements in this current report other than statements of historical fact are forward-looking statements. These forward-looking statements include, among other things, all statements regarding the Company’s expectations and beliefs regarding its operations, financial performance, asset write-offs, recoverability of aircraft in Russia, and the outcome of any insurance claim. These forward-looking 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 due to the following factors, among others: the extent to which the Russian invasion of Ukraine and the impact of the sanctions imposed by United States, European Union, UK and other countries affect the Company’s business and financial condition, results and cash flows; the Company’s inability to generate sufficient returns on its aircraft investments through strategic acquisitions and profitable leases; changes in the value and lease rates of the Company’s aircraft, including due to oversupply of aircraft, manufacturers’ production levels, inability of lessees to maintain the Company’s aircraft and other factors beyond the control of the Company; deterioration in the financial condition and liquidity of the Company’s tenants, including due to defaults and tenant reorganizations, bankruptcies or similar proceedings; the failure of the Company’s lessees to adequately insure its aircraft or to fulfill their contractual indemnification obligations to the Company; increased tariffs and other trade restrictions; changes in the regulatory environment, including changes in tax laws and environmental regulations; and other events affecting the business of the Company or the business of its tenants and aircraft manufacturers or their suppliers that are beyond the Company or their control, such as the threat or occurrence of epidemic diseases in addition to COVID- 19, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors; and additional factors discussed in “Part I – Item 1A. Risk Factors,” in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and other documents filed by the Company with the
Security and Exchange Commission.

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 the Company does not intend and undertakes no obligation to update any forward-looking information to reflect actual results, events or circumstances. after the date the statement is made or to reflect the occurrence of unforeseen events.

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