Sumisho Air Lease Announces Third Quarter 2026 Results
Sumisho Air Lease Announces Third Quarter 2026 Results
LOS ANGELES--(BUSINESS WIRE)--Sumisho Air Lease announces financial results for the third quarter of 2026.
Third Quarter 2026 Results
The following table summarizes the operating results of Sumisho Air Lease Corporation (the "Company") for the three months ended September 30, 2026 (Successor) and the three months ended September 30, 2025 (Predecessor) (in millions, except per share amounts and percentages):
Operating Results
|
Successor |
|
|
Predecessor |
|
|
|
|
|||||||
|
Three Months Ended September 30, |
|
|
Three Months Ended September 30, |
|
$ change 2026 vs. 2025 |
|
% change 2026 vs. 2025 |
|||||||
|
|
2026 |
|
|
|
|
2025 |
|
|
|
|||||
Rental of flight equipment revenue |
$ |
556.7 |
|
|
|
$ |
680.9 |
|
|
$ |
(124.2 |
) |
|
(18.2 |
)% |
Gain on aircraft sales, trading and other |
|
36.0 |
|
|
|
|
44.5 |
|
|
|
(8.5 |
) |
|
(19.1 |
)% |
Total Revenues |
|
592.6 |
|
|
|
|
725.4 |
|
|
|
(132.8 |
) |
|
(18.3 |
)% |
Operating expenses |
|
(493.1 |
) |
|
|
|
(600.9 |
) |
|
|
107.8 |
|
|
(17.9 |
)% |
Recoveries of Russian fleet write-off |
|
27.3 |
|
|
|
|
60.5 |
|
|
|
(33.2 |
) |
|
(54.9 |
)% |
Income before taxes |
|
126.8 |
|
|
|
|
185.0 |
|
|
|
(58.2 |
) |
|
(31.5 |
)% |
Net income attributable to common stockholders |
$ |
93.4 |
|
|
|
$ |
135.4 |
|
|
$ |
(42.0 |
) |
|
(31.0 |
)% |
Adjusted net income before income taxes(1) |
$ |
123.1 |
|
|
|
$ |
144.5 |
|
|
$ |
(21.4 |
) |
|
(14.8 |
)% |
Key Financial Ratios
|
Successor |
|
|
Predecessor |
|
|
Three Months Ended September 30, |
|
|
Three Months Ended September 30, |
|
|
2026 |
|
|
2025 |
|
Pre-tax margin |
21.4 % |
|
|
25.5 % |
|
Adjusted pre-tax margin(1) |
20.8 % |
|
|
19.9 % |
|
____________________ |
|||||
(1) |
Adjusted net income before income taxes and adjusted pre-tax margin have been adjusted to exclude the effects of certain non-cash items and other items that we do not believe are indicative of our ongoing operations, such as retirement compensation, merger related costs, and recoveries related to our former Russian fleet. See note 1 under the Consolidated Statements of Income included in this earnings release for a discussion of the non-GAAP measures and a reconciliation to their most comparable GAAP financial measures. |
Highlights
- We ended the period with 473 aircraft in our owned fleet and approximately $29.9 billion in total assets.
- Sold 15 aircraft during the three months ended September 30, 2026 for $761.9 million in sales proceeds.
- We have $4.3 billion of aircraft in our sales pipeline1, which includes approximately $4.3 billion in flight equipment held for sale and approximately $55.3 million of aircraft subject to letters of intent as of September 30, 2026.
- In September 2026, we received $27.3 million in cash insurance proceeds from the settlement of insurance claims with all of the Airlines’ Insurers related to our former Russian fleet. As of November 5, 2026, we do not have any pending litigation related to the Russian Fleet write-off that was recorded in March of 2022 at the onset of the Russia-Ukraine War.
Financial Overview
Third Quarter 2026 vs. Third Quarter 2025
Our rental of flight equipment revenues for the three months ended September 30, 2026, decreased by approximately 18.2%, to $556.7 million, as compared to $680.9 million for the three months ended September 30, 2025. The decrease is primarily due to a lower weighted average net book value of our flight equipment subject to operating leases resulting from the sale of our orderbook and continued sales activity. The net book value of our flight equipment subject to operating leases decreased to $23.7 billion as of September 30, 2026 from a net book value of $29.5 billion as of September 30, 2025.
Our gain on aircraft sales and trading and other income decreased to $36.0 million compared to $44.5 million for the three months ended September 30, 2025. The decrease was primarily driven by lower gains on aircraft sales as a result of acquisition accounting adjustments, partially offset by higher management fee revenue attributable to disposition fees earned on sales of managed aircraft. As a result of the application of the acquisition method of accounting, the carrying values of our flight equipment subject to operating leases and our flight equipment held for sale as of the date of the merger were adjusted to fair value. For the three months ended September 30, 2026, we sold 15 aircraft to third parties resulting in $0.6 million in gains compared to $35.0 million in gains from the sale of five aircraft for the three months ended September 30, 2025. Sales proceeds for the 15 aircraft sold during the three months ended September 30, 2026 were $761.9 million.
Excluding the $27.3 million and $60.5 million insurance recoveries related to our Russian fleet in the three months ended September 30, 2026, and 2025, respectively, total operating expenses decreased 17.9% to $493.1 million for the three months ended September 30, 2026, compared to $600.9 million in the prior-year period. The decrease was primarily due to lower depreciation expense because of a decrease in the weighted average net book value of our flight equipment subject to operating leases, resulting from the sale of our orderbook and continued sales activity and revised aircraft depreciation estimates, partially offset by an increase in servicing fees and higher interest expense due to the amortization of fair value adjustments resulting from purchase accounting, and an increase in our composite cost of funds.
During the three months ended September 30, 2026, we reported a net income attributable to common stockholders of $93.4 million, compared to net income attributable to common stockholders of $135.4 million for the three months ended September 30, 2025. The decrease was primarily driven by lower total revenues, an increase in servicing fees and higher interest expense due to fair value adjustments and an increase in composite costs of funds, partially offset by lower depreciation expense as discussed above. In addition, we recognized a net benefit of $27.3 million from insurance claims associated with our former Russian fleet as compared to $60.5 million in the prior-year period, further contributing to the decrease in net income attributable to common stockholders.
During the three months ended September 30, 2026, adjusted net income before income taxes decreased to $123.1 million from $144.5 million for the three months ended September 30, 2025. The decrease was primarily attributable to lower total revenues, an increase in servicing fees under the Servicing Agreement entered into in connection with the Merger, partially offset by a lower depreciation expense, as discussed above.
| ____________________ | |
1 |
Aircraft in our sales pipeline is as of September 30, 2026, and includes letters of intent and sale agreements signed through November 5, 2026. |
Our Fleet
As of September 30, 2026, the net book value of our flight equipment subject to operating leases was $23.7 billion, compared to $29.1 billion as of December 31, 2025. On April 8, 2026, the carrying value of our flight equipment was adjusted to reflect the fair value adjustments recorded as part of the purchase price allocation in connection with the merger. In addition, during the Successor period from April 8, 2026 through September 30, 2026, approximately $4.6 billion of aircraft assets were reclassified to flight equipment held for sale, resulting in a corresponding decrease in the net book value of flight equipment subject to operating leases. As of September 30, 2026, we owned 473 aircraft in our aircraft portfolio, comprised of 339 narrowbody aircraft and 134 widebody aircraft, and we managed 32 aircraft. The weighted average fleet age and weighted average remaining lease term of flight equipment subject to operating leases as of September 30, 2026 was 5.0 years and 6.8 years, respectively. We had a globally diversified customer base comprised of 94 airlines in 51 countries as of September 30, 2026.
We revised our aircraft depreciation estimates starting in the third quarter of 2026 based on updated information about expected disposition timing and residual values. Compared with previous estimates, the change reduced depreciation expense by $38.8 million for the three months ended September 30, 2026. See Note 2 of the Notes to Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 for further discussion. We expect the quarterly depreciation expense to be approximately $192 million for the fourth quarter of 2026.
The following table summarizes the key portfolio metrics of our fleet as of September 30, 2026 and December 31, 2025:
|
Successor |
|
|
Predecessor |
||
|
September 30, 2026 |
|
|
December 31, 2025 |
||
Net book value of flight equipment subject to operating leases(1) |
$ |
23.7 billion |
|
|
$ |
29.1 billion |
Weighted-average fleet age(2) |
5.0 years |
|
|
4.9 years |
||
Weighted-average remaining lease term(2) |
6.8 years |
|
|
7.2 years |
||
|
|
|
|
|
||
Owned fleet(3) |
473 |
|
|
490 |
||
Managed fleet(4) |
32 |
|
|
45 |
||
Aircraft on order(1) |
— |
|
|
218 |
||
Total |
505 |
|
|
753 |
||
|
|
|
|
|
||
Current fleet contracted rentals |
$ |
16.2 billion |
|
|
$ |
19.6 billion |
Committed fleet rentals(1) |
$ |
— |
|
|
$ |
9.3 billion |
Total committed rentals |
$ |
16.2 billion |
|
|
$ |
28.9 billion |
|
|
|
|
|
(1) |
On April 8, 2026, in connection with the closing of the merger, SMBC AC acquired our rights to the outstanding orderbook for undelivered aircraft and the committed fleet rentals for such aircraft have been subsequently transferred to SMBC AC. In addition, the carrying value of flight equipment subject to operating lease was adjusted to reflect purchase accounting fair value adjustments recorded as part of the purchase price allocation. For further discussion of the merger see Note 3 of the Notes to Consolidated Financial Statements included in Part I, Item 1 of our Quarterly Report on Form 10-Q. |
||||
(2) |
Weighted-average fleet age and remaining lease term calculated based on net book value of our flight equipment subject to operating leases. |
||||
(3) |
As of September 30, 2026 and December 31, 2025, our owned fleet count included 72 and 12 aircraft classified as flight equipment held for sale, respectively, and 17 and 16 aircraft classified as net investments in sales-type leases, respectively. |
||||
(4) |
Following the Merger, we continue to manage our managed fleet; however, certain services for these aircraft and leases are subserviced by SMBC AC. |
||||
The following table details the regional concentration of our flight equipment subject to operating leases:
|
|
Successor |
|
|
Predecessor |
|
|
September 30, 2026 |
|
|
December 31, 2025 |
Region |
|
% of Net Book Value(1) |
|
|
% of Net Book Value |
Europe |
|
39.4 % |
|
|
39.1 % |
Asia Pacific |
|
35.9 % |
|
|
36.5 % |
Central America, South America, and Mexico |
|
11.2 % |
|
|
10.7 % |
U.S. and Canada |
|
7.4 % |
|
|
5.9 % |
The Middle East and Africa |
|
6.1 % |
|
|
7.8 % |
Total |
|
100.0 % |
|
|
100.0 % |
|
|
|
|
|
|
(1) |
On April 8, 2026, the carrying value of flight equipment was adjusted to reflect purchase accounting fair value adjustments recorded as part of the purchase price allocation. For further discussion of the merger see Note 3 of Notes to Consolidated Financial Statements included in Part I, Item 1 of our Quarterly Report on Form 10-Q. |
|||||
The following table details the composition of our owned fleet by aircraft type:
|
|
Successor |
|
|
Predecessor |
||||
|
|
September 30, 2026 |
|
|
December 31, 2025 |
||||
Aircraft type |
|
Number of Aircraft |
|
% of Total |
|
|
Number of Aircraft |
|
% of Total |
Airbus A220-100 |
|
9 |
|
1.9 % |
|
|
8 |
|
1.6 % |
Airbus A220-300 |
|
34 |
|
7.2 % |
|
|
33 |
|
6.7 % |
Airbus A320-200 |
|
14 |
|
3.0 % |
|
|
17 |
|
3.5 % |
Airbus A320-200neo |
|
21 |
|
4.4 % |
|
|
23 |
|
4.7 % |
Airbus A321-200 |
|
15 |
|
3.2 % |
|
|
17 |
|
3.5 % |
Airbus A321-200neo |
|
103 |
|
21.8 % |
|
|
109 |
|
22.2 % |
Airbus A330-200(1) |
|
12 |
|
2.5 % |
|
|
13 |
|
2.7 % |
Airbus A330-300 |
|
5 |
|
1.1 % |
|
|
5 |
|
1.0 % |
Airbus A330-900neo |
|
27 |
|
5.7 % |
|
|
28 |
|
5.7 % |
Airbus A350-900 |
|
16 |
|
3.4 % |
|
|
17 |
|
3.5 % |
Airbus A350-1000 |
|
8 |
|
1.7 % |
|
|
8 |
|
1.6 % |
Boeing 737-800 |
|
32 |
|
6.8 % |
|
|
38 |
|
7.8 % |
Boeing 737-8 MAX |
|
75 |
|
15.9 % |
|
|
71 |
|
14.5 % |
Boeing 737-9 MAX |
|
35 |
|
7.4 % |
|
|
35 |
|
7.1 % |
Boeing 777-200ER |
|
1 |
|
0.2 % |
|
|
1 |
|
0.2 % |
Boeing 777-300ER |
|
22 |
|
4.6 % |
|
|
23 |
|
4.7 % |
Boeing 787-9 |
|
25 |
|
5.2 % |
|
|
26 |
|
5.3 % |
Boeing 787-10 |
|
18 |
|
3.8 % |
|
|
17 |
|
3.5 % |
Embraer E190 |
|
1 |
|
0.2 % |
|
|
1 |
|
0.2 % |
Total(2) |
|
473 |
|
100.0 % |
|
|
490 |
|
100.0 % |
|
|
|
|
|
|
|
|
|
|
(1) |
As of each of September 30, 2026 and December 31, 2025, aircraft count includes three Airbus A330-200 aircraft classified as freighters. |
|||||||||
(2) |
As of September 30, 2026 and December 31, 2025, our owned fleet count included 72 and 12 aircraft classified as flight equipment held for sale, respectively, and 17 and 16 aircraft classified as net investments in sales-type leases, respectively. |
|||||||||
Debt Financing Activities
Our total debt financing, net of discounts and issuance costs was $19.3 billion and $19.7 billion as of September 30, 2026 and December 31, 2025. As of September 30, 2026, and December 31, 2025, 70.8% and 76.8% of our total debt financing was at a fixed rate, respectively and 99.2% and 97.5% was unsecured, respectively. Our composite cost of funds was 4.51% and 4.15% as of September 30, 2026 and December 31, 2025, respectively. We ended the quarter with total liquidity of $4.2 billion which was comprised of unrestricted cash of $704.1 million and approximately $3.5 billion in undrawn balances under our unsecured revolving credit facility.
As of the end of the periods presented, our debt portfolio was comprised of the following components (dollars in millions, except percentages):
|
|
Successor |
|
|
Predecessor |
||
|
|
September 30, 2026 |
|
|
December 31, 2025 |
||
Unsecured |
|
|
|
|
|
||
Senior unsecured securities |
|
$ |
13,812 |
|
|
$ |
13,861 |
Term financings |
|
|
5,089 |
|
|
|
3,847 |
Commercial paper |
|
|
— |
|
|
|
1,361 |
Revolving credit facility |
|
|
— |
|
|
|
— |
Other revolving credit facilities |
|
|
450 |
|
|
|
300 |
Total unsecured debt financing |
|
|
19,351 |
|
|
|
19,369 |
Secured |
|
|
|
|
|
||
Term financings |
|
|
— |
|
|
|
318 |
Export credit financing |
|
|
163 |
|
|
|
175 |
Total secured debt financing |
|
|
163 |
|
|
|
493 |
|
|
|
|
|
|
||
Total debt financing |
|
|
19,514 |
|
|
|
19,862 |
Less: Debt discounts and issuance costs |
|
|
(63) |
|
|
|
(132) |
Less: Fair value adjustment |
|
|
(178) |
|
|
|
— |
Debt financing, net of discounts and issuance costs |
|
$ |
19,273 |
|
|
$ |
19,730 |
Selected interest rates and ratios: |
|
|
|
|
|
||
Composite interest rate(1) |
|
|
4.51 % |
|
|
|
4.15 % |
Composite interest rate on fixed-rate debt(1) |
|
|
4.35 % |
|
|
|
3.91 % |
Percentage of total debt at a fixed-rate |
|
|
70.78 % |
|
|
|
76.85 % |
|
|
|
|
|
|
||
(1) |
This rate does not include the effect of upfront fees, facility fees, undrawn fees or amortization of debt discounts and issuance costs. |
|||||||
Conference Call
In connection with this earnings release, Sumisho Air Lease will host a conference call on November 5, 2026 at 4:30 PM Eastern Time to discuss the Company's financial results for the third quarter of 2026.
Investors can participate in the conference call by dialing 1 (833) 461-5787 domestic or 1 (585) 542-9983 international. The passcode for the call is 381 279 840.
The conference call will also be broadcast live through a link on the Investors page of the Sumisho Air Lease website at www.sumisho.aero. Materials presented during the conference call will also be posted on the Sumisho Air Lease website. Please visit the website at least 15 minutes prior to the call to register, download and install any necessary audio software. A transcript of the conference call will be available on the Investors page of the Sumisho Air Lease website for a period of 12 months following the conference call.
About Sumisho Air Lease
Sumisho Air Lease Corporation is a leading global aircraft leasing company acquired by Sumitomo Corporation, SMBC Aviation Capital, and investment vehicles affiliated with Apollo and Brookfield in April 2026. The company is principally engaged in leasing liquid and new technology aircraft to airlines throughout the world. Sumisho Air Lease routinely posts information that may be important to investors in the “Investors” section of its website at www.sumisho.aero. Investors and potential investors are encouraged to consult Sumisho Air Lease’s website regularly for important information. The information contained on, or that may be accessed through, Sumisho Air Lease’s website is not incorporated by reference into, and is not a part of, this press release.
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places in this press release and include statements regarding, among other matters, our aircraft sales pipeline and expectations and other factors affecting our financial condition or results of operations. Words such as “can,” “could,” “may,” “predicts,” “potential,” “will,” “projects,” “continuing,” “ongoing,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and “should,” and variations of these words and similar expressions, are used in many cases to identify these forward-looking statements. Any such forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors that may cause our actual results, performance or achievements, or industry results to vary materially from our future results, performance or achievements, or those of our industry, expressed or implied in such forward-looking statements. Such factors include, among others:
- we have a significant amount of indebtedness, requiring a substantial portion of our cash flows to be dedicated to debt service payments, and we will require significant capital to satisfy our outstanding debt obligations as they come due;
- despite our substantial indebtedness levels, we may still be able to incur significantly more debt, which could exacerbate the risks associated with our substantial debt;
- changes in our cost of borrowing or interest rate increases may adversely affect our net income and our ability to compete in the marketplace;
- any negative changes in our credit ratings may limit our ability to obtain financing or increase our borrowing costs;
- our senior unsecured securities will be effectively subordinated to our secured debt to the extent of the value of the assets securing such indebtedness;
- the limited covenants applicable to our senior unsecured securities may not provide protection against some events or developments that may affect our ability to repay such securities or the trading prices for such securities;
- we may be unable to generate sufficient returns on our aircraft investments which may have an adverse impact on our net income;
- failure to complete our planned aircraft sales could affect our net income and credit ratings and may lead us to use alternative sources of liquidity;
- if our aircraft become obsolete or experience a decline in customer demand, our ability to lease and sell those aircraft and our results of operations may be negatively impacted and may result in impairment charges;
- potential conflicts of interest may arise from SMBC AC’s role as the exclusive servicer of our aircraft leased to non-U.S. airlines;
- after the merger, we no longer have an OEM orderbook, which may impact our ability to manage our aircraft portfolio and, if we are unable to obtain new and younger aircraft, it may increase our re-leasing risk and residual value risk;
- aircraft have limited economic useful lives and depreciate over time and we may be required to record an impairment charge or sell aircraft for a price less than their depreciated book value, which may impact our financial results;
- we are dependent on the ability of our lessees to perform their payment and other obligations to us under our leases and their failure to do so may materially and adversely affect our financial results and cash flows;
- we may experience increased competition from other aircraft lessors which may impact our ability to execute our long-term strategy;
- our lessees may fail to adequately insure our aircraft or fulfill their indemnity obligations, or we may not be able to adequately insure our aircraft or insurers may not fulfill their policy obligations, which may result in increased costs and liabilities;
- other events affecting our business or the business of our lessees and aircraft manufacturers or their suppliers that are beyond our or their control, such as the threat or realization of epidemic diseases, natural disasters, terrorist attacks, war or armed hostilities between countries or non-state actors; and
- any additional factors discussed under “Part I — Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025, and “Part II — Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and other Securities and Exchange Commission (“SEC”) filings, including future SEC filings.
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 do not intend and undertake no obligation to update any forward-looking information to reflect actual results or events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
Factors Affecting Comparability of Financial Results
The merger was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, we have up to one year from the Effective Time to obtain the information necessary to finalize the fair values of the assets acquired and liabilities assumed. As of September 30, 2026, the purchase accounting allocation remained preliminary. The application of acquisition accounting resulted in certain adjustments that affect the comparability of our results of operations to those of our Predecessor, including changes in the carrying values of assets acquired and liabilities assumed and the related depreciation and amortization expense, as well as transaction expenses associated with the merger. Refer to Note 3 Merger Transaction and Purchase Accounting, to the accompanying Notes to Consolidated Financial Statements included in Part I, Item 1 of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 for additional information regarding the preliminary allocation of consideration transferred to the assets acquired and liabilities assumed.
As noted elsewhere, we revised our aircraft depreciation estimates starting in the third quarter of 2026 based on updated information about expected disposition timing and residual values. These revised estimates are separate from the acquisition-date fair value adjustments. These revisions were applied prospectively and did not affect prior periods presented. See Note 2 of the Notes to Consolidated Financial Statements in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 for further discussion.
The comparability of our operating results for the period from April 8, 2026 through September 30, 2026 (Successor), January 1, 2026 through April 7, 2026 (Predecessor) and the nine-month period ended September 30, 2025 (Predecessor) was impacted by the merger. Although U.S. GAAP requires that we report our results for the Predecessor period before the merger and the Successor period after the merger separately, our operating results for the nine months ended September 30, 2026 are shown by combining the results of the Predecessor and Successor periods (“Non-GAAP Combined”) in order to compare to the same period in the prior year. The combined results for the nine months ended September 30, 2026 represent the sum of the reported amounts for the Predecessor period from January 1, 2026 through April 7, 2026 and the Successor period from April 8, 2026 through September 30, 2026. The combined results of operations included in our discussion below are not considered to be prepared in accordance with U.S. GAAP because a different basis of accounting was used with respect to the financial results for the Predecessor as compared to the financial results of the Successor and have not been prepared as pro forma results under applicable regulations. The Non-GAAP Combined results do not reflect the actual results we would have achieved had the merger occurred at the beginning of fiscal 2026 and are not necessarily indicative of future results. Accordingly, the results for the combined nine-month period ended September 30, 2026 (prepared on a Non-GAAP basis) and the nine-month period ended September 30, 2025 (prepared on a GAAP basis) may not be comparable.
Sumisho Air Lease Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands, except share and par value amounts) |
||||||||
|
Successor |
|
|
Predecessor |
||||
|
September 30, 2026 |
|
|
December 31, 2025 |
||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Cash and cash equivalents |
$ |
704,100 |
|
|
|
$ |
466,410 |
|
Restricted cash |
|
— |
|
|
|
|
3,540 |
|
Flight equipment subject to operating leases |
|
24,045,580 |
|
|
|
|
35,880,458 |
|
Less accumulated depreciation |
|
(367,823 |
) |
|
|
|
(6,826,828 |
) |
|
|
23,677,757 |
|
|
|
|
29,053,630 |
|
Flight equipment held for sale |
|
4,251,072 |
|
|
|
|
529,016 |
|
Net investment in sales-type leases |
|
325,435 |
|
|
|
|
460,806 |
|
Deposits on flight equipment purchases |
|
— |
|
|
|
|
1,052,141 |
|
Other assets |
|
897,890 |
|
|
|
|
1,318,150 |
|
Total assets |
$ |
29,856,254 |
|
|
|
$ |
32,883,693 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Accrued interest and other payables |
$ |
712,150 |
|
|
|
$ |
1,012,345 |
|
Debt financing, net of discounts and issuance costs |
|
19,272,653 |
|
|
|
|
19,730,129 |
|
Security deposits on flight equipment leases |
|
395,972 |
|
|
|
|
622,556 |
|
Maintenance reserves on flight equipment leases |
|
1,762,565 |
|
|
|
|
1,477,046 |
|
Rentals received in advance |
|
124,457 |
|
|
|
|
143,631 |
|
Deferred tax liability |
|
1,376,533 |
|
|
|
|
1,425,230 |
|
Total liabilities |
$ |
23,644,330 |
|
|
|
$ |
24,410,937 |
|
Stockholders’ Equity |
|
|
|
|
||||
Preferred Stock, $0.01 par value; 1,000,000 shares and 50,000,000 shares authorized at September 30, 2026 and December 31, 2025, respectively; 900,000 (aggregate liquidation preference of $900,000) shares issued and outstanding at September 30, 2026 and December 31, 2025. |
$ |
9 |
|
|
|
$ |
9 |
|
Class A common stock, $0.01 par value; no shares and 500,000,000 shares authorized at September 30, 2026 and December 31, 2025, respectively; no shares issued and outstanding (Successor) at September 30, 2026 and 112,035,408 shares issued and outstanding (Predecessor) at December 31, 2025. |
|
— |
|
|
|
|
1,120 |
|
Class B Non-Voting common stock, $0.01 par value; no shares and 10,000,000 shares authorized at September 30, 2026 and December 31, 2025, respectively; no shares issued or outstanding at September 30, 2026 and December 31, 2025. |
|
— |
|
|
|
|
— |
|
Class C common stock, $0.01 par value; 1,000 shares authorized and no shares authorized at September 30, 2026 and December 31, 2025, respectively; 200 shares issued and outstanding (Successor) at September 30, 2026 and no shares issued and outstanding (Predecessor) at December 31, 2025. |
|
— |
|
|
|
|
— |
|
Paid-in capital |
|
6,243,960 |
|
|
|
|
3,383,414 |
|
(Accumulated deficit)/Retained earnings |
|
(47,605 |
) |
|
|
|
5,092,929 |
|
Accumulated other comprehensive income/(loss) |
|
15,560 |
|
|
|
|
(4,716 |
) |
Total stockholders’ equity |
$ |
6,211,924 |
|
|
|
$ |
8,472,756 |
|
Total liabilities and stockholders’ equity |
$ |
29,856,254 |
|
|
|
$ |
32,883,693 |
|
Sumisho Air Lease Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME (unaudited) (In thousands) |
The combined results of operations included in our discussion below are not considered to be prepared in accordance with U.S. GAAP because a different basis of accounting was used with respect to the financial results for the Predecessor as compared to the financial results of the Successor and have not been prepared as pro forma results under applicable regulations. The Non-GAAP Combined results do not reflect the actual results we would have achieved had the merger occurred at the beginning of fiscal 2026 and are not necessarily indicative of future results. Accordingly, the results for the combined nine-month period ended September 30, 2026 (prepared on a Non-GAAP basis) and the nine-month period ended September 30, 2025 (prepared on a GAAP basis) may not be comparable.
The following tables present the Company’s operating results for the Successor periods for the three months ended September 30, 2026 and from April 8, 2026 through September 30, 2026, the Predecessor period from January 1, 2026 through April 7, 2026, the non-GAAP combined nine months ended September 30, 2026, and the Predecessor three- and nine-month periods ended September 30, 2025 (in thousands, except per share amounts and percentages):
|
Successor |
|
|
Predecessor |
|
Non-GAAP Combined |
||||||||||||||||||
|
Three Months Ended September 30, |
|
Period from April 8 – September 30, |
|
|
Three Months Ended September 30, |
|
Period from January 1 - April 7, |
|
Nine Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2026 |
|
2026 |
|
|
2025 |
|
2026 |
|
2025 |
|
2026 |
||||||||||||
Revenues and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rental of flight equipment revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lease rentals |
$ |
553,420 |
|
|
$ |
1,109,636 |
|
|
|
$ |
665,576 |
|
|
$ |
717,822 |
|
|
$ |
1,950,469 |
|
|
$ |
1,827,458 |
|
Maintenance rentals and other receipts |
|
3,238 |
|
|
|
5,977 |
|
|
|
|
15,325 |
|
|
|
8,155 |
|
|
|
54,509 |
|
|
|
14,132 |
|
Total rental of flight equipment revenue |
|
556,658 |
|
|
|
1,115,613 |
|
|
|
|
680,901 |
|
|
|
725,977 |
|
|
|
2,004,978 |
|
|
|
1,841,590 |
|
Gain on aircraft sales and trading and other income |
|
35,973 |
|
|
|
52,290 |
|
|
|
|
44,492 |
|
|
|
79,050 |
|
|
|
190,392 |
|
|
|
131,340 |
|
Total revenues and other income |
|
592,631 |
|
|
|
1,167,903 |
|
|
|
|
725,393 |
|
|
|
805,027 |
|
|
|
2,195,370 |
|
|
|
1,972,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest |
|
223,946 |
|
|
|
439,177 |
|
|
|
|
215,501 |
|
|
|
217,956 |
|
|
|
633,162 |
|
|
|
657,133 |
|
Amortization of debt discounts and issuance costs |
|
5,393 |
|
|
|
8,779 |
|
|
|
|
12,880 |
|
|
|
13,345 |
|
|
|
40,092 |
|
|
|
22,124 |
|
Amortization of fair value adjustments |
|
29,213 |
|
|
|
59,809 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,809 |
|
Interest expense |
|
258,552 |
|
|
|
507,765 |
|
|
|
|
228,381 |
|
|
|
231,301 |
|
|
|
673,254 |
|
|
|
739,066 |
|
Depreciation of flight equipment |
|
172,772 |
|
|
|
368,678 |
|
|
|
|
311,126 |
|
|
|
333,736 |
|
|
|
914,433 |
|
|
|
702,414 |
|
Recoveries of Russian fleet write-off |
|
(27,300 |
) |
|
|
(27,300 |
) |
|
|
|
(60,469 |
) |
|
|
— |
|
|
|
(736,409 |
) |
|
|
(27,300 |
) |
Selling, general and administrative |
|
34,202 |
|
|
|
140,129 |
|
|
|
|
51,784 |
|
|
|
64,452 |
|
|
|
160,983 |
|
|
|
204,581 |
|
Servicing fees |
|
27,569 |
|
|
|
34,504 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,504 |
|
Stock-based compensation expense |
|
— |
|
|
|
26,299 |
|
|
|
|
9,603 |
|
|
|
5,405 |
|
|
|
39,892 |
|
|
|
31,704 |
|
Total expenses |
|
465,795 |
|
|
|
1,050,075 |
|
|
|
|
540,425 |
|
|
|
634,894 |
|
|
|
1,052,153 |
|
|
|
1,684,969 |
|
Income before taxes |
|
126,836 |
|
|
|
117,828 |
|
|
|
|
184,968 |
|
|
|
170,133 |
|
|
|
1,143,217 |
|
|
|
287,961 |
|
Income tax expense |
|
(19,590 |
) |
|
|
(18,276 |
) |
|
|
|
(38,512 |
) |
|
|
(18,274 |
) |
|
|
(235,762 |
) |
|
|
(36,550 |
) |
Net income |
$ |
107,246 |
|
|
$ |
99,552 |
|
|
|
$ |
146,456 |
|
|
$ |
151,859 |
|
|
$ |
907,455 |
|
|
$ |
251,411 |
|
Preferred stock dividends |
|
(13,844 |
) |
|
|
(24,925 |
) |
|
|
|
(11,082 |
) |
|
|
(11,081 |
) |
|
|
(33,244 |
) |
|
|
(36,006 |
) |
Net income attributable to common stockholders |
$ |
93,402 |
|
|
$ |
74,627 |
|
|
|
$ |
135,374 |
|
|
$ |
140,778 |
|
|
$ |
874,211 |
|
|
$ |
215,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other financial data |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pre-tax margin |
|
21.4 |
% |
|
|
10.1 |
% |
|
|
|
25.5 |
% |
|
|
21.1 |
% |
|
|
52.1 |
% |
|
|
14.6 |
% |
Adjusted net income before income taxes(1) |
$ |
123,119 |
|
|
$ |
228,087 |
|
|
|
$ |
144,540 |
|
|
$ |
186,908 |
|
|
$ |
471,418 |
|
|
$ |
414,995 |
|
Adjusted pre-tax margin(1) |
|
20.8 |
% |
|
|
19.5 |
% |
|
|
|
19.9 |
% |
|
|
23.2 |
% |
|
|
21.5 |
% |
|
|
21.0 |
% |
__________________________________________ |
||||||||||||||||||||||||
(1) |
Adjusted net income before income taxes (defined as net income attributable to common stockholders excluding the effects of certain non-cash items and other items that we do not believe are indicative of our ongoing operations, such as retirement compensation, merger related costs and recoveries related to our former Russian fleet, and certain other items) and adjusted pre-tax margin (defined as adjusted net income before income taxes divided by total revenues) are measures of operating performance that are not defined by GAAP and should not be considered as an alternative to net income attributable to common stockholders and pre-tax margin, or any other performance measures derived in accordance with GAAP. Adjusted net income before income taxes and adjusted pre-tax margin 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 and adjusted pre-tax margin 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, and other items that we do not believe are indicative of our ongoing operations. Adjusted net income before income taxes and adjusted pre-tax margin, 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 and adjusted pre-tax margin 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 and adjusted pre-tax margin may differ from the adjusted net income before income taxes and adjusted pre-tax margin, or analogous calculations of other companies in our industry, limiting their usefulness as a comparative measure. |
|
||||||||||||||||||||||||
The following table shows the reconciliation of the numerator for adjusted pre-tax margin (in thousands, except percentages): |
||||||||||||||||||||||||
|
Successor |
|
|
Predecessor |
|
Non-GAAP Combined |
||||||||||||||||||
|
Three Months Ended September 30, |
|
Period from April 8 – September 30, |
|
|
Three Months Ended September 30, |
|
Period from January 1 - April 7, |
|
Nine Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2026 |
|
|
|
2026 |
|
|
|
|
2025 |
|
|
|
2026 |
|
|
|
2025 |
|
|
|
2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reconciliation of the numerator for adjusted pre-tax margin (net income attributable to common stockholders to adjusted net income before income taxes): |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to common stockholders |
$ |
93,402 |
|
|
$ |
74,627 |
|
|
|
$ |
135,374 |
|
|
$ |
140,778 |
|
|
$ |
874,211 |
|
|
$ |
215,405 |
|
Amortization of debt discounts and issuance costs |
|
5,393 |
|
|
|
8,779 |
|
|
|
|
12,880 |
|
|
|
13,345 |
|
|
|
40,092 |
|
|
|
22,124 |
|
Amortization of fair value adjustments |
|
29,213 |
|
|
|
59,809 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,809 |
|
Recoveries of Russian fleet write-off |
|
(27,300 |
) |
|
|
(27,300 |
) |
|
|
|
(60,469 |
) |
|
|
— |
|
|
|
(736,409 |
) |
|
|
(27,300 |
) |
Stock-based compensation expense |
|
— |
|
|
|
26,299 |
|
|
|
|
9,603 |
|
|
|
5,405 |
|
|
|
39,892 |
|
|
|
31,704 |
|
Retirement compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
9,230 |
|
|
|
— |
|
Merger related costs |
|
2,821 |
|
|
|
67,597 |
|
|
|
|
8,640 |
|
|
|
9,106 |
|
|
|
8,640 |
|
|
|
76,703 |
|
Income tax expense |
|
19,590 |
|
|
|
18,276 |
|
|
|
|
38,512 |
|
|
|
18,274 |
|
|
|
235,762 |
|
|
|
36,550 |
|
Adjusted net income before income taxes |
$ |
123,119 |
|
|
$ |
228,087 |
|
|
|
$ |
144,540 |
|
|
$ |
186,908 |
|
|
$ |
471,418 |
|
|
$ |
414,995 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Denominator for adjusted pre-tax margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total revenues |
$ |
592,631 |
|
|
$ |
1,167,903 |
|
|
|
$ |
725,393 |
|
|
$ |
805,027 |
|
|
$ |
2,195,370 |
|
|
$ |
1,972,930 |
|
Adjusted pre-tax margin(a) |
|
20.8 |
% |
|
|
19.5 |
% |
|
|
|
19.9 |
% |
|
|
23.2 |
% |
|
|
21.5 |
% |
|
|
21.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(a) Adjusted pre-tax margin is adjusted net income before income taxes divided by total revenues. |
|
|
||||||||||||||||||||||
Sumisho Air Lease Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands) |
||||||||||||
Successor |
|
|
Predecessor |
|||||||||
|
Period from April 8 - September 30, |
|
|
Period from January 1 - April 7, |
|
Nine Months Ended September 30, |
||||||
|
|
2026 |
|
|
|
|
2026 |
|
|
|
2025 |
|
|
|
|
|
|
||||||||
Operating Activities |
|
|
|
|
|
|
||||||
Net income |
$ |
99,552 |
|
|
|
$ |
151,859 |
|
|
$ |
907,455 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||||||
Depreciation of flight equipment |
|
368,678 |
|
|
|
|
333,736 |
|
|
|
914,433 |
|
Recoveries of Russian fleet write-off |
|
(27,300 |
) |
|
|
|
— |
|
|
|
(736,409 |
) |
Stock-based compensation expense |
|
— |
|
|
|
|
5,405 |
|
|
|
39,892 |
|
Deferred taxes |
|
(1,498 |
) |
|
|
|
19,055 |
|
|
|
234,840 |
|
Amortization of prepaid lease costs and lease intangibles |
|
5,681 |
|
|
|
|
22,717 |
|
|
|
69,128 |
|
Amortization of discounts and debt issuance costs and fair value adjustments |
|
68,588 |
|
|
|
|
13,345 |
|
|
|
40,092 |
|
Foreign currency remeasurement (gain)/loss on sales-type leases |
|
6,038 |
|
|
|
|
2,392 |
|
|
|
— |
|
Gain on aircraft sales, trading and other activity |
|
(8,656 |
) |
|
|
|
(66,478 |
) |
|
|
(125,108 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||||||
Other assets |
|
(160,904 |
) |
|
|
|
42,422 |
|
|
|
40,752 |
|
Accrued interest and other payables |
|
53,385 |
|
|
|
|
(20,594 |
) |
|
|
(60,202 |
) |
Rentals received in advance |
|
3,851 |
|
|
|
|
(22,991 |
) |
|
|
(4,320 |
) |
Net cash provided by operating activities |
|
407,415 |
|
|
|
|
480,868 |
|
|
|
1,320,553 |
|
Investing Activities |
|
|
|
|
|
|
||||||
Acquisition of a business |
|
(11,138,440 |
) |
|
|
|
— |
|
|
|
— |
|
Proceeds from orderbook transfer |
|
1,461,079 |
|
|
|
|
— |
|
|
|
— |
|
Acquisition of flight equipment |
|
— |
|
|
|
|
(609,308 |
) |
|
|
(1,704,105 |
) |
Payments for deposits on flight equipment purchases |
|
— |
|
|
|
|
(240,996 |
) |
|
|
(866,888 |
) |
Proceeds from aircraft sales, trading and other activity |
|
925,294 |
|
|
|
|
293,703 |
|
|
|
602,686 |
|
Proceeds from settlement of insurance claims |
|
27,300 |
|
|
|
|
— |
|
|
|
727,572 |
|
Acquisition of aircraft furnishings, equipment and other assets |
|
(17,102 |
) |
|
|
|
(61,736 |
) |
|
|
(165,738 |
) |
Net cash used in investing activities |
|
(8,741,869 |
) |
|
|
|
(618,337 |
) |
|
|
(1,406,473 |
) |
Financing Activities |
|
|
|
|
|
|
||||||
Merger-related distribution to Parent |
|
(44,112 |
) |
|
|
|
— |
|
|
|
— |
|
Equity contributions from investors |
|
5,404,613 |
|
|
|
|
— |
|
|
|
— |
|
Buyer transaction costs |
|
(120,534 |
) |
|
|
|
— |
|
|
|
— |
|
Cash dividends paid on Class A common stock |
|
— |
|
|
|
|
(49,319 |
) |
|
|
(73,679 |
) |
Cash dividends paid on preferred stock |
|
(24,925 |
) |
|
|
|
(11,081 |
) |
|
|
(33,244 |
) |
Tax withholdings on stock-based compensation |
|
— |
|
|
|
|
(15,952 |
) |
|
|
(12,302 |
) |
Net change in unsecured revolving facilities |
|
450,000 |
|
|
|
|
2,700,000 |
|
|
|
430,000 |
|
Net change in commercial paper balance |
|
(510,000 |
) |
|
|
|
(851,400 |
) |
|
|
1,508,000 |
|
Proceeds from debt financings |
|
7,114,225 |
|
|
|
|
100,000 |
|
|
|
683,074 |
|
Payments in reduction of debt financings |
|
(3,872,403 |
) |
|
|
|
(1,861,354 |
) |
|
|
(2,774,825 |
) |
Debt issuance costs |
|
(39,414 |
) |
|
|
|
(49 |
) |
|
|
(5,041 |
) |
Security deposits and maintenance reserve receipts |
|
250,761 |
|
|
|
|
124,815 |
|
|
|
367,728 |
|
Security deposits and maintenance reserve disbursements |
|
(22,585 |
) |
|
|
|
(15,213 |
) |
|
|
(24,138 |
) |
Net cash provided by financing activities |
|
8,585,626 |
|
|
|
|
120,447 |
|
|
|
65,573 |
|
Net increase/(decrease) in cash |
|
251,172 |
|
|
|
|
(17,022 |
) |
|
|
(20,347 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
452,928 |
|
|
|
|
469,950 |
|
|
|
476,104 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
704,100 |
|
|
|
$ |
452,928 |
|
|
$ |
455,757 |
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
|
|
||||||
Cash paid during the period for interest, including capitalized interest of $12,210 and $31,399 for the period from January 1, 2026 through April 7, 2026 and the nine months ended September 30, 2025, respectively |
$ |
442,316 |
|
|
$ |
252,781 |
|
$ |
712,557 |
|||
Cash paid for income taxes |
$ |
357,857 |
|
|
$ |
2,143 |
|
$ |
2,363 |
|||
Supplemental Disclosure of Noncash Activities |
|
|
|
|
|
|
||||||
Buyer furnished equipment, capitalized interest and deposits on flight equipment purchases applied to acquisition of flight equipment and other assets |
$ |
116 |
|
|
$ |
234,843 |
|
$ |
693,808 |
|||
Flight equipment subject to operating leases reclassified to flight equipment held for sale |
$ |
4,560,333 |
|
|
$ |
628,925 |
|
$ |
140,253 |
|||
Transfer of flight equipment to investment in sales-type lease |
$ |
— |
|
|
$ |
21,674 |
|
$ |
33,778 |
|||
Cash dividends declared on Class A common stock, not yet paid |
$ |
— |
|
|
$ |
— |
|
$ |
24,588 |
|||
Contacts
Investors:
Jason Arnold
Vice President, Investor Relations
Email: investors@sumisho.aero
Media:
Ashley Arnold
Senior Manager, Media and Investor Relations
Email: press@sumisho.aero
