Q1 2025 Air Lease Corp Earnings Call
Audra: Good afternoon, my name is Adra and I will be your conference operator today. At this time I would like to welcome everyone to the Air Lease Q1 2025 Earnings Conference call.
Audra: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. [inaudible]
Speaker Change: I will now turn the call over to Mr. Jason Arnold, head with investor relations. Mr. Arnold, you may begin your conference.
Jason Arnold: Thanks, Audra, and good afternoon everyone and welcome to Air Lease's first quarter, 2025 earnings call. This is Jason Arnold. I'm joined today by John Plueger, our chief
John Plueger: Executive Officer and President, and Greg Willis, our Executive Vice President and Chief Financial Officer. Earlier today, we published our first quarter 2025 results.
John Plueger: A copy of earnings releases available on the investor's section of our website at www.airleasecorp.com This conference calls being webcast and recorded today Monday May 5th, 2025, and the webcast will be available for replay on our website. At this time, all participants to this call are in listen only mode.
John Plueger: Before we begin, please note that certain statements in this conference call, including certain answers to your questions are forward looking statements within the meaning of the private securities litigation reform act.
John Plueger: This includes, without limitations, statements regarding the state of the airline industry, the impact of aircraft and engine delivery delays and manufacturing flaws, our aircraft sales pipeline and our future operations and performance.
John Plueger: These statements and any projections as to our future performance represent management's current estimates and speak only as of today's date. These estimates involve risks in uncertainties that could cause actual results to differ materially from expectations. These statements involve risks in uncertainties that could cause actual results to differ materially from expectations.
John Plueger: Please refer to our filings with the Securities and Exchange Commission for a more detailed description of risk factors that may affect our results.
John Plueger: Air Lease assumes no obligation to update any forward-looking statements or any information in light of new information or future events. In addition, we may discuss.
John Plueger: Certain financial measures such as adjusted net income before income taxes, adjusted deluded earnings per share before income taxes
John Plueger: and adjusted pre-tax return on equity which are non-GAAP measures . A description of our reasons for utilizing these non-GAAP measures as well as our definition of them.
John Plueger: can be found in the earnings release in Kent 10Q We Issued Today. This release can be found in both the investors and press section of our website at www.airleasecorp.com. Similar to last quarter, given ongoing litigation we won't be able to take any questions about our Russia fleet insurance claims. Thank you very much.
John Plueger: Lastly as a reminder, unauthorized recording of this conference call is not permitted. I'll now turn the call over to our Chief Executive Officer and President John Plueger. John .
John Plueger: Well, thanks Jason, good afternoon everyone and thank you for joining our call today.
John Plueger: During the first quarter, Air Lease generated revenues of $738 million and $3.26 in diluted earnings
John Plueger: Results benefited from the continued expansion of our fleet, strong gain on sale revenue, and Russia to fleet insurance settlements.
John Plueger: We were very pleased to receive insurance proceeds of 329 million during the first quarter, and we have received an additional 227 million just last week.
John Plueger: Relative to last year's first quarter, results were partially upset by higher interest expense as compared to the prior year, along with recognizing expenses related to Steve Hodge's retirement. [inaudible]
John Plueger: Overall, total revenue, fleet net book value, and book value per common share reached all time record levels in our company's history during the first quarter.
John Plueger: Greg will provide more detail and color on our financial results in his remarks.
John Plueger: We purchased 14 new aircraft from our order book during Q1, adding roughly 800 million in flight equipment to our balance sheet, and sold 16 aircraft for 521 million in sales proceeds.
John Plueger: The weighted average age of our fleet rose slightly quarter over quarter to 4.7 years, while weighted average lease term remained unchanged at 7.2 years.
Fleet Utilization Remains at 100% . .
John Plueger: Our outlook for deliveries this year remains consistent with what we told you last quarter at 3-3.5 billion of new aircraft delivered from our order book and we are expecting around 800 million of deliveries for the second quarter.
John Plueger: I do want to note that we've recently received additional delay notifications from Airbus, primarily impacting our 2027 and 2028 A320 and 321 neo-deliveries by about a year, which you can see reflected in our expected deliveries table in our 10Q.
John Plueger: Our sales pipeline remains solid at $741 million, all contracted at healthy gain on sale margins.
John Plueger: We continue to expect around 1.5 billion of aircraft sales for 2025, with around 300 million anticipated to close during the second quarter.
Subsequent to the U.S. Administration announcing tariffs and tariff qualities to the U.S. Administration.
John Plueger: Airlines, primarily in North America, began reporting softer passenger traffic with most airlines in the USA withdrawing or reducing their forward guidance, and United Airlines in particular provided two different forward guidance paths.
John Plueger: Outside of North America, a couple of weeks ago I was in Asia visiting six of our large airline customers in Malaysia, Vietnam, Taiwan, or public of China, and Thailand.
John Plueger: The following week I was in Europe doing the same thing.
John Plueger: The airlines in Asia all report continuing strong overall passenger traffic and forward bookings, but with some pre-existing trans-Pacific economy fair witness which well preceded the terrorist announcement.
John Plueger: Fluctuating cargo demand was cited as the most notable impact after the U.S. terrorist announcement.
Their continued need and demand for more aircraft remains consistent.
John Plueger: They expressed sentiment that it was highly unlikely their governments would enact reciprocal terrorists that included aircraft being imported to their respective countries.
John Plueger: Turning to Europe , our largest top-tier airline let's see customers in France and the Netherlands advised continued strong passenger bookings.
John Plueger: but with some slight fair discounting in economy class and a good summer booking, including travel to the US.
John Plueger: The Lufthansa Group, earnings which they released on April 29th, cited improved positive adjusted EBITDA in Q1 and confirmed positive outlook for the full year.
Speaker Change: Carson Sporer commented, quote, global demand for air travel continues to grow. Despite all the geographical uncertainties, we therefore remain on course for growth, are optimistic about the summer, and are sticking to our positive outlook for 2025. End quote.
Speaker Change: Both Ryanair and Wiz last week published positive results and good traffic levels as well.
Speaker Change: Like airlines in Asia, European Airlines, Echo, continuing robust demand for aircraft. The Middle East also remains strong.
Speaker Change: As a result, Lease rates continue to trend higher, while extension activity and forward placements continue remain very robust .
Speaker Change: Traffic volume growth globally remains above the pace of global GDP growth year-to-date of the global GDP growth year-to-date.
Speaker Change: I also want to remind you that fuel prices have been trending down and the weakening dollar benefits are foreign lessseas as our leases are paid in US dollars, as is fuel globally, as are most major maintenance and repair organization buildings even outside the US.
Speaker Change: I highlight these discussions I had in Asia and Europe and our view on the Middle East to re-emphasize to you that 87% of our business is outside of North America, which includes the US, Canada, and Mexico, and there is no overall change in the aircraft-a-man picture.
Speaker Change: Also to highlight that with Airbus and Boeing being far from their aspirational production rates, the supply of new aircraft remains limited and well short of the rates needed to meet their order of commitments.
Speaker Change: Aircraft Supply constraints look to continue for the next three to four years if not longer.
Speaker Change: Carrus would further weaken the supply chain to the airframe OEMs.
Speaker Change: This means that global airline fleets will remain well behind the power curve replacing older aircraft fleets.
Speaker Change: The cessation of max deliveries following the max crashes and fleet grounding accelerated the replacement shortfall.
Speaker Change: Tariffs clearly are a key focus in the markets and industry and I do want to make a few comments.
Air Lease is not responsible for tariffs imposed on aircraft importation.
Speaker Change: As part of our lease agreements, tariffs are contractually the responsibility of the airline customer importing an aircraft into their country. The airline is the importer into their own country, not us.
Speaker Change: As of now, Air Lease has no aircraft delivering to countries where tariffs applicable to commercial aircraft exist or have been announced.
Speaker Change: We have no aircraft going to China and in fact our total China exposure is now
Speaker Change: Also, many of our foreign airline customers are wholly or partially owned by their respective governments, and we do not believe it likely that those airlines would have reciprocal tariffs imposed on aircraft importation [inaudible]
Speaker Change: Examples in 2025 include Royal Air Morocco and Morocco, Oman Air and Oman, Aerolinius Argentinus in Argentina and Croatia Airlines in Croatia.
Speaker Change: Then there is the potential impact of increased pricing on aircraft engines and aircraft installed equipment such as seats.
Speaker Change: Air Lease has long-term forward purchase agreements covering pricing in all of these cases for new aircraft, including escalation caps with the Airframe OEMs.
Speaker Change: Let me remind you that aircraft maintenance costs are the responsibility of the airline in our leases, so any escalating maintenance costs which might result from tariffs are the airline's responsibility.
Speaker Change: The potential impact from tariffs on wider economic recession or high inflation, and indeed it would need to be a global impact on air travel outside North America remains to be seen.
At this point, it's just speculative. It's speculative.
Speaker Change: However, I highlighted earlier the continued strength we are seeing broadly in Asia, Europe and the Middle East There is a great deal of uncertainty about tariffs and their impact and as most of you know news flow on the topic changes from day to day if not hour to hour at times
Speaker Change: However, I would urge caution on too much speculation at this juncture [inaudible]
I believe Terrace will get sorted out.
Speaker Change: Any measures that was seriously threatened deliveries of Boeing Airlines to Europe , for example, on top of China would be a serious challenge, even who fits the airline's responsibility.
Speaker Change: You saw recently that Michael O'Leary at Ryanair a threatened cancellation of 330 Boeing
Speaker Change: If Tarris were to remain long-term, it could ultimately serve as an incentive for US aerospace manufacturers to look outside the US to start additional production lines for product delivery outside the US.
Speaker Change: That would be the complete opposite to the US administration's stated intention for manufacturers to produce in the US. And I believe the current US administration wants Boeing and US aerospace companies to be global leaders with commanding market share.
Speaker Change: Turning back to Air Lease, the significant insurance recovery we have received today puts us at our target debt equity ratio.
Speaker Change: This now allows us to consider a wide range of capital allocation, and we are doing so, including organic and organic growth and returning capital to shareholders.
Speaker Change: We are awaiting potential further insurance recoveries and are also keeping a close watch on the debt capital markets during this time of great volatility.
Speaker Change: Carefulness and patience have been a hallmark of Air Lease that has served us well, and our ultimate goal is driving Sherwolder by you over the long term.
Speaker Change: In summary, we remain very positive about Air Lease's prospects for 2025 and beyond, in spite of recent geopolitical and potential macroeconomic crosswinds.
Speaker Change: And in closing, I'd like to recognize and honor Steve Haasley on his retirement, which was effective last Friday, May 2nd.
Speaker Change: Few, if any, have had the impact and influence on our entire industry on aircraft design and passion for the early industry that he has. He's one of a kind. His vision catapulted the entire aircraft leasing industry and his impact will be felt for decades.
Speaker Change: You all know that Stephen I worked hand in hand together since 1986, just about 39 years.
Speaker Change: Steve has been an amazing mentor, friend and colleague. Most everything I learned, I learned from him.
Speaker Change: It's been an amazing ride, but that ride is not over. Steve remains our chairman for another year. We want to make Steve and our shareholders proud and that is exactly what we intend to do. We could not have a better management team to make that happen. [inaudible]
Speaker Change: I'll now turn the call over to our CFO , Greg Willis, to offer his further commentary and details on our financial results.
Greg Willis: Thank you very much, John , and good afternoon, everyone. During the first quarter, Air Lease generated total revenues of $738 million, which was comprised of approximately $645 million of rental revenue and 93 million of aircraft sales trading and other activities.
Greg Willis: Ronald Revenue, Rose, 5% relative to the same quarter last year and Lee Shields remained essentially flat relative to that period, so Rose monocally relative to the fourth quarter
Greg Willis: Reynolds Revenue is benefited from the growth of our fleet offset by approximately 13 million last and end of lease revenue as compared to the prior year.
Greg Willis: We continue to anticipate lower levels of end of lease revenue due to higher extension rates, though as an offset we should continue to benefit from these assets as we negotiate higher lease rates on extensions which ultimately support higher values when it comes time to sell the aircraft.
Greg Willis: We continue to expect the portfolio yield observed in our financial statements to continue to trend higher over the course of this year, as well as trend steadily higher over the next three or four years.
Greg Willis: Sales proceeds for the quarter total 521 million from the sale of 16 aircraft. These sales generated 61 million in gains representing roughly 13% gain on sale margin.
Greg Willis: We continue to expect to see healthy margins towards the upper end of our historical range of 8-10% based on the current sales pipeline.
Greg Willis: Strong gains continue to reflect the significant value embedded in our fleet which we carry on the balance sheet at depreciated cost
Greg Willis: Moving on to expenses, interest expense rose by approximately 28 million year-over-year driven by a 23 basis point increase in our composite cost of funds to 4.26% at quarter-end.
Greg Willis: Increased financing costs and honestly higher debt balances, or the primary contributors to the year-over-year increase in our interest expense.
Greg Willis: It's worth noting that our debt balances have declined from year-end as a function of the de-leveraging effects of our insurance recovery. Our composite rate trended higher compared to the quarter as financing rates remained
Greg Willis: At the end of the first quarter, roughly 78% of our borrowings were at fixed rates versus floating just inside of our 80% target. We continue to benefit from our largely fixed rate borrowings which have meaningfully moderated the impact of the elevated interest rate environment.
The depreciation expense continues to track the growth of our fleet [inaudible]
Greg Willis: Excluding the effect of $17 million in one-time expenses related to Steve Hodges' retirement, $9.2 million of which was included in the SGNA line item, and $7.4 million in stock comp. SGNA and stock comp rose only modestly or year, excluding these expenses.
Greg Willis: SGNA's percentage of revenue was flat relative to the fourth quarter and down, compared to the prior year's quarter at around 6.8%.
Greg Willis: We expect this number to trend lower over time as the fleet continues to expand and elevator legal expenses are expected to decline.
Greg Willis: As John mentioned earlier, we received approximately 329 million in rush of fleet insurance settlement proceeds along with a 3 million with
Greg Willis: along with $3 million related to the equity interest in our managed fleet during the quarter. In total, representing $2.36 per share, helping to increase our book value for share $62.32.
Greg Willis: The additional 227 million received last week will be reflected in our second quarter earnings and will serve to further increase our book value brochure and our overall capital position.
along with additional recovery that we may receive.
Greg Willis: Moving on to our financing activities, as we have previously stated we are.
Greg Willis: Able to largely self-fund our order book with expected operating cash flow and aircraft sales in 25 and 26.
Greg Willis: We now believe that we are largely able to self-fund our order book with expected operating cash flows and sales. Therefore, the primary financing needs that remain are related to the refinancing of existing debt.
Greg Willis: Additionally, I'm pleased to report the upsizing and one-year extension of our revolving credit facility. We are able to increase the size of the facility to 8.2 billion from 7.8 billion with the final maturity in 2029.
Greg Willis: I'd like to thank our 52 bank partners in the facility, many of which whom have been with us since the inception of the facility, along with a number of new banks that we have added over the years for their support.
Greg Willis: This facility provides critical equities to the business that allows us flexibility as to when we look to access the debt capital markets to attractively re-financed or existing debts.
Greg Willis: As John just noted, we have reached our debt equity target ratio at the end of the first quarter We do expect to see some movement in this ratio from quarter to quarter as we continue to take delivery of aircraft from our order vote and the timing of aircraft sales
Greg Willis: But nonetheless, there's an important milestone for us as a company [inaudible]
Greg Willis: As we look forward to receiving additional insurance recoveries, we should have a more complete view of our capital position. We anticipate having more financial flexibility over the next several years as compared to the constrained position that we were previously in.
Greg Willis: As always, our strong liquidity position of $7.4 billion, $30 billion of un-inccovered asset base, and 29 billion of contracted rentals continued to remain key pillars of our financial strength for our business [inaudible]
Greg Willis: As John highlighted already, we are very excited by the shifting direction of two headwinds that have negatively impacted our business over the last several years.
Greg Willis: The drag of lower yielding COVID-19 air leases and the Russia fleet right off.
Jason Arnold: As these headwinds continue to resolve, we would expect profit margins in our ROE to expand in the years ahead with that I'll turn the call back over to Jason for the question and answer session of the call
Jason Arnold: Thanks Greg. This concludes our prepared commentary and remarks for the question and answer session. We ask each participant to limit their time to one question and one follow-up.
Audra: Thank you. At this time I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. Again we ask that you please limit yourself to one question and one follow-up, tell everyone an opportunity to ask a question.
We'll go first to Catherine O'Brien at Goldman Sachs
Good afternoon everyone, thanks for the time.
Speaker Change: So John , I know you gave a detailed account of the latest encouraging conversations you've had with Lesbys around the globe, Post-Harris.
Speaker Change: But are there any real-time examples of lease extensions or order book placements? You could share that both your confidence that the airlines are continuing, you know, with businesses usual on their longer term fleet planning posts some of the tariff noise, you know, just on extensions range, or any encouraging on where lease rates are or on extensions or newly splacements? [inaudible]
Speaker Change: Thanks. Sure. Well, I can give the example last week. For example, we signed an extension term sheet with a major airline in Asia.
on two A330-300s and one A321.
Speaker Change: with those A330-300 lease rates being, oh I would say a full 50% or so above what they were previously. Now previously I have to note...
Though those leases were extended during COVID.
Speaker Change: So, 50% sounds like a lot, but I want to tell you that...
Speaker Change: It's reflecting effectively of a lower rate that was enacted during COVID so that's just a recent example from last week and we have others
Speaker Change: We have currently some additional wide-body extensions that we anticipate closing this coming
Speaker Change: which we'll tell you about. And those have also a similarly nice step up from where they were before, or as a percentage, or above the current appraised lease rate estimates for each of those aircraft types.
Speaker Change: That's great, thanks. And I know you said you can't take any questions on the ongoing litigation of your Russian insurance claims but you've made several references to, you know, any potential future settlements in the press release, you know, you've got 82% already recovered. I guess we assume that's not the final number, is the intention to pursue the full remainder of the claims? [inaudible]
Speaker Change: All I can tell you is that we have a process of ongoing and we are in litigation so I really can't comment any further, however...
A total additional capital that we would be looking at
Speaker Change: for Allocation is dependent upon totally what we have available and that the insurance recovery has been significant and we therefore want to remain we wait and see how much more if any will be getting during the course of the next several months or year whatever however long it takes.
Thank you very much.
George.
Speaker Change: We'll move to our next question from Hillary Cacanando at Deutsche Bank.
Hilary Cacanondo: Hi, thanks for taking my question. In terms of capital allocation, would you be able to just talk about your priority, whether it be buyback or MNA or increased dividends or etc. and what are you watching or considering to make that decision? And with that decision come in the third quarter or fourth quarter.
Thank you.
Hilary Cacanondo: Well, I would say we are still considering all the above. I said in my remarks, uh,
Hilary Cacanondo: You know, we're including organic and inorganic growth as well as share reproaches, reproaches, reproaches. So,
Hilary Cacanondo: It's hard to indicate where we would fall on those. We have a number of things that we're looking at.
Hilary Cacanondo: Just requires a bit more patience and we are awaiting some more insurance developments as they may happen. So I can't really tip the hat today as to which way we would be looking to but suffice to say that everything is under consideration today.
Speaker Change: Got it. Thank you. And then just regarding tariffs, as you mentioned, you said, airlines are the ones that have to pay the tariffs as they take delivery and cross the border. But do you expect airlines to reach out to you and kind of ask you to work with them to kind of...
Hilary Cacanondo: You know, Easter burden, and kind of, you know, provide some sort of solution with tariffs.
Speaker Change: Well, let me re-expect to work with them. Thanks. Let me re-emphasize what I said in my prepared remarks that as of today we have no aircraft delivery scheduled to any country that's announced a reciprocal tariff.
on Billing Aircraft.
Speaker Change: In terms of air bus deliveries, for example, this year we have three airplanes going to the U.S. airline, but those airplanes are all being built in Mobile, Alabama, so they're not being imported. They're domestic purchased aircraft. So far the answer is, nobody has come to us. I don't understand.
Speaker Change: Anticipated, especially I don't expect it after my travels in Asia and Europe because I think the demand is very, very strong, so...
Speaker Change: Look, we'll have to see if the time comes, but that's why I also cautioned about too much speculation looking forward. This is a very unfolding situation, but I do think it's going to be resolved. [inaudible]
Okay, that's great to hear. Thank you very much.
Sure.
We'll go next to Moshe Orenbuch at TD Cowan.
Speaker Change: Great, thanks, John . You talked a little bit about the potential for share repurchase.
Speaker Change: and you also, in your prepared remarks, alluded to organic growth opportunities.
Speaker Change: There was hope that you could maybe drill down on some of that [inaudible]
Speaker Change: Some of that possibility, because I mean it felt like in the past you kind of shied away from a lot of that just because
Speaker Change: You had to keep the capital there in case the order book delivered in line with expectations. Now you'll be a little bit more flexible. I would assume in terms of pursuing other sorts of things and if you could just talk about that a little bit. I would assume in terms of pursuing other sorts of things and if you could just talk about that a little bit.
Speaker Change: Yeah, we are very flexible. Thanks, Moshe, on considering, you know, other things. You know, you know
boi
Speaker Change: There's just a wide variety of possibilities, and you've cited organic growth. That is a possibility, but I won't say it's a probability, necessarily.
Speaker Change: There are some used aircraft fleets or segments of fleets, which may in fact become available. We would be compelled to look at that as another example, not just order book editions.
Greg Willis: So I would just say that we are very carefully considering all these categories of forward capital allocation. We're very happy to have that flexibility. I don't know, Greg, you have any other color you'd like to add? I would just add that on the autobox side.
Greg Willis: It's a little bit more challenging as John indicated just given the how full the Boeing Intervalist backlogs are, right? I think you look to see us have a lot of discipline about the working around ordering your aircraft. [inaudible] I'm not sure.
Greg Willis: We order when the pricing is right and when the order books are full with airline orders, it's hard to extract the best the most amount of value. So...
Greg Willis: of the options that one's harder to get to, but we have to look at everything.
Speaker Change: Let me add one more comment, Moshe, you know, of course, the China position on taking Boeing aircraft.
Speaker Change: and you know the Boeing is reacting accordingly. So, for example, I'll just give you a hypothetical. There could be some air, some of the Chinese aircraft that were built or nearly completion being built. And if we were to be approached...
Speaker Change: or have a discussion with a Boeing company and or other airlines who may want those aircraft. Given the right deal, that's an example of an opportunity that we might explore for
Got it.
Speaker Change: And maybe just as a follow up, I know it's early since this is only the first quarter since you announced kind of the expectations of the yield improvement over a multi-year period.
Speaker Change: But can you maybe, you know, you were Greg, put in context, you know, how you feel about Q1 relative to that and how we should think about, you know, the progression and
Speaker Change: You know, Canada 25. Yeah, Q1 was driving our models nicely and things are the new placements and the extensions are all going according to plan so we're turning very nicely towards our internal targets that allow us to make those those longer term projections. Thank you for your attention.
Okay. Thanks very much.
Our next question comes from Jamie Baker at J.P. Morgan .
Speaker Change: Hey, this is James on for Jamie. First question, just a simple two-part credit question I guess. Is the leveraged target reaffirmed at 2.5 or is that going to come lower now that you've met it? And then just on the revolver up size, was that procedural or was it opportunistic? Is there anything reading to that there?
Speaker Change: Sure, I'll take it. The revolver, we tend to amend and extend every single year, we've been growing it every single year, and we have a lot of bank demand, and that's why we increased the size to 8.2 [inaudible]
Speaker Change: It provides us a ton of liquidity, so we feel very good about that. And then James, can you remind me your first question? Yeah, just an elevator surrogate. Yeah, no. Our lever surrogate's been 2.5 since we inception the company and there's been no change to that target.
James: Great, thanks Greg. And then my second question on the last ring call you mentioned the opportunity for a new managed structure vehicle. I'm just wondering if there's anything in the macro that would impact timing of that structure being set up or you know, just anything any color you share there.
Speaker Change: All I can say is that the managed vehicles take a long time to put together. We look at a lot of options and it's something that we've been wanting to do for a while is to increase our management, manage fleets, especially at some of the older vehicles mature. Thank you.
Okay, that's it for me. Thanks
Thanks James.
Next, we'll move to Stephen Trent at City
Steven Trent: I guess good afternoon, gentlemen, and thanks very much for taking my question. The first kind of a follow-up on Moshe's question, could you help me understand?
Steven Trent: the receipts from the insurance and what have you. Thank you.
There's no change to our expectations for profitability this year.
Jason Arnold, Gregory Willis, Steven Udvar
Speaker Change: Okay, appreciate that. And just as a follow-up, I was trying to understand
Speaker Change: Your pre-tax margin went up year on year, but if I'm reading this directly, your pre-tax return on common equity went down a little bit and I was just wondering if that's
Speaker Change: Timing related with the, you know, the Russia claims that that came in or if there was something else happening, thank you. [inaudible]
Speaker Change: I think it's important to look at the adjusted numbers, but I think what's driving the differential between margin and ROE is the fact that ROE is a trailing 12-month figure, and that gets skewed by the timing of aircraft sales.
Well, perfect. Thanks for the color.
Speaker Change: and that concludes the question and answer session at this time. I'll turn it back over to Mr. Arnold for any closing remarks.
Jason Arnold: Thanks everyone for joining our first quarter call. We look forward to speaking with you again next quarter. Audra, thanks very much for your assistance.
Jason Arnold: You're welcome, and this concludes today's conference call. Thank you for your participation. You may now disconnect and connect.