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AL, Air Lease

Trading Companies & Distributors diversified Cyclical

A diversified business; where the profit really comes from, and whether it is earned or bought, is what the segment detail settles.

Latest annual: FY2025 10-K

AL · Air Lease

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$3.0B

+10.3% YoY · 8% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $3.0B 5-yr avg $2.6B

Operating margin 59.2% 5-yr avg 37.5%

ROIC 5% 5-yr avg 3%

Owner-earnings margin 54% 5-yr avg 51%

Free cash flow margin 54% 5-yr avg 51%

The business in brief

What this business is and what moves its needle, from its own SEC filings.

Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Operating margin has run about 54% through the cycle, a wide margin for the work it does — whether that reflects a durable edge or one that can fade is what the record weighs. The operating margin has swung widely — from 18% to 61% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Capital spending runs about 11% of sales, below what it charges for depreciation, so the return earned on what it sinks into that plant weighs as much as the margin.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 5%, above 15% in 0 of 9 years). By owner earnings: roughly 54% of revenue reaches owners as cash, consistently. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$1.4B	$1.5B	$1.7B	$2.0B	$2.0B	$2.1B	$2.3B	$2.7B	$2.7B	$3.0B	$3.0B	RevenueRevenue
6%	6%	6%	6%	5%	6%	7%	7%	7%	7%	7%	SG&A / revenueSG&A/rev
$866M	$897M	$983M	$1.2B	$1.1B	$1.1B	$407M	$1.5B	$533M	$1.4B	$1.8B	Operating incomeOp. inc.
61.1%	59.1%	58.5%	58.0%	55.6%	50.5%	17.6%	54.5%	19.5%	45.4%	59.2%	Operating marginOp. mgn
$375M	$756M	$511M	$587M	$516M	$437M	($97M)	$615M	$428M	$1.1B	$838M	Net incomeNet inc.
35%	—	20%	20%	20%	19%	—	18%	20%	21%	20%	Effective tax rateTax rate
											Cash flow & returns
$1.0B	$1.1B	$1.3B	$1.4B	$1.1B	$1.4B	$1.4B	$1.7B	$1.7B	$1.7B	$1.8B	Operating cash flowOp. cash
$453M	$508M	$582M	$703M	$781M	$883M	$966M	$1.1B	$1.1B	$1.2B	$1.2B	DepreciationDeprec.
$176M	($225M)	$144M	$82M	($224M)	$31M	$498M	$29M	$72M	($626M)	($260M)	Working capital & otherWC & other
$211M	$177M	$288M	$291M	$161M	$230M	$217M	$305M	$387M	$238M	$223M	CapexCapex
14.9%	11.7%	17.1%	14.4%	8.0%	11.0%	9.3%	11.4%	14.2%	7.9%	7.4%	Capex / revenueCapex/rev
$809M	$882M	$967M	$1.1B	$929M	$1.1B	$1.2B	$1.4B	$1.3B	$1.5B	$1.6B	Owner earningsOwner earn.
57.0%	58.2%	57.5%	54.6%	46.1%	54.9%	50.3%	53.7%	47.2%	49.6%	53.9%	Owner earnings marginOE mgn
$809M	$882M	$967M	$1.1B	$929M	$1.1B	$1.2B	$1.4B	$1.3B	$1.5B	$1.6B	Free cash flowFCF
57.0%	58.2%	57.5%	54.6%	46.1%	54.9%	50.3%	53.7%	47.2%	49.6%	53.9%	Free cash flow marginFCF mgn
$21M	$31M	$42M	$58M	$68M	$73M	$83M	$89M	$93M	$98M	$98M	Dividends paidDiv. paid
—	—	—	$0	$0	$6M	$150M	$0	$0	—	—	BuybacksBuybacks
5%	7%	5%	5%	4%	4%	—	5%	2%	4%	5%	ROICROIC
11%	18%	11%	10%	9%	6%	-1%	9%	6%	13%	10%	Return on equityROE
10%	18%	10%	9%	7%	5%	−3%	7%	4%	12%	9%	Retained to equityRetained/eq
											Balance sheet
$275M	$292M	$300M	$317M	$1.7B	$1.1B	$766M	$461M	$473M	$466M	$554M	Cash & investmentsCash+inv
$14.0B	$15.6B	$18.5B	$21.7B	$25.2B	$27.0B	$28.4B	$30.5B	$32.3B	$32.9B	$33.2B	Total assetsAssets
$8.7B	$9.7B	$11.5B	$13.6B	$16.5B	$17.0B	$18.6B	$19.2B	$20.2B	$19.7B	$19.8B	Total debtDebt
$8.4B	$9.4B	$11.2B	$13.3B	$14.8B	$15.9B	$17.9B	$18.7B	$19.7B	$19.3B	$19.3B	Net debt / (cash)Net debt
3.0×	3.1×	2.9×	2.7×	2.4×	2.1×	0.7×	2.1×	—	—	2.4×	Interest coverageInt. cov.
$3.4B	$4.1B	$4.8B	$5.6B	$6.1B	$7.0B	$6.6B	$7.2B	$7.5B	$8.5B	$8.5B	Shareholders’ equityEquity
1.2%	1.3%	1.0%	1.0%	0.9%	1.3%	0.7%	1.3%	1.2%	1.6%	1.2%	Stock comp / revenueSBC/rev
											Per share
111M	112M	112M	113M	114M	114M	112M	111M	112M	112M	112M	Shares out (diluted)Shares
$12.81	$13.58	$14.95	$17.84	$17.68	$18.25	$20.76	$24.09	$24.44	$26.85	$26.82	Revenue / shareRev/sh
$3.38	$6.77	$4.55	$5.19	$4.53	$3.82	$-0.87	$5.52	$3.82	$9.69	$7.45	EPS (diluted)EPS
$7.30	$7.90	$8.60	$9.74	$8.15	$10.02	$10.44	$12.94	$11.53	$13.33	$14.46	Owner earnings / shareOE/sh
$7.30	$7.90	$8.60	$9.74	$8.15	$10.02	$10.44	$12.94	$11.53	$13.33	$14.46	Free cash flow / shareFCF/sh
$0.19	$0.28	$0.37	$0.51	$0.60	$0.64	$0.75	$0.80	$0.84	$0.87	$0.87	Dividends / shareDiv/sh
$1.91	$1.59	$2.56	$2.58	$1.41	$2.01	$1.94	$2.74	$3.46	$2.12	$1.98	Cap. spending / shareCapex/sh
$30.53	$36.97	$42.78	$49.73	$53.26	$61.24	$59.54	$64.25	$67.33	$75.43	$76.00	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+8.6%/yr	+8.7%/yr
Owner earnings / share	+6.9%/yr	+10.3%/yr
EPS	+12.4%/yr	+16.4%/yr
Dividends / share	+18.8%/yr	+7.9%/yr
Capital spending / share	+1.2%/yr	+8.4%/yr
Book value / share	+10.6%/yr	+7.2%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

112Mpeak FY2021

ROIC

4%low FY2024

Net debt ÷ owner earnings

12.9×peak FY2020

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.5Bowner earningsvs.$1.1Bnet incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $1.1B of profit into $1.5B of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$1.1B

Owner earnings$1.5B · 50% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.1B	$428M	$615M	($97M)	$437M
Depreciation & amortizationnon-cash charge added back	+$1.2B	+$1.1B	+$1.1B	+$966M	+$883M
Stock-based compensationreal costnon-cash, but a real cost	+$49M	+$34M	+$35M	+$16M	+$27M
Working capital & othertiming of cash in and out, other non-cash items	−$626M	+$72M	+$29M	+$498M	+$31M
Cash from operations	$1.7B	$1.7B	$1.7B	$1.4B	$1.4B
Capital expenditurecash put back in to keep running and to grow	−$238M	−$387M	−$305M	−$217M	−$230M
Owner earnings	$1.5B	$1.3B	$1.4B	$1.2B	$1.1B
Owner-earnings marginowner earnings ÷ revenue	50%	47%	54%	50%	55%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $49M), owner earnings is nearer $1.4B.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 2.9×

Adequate

Operating income $2.1B ÷ interest expense $709M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $19.3B · 9.3× operating profit

Heavy net debt

Cash $466M − debt $19.7B

What this means
Netting $466M of cash and short-term investments against $19.7B of debt leaves $19.3B owed, about 9.3× a year's operating profit (9.5× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 5%

Below average through the cycle

9-yr median, range 2%–7%; 6% latest = NOPAT $1.7B ÷ invested capital $27.7B

Industry peers: median 7%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 54%

High through the cycle

10-yr median margin, range 46%–58%; latest $1.5B = operating cash $1.7B − maintenance capex $238M

Industry peers: median 9%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 50% of revenue this year, a 54% median across 10 years. Treating stock comp as the real expense it is (less $49M of SBC) leaves $1.4B.
Are earnings backed by cash? 1.59×

Cash-backed

Cash from ops $1.7B ÷ net income $1.1B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 7%

Reinvests most of it

Dividends + buybacks $98M ÷ Owner Earnings $1.5B

What this means
Of $1.5B Owner Earnings, $98M (7%) went back to shareholders, $98M dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.19×

Harvesting

Capex $238M ÷ depreciation $1.2B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 4 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $3.0B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity —

Current ratio ≥ 2× · —

What this means
Current assets / liabilities not in the data yet.
Earnings stability Near

A profit every year (10-yr record) · 1 loss year

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Near

Earnings +33% over the record · +30%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3551.19/share (latest year $5441.94), the averaged base the calculator's gate runs on, and book value is $42363.78/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 10

What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 60% → 40% (3-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 60% early to 40% lately, median 54% — competition or costs are biting in.
Reinvestment, incremental ROIC 1%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +6%/yr

What this means
Owner earnings grew about 6% a year over the record.
Worst year 2022 · 17.6% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +0.2%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

How the cash was used, 2016–2025

Over the record, the business generated $13.7B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$2.5B · 18%
Dividends$656M · 5%
Buybacks$156M · 1%
Retained (debt / cash)$10.4B · 76%

Returned to owners$812M
7% of the owner earnings the business produced over the span, $656M as dividends and $156M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $11.1B and cash and short-term investments rose $279M.
Average price paid for buybacks$37.54
Across the years where the filing reports a share count, 0M shares were bought for $6M, about $37.54 each.
Net change in share count1.5%
The diluted count rose from 111M to 112M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$0.87/sh
Paid in 10 of the years on record, the per-share dividend growing about 19% a year. It was never cut over the span.
Return on what it retained12%
Of the earnings it kept rather than paid out ($4.4B over the span), annual owner earnings (first three years vs last three) grew $524M, so each retained $1 added about 0.12 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2020	Mr. Plueger	$6.0M	$2.7M	$929M
2021	Mr. Plueger	$9.1M	$7.0M	$1.1B
2022	Mr. Plueger	$8.5M	$3.1M	$1.2B
2023	Mr. Plueger	$9.1M	$12.0M	$1.4B
2024	Mr. Plueger	$8.4M	$10.2M	$1.3B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$49M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Air Lease is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 5 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?50.2% vs 57.6%
The owner-earnings margin averaged 57.6% early in the record and 50.2% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$8.7B → $19.8B
Debt rose from $8.7B to $19.8B while owner earnings went from about $886M to $1.4B — about 9.8 years of owner earnings in debt then, about 14 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Trading Companies & Distributors

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
UPBDUpbound Group Inc.	$4.7B	55%	4.4%	7%	7%
ALAir Lease	$3.0B	—	55.1%	5%	54%
KFYKorn Ferry	$2.9B	—	10.0%	14%	10%
STGWStagwell Inc.	$2.9B	35%	5.1%	4%	5%
CBZCBIZ	$2.8B	14%	8.5%	5%	9%
AMNAMN Healthcare Services	$2.7B	33%	9.2%	13%	8%
PRGPROG Holdings Inc.	$2.4B	—	8.3%	15%	10%
WSCWillScot	$2.3B	—	11.0%	4%	23%
Group median	—	—	8.9%	6%	9%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Air Lease has delivered.

Today’s price $

Through the cycle, Air Lease earns about $1.6B on its 54.1% median owner-earnings margin. This year’s 49.6% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.6B) Net of stock comp (−$36M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+5%/yr

Owner-earnings growth · ’16→’25+6%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $1.6B on 0M shares outstanding, per the 10-Q cover, as of 2026-05-05; net debt $19.3B. The if-converted diluted count is 112M, 56142% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh AL against another business →

Cite: Owner Scorecard, "Air Lease (AL), the owner's record," https://ownerscorecard.com/c/AL, data as of 2026-07-09.

Manual order: ← AKR its page in the Manual ALAB →

Industry order: ← AIT the Trading Companies & Distributors chapter ARW →