Good day, ladies and gentlemen, and welcome to the Q1 2015 Air Lease Corp. Earnings Conference Call. My name is Joyce, and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ryan McKenna, Head of Strategic Planning. Please proceed.

Good afternoon, everyone, and welcome to Air Lease Corporation’s first quarter 2015 earnings call. This is Ryan McKenna. I’m joined this afternoon by Steve Házy, our Chairman and Chief Executive Officer; John Plueger, our President and Chief Operating Officer; and Greg Willis, our Senior Vice President and Chief Financial Officer. Earlier today, we published our first quarter 2015 results. A copy of our earnings release is available on the Investors section of our website at www.airleasecorp.com. This conference call is being webcast and recorded today, Thursday, May 7, 2015, and the webcast will be available for replay on our website. At this time, all participants to this call are in listen-only mode. At the conclusion of today’s conference call, instructions will be given for the question-and-answer session. 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, including without limitation, statements regarding our future operations and performance, revenues, operating expenses, other income and expense, and stock-based compensation expense. These statements and any projections as to the company’s future performance represent management’s estimates of future results and speak only as of today, May 7, 2015. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our filings with the Securities and Exchange Commission for a more detailed description of the risk factors that may affect our results. Air Lease Corporation assumes no obligation to update any forward-looking statements or information in light of new information or future events. In addition, certain financial measures we will use during this call, such as adjusted pretax income and adjusted diluted earnings per share, are non-GAAP measures and have been adjusted to exclude charges relating…

Thank you, Steve. Our core leasing operations remains strong and our customers are performing well. During the first quarter, we increased our own fleet by 10 aircrafts, bringing our owned total fleet to 223 aircrafts. We also increased our managed fleet by 2 units to 19 aircrafts. As we look forward to deliveries in 2015, we expect our heaviest quarter of deliveries of the year in the second quarter with the following 18 units scheduled to deliver: 7 Boeing 737-800s, 5 A321-200s, 4 777-300ERs, 1 A320, and 1 ATR. Now, I’d like to remind you that the full revenue impact of these deliveries will not be realized until the following quarter and will be offset by sales activity during the quarter. The market has remained consistently strong for the modern technology aircraft in our order book. Our overall portfolio lease rate factor remains strong and consistent. We are 100% placed in 2015, 88% placed in 2016, and 56% placed in 2017. In summary, were on track with how we target aircraft placements from our order book 18 to 36 months ahead of delivery. I told you during last quarter’s earnings call that we sold more aircrafts in 2014 than we originally planned, and as such, we would lighten up on aircraft sales during Q1 of 2015. Accordingly, we sold two airplanes during the first quarter, but we anticipate increased sales activity during the second quarter. The market remains strong for high-quality used aircraft and we will continue to prudently sell assets to manage our fleet. The equity capital raising process for Blackbird Capital I formerly included in April with more than $500 million equity now in place. Our team continues to add aircraft to Blackbird Capital I during the first few months of the year and is making progress in lining up opportunities for the total $2 billion fund. I’ll now turn this over to Greg Willis, who will walk you through our financial results, that we believe further differentiates ALC. Greg?

Thanks, John. As Steve mentioned, we increased our top line revenues for the first quarter of 2015 by 13% to $278 million versus 2014. After excluding the nonrecurring impact of our legal settlement our adjusted income before taxes increased to $102 million with an adjusted pretax margin of 37%, resulting in adjusted diluted earnings per share of $0.61. During the first quarter, we sold a smaller number of aircrafts than what we expect to close in the second and third quarters, given the pipeline of opportunities that we are in the works with. I want to remind everyone that our rental revenues are a function of the size of the fleet and as you forecast, the remainder of 2015 in your financial models, you will need to start with the ending net book value of assets and apply a lease rate factor. Our second quarter deliveries amount to approximately $1.2 billion in capital expenditures. As a result of the timing of this CapEx, we expect to have a slightly elevated debt-to-equity ratio in the second quarter, which will naturally de-lever as a function of the cash flows generated by the business along with our new aircraft delivery pipeline tapering off during the second-half of the year. Our debt-to-equity ratio has quarterly cyclicality that matches our delivery stream, but has no impact on our overall target ratio of 2.5 to 1. On the financing side of the business we have continued to maintain a high level of liquidity. At the end of the quarter, we ended with approximately $2.5 billion in liquidity, in addition to the 7 year $600 million senior unsecured notes that we closed in early January at 3.75%. We increased the size of our unsecured revolving credit facility by 10% to $2.3 billion up from $2.1 billion. The pricing of facility remains unchanged at LIBOR plus 125. Our bank group continues to grow and remain very appreciative for their support of our business. I’m very pleased to report that our low composite cost of funds of 3.7% has been achieved even as we further increased the fixed-rate portion of our debt to 80%, lengthened our maturity profile and increased the unsecured percentage of our debt. The secured portion of our debt book has declined to 10% of total assets, resulting in 85% of our debt portfolio being unsecured. As we continue to execute our financing strategy, our investment grade credit metrics have continued to improve. This concludes my review of the financial results and financing activities of the company. And I will now turn it back to Ryan.

Thanks, Greg. At this time, we’d like to open up the call to questions from the analysts.

[Operator Instructions] The first question comes from the line of Jason Arnold with RBC Capital Markets. Please proceed.

Hi. Good afternoon, guys. I’m just curious if you could comment on the timing of those two deliveries, are they relatively steady over the course of the quarter, or maybe a little bit more lumpy? And then, maybe, you could also remind us what’s left for deliveries here in the second-half of the year as well, please? Steven Udvar-Házy: Yes, Jason. I would - my comments would be that the deliveries are relatively steady throughout the quarter.

Okay. And then what’s coming in 2015 as well, please? Steven Udvar-Házy: Well, we have approximately nine aircraft in Q3 and five aircraft in Q4 with roughly $600 million in CapEx split evenly between the quarters.

Yes, so we have 18 aircraft this quarter and 14 aircraft in the second-half of the year.

Excellent. Okay, thanks, guys. And then I guess, the other one I was curious about is maybe you could talk about the two aircraft that added from the secondary market here this quarter, were those kind of a too good to pass up opportunities, or something else where is the driving force there? Steven Udvar-Házy: There were two opportunistic sale leaseback transactions that popped up during the quarter that we took advantage of.

Okay. And can you divulge type or…? Steven Udvar-Házy: Yes, there were two A320s.

Okay, superb. Thanks very much. Steven Udvar-Házy: Thanks, Jason.

The next question comes from the line of Nathan Hong with Morgan Stanley. Please proceed.

Hi, thanks for taking the question. Steve, I’m just thinking about what we’re seeing across the global economies? And I was hoping if you could take a step back and just offer an outlook on where we are in the cycle? Steven Udvar-Házy: Well, I just completed two back-to-back around the world trips, where we visited 15 different airlines. So it’s a nice cross-section of airlines in North America, Europe, the Middle East, Central Asia, Far East, Australia, and the South Pacific. And the consistent message that we got is most of these airlines are experiencing traffic growth in the last six months of between 5% and 12% over the same periods previously. They’re anticipating a modest, I would say, the general feeling is, they’re anticipating a modest increase over the next two, three years in oil prices, so all the airlines are planning for a little bit of upward pressure on oil prices. And particularly in the lesser developed countries, there’s still a high rate of formation of middle-class earners, which will filter down to more air travel. We’re also seeing an impact in North America, Europe, and Asia from traffic stimulation of the low-cost carriers, the LCCs and now the ULCCs, which in North America right now we have people like Spirit and Frontier are taking a lot of traffic out of cars or creating traffic that heretofore did not go at all on these trips. And we’re seeing similar phenomenon in Eastern Europe with, for example, Wizz, they just went public on the London Stock Exchange. And, of course, in Asia, where we have a proliferation of low-cost carriers, all the way from Japan, Korea, China, Taiwan, and Southeast Asia, including Thailand, Vietnam, Indonesia, Malaysia, and Singapore. So what we’re seeing here is a modest increase in GDP. Air traffic continues to grow at 1.5 to 2 times GDP. Load factors are at historically strong levels for many airlines in Q1 was the highest load factors they’ve ever had in the slowest three months of the year. And we’re seeing this traffic stimulation effect from the LCCs and ULCCs. I hope that gives you kind of a broad overview.

Nathan, I would just add, I was on that last trip with Steve. I would also add specifically with respect to the people of Republic of China. We are really seeing no slowdown and appetite request or demand, whether it is from the big three main Chinese airline routes, or the smaller regional airline - some of the lower-cost airlines in China. As you know, they continue to build more new airports in China than practically the rest of world combined. And despite what you may be reading in the financial headlines about overall slowing of growth in China, we see no evidence of that in terms of our inbound requests and the campaigns we currently have actively in progress in China. Steven Udvar-Házy: But I think talking about China is also true for the rest of Asia. Even in Japan where you have virtually no population growth, or even slight decrease in population and to some degree in aging average profile of the population, the impact of the low-cost carriers has been a positive influence in generating additional traffic. And as those people move up the economic ladder, the windup flying on full-service carriers in the future. So we’re really not seeing any particular, what I would call, dangerous spots in terms of traffic trends. Secondly, I just want to add that the majority of our new aircraft placements are geared toward replacement of older airplanes that were built in the 1980s and 1990s. So it’s not necessarily focused on achieving the growth rates that we have seen in the last two years.

Got it. It’s very helpful. And just a quick follow-up on your last commentary about replacement, I guess over the years, have you guys actually seen a shift of more interest to growth, or has that mix between growth versus replacement been fairly stable over the years?

I mean, it’s actually been relatively constant and pretty stable. As Steve indicated, we specifically as a company, we tend to target our new aircraft placements at the replacement market. Now, of course, we put a number of aircraft that are in growth - in sort of a growth mode for some of the airlines, but the majority are replacements and really it just not changed very much over the last year or two. Steven Udvar-Házy: Yes, and just to give you an example, we have ordered 21 new 777-300 yards. And every one of those aircraft is replacing an older 747, or MD11 or an A340 on a one-for-one basis to, I think, it’s nine different airlines. So, as John indicated, our focus is replacing aircraft that are no longer as economical to operate. And also these airlines can achieve better fleet commonality, a more upgraded customer product with these new airplanes that’s in harmony with the rest of their fleet. So we see that trend continuing and airlines upgrading their offerings, particularly in the business and first class.

Great. Very helpful, guys. Thanks for the time. Steven Udvar-Házy: Thanks, Nathan.

The next question comes from the line of Jamie Baker with JPMorgan. Please proceed.

Good afternoon, gentlemen. It’s actually Jamie and Mark Streeter here. Clarification on the $9 million in trading games that you booked in the quarter, was that just the two aircraft that that you disposed, or was there something else in that figure? Was it evenly split if it was just two aircrafts, any additional color on that would help? Steven Udvar-Házy: About $7.5 million of that was gain on aircraft sales and the rest was management fees and other miscellaneous income.

Okay, perfect. Follow-up, your competitor Avalon routinely discloses an appraised mark-to-market on their portfolio. They update those appraisers - appraisals, excuse me, annually. I’m just curious if this is the sort of thing that Air Lease might consider, or maybe you’ve already done it and you can share with us. I realize your preferences to move away from book valuation metrics, but I figure that after the question anyway? Steven Udvar-Házy: Yes. First of all, the appraisers call us to find out what aircraft values are. They use Air Lease as a resource. So I don’t want to pay for any information that we already have. Secondly, the strength of our company is based on cash flow generation of a more advanced technology book or forward placements, which will probably bring in anywhere from $45 billion to $50 billion of future lease revenues. And so we’re looking at where this company is going rather than historical - usually six to nine months behind in terms of valuation of aircraft versus book values, we’re not going to use that metric. Does it…

Okay - yes, sure, sure. Understood, understood. I appreciate you taking the question. Just one last housekeeping thing, Steve, while I have you. The 57 additional aircrafts that includes 321 LRs that were announced early in the quarter, correct? Steven Udvar-Házy: That is correct. We launched the A321 LR. We’ll be making announcements very soon about those aircrafts, placement of those aircrafts. And we’re seeing a lot of demand particularly to replace Boeing 757s on longer sectors.

Yes, bigger. Excellent. Thank you very much. I appreciate it. Steven Udvar-Házy: Thanks, Jamie.

Thank you, Jamie.

The next question comes from the line of Kristine Liwag with Bank of America Merrill Lynch. Please proceed.

Hi, good afternoon, gentlemen. Steven Udvar-Házy: Hi, Kristine. How are you?

Great. When we think about the lease rate factors of the aircrafts that you’re placing 2017, how does that compare to the airplanes you’ve placed for 2015 and 2016? Steven Udvar-Házy: That’s actually a very good question, because we just had a board meeting yesterday. And we were looking at charges and we’re actually seeing a slight uptick. And I think one of the reasons for that is that airlines are anticipating that in the next two or three years interest rates will begin to move upward slowly. And so they are thinking that their own financing costs may rise. So consequently, they’re willing to pay a slightly higher lease rate versus what they’re paying today for an equivalent airplane. Secondly, those aircrafts have escalation formulas based on inflation indexes that are published by Boeing and Airbus. So we’re seeing really robust lease rates on the new technology airplanes, including the neos and MAXs, 787s, A350s in particular.

Great. So far you’ve got a pretty healthy OEM order book and you’re very opportunistic about selling aircraft in your portfolio. So with these puts and takes, how should we think about that the net addition of your own fleet? And also, over time do you have an optimized fleet size in mind? Steven Udvar-Házy: Let me answer the first one - the last one first. The answer is no, we don’t have an optimized fleet size, because you hit the nail in the head, we have our order book, but we’re also very focused on opportunistic purchases and sales. So we focused on the quality of our earnings and the return; and every single transaction, the return to us or the company, return on equity, return on investment that we make. And so we do not have an optimized fleet size. We will continue to grow and manage the company to give the best returns to our shareholders over time. And that’s actually how we’ve operated as a management team for almost 30 years. Generally speaking, we would endeavor to sell probably between 20%-25% of our annual CapEx in used aircrafts. But that depends a great deal on the buyers, which aircraft types they’re seeking and balancing our portfolio. So it’s an optimized mix of wide bodies, narrow bodies, as well as geographic diversification. But - so in any given year, let’s say, we had a $3 billion CapEx we would look at selling between $600 million and $750 million of aircrafts. But that’s just the general kind of rule of thumb, it’s not a scientific order of magnitude. But in your forward planning that’s what you could probably put into your model.

Okay, great. And then switching topics and this is the last question for me. From Blackbird, can you just walk through how your fee structure from that and how you get paid? Steven Udvar-Házy: Yes, that’s something, Kristine, actually that we don’t disclose publically. This is a private venture. We don’t consolidate into our balance sheet. So it is a fee-based business, but we actually do not disclose the details of that arrangement. But as we add, Kristine, more aircrafts to that portfolio, which is an ongoing process with the goal of reaching about $2 billion of jet aircrafts by the end of 2016, that management fee income will grow proportionally to the asset growth in that portfolio.

Yes, and at some point it may. I mean, if those lines get big enough they may - we may have to think about separate that, but it’s too soon and it’s early days for that, Kristine, as we sort of pointed to. It’s really a strategic venture for us to manage risk and concentrations. And we think we’re well aligned with our shareholders there. Steven Udvar-Házy: But the game plan is to add aircraft every quarter to that portfolio, the Blackbird portfolio between now and the end of 2016. So that will all filter down into additional management fees.

Great. Thank you so much. Steven Udvar-Házy: Thanks, Kristine.

Your next question comes from the line of Vincent Caintic with Macquarie. Please proceed.

Hey, good afternoon, guys. I wanted to touch upon those opportunistic purchases and you mentioned sale leaseback market. First, just kind of wanted to get a sense - your sense of the competitive environment. And then, with the sale leasebacks, has your view evolved in terms of how you see the economics of sale leaseback versus the direct orders and what’s your thoughts there? Steven Udvar-Házy: Difference between our approach to sale leasebacks and many of the other lessors is totally different. We do not participate in what we call RFPs or competitive bidding or auctions for RFPs. And every incremental transaction that we did this year was the result of a fleet planning process between us and the respective airlines. And it was a directly negotiated transaction. There was no lessors or financial parties involved in the process. So it was basically a bilateral deal between us and the airlines involved. It was not through an open bidding RFP process, which is the general method that airlines are using nowadays. So I just want to emphasize that we are not on the herd. Our transactions are unique and they’re basically created through a creative structure between us and the respective airlines.

Got it. Thanks for that. And then just second question for me. On your - on the demand for used aircraft, are there any specific trends that you’re seeing in terms of the demand for certain types of aircraft types and maybe geographies of those who might be interested in that? Steven Udvar-Házy: Well, historically most of classic demand, Vincent has been in the single isle side. However, as this industry has grown, and has more lessors, and more investors have looked overall at the space, we’re actually seeing now an increase in interest in the widebodies. And so across the spectrum what we will be selling this year and into next year, I think the sales from our more fleet should about approximate the distribution our fleet right now, as to single isle and widebody, maybe not quite as much widebody percent. But the bottom line is the biggest overall trends I think we’re seeing of more appetite on the good young widebody aircraft than we have generally speaking over the past several years, as this industry is grown. The primary demand still remains for the single isle, but we are seeing a broader growth in the twin isle market.

At the end of last year we sold a 777-300ER lease to a major airline, we sold an A333-100 to - this also leased to a major airline. So, as John indicated, the A320 and 737 NGs are still sort of the bread-and-butter airplanes in the used market, but many investors are also sprinkling in the widebody aircraft as well as the Embraer jets.

That’s very helpful. Thanks very much, guys. Steven Udvar-Házy: Sure.

Your next question comes from the line of Richa Talwar of Deutsche Bank. Please proceed.

Good afternoon, everyone. Steven Udvar-Házy: Hi.

Hi. So first, I wanted to touch on John’s point regarding the placed aircrafts. You said, 88% of your 2016 and 56% of your 2017 deliveries had been placed. So I was wondering if you’d be willing to share comments about the unplaced aircraft over those years. And could you tell us what’s available and how demand is shaping up for those particular aircraft types? Steven Udvar-Házy: As I indicated in my remarks, we are pretty much on track. I feel very confident in telling you those percentages. They are going to increase next quarter. We have a number of transactions that are really littler than closing in the last week or too. So our placements are pretty much right where they need to be. But what I will add, that is a bit different is consistent with the strong long backlogs at the manufacturer. Generally speaking, we are placing aircraft farther out in the future, because there’s less NEO/MAX aircraft available in the 2016, 2017 timeframe. Today, we are looking at very close on our first placements of A350-900s, 787-9s. We are, as we are the launch customer of the 321LR Neo. So generally speaking, we are seeing placements much farther out today than we did certainly three or four years ago, or even a couple of years ago. So, I can’t ever imagine, remember, we did our first transactions with the Southeast Asian Airline placing 787-9s. We did them really in 2013, and these were 2018 deliveries. So five years out, we’re placing product and that trend continues. So for us it is a balance. How much do we want to place now versus whether or not we should wait a year or two, because we know that as a company that really, really tailor makes fleet solutions to - for our airlines, working with our airline, as Steve mentioned earlier the sale leasebacks we talked about earlier. So we want to have some product remaining available to meet strategic growing demands globally. If we wanted to, we could push the go-forward fast lever and increase our rate of placements. But for us life is about balance and about having some product available over the next year, two, or three across the globe, because we offer fleet solutions. And if we’re out of product completely, we have less tools to work with.

Okay. That’s really helpful. And then you mentioned that 787-9s, and I recently read that Chinese operator Hainan Airlines was looking to get those aircrafts…

Hainan?

Yes, as early as next year. So wondering if A, your 2016 delivery slots for that aircraft are even still available, and B, if we’re speaking to that airline broadly about their upcoming fleet needs? Steven Udvar-Házy: That’s a tough one to answer, just stay tuned.

All right, fair enough. And then if I could just ask one more then, this is more a big picture. Yes, I noticed that the Middle East seems to have - seems to be accounting for a larger share of your overall fleet than it did last year. So in that context, curious to share what your thoughts are around the subsidy argument between the big Middle Eastern carriers and the U.S. operators, and how you think the outcome of that issue may impact on the aircraft leasing industry? Steven Udvar-Házy: Right. The reason that in Q1 the Middle East Africa a percentage of our total fleet assets grew was that, we delivered a new Boeing 777-300 ERs to Emirates. And so that aircraft alone because of its value changed very slightly, the proportionality of assets dedicated to airlines in Middle East and Africa. As far as the arguments and the debate that’s ongoing between the major U.S. airline and the Gulf carriers. We really don’t want to comment on that, because we have customers in both buckets. And this is something that will be publicly aired and dealt with by the regulators in terms of how to deal with the open skies matters and how to deal with alleged subsidies on both sides of the Atlantic. So it’s really not for us to draw any conclusions. Both sides are putting forward interesting arguments, and we’ll let it play out.

All right. Well, I appreciate the color. Thank you. Steven Udvar-Házy: You’re welcome.

Thank you.

The next question comes from the line of Darryl Genovesi with UBS. Please proceed.

Hi, guys. Thanks for taking my question. I guess, I just wanted to start, you had a - a couple of weeks ago United said they were going to start moving some 777s out of long-haul flying and into sort of domestic U.S. flying. And just wondering if you see that as a developing trend, if you’re noticing 777 start to fly shorter-haul routes as, perhaps, Boeing is looking to move more of them more quickly in anticipation of the model transition out in a few years, perhaps there is a little bit more availability, and perhaps that’s what’s motivating this decision. I’m just wondering if you think that’s right, and if you’re seeing - if there’s anything sort of more broad-based than just the move that we saw there a couple weeks ago.

Not really. I mean what you’re talking about, I believe were 777-200s…

200s, yes.

Not 777-300 ERs, I really don’t think it’s related to any sales push on the part of Boeing. It really is strictly related, it’s not just United States, but particularly in Asia, you see a lot of white bodies being used on more, so-called regional routings. I mean, you’ve got widebodies all day long going between Beijing and Hong Kong, especially on the weekend. So I think it’s really strictly just a function of demand passenger load factors and the factor that there’s limit slot availability, it’s a global phenomenon, it’s not just localized anywhere like the United States. If you go back into the 1970s and 1980s, airlines like United and TWA, American were using 747s on U.S. Transcontinental routes even on flights between New York and Florida. And there was extensive use of DC-10s and L-1011s, which are comparable in size to the 777-200. So if you go back in history in the 1970s and 1980s and even into the 1990s, there was very, very extensive use of widebody aircraft on transcon markets, as well as Midwest to the West Coast and from the Northeast of Florida.

Okay. And then I guess - well, thanks for that. I also wanted to ask you - Boeing Capital hosted this meeting on Monday, I believe it was. And every year when they do this thing, they do this survey. And they asked a couple questions that I think are sort of related. One is, they always ask aircraft financiers what’s their view on sort of the current level of capital available for aircraft finance. And in this particular case, you had 60% to 65% respondents said, there was too much capital, and only 3% said there was too little capital. But then a question or two later, they asked what’s your plan for your aircraft finance portfolio? And 80% of them said they were going to grow. And I have trouble sort of reconciling those two views. And I wonder - I know that you try not to take part in some of the more commoditized aspects of the business, but I wonder if perhaps you are worried that you do start to see an issue take hold with respect to kind of lease rate factors going forward because of this?

Well, I mean, the capital inflows to this space have been strong now for several years. I mean, it’s partially a result of the success of the space, but also the overall growth of worldwide air travel and air traffic. So, I would say, we have no concern. We’re quite happy that we have capital readily available. In fact, I think it’s one of the underlying reasons why the overall airline industry has done well, because they benefited from not only lower interest rates, but a plentiful capital sourcing, and the same thing for the aircraft leasing industry. I don’t see that that’s going to really - that’s going to really fundamentally change in terms of too much capital chasing too fewer deals. I think there already has been capital available to the global marketplace. It is a result of the more efficient operations for the airlines and given them more choices. So it’s provided indirectly and directly, it’s provided them healthier balance sheets and healthier P&L. So we tend to view it as a good thing. We don’t see any evidence that there is some sort of global capital glut that’s just profoundly influencing lease rates and financial returns. Every shareholder, every company has to have their defendable earnings. And we at Air Lease enjoy the highest pre-tax profit margins in the industry. So I would just say the short answer is no. I don’t see any evidence that capital availability is going to hurt the industry or hurt our returns. Steven Udvar-Házy: Also in the last two years the airlines global lease have used the export credit agencies to a lesser degree than they did back in 2010, 2011, 2012, partly because of the new ASU regulations or agreements, which require higher fees. So what we’re seeing as airlines have improved their balance sheets, they’re relying more on the commercial marketplace rather government guaranteed financing, which has become much more expensive than it was historically because of the new fee structures.

I guess, what - are there any leading indicators that your monitoring that you think give you a sense of sort of when you might expect to see a market for aircraft financing that’s perhaps oversupplied. I mean, I guess, I’m sure you’re monitoring kind of traffic patterns as you pointed out. But I mean, is there anything kind of on the supply-side that you’re monitoring that if it goes in a certain direction would have you worried? Steven Udvar-Házy: Well, what we do look at is the total capital requirement for all of the new deliveries that are taking place in 2015, 2016, and 2017. And that is at historically the highest levels we’ve ever seen, because when you add the combined value of all of the A380s, and 777s, 787s, and A350s, and 747 freighters, and 787-9s, and 787-8s, and then all of the increased production rates on the 737 line and the A320-A321 line, and you put that altogether and then add the regional aircraft, the capital being consumed to finance all of these aircrafts is really at historical highs. So we need more capital in the marketplace to finance all of those aircrafts, whether through bank financing, EETCs, operating leases, finance leases, and export credit financing.

Great. Well, thanks for the color. I appreciate it. Steven Udvar-Házy: You’re welcome.

There are no further questions in queue at this time. I would now like to turn the call back over to Ryan McKenna for closing remarks.

Thanks you very much for dialing into the Q1 call and we look forward to speaking with you again in Q2.