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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
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| For the month of August 2024 | Commission File Number 001-33159 |
AERCAP HOLDINGS N.V.
(Translation of Registrant’s Name into English)
AerCap House, 65 St. Stephen’s Green, Dublin D02 YX20, Ireland, +353 1 819 2010
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Other Events
On August 1, 2024, AerCap Holdings N.V. (together with its subsidiaries, “AerCap,” “we,” “us” or the “Company”) furnished its interim financial report for the quarter ended June 30, 2024.
The information contained in this Form 6-K is incorporated by reference into the Company’s Form F-3 Registration Statements File No. 333-260359 and Form S-8 Registration Statements File Nos. 333-194638, 333-194637, 333-180323, 333-165839, and 333-154416, and related Prospectuses, as such Registration Statements and Prospectuses may be amended from time to time.
Dividend
In connection with AerCap’s dividend policy, in July 2024, AerCap’s Board of Directors declared a quarterly cash dividend of $0.25 per share, with a payment date of September 5, 2024, to shareholders of record as of the close of business on August 14, 2024.
The dividend will be subject to Irish dividend withholding tax at a current statutory rate of 25% unless an exemption applies. Pursuant to a confirmation obtained from the Irish Revenue Commissioners, U.S. resident shareholders who hold their shares through the Depository Trust Company (“DTC”) should be exempt from Irish dividend withholding tax provided the address of the beneficial owner of the shares in the records of their broker, or otherwise provided to AerCap’s qualifying intermediary, is in the United States. The confirmation from the Irish Revenue Commissioners is operative for a period of five years until July 25, 2029. Individuals and certain corporate shareholders that are tax resident in a country (other than Ireland) which is a member of the European Union or a country with which Ireland has a double tax treaty in effect (which includes the United States) may be exempt from Irish dividend withholding tax if they provide a relevant declaration as prescribed by the Irish Revenue Commissioners establishing their exemption from Irish dividend withholding tax provided such corporate shareholder is not itself controlled by Irish tax residents.
In addition, the dividend will be subject to Dutch dividend withholding tax (currently at a rate of 15%) for persons who are resident, or deemed to be resident, in the Netherlands (“Dutch resident holders”). To confirm that a shareholder is not a Dutch resident holder, such shareholder must provide an Irish dividend withholding tax relevant declaration as prescribed by the Irish Revenue Commissioners representing that the shareholder is not a Dutch resident holder except that, pursuant to the confirmation from the Irish Revenue Commissioners referred to above, U.S. resident shareholders who hold their shares through the DTC and have a U.S. address of the beneficial owner of the shares in the records of their broker, or that has otherwise been provided to AerCap’s qualifying intermediary, need not provide this declaration form. AerCap intends to presume that shareholders who do not comply with the above requirements are Dutch resident holders.
For a further discussion of Irish and Dutch dividend withholding taxes, see “Irish tax considerations—Dividend withholding tax” and “Dutch withholding tax considerations” in Item 10 of AerCap’s 2023 Annual Report on Form 20-F. The summary provided therein is not exhaustive and shareholders should consult their own tax advisor to determine the Irish and Dutch tax consequences of the dividend in their particular circumstances.
INDEX
PART I. FINANCIAL INFORMATION
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| Item 1. Financial Statements (Unaudited) | |
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AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
As of June 30, 2024 and December 31, 2023
| | | | | | | | | | | | | | | | | |
| Note | | June 30, 2024 | | December 31, 2023 |
| | | (U.S. Dollars in thousands, except share data) |
| Assets | | | | | |
| Cash and cash equivalents | 4 | | $ | 1,436,032 | | | $ | 1,627,181 | |
| Restricted cash | 4 | | 176,203 | | | 198,285 | |
| Trade receivables | | | 49,512 | | | 73,667 | |
| Flight equipment held for operating leases, net | 5 | | 57,515,152 | | | 57,091,166 | |
| Investment in finance leases, net | 6 | | 1,276,639 | | | 1,254,451 | |
| Flight equipment held for sale | 7 | | 104,891 | | | 296,696 | |
| Prepayments on flight equipment | 26 | | 3,799,172 | | | 3,576,187 | |
| Maintenance rights and lease premium, net | 8 | | 2,411,180 | | | 2,729,962 | |
| Other intangibles, net | 9 | | 150,728 | | | 163,167 | |
| Deferred tax assets | 16 | | 273,298 | | | 275,756 | |
| Associated companies | 10 | | 1,039,709 | | | 971,517 | |
| Other assets | 11 | | 2,874,145 | | | 3,016,524 | |
| Total Assets | | | $ | 71,106,661 | | | $ | 71,274,559 | |
| | | | | |
| Liabilities and Equity | | | | | |
| Accounts payable, accrued expenses and other liabilities | 13 | | $ | 1,722,501 | | | $ | 1,793,058 | |
| Accrued maintenance liability | 14 | | 2,979,269 | | | 2,863,730 | |
| Lessee deposit liability | | | 1,007,927 | | | 1,018,702 | |
| Debt | 15 | | 45,697,189 | | | 46,483,903 | |
| Deferred tax liabilities | 16 | | 2,683,354 | | | 2,526,120 | |
| Commitments and contingencies | 26 | | | | |
| Total Liabilities | | | 54,090,240 | | | 54,685,513 | |
| | | | | |
Ordinary share capital, €0.01 par value, 450,000,000 ordinary shares authorized as of June 30, 2024 and December 31, 2023; 204,543,739 and 215,543,739 ordinary shares issued and 195,159,322 and 202,493,168 ordinary shares outstanding (including 4,975,247 and 4,561,249 shares of unvested restricted stock) as of June 30, 2024 and December 31, 2023, respectively | 17, 23 | | 2,558 | | | 2,676 | |
| Additional paid-in capital | | | 5,780,955 | | | 6,594,556 | |
Treasury shares, at cost (9,384,417 and 13,050,571 ordinary shares as of June 30, 2024 and December 31, 2023, respectively) | 23 | | (644,954) | | | (819,305) | |
| Accumulated other comprehensive income | | | 75,406 | | | 8,304 | |
| Accumulated retained earnings | | | 11,802,243 | | | 10,802,599 | |
| Total AerCap Holdings N.V. shareholders’ equity | | | 17,016,208 | | | 16,588,830 | |
| Non-controlling interest | | | 213 | | | 216 | |
| Total Equity | | | 17,016,421 | | | 16,589,046 | |
| Total Liabilities and Equity | | | $ | 71,106,661 | | | $ | 71,274,559 | |
| | | | | |
Supplemental balance sheet information—amounts related to assets and liabilities of consolidated Variable Interest Entities (“VIE”) for which creditors do not have recourse to our general credit: | | | | | |
| Restricted cash | | | $ | 55,416 | | | $ | 80,910 | |
| Flight equipment held for operating leases and held for sale | | | 2,920,718 | | | 2,919,819 | |
| Other assets | | | 85,750 | | | 100,045 | |
| | | | | |
| Accrued maintenance liability | | | $ | 133,547 | | | $ | 140,310 | |
| Debt | | | 1,098,712 | | | 1,271,340 | |
| Other liabilities | | | 73,147 | | | 74,070 | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Income Statements
For the Three and Six Months Ended June 30, 2024 and 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, | | |
| Note | | 2024 | | 2023 | | 2024 | | 2023 | | | | |
| | | (U.S. Dollars in thousands, except share and per share data) |
| Revenues and other income | | | | | | | | | | | | | |
| Lease revenue: | | | | | | | | | | | | | |
| Basic lease rents | | | $ | 1,567,526 | | | $ | 1,561,368 | | | $ | 3,153,157 | | | $ | 3,098,031 | | | | | |
| Maintenance rents and other receipts | | | 180,036 | | | 156,014 | | | 359,496 | | | 343,156 | | | | | |
| Total lease revenue | | | 1,747,562 | | | 1,717,382 | | | 3,512,653 | | | 3,441,187 | | | | | |
| Net gain on sale of assets | | | 129,459 | | | 165,909 | | | 289,039 | | | 265,449 | | | | | |
| Other income | 18 | | 81,124 | | | 41,090 | | | 174,541 | | | 83,467 | | | | | |
| Total Revenues and other income | | | 1,958,145 | | | 1,924,381 | | | 3,976,233 | | | 3,790,103 | | | | | |
| Expenses | | | | | | | | | | | | | |
| Depreciation and amortization | 5, 8, 9 | | 636,419 | | | 615,604 | | | 1,269,897 | | | 1,226,121 | | | | | |
Net recoveries related to Ukraine Conflict | 19 | | — | | | (13,964) | | | (22,749) | | | (28,072) | | | | | |
| Asset impairment | 20 | | 27,686 | | | 2,098 | | | 30,356 | | | 36,433 | | | | | |
| Interest expense | | | 478,282 | | | 427,376 | | | 969,797 | | | 863,598 | | | | | |
| Loss on debt extinguishment | | | 7,008 | | | 790 | | | 7,020 | | | 3,851 | | | | | |
| Leasing expenses | | | 172,791 | | | 229,238 | | | 321,405 | | | 455,247 | | | | | |
| Selling, general and administrative expenses | 21 | | 125,333 | | | 119,737 | | | 244,625 | | | 230,341 | | | | | |
| | | | | | | | | | | | | |
| Total Expenses | | | 1,447,519 | | | 1,380,879 | | | 2,820,351 | | | 2,787,519 | | | | | |
| | | | | | | | | | | | | |
| (Loss) gain on investments at fair value | | | (18,207) | | | (5,259) | | | (4,684) | | | 3,986 | | | | | |
| | | | | | | | | | | | | |
Income before income taxes and income of investments accounted for under the equity method | | | 492,419 | | | 538,243 | | | 1,151,198 | | | 1,006,570 | | | | | |
| Income tax expense | 16 | | (76,346) | | | (75,747) | | | (170,455) | | | (141,341) | | | | | |
Equity in net earnings of investments accounted for under the equity method | | | 32,094 | | | 34,374 | | | 71,634 | | | 66,918 | | | | | |
| Net income | | | $ | 448,167 | | | $ | 496,870 | | | $ | 1,052,377 | | | $ | 932,147 | | | | | |
Net (income) loss attributable to non-controlling interest | | | (1) | | | (3,976) | | | 3 | | | (7,148) | | | | | |
Net income attributable to AerCap Holdings N.V. | | | $ | 448,166 | | | $ | 492,894 | | | $ | 1,052,380 | | | $ | 924,999 | | | | | |
| | | | | | | | | | | | | |
| Basic earnings per share | 23 | | $ | 2.33 | | | $ | 2.13 | | | $ | 5.42 | | | $ | 3.93 | | | | | |
| Diluted earnings per share | 23 | | $ | 2.28 | | | $ | 2.12 | | | $ | 5.30 | | | $ | 3.90 | | | | | |
| | | | | | | | | | | | | |
| Weighted average shares outstanding—basic | 23 | | 192,515,755 | | | 231,318,582 | | | 194,144,800 | | | 235,321,261 | | | | | |
| Weighted average shares outstanding—diluted | 23 | | 196,881,272 | | | 232,866,512 | | | 198,514,778 | | | 237,204,222 | | | | | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income
For the Three and Six Months Ended June 30, 2024 and 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, | | |
| 2024 | | 2023 | | 2024 | | 2023 | | | | |
| (U.S. Dollars in thousands) |
| Net income | $ | 448,167 | | | $ | 496,870 | | | $ | 1,052,377 | | | $ | 932,147 | | | | | |
| | | | | | | | | | | |
| Other comprehensive income (loss): | | | | | | | | | | | |
Net gain on derivatives (Note 12), net of tax of $(614), $(8,544), $(11,286) and $(4,217), respectively | 3,315 | | | 54,185 | | | 70,513 | | | 22,619 | | | | | |
Actuarial (loss) gain on pension obligations, net of tax of $487, nil, $487 and $(254), respectively | (3,411) | | | — | | | (3,411) | | | 1,779 | | | | | |
| Total other comprehensive (loss) income | (96) | | | 54,185 | | | 67,102 | | | 24,398 | | | | | |
| | | | | | | | | | | |
| Comprehensive income | 448,071 | | | 551,055 | | | 1,119,479 | | | 956,545 | | | | | |
| Comprehensive (income) loss attributable to non-controlling interest | (1) | | | (3,976) | | | 3 | | | (7,148) | | | | | |
| Total comprehensive income attributable to AerCap Holdings N.V. | $ | 448,070 | | | $ | 547,079 | | | $ | 1,119,482 | | | $ | 949,397 | | | | | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2024 and 2023
| | | | | | | | | | | | |
| Six Months Ended June 30, | |
| 2024 | | 2023 | |
| (U.S. Dollars in thousands) | |
| Net income | $ | 1,052,377 | | | $ | 932,147 | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Depreciation and amortization | 1,269,897 | | | 1,226,121 | | |
| Net recoveries related to Ukraine Conflict | (22,749) | | | (15,072) | | |
| Asset impairment | 30,356 | | | 36,433 | | |
| Amortization of debt issuance costs, debt discount, debt premium and lease premium | 116,181 | | | 130,723 | | |
| | | | |
| Maintenance rights write-off (a) | 184,118 | | | 214,821 | | |
| Maintenance liability release to income | (112,413) | | | (145,006) | | |
| Net gain on sale of assets | (289,039) | | | (265,449) | | |
| Deferred tax expense | 148,777 | | | 145,085 | | |
| Share-based compensation | 57,668 | | | 48,669 | | |
| Collections of finance leases | 203,113 | | | 233,812 | | |
| Loss (gain) on investments at fair value | 4,684 | | | (3,986) | | |
| Loss on debt extinguishment | 7,020 | | | 3,851 | | |
| | | | |
| Other | (4,719) | | | (16,089) | | |
| Changes in operating assets and liabilities: | | | | |
| Trade receivables | 24,305 | | | 65,486 | | |
| Other assets | 165,557 | | | (56,712) | | |
| Accounts payable, accrued expenses and other liabilities | (50,620) | | | 21,762 | | |
| Net cash provided by operating activities | 2,784,513 | | | 2,556,596 | | |
| Purchase of flight equipment | (2,177,406) | | | (2,290,042) | | |
| Proceeds from sale or disposal of assets | 1,527,481 | | | 944,798 | | |
| Prepayments on flight equipment | (1,077,429) | | | (789,408) | | |
| | | | |
| Net proceeds from (issuances of) loans receivable | 34,136 | | | (95,880) | | |
| Other | 803 | | | (20,756) | | |
| Net cash used in investing activities | (1,692,415) | | | (2,251,288) | | |
| Issuance of debt | 2,796,670 | | | 2,327,579 | | |
| Repayment of debt | (3,579,662) | | | (2,590,220) | | |
| Debt issuance and extinguishment costs paid, net of debt premium received | (37,165) | | | (35,627) | | |
| Maintenance payments received | 442,130 | | | 378,292 | | |
| Maintenance payments returned | (178,364) | | | (109,522) | | |
| Security deposits received | 122,433 | | | 193,524 | | |
| Security deposits returned | (105,500) | | | (114,150) | | |
| Dividend paid to non-controlling interest holders | — | | | (6,055) | | |
| Repurchase of shares and tax withholdings on share-based compensation | (722,974) | | | (790,013) | | |
| Dividends paid on ordinary shares | (41,806) | | | — | | |
| Net cash used in financing activities | (1,304,238) | | | (746,192) | | |
| Net decrease in cash, cash equivalents and restricted cash | (212,140) | | | (440,884) | | |
| Effect of exchange rate changes | (1,091) | | | 1,101 | | |
| Cash, cash equivalents and restricted cash at beginning of period | 1,825,466 | | | 1,756,770 | | |
| Cash, cash equivalents and restricted cash at end of period | $ | 1,612,235 | | | $ | 1,316,987 | | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows (Continued)
For the Six Months Ended June 30, 2024 and 2023
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2024 | | 2023 |
| (U.S. Dollars in thousands) |
| Supplemental cash flow information: | | | |
| Interest paid, net of amounts capitalized | $ | 868,666 | | | $ | 821,700 | |
| Income taxes paid, net | 14,263 | | | 6,657 | |
(a)Maintenance rights write-off consisted of the following:
| | | | | | | | | | | |
| End-of-Lease (“EOL”) and Maintenance Reserve (“MR”) contract maintenance rights expense | $ | 51,841 | | | $ | 140,686 | |
| MR contract maintenance rights write-off offset by maintenance liability release | 34,988 | | | 16,594 | |
| EOL contract maintenance rights write-off offset by EOL compensation received | 97,289 | | | 57,541 | |
| | | |
| Maintenance rights write-off | $ | 184,118 | | | $ | 214,821 | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows (Continued)
For the Six Months Ended June 30, 2024 and 2023
Non-Cash Investing and Financing Activities
Six Months Ended June 30, 2024:
Flight equipment held for operating leases in the amount of $206 million, net, was reclassified to investment in finance leases, net/inventory.
Flight equipment held for operating leases in the amount of $520 million was reclassified to flight equipment held for sale, net.
Accrued maintenance liability in the amount of $3 million was settled with buyers upon sale or disposal of assets.
Six Months Ended June 30, 2023:
Flight equipment held for operating leases in the amount of $154 million, net, was reclassified to investment in finance and sales-type leases, net/inventory.
Flight equipment held for operating leases in the amount of $1.0 billion was reclassified to flight equipment held for sale, net.
Accrued maintenance liability in the amount of $66 million was settled with buyers upon sale or disposal of assets.
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Equity
For the Three Months Ended June 30, 2024 and 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of ordinary shares issued | | Ordinary share capital | | Additional paid-in capital | | Treasury shares | | Accumulated other comprehensive income (loss) | | Accumulated retained earnings | | AerCap Holdings N.V. shareholders’ equity | | Non-controlling interest | | Total equity |
| (U.S. Dollars in thousands, except share data) |
Balance as of March 31, 2024 | 215,543,739 | | | $ | 2,676 | | | $ | 6,614,795 | | | $ | (1,144,579) | | | $ | 75,502 | | | $ | 11,407,200 | | | $ | 16,955,594 | | | $ | 212 | | | $ | 16,955,806 | |
| | | | | | | | | | | | | | | | | |
Repurchase of shares | — | | | — | | | — | | | (344,665) | | | — | | | — | | | (344,665) | | | — | | | (344,665) | |
Dividends declared on ordinary shares ($0.25 per share) | — | | | — | | | — | | | — | | | — | | | (49,800) | | | (49,800) | | | — | | | (49,800) | |
| Share cancellation | (11,000,000) | | | (118) | | | (802,170) | | | 802,288 | | | — | | | — | | | — | | | — | | | — | |
Ordinary shares issued, net of tax withholdings | — | | | — | | | (63,960) | | | 42,002 | | | — | | | (3,323) | | | (25,281) | | | — | | | (25,281) | |
Share-based compensation | — | | | — | | | 32,290 | | | — | | | — | | | — | | | 32,290 | | | — | | | 32,290 | |
Total comprehensive (loss) income | — | | | — | | | — | | | — | | | (96) | | | 448,166 | | | 448,070 | | | 1 | | | 448,071 | |
Balance as of June 30, 2024 | 204,543,739 | | | $ | 2,558 | | | $ | 5,780,955 | | | $ | (644,954) | | | $ | 75,406 | | | $ | 11,802,243 | | | $ | 17,016,208 | | | $ | 213 | | | $ | 17,016,421 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of ordinary shares issued | | Ordinary share capital | | Additional paid-in capital | | Treasury shares | | Accumulated other comprehensive income | | Accumulated retained earnings | | AerCap Holdings N.V. shareholders’ equity | | Non-controlling interest | | Total equity |
| (U.S. Dollars in thousands, except share data) |
Balance as of March 31, 2023 | 250,347,345 | | | $ | 3,024 | | | $ | 8,590,697 | | | $ | (731,517) | | | $ | 78,439 | | | $ | 8,104,773 | | | $ | 16,045,416 | | | $ | 78,207 | | | $ | 16,123,623 | |
Dividends paid to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (3,547) | | | (3,547) | |
Repurchase of shares | — | | | — | | | — | | | (296,109) | | | — | | | — | | | (296,109) | | | — | | | (296,109) | |
| | | | | | | | | | | | | | | | | |
Ordinary shares issued, net of tax withholdings | — | | | — | | | (8,210) | | | 1,552 | | | — | | | 338 | | | (6,320) | | | — | | | (6,320) | |
Share-based compensation | — | | | — | | | 21,806 | | | — | | | — | | | — | | | 21,806 | | | — | | | 21,806 | |
Total comprehensive income | — | | | — | | | — | | | — | | | 54,185 | | | 492,894 | | | 547,079 | | | 3,976 | | | 551,055 | |
Balance as of June 30, 2023 | 250,347,345 | | | $ | 3,024 | | | $ | 8,604,293 | | | $ | (1,026,074) | | | $ | 132,624 | | | $ | 8,598,005 | | | $ | 16,311,872 | | | $ | 78,636 | | | $ | 16,390,508 | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Equity (Continued)
For the Six Months Ended June 30, 2024 and 2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of ordinary shares issued | | Ordinary share capital | | Additional paid-in capital | | Treasury shares | | Accumulated other comprehensive income | | Accumulated retained earnings | | AerCap Holdings N.V. shareholders’ equity | | Non-controlling interest | | Total equity |
| (U.S. Dollars in thousands, except share data) |
Balance as of December 31, 2023 | 215,543,739 | | | $ | 2,676 | | | $ | 6,594,556 | | | $ | (819,305) | | | $ | 8,304 | | | $ | 10,802,599 | | | $ | 16,588,830 | | | $ | 216 | | | $ | 16,589,046 | |
| | | | | | | | | | | | | | | | | |
Repurchase of shares | — | | | — | | | — | | | (680,481) | | | — | | | — | | | (680,481) | | | — | | | (680,481) | |
Dividends declared on ordinary shares ($0.25 per share) | — | | | — | | | — | | | — | | | — | | | (49,800) | | | (49,800) | | | — | | | (49,800) | |
| Share cancellation | (11,000,000) | | | (118) | | | (802,170) | | | 802,288 | | | — | | | — | | | — | | | — | | | — | |
Ordinary shares issued, net of tax withholdings | — | | | — | | | (69,099) | | | 52,544 | | | — | | | (2,936) | | | (19,491) | | | — | | | (19,491) | |
Share-based compensation | — | | | — | | | 57,668 | | | — | | | — | | | — | | | 57,668 | | | — | | | 57,668 | |
Total comprehensive income (loss) | — | | | — | | | — | | | — | | | 67,102 | | | 1,052,380 | | | 1,119,482 | | | (3) | | | 1,119,479 | |
Balance as of June 30, 2024 | 204,543,739 | | | $ | 2,558 | | | $ | 5,780,955 | | | $ | (644,954) | | | $ | 75,406 | | | $ | 11,802,243 | | | $ | 17,016,208 | | | $ | 213 | | | $ | 17,016,421 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of ordinary shares issued | | Ordinary share capital | | Additional paid-in capital | | Treasury shares | | Accumulated other comprehensive income | | Accumulated retained earnings | | AerCap Holdings N.V. shareholders’ equity | | Non-controlling interest | | Total equity |
| (U.S. Dollars in thousands, except share data) |
Balance as of December 31, 2022 | 250,347,345 | | | $ | 3,024 | | | $ | 8,586,034 | | | $ | (254,699) | | | $ | 108,226 | | | $ | 7,674,922 | | | $ | 16,117,507 | | | $ | 77,543 | | | $ | 16,195,050 | |
Dividends paid to non-controlling interest holders | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (6,055) | | | (6,055) | |
Repurchase of shares | — | | | — | | | — | | | (796,845) | | | — | | | — | | | (796,845) | | | — | | | (796,845) | |
| | | | | | | | | | | | | | | | | |
Ordinary shares issued, net of tax withholdings | — | | | — | | | (30,410) | | | 25,470 | | | — | | | (1,916) | | | (6,856) | | | — | | | (6,856) | |
Share-based compensation | — | | | — | | | 48,669 | | | — | | | — | | | — | | | 48,669 | | | — | | | 48,669 | |
| | | | | | | | | | | | | | | | | |
Total comprehensive income | — | | | — | | | — | | | — | | | 24,398 | | | 924,999 | | | 949,397 | | | 7,148 | | | 956,545 | |
Balance as of June 30, 2023 | 250,347,345 | | | $ | 3,024 | | | $ | 8,604,293 | | | $ | (1,026,074) | | | $ | 132,624 | | | $ | 8,598,005 | | | $ | 16,311,872 | | | $ | 78,636 | | | $ | 16,390,508 | |
The accompanying notes are an integral part of these Unaudited Financial Statements.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
1. General
The Company
AerCap is the global leader in aviation leasing, with 2,063 aircraft owned, managed or on order, over 1,000 engines (including engines owned and managed by our Shannon Engine Support (“SES”) joint venture), over 300 owned helicopters, and total assets of $71 billion as of June 30, 2024. Our ordinary shares are listed on the New York Stock Exchange under the ticker symbol AER. Our headquarters is located in Dublin, and we have offices in Shannon, Miami, Singapore, Memphis, Amsterdam, Shanghai, Dubai and other locations. We also have representative offices at the world’s largest aircraft manufacturers, The Boeing Company (“Boeing”) in Seattle and Airbus S.A.S. (“Airbus”) in Toulouse.
The Condensed Consolidated Financial Statements presented herein include the accounts of AerCap Holdings N.V. and its subsidiaries. AerCap Holdings N.V. was incorporated in the Netherlands as a public limited liability company (“naamloze vennootschap” or “N.V.”) on July 10, 2006.
2. Basis of presentation
General
Our Condensed Consolidated Financial Statements are presented in accordance with Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”).
We consolidate all companies in which we have effective control and all variable interest entities (“VIEs”) for which we are deemed the Primary Beneficiary (“PB”) under Accounting Standards Codification (“ASC”) 810. All intercompany balances and transactions with consolidated subsidiaries are eliminated. The results of consolidated entities are included from the effective date of control or, in the case of VIEs, from the date that we are or become the PB. The results of subsidiaries sold or otherwise deconsolidated are excluded from the date that we cease to control the subsidiary or, in the case of VIEs, when we cease to be the PB.
Unconsolidated investments where we do not have a controlling financial interest, but over which we have significant influence, are reported using the equity method of accounting.
Our Condensed Consolidated Financial Statements are stated in U.S. dollars, which is our functional currency.
Our interim financial statements have been prepared pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”) and U.S. GAAP for interim financial reporting, and reflect all adjustments that are necessary to fairly state the results for the interim periods presented. Certain information and footnote disclosures required by U.S. GAAP for complete annual financial statements have been omitted and, therefore, our interim financial statements should be read in conjunction with our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on February 23, 2024. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of those for a full fiscal year.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
Use of estimates
The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The use of estimates is or could be a significant factor affecting the reported carrying values of flight equipment, intangible assets, investment in finance leases, net, investments, trade receivables, notes receivables, deferred tax assets, unrecognized tax benefits and maintenance liabilities. Actual results may differ from our estimates under different conditions, sometimes materially.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
2. Basis of presentation (Continued)
Reportable segments
We manage our business and analyze and report our results of operations on the basis of one business segment: leasing, financing, sales and management of commercial flight equipment.
3. Summary of significant accounting policies
Our significant accounting policies are described in our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on February 23, 2024.
Future application of accounting standards:
Improvements to Reportable Segmental Disclosures
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07—Segmental Reporting (Topic 280): Improvements to Reportable Segmental Disclosures (“ASU 2023-07”). ASU 2023-07 enhances segmental reporting through expanding the breadth and frequency of segment disclosures. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted. The amendments in ASU 2023-07 should be applied retrospectively unless it is impractical to do so and any segment expense categories and amounts disclosed in prior periods are based on the significant segment expense categories identified and disclosed in the period of adoption. The adoption of ASU 2023-07 is not expected to have a material effect on the Company’s consolidated financial statements.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency and decision usefulness of the annual income tax disclosures. The two primary enhancements include disaggregating existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in ASU 2023-09 should be applied on a prospective basis; however, retrospective application in all prior periods presented in the annual financial statements is permitted. The adoption of ASU 2023-09 is not expected to have a material effect on the Company’s consolidated financial statements.
4. Cash, cash equivalents and restricted cash
Our restricted cash balance was $176 million and $198 million as of June 30, 2024 and December 31, 2023, respectively, and was primarily related to our Export Credit Agency (“ECA”) financings, Export-Import Bank of the United States (“Ex-Im”) financings, our AerFunding revolving credit facility, our Brazilian Development Bank (“BNDES”) financing and other debt. Refer to Note 15—Debt.
The following is a summary of our cash, cash equivalents and restricted cash as of June 30, 2024, December 31, 2023 and June 30, 2023:
| | | | | | | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 | | June 30, 2023 |
| Cash and cash equivalents | $ | 1,436,032 | | | $ | 1,627,181 | | | $ | 1,153,922 | |
| Restricted cash | 176,203 | | | 198,285 | | | 163,065 | |
| Total cash, cash equivalents and restricted cash | $ | 1,612,235 | | | $ | 1,825,466 | | | $ | 1,316,987 | |
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
5. Flight equipment held for operating leases, net
Movements in flight equipment held for operating leases during the six months ended June 30, 2024 and 2023 were as follows:
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2024 | | 2023 |
| Net book value at beginning of period | $ | 57,091,166 | | | $ | 55,220,809 | |
| Additions | 2,962,708 | | | 3,153,388 | |
| Depreciation | (1,253,894) | | | (1,209,646) | |
| Disposals and transfers to held for sale | (1,075,340) | | | (1,385,375) | |
| Transfers from/to investment in finance leases, net/inventory | (206,041) | | | (152,906) | |
| Recoveries related to Ukraine Conflict (Note 19) | 26,909 | | | 15,072 | |
| Impairments (Note 20) | (30,356) | | | (36,433) | |
| | | |
| Net book value at end of period | $ | 57,515,152 | | | $ | 55,604,909 | |
| | | |
| Accumulated depreciation and impairment as of June 30, 2024 and 2023, respectively: | $ | (14,552,422) | | | $ | (12,965,931) | |
6. Investment in finance leases, net
Components of investment in finance leases, net as of June 30, 2024 and December 31, 2023 were as follows:
| | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Future minimum lease payments to be received, net | $ | 1,265,710 | | | $ | 1,156,693 | |
Estimated residual values of leased flight equipment | 537,162 | | | 597,184 | |
| Less: Unearned income | (517,211) | | | (490,502) | |
| Less: Allowance for credit losses (Note 22) | (9,022) | | | (8,924) | |
| $ | 1,276,639 | | | $ | 1,254,451 | |
During the three months ended June 30, 2024 and 2023, we recognized interest income from investment in finance leases, net of $25 million and $24 million, respectively, included in basic lease rents. During the six months ended June 30, 2024 and 2023, we recognized interest income from investment in finance leases, net of $50 million and $51 million, respectively, included in basic lease rents.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
7. Flight equipment held for sale
As of June 30, 2024, flight equipment with a total net book value of $105 million met the held for sale criteria and was classified as flight equipment held for sale in our Condensed Consolidated Balance Sheet. Aggregate maintenance and security deposit amounts received from the lessees of approximately $61 million will be assumed by the buyers of these aircraft upon consummation of the individual sales transactions.
As of December 31, 2023, flight equipment with a total net book value of $297 million met the held for sale criteria and was classified as flight equipment held for sale in our Condensed Consolidated Balance Sheet.
8. Maintenance rights and lease premium, net
Maintenance rights and lease premium, net consisted of the following as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Maintenance rights | $ | 1,870,381 | | | $ | 2,099,513 | |
| Lease premium, net | 540,799 | | | 630,449 | |
| $ | 2,411,180 | | | $ | 2,729,962 | |
Movements in maintenance rights during the six months ended June 30, 2024 and 2023 were as follows:
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2024 | | 2023 |
Maintenance rights at beginning of period | $ | 2,099,513 | | | $ | 2,540,286 | |
EOL and MR contract maintenance rights expense | (51,841) | | | (140,686) | |
MR contract maintenance rights write-off due to maintenance liability release | (34,988) | | | (16,594) | |
EOL contract maintenance rights write-off due to cash receipt | (97,289) | | | (57,541) | |
| EOL and MR contract maintenance rights write-off due to sale of aircraft | (45,016) | | | (70,505) | |
| | | |
| | | |
Maintenance rights at end of period | $ | 1,870,379 | | | $ | 2,254,960 | |
The following tables present details of lease premium assets and related accumulated amortization as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | | | | | | | |
| June 30, 2024 |
| Gross carrying amount | | Accumulated
amortization | | Net carrying amount |
| Lease premium | $ | 975,245 | | | $ | (434,446) | | | $ | 540,799 | |
| | | | | |
| | | | | | | | | | | | | | | | | |
| December 31, 2023 |
| Gross carrying amount | | Accumulated
amortization | | Net carrying amount |
| Lease premium | $ | 1,002,293 | | | $ | (371,844) | | | $ | 630,449 | |
Lease premium assets that are fully amortized are removed from the gross carrying amount and accumulated amortization columns in the tables above.
During the three months ended June 30, 2024 and 2023, we recorded amortization expense for lease premium assets of $41 million and $44 million, respectively. During the six months ended June 30, 2024 and 2023, we recorded amortization for lease premium assets of $83 million and $90 million, respectively.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
9. Other intangibles, net
Other intangibles, net consisted of the following as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Customer relationships, net | $ | 145,471 | | | $ | 156,059 | |
| Other intangible assets | 5,257 | | | 7,108 | |
| $ | 150,728 | | | $ | 163,167 | |
The following tables present details of customer relationships and related accumulated amortization as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | | | | | | | |
| June 30, 2024 |
| Gross carrying amount | | Accumulated
amortization | | Net carrying amount |
| Customer relationships | $ | 360,000 | | | $ | (214,529) | | | $ | 145,471 | |
| | | | | |
| December 31, 2023 |
| Gross carrying amount | | Accumulated
amortization | | Net carrying amount |
| Customer relationships | $ | 360,000 | | | $ | (203,941) | | | $ | 156,059 | |
During the three months ended June 30, 2024 and 2023, we recorded amortization expense for customer relationships of $5 million. During the six months ended June 30, 2024 and 2023, we recorded amortization expense for customer relationships of $11 million.
10. Associated companies
As of June 30, 2024 and December 31, 2023, associated companies accounted for under the equity method of accounting consisted of the following:
| | | | | | | | | | | | | | | | | |
| % Ownership as of June 30, 2024 | | June 30, 2024 | | December 31, 2023 |
| Shannon Engine Support | 50.0 | | $ | 869,284 | | | $ | 797,185 | |
AerDragon Aviation Partners Limited and its Subsidiaries (“AerDragon”) | 16.7 | | 91,940 | | | 91,898 | |
| Other | 9.5-39.3 | | 78,485 | | | 82,434 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | $ | 1,039,709 | | | $ | 971,517 | |
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
11. Other assets
Other assets consisted of the following as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | | |
| June 30, 2024 | | | December 31, 2023 |
| Straight-line rents, prepaid expenses and other | $ | 642,360 | | | | $ | 692,521 | |
| Loans receivable, net of allowance for credit losses (a) | 635,008 | | | | 654,925 | |
| Notes receivable, net of allowance for credit losses (b) | 607,530 | | | | 663,644 | |
| Derivative assets (Note 12) | 143,460 | | | | 130,614 | |
| Lease incentives | 136,966 | | | | 152,056 | |
| Investments | 78,029 | | | | 87,055 | |
| Operating lease right of use assets, net | 66,467 | | | | 57,009 | |
| Inventory | 62,499 | | | | 85,668 | |
| Other assets and receivables, net | 501,826 | | | | 493,032 | |
| | | | |
| | | | |
| $ | 2,874,145 | | | | $ | 3,016,524 | |
(a)As of June 30, 2024 and December 31, 2023, we had $0.3 million and $1 million, respectively, allowance for credit losses on loans receivable. Refer to Note 22—Allowance for credit losses for further details. During the six months ended June 30, 2024 and 2023, we recognized interest income from loans receivable, net of allowance for credit losses of $29 million and $14 million, respectively, included in other income.
(b)As of June 30, 2024 and December 31, 2023, we had $24 million allowance for credit losses on notes receivable. Refer to Note 22—Allowance for credit losses for further details.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
12. Derivative financial instruments
We have entered into interest rate derivatives to hedge the current and future interest rate payments on our variable rate debt. These derivative financial instruments can include interest rate swaps, caps, floors, U.S. treasury locks, options and forward contracts.
As of June 30, 2024, we had interest rate caps, swaps and U.S. treasury locks outstanding, with underlying variable benchmark interest rates of daily SOFR or Term SOFR, as applicable.
Some of our agreements with derivative counterparties require a two-way cash collateralization of derivative fair values. As of June 30, 2024, we did not have cash collateral. As of December 31, 2023, we had cash collateral of $1 million from various counterparties and the obligation to return this collateral was recorded in accounts payable, accrued expenses and other liabilities. We had not advanced any cash collateral to counterparties as of June 30, 2024 or December 31, 2023.
The counterparties to our interest rate derivatives are primarily major international financial institutions. We continually monitor our positions and the credit ratings of the counterparties involved and limit the amount of credit exposure to any one party. We could be exposed to potential losses due to the credit risk of non-performance by these counterparties. We have not experienced any losses to date.
Our derivative assets are recorded in other assets and our derivative liabilities are recorded in accounts payable, accrued expenses and other liabilities in our Condensed Consolidated Balance Sheets.
The following tables present notional amounts and fair values of derivatives outstanding as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Notional amount (a) | | Fair value | | Notional amount (a) | | Fair value |
| Derivative assets not designated as accounting cash flow hedges: | | | | | | | |
| | | | | | | |
| | | | | | | |
| Interest rate contracts | $ | 1,197,500 | | | $ | 32,081 | | | $ | 1,150,000 | | | $ | 39,918 | |
Derivative assets designated as accounting cash flow hedges: | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Interest rate contracts | $ | 4,650,000 | | | $ | 111,379 | | | $ | 3,165,000 | | | $ | 90,696 | |
| Total derivative assets | | | $ | 143,460 | | | | | $ | 130,614 | |
(a)The notional amount is excluded for interest rate contracts which are not yet effective.
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Notional amount (a) | | Fair value | | Notional amount (a) | | Fair value |
| | | | | | | |
| | | | | | | |
Derivative liabilities designated as accounting cash flow hedges: | | | | | | | |
| Interest rate contracts | $ | 1,105,000 | | | $ | 9,866 | | | $ | 3,590,000 | | | $ | 80,840 | |
| Total derivative liabilities | | | $ | 9,866 | | | | | $ | 80,840 | |
(a)The notional amount is excluded for interest rate contracts which are not yet effective.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
12. Derivative financial instruments (Continued)
We recorded the following in other comprehensive gain or loss related to derivative financial instruments for the three and six months ended June 30, 2024 and 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Gain | | | | | | | |
Effective portion of change in fair market value of derivatives designated as accounting cash flow hedges: | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Interest rate contracts | $ | 1,180 | | | $ | 58,408 | | | $ | 76,439 | | | $ | 20,854 | |
| Derivative premium and amortization | 2,749 | | | 4,321 | | | 5,360 | | | 5,982 | |
| Income tax effect | (614) | | | (8,544) | | | (11,286) | | | (4,217) | |
| Net gain on derivatives, net of tax | $ | 3,315 | | | $ | 54,185 | | | $ | 70,513 | | | $ | 22,619 | |
We expect to reclassify approximately $79 million from accumulated other comprehensive income (“AOCI”) as a reduction in interest expense in our Condensed Consolidated Income Statements over the next 12 months.
The following table presents the effect of derivatives recorded in interest expense in our Condensed Consolidated Income Statements for the three and six months ended June 30, 2024 and 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Gain (Loss) | | | | | | | |
| Derivatives not designated as accounting hedges: | | | | | | | |
| Interest rate contracts | $ | (4,594) | | | $ | 2,874 | | | $ | (7,837) | | | $ | (10,757) | |
| Reclassification to Condensed Consolidated Income Statements: | | | | | | | |
| Reclassification of amounts previously recorded within AOCI | (30,248) | | | 29,348 | | | 60,426 | | | 47,005 | |
| (Loss) gain recognized in interest expense | $ | (34,842) | | | $ | 32,222 | | | $ | 52,589 | | | $ | 36,248 | |
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Accounts payable, accrued expenses and other liabilities
Accounts payable, accrued expenses and other liabilities consisted of the following as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Deferred revenue | $ | 790,577 | | | $ | 827,525 | | |
| Accounts payable and accrued expenses | 420,607 | | | 444,042 | | |
| Accrued interest | 394,528 | | | 348,568 | | |
| Operating lease liabilities | 106,923 | | | 92,083 | | |
| Derivative liabilities (Note 12) | 9,866 | | | 80,840 | | |
| $ | 1,722,501 | | | $ | 1,793,058 | | |
14. Accrued maintenance liability
Movements in accrued maintenance liability during the six months ended June 30, 2024 and 2023 were as follows:
| | | | | | | | | | | | |
| Six Months Ended June 30, |
| 2024 | | 2023 |
| Accrued maintenance liability at beginning of period | $ | 2,863,730 | | | $ | 2,503,202 | | |
| Maintenance payments received | 442,130 | | | 378,292 | | |
| Maintenance payments returned | (178,364) | | | (109,522) | | |
| Release to income upon sale | (2,766) | | | (66,418) | | |
| Release to income other than upon sale | (112,413) | | | (145,006) | | |
| Lessor contribution, top-ups and other | (33,048) | | | 6,559 | | |
| Accrued maintenance liability at end of period | $ | 2,979,269 | | | $ | 2,567,107 | | |
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
15. Debt
As of June 30, 2024, the principal amount of our outstanding indebtedness totaled $45.9 billion, which excluded debt issuance costs, debt discounts and debt premium of $216 million, and our undrawn lines of credit were $10.9 billion, availability of which is subject to certain conditions, including compliance with certain financial covenants. As of June 30, 2024, we remained in compliance with the financial covenants across our various debt obligations.
The following table provides a summary of our indebtedness as of June 30, 2024 and December 31, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2024 | | December 31, 2023 |
| Debt obligation | | Collateral (number of aircraft and helicopters) | | Commitment | | Undrawn amounts | | Amount outstanding | | Weighted average interest rate (a) | | Maturity | | Amount outstanding |
| Unsecured | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
AerCap Trust (b) & AICDC (c) Notes | | | | $ | 30,915,349 | | | $ | — | | | $ | 30,915,349 | | | 3.64 | % | | 2024-2041 | | $ | 31,215,349 | |
| Revolving credit facilities (d) | | | | 9,300,000 | | | 9,275,000 | | | 25,000 | | | 6.88 | % | | 2025-2027 | | 25,000 | |
| Other unsecured debt | | | | 3,975,000 | | | — | | | 3,975,000 | | | 6.75 | % | | 2026-2028 | | 3,055,000 | |
| | | | | | | | | | | | | | |
| TOTAL UNSECURED | | | | $ | 44,190,349 | | | $ | 9,275,000 | | | $ | 34,915,349 | | | | | | | $ | 34,295,349 | |
| Secured | | | | | | | | | | | | | | |
| Export credit facilities (e) | | 38 | | | 1,109,113 | | | 140,000 | | | 969,113 | | | 2.50 | % | | 2025-2035 | | 1,034,687 | |
Institutional secured term loans & secured portfolio loans | | 200 | | | 6,557,290 | | | — | | | 6,557,290 | | | 6.05 | % | | 2024-2032 | | 7,667,363 | |
AerFunding Revolving Credit Facility | | 35 | | | 2,075,000 | | | 1,199,109 | | | 875,891 | | | 7.38 | % | | 2027 | | 1,032,151 | |
| Other secured debt (f) | | 10 | | | 672,028 | | | 326,954 | | | 345,074 | | | 5.87 | % | | 2025-2041 | | 415,982 | |
| Fair value adjustment | | | | — | | | — | | | 628 | | | | | | | 993 | |
| TOTAL SECURED | | | | $ | 10,413,431 | | | $ | 1,666,063 | | | $ | 8,747,996 | | | | | | | $ | 10,151,176 | |
| Subordinated | | | | | | | | | | | | | | |
Subordinated Notes | | | | 2,250,000 | | | — | | | 2,250,000 | | | 6.63 | % | | 2045-2079 | | 2,250,000 | |
| | | | | | | | | | | | | | |
| TOTAL SUBORDINATED | | | | $ | 2,250,000 | | | $ | — | | | $ | 2,250,000 | | | | | | | $ | 2,250,000 | |
Debt issuance costs, debt discounts and debt premium | | | | | | | | (216,156) | | | | | | | (212,622) | |
| | 283 | | | $ | 56,853,780 | | | $ | 10,941,063 | | | $ | 45,697,189 | | | | | | | $ | 46,483,903 | |
(a)The weighted average interest rate for our floating rate debt of $10.6 billion is calculated based on the applicable U.S. dollar SOFR rate, as applicable, as of the most recent interest payment date of the respective debt, and excludes the impact of related derivative financial instruments which we hold to hedge our exposure to floating interest rates, as well as any amortization of debt issuance costs, debt discounts and debt premium. The institutional secured term loans and secured portfolio loans also contain base rate interest alternatives.
(b)AerCap Global Aviation Trust, a Delaware Statutory Trust (“AerCap Trust”).
(c)AerCap Ireland Capital Designated Activity Company, a designated activity company with limited liability incorporated under the laws of Ireland (“AICDC”).
(d)Asia Revolver and Citi Revolvers (the “Revolving credit facilities”).
(e)An additional $0.8 billion of commitment has been approved by the Export Credit Agencies, subject to customary conditions at drawdown.
(f)In addition to the ten aircraft, 74 engines are pledged as collateral.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
15. Debt (Continued)
Additional details of the principal terms of our indebtedness can be found in our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on February 23, 2024. The material changes to our indebtedness since the filing of that report, except for scheduled repayments, are described below.
AerCap Trust and AICDC Notes
In January 2024, AerCap Trust and AICDC co-issued $800 million aggregate principal amount of 5.10% Senior Notes due 2029 and $700 million aggregate principal amount 5.30% Senior Notes due 2034.
In April 2024, AerCap Trust and AICDC completed an exchange offer whereby outstanding privately-placed 6.45% Senior Notes due 2027 that were issued in November 2023 were exchanged for a like principal amount of new 6.45% Senior Notes due 2027, pursuant to an SEC-registered public offering.
Other unsecured debt
In May 2024, we entered into a $1 billion unsecured term loan (Terapon), with a maturity of May 2028.
Institutional secured term loans
In May 2024, we amended our Setanta term loan. The loan was downsized to $1 billion and re-priced. All other terms remain the same.
AerFunding Revolving Credit Facility amendment and extension
In April 2006, AerFunding entered into a non-recourse senior secured revolving credit facility which was subsequently upsized and amended. In July 2024, AerFunding amended this facility, extending the revolving period to July 2027, following which there is a 24-month term out period. The final maturity date of the AerFunding Revolving Credit Facility is July 2029.
Junior Subordinated Notes
In July 2024, AerCap Trust and AICDC co-issued $750 million aggregate principal amount of 6.950% fixed-rate reset junior subordinated notes due 2055. The Junior Subordinated Notes are fully and unconditionally guaranteed on a junior subordinated basis by the Company and certain other subsidiaries of the Company.
16. Income taxes
Our effective tax rate was 15.5% and 14.8% for the three and six months ended June 30, 2024, respectively and 14.1% and 14.0% for the three and six months ended June 30, 2023, respectively.
During the six months ended June 30, 2024, our income tax expense was reduced by $8 million due to the resolution of an uncertain tax position.
Excluding discrete items, our effective tax rate for the full year 2024 is expected to be 15.5%. The effective tax rate is impacted by the source and amount of earnings among our various tax jurisdictions, permanent tax differences relative to pre-tax income or loss, and certain other discrete items. Our effective tax rate in any period can be impacted by revisions to the estimated full year rate. Our effective tax rate has increased primarily due to the introduction of the Pillar Two rules under the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Sharing (“BEPS”) 2.0 initiative which came into effect in Ireland from January 1, 2024. The majority of the Group’s assets are owned in Ireland.
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
17. Equity
Share repurchase programs
The following table presents our share repurchase programs approved by our Board of Directors from January 1, 2023 through June 30, 2024:
| | | | | | | | | | | | | | | | | | | | |
| Program approval date | | Program end date | | Authorized amount | | Program completion date |
| March 2023 | | September 30, 2023 | | $ | 500,000 | | | March 13, 2023 |
| April 2023 | | September 30, 2023 | | 500,000 | | | September 14, 2023 |
| July 2023 | | December 31, 2023 | | 500,000 | | | September 14, 2023 |
| September 2023 | | December 31, 2023 | | 650,000 | | | November 16, 2023 |
| October 2023 | | March 31, 2024 | | 500,000 | | | January 12, 2024 |
| December 2023 | | March 31, 2024 | | 250,000 | | | March 8, 2024 |
| February 2024 | | September 30, 2024 | | 500,000 | | | Not yet completed |
| May 2024 | | December 31, 2024 | | 500,000 | | | Not yet completed |
During the three months ended June 30, 2024, we repurchased an aggregate of 3.9 million of our ordinary shares under our share repurchase program at an average price of $88.66 per ordinary share. During the six months ended June 30, 2024, we repurchased an aggregate of 8.2 million of our ordinary shares under our share repurchase programs at an average price of $83.00 per ordinary share.
During the three months ended June 30, 2024, we cancelled 11.0 million ordinary shares which were acquired through the share repurchase programs in accordance with authorizations obtained from the Company’s shareholders.
Between July 1, 2024 and July 29, 2024, we repurchased an aggregate of 0.2 million of our ordinary shares under our share repurchase program at an average price of $92.50 per ordinary share.
Dividends on ordinary shares
During the three months ended June 30, 2024, we adopted a dividend policy pursuant to which we intend to pay quarterly cash dividends on our ordinary shares in an aggregate annual amount of approximately $200 million, or approximately $50 million per quarter, subject to quarterly approval by our Board of Directors.
Our Board of Directors declared an inaugural quarterly cash dividend of $0.25 per share, which was paid on June 13, 2024, to shareholders of record as of the close of business on May 22, 2024. We expect to pay a cash dividend on a quarterly basis going forward, subject to the Board’s consideration of, among other things, market conditions and our financial performance and cash flows.
In July 2024, our Board of Directors declared a quarterly cash dividend of $0.25 per share, with a payment date of September 5, 2024, to shareholders of record as of the close of business on August 14, 2024.
18. Other income
Other income consisted of the following for the three and six months ended June 30, 2024, and 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Interest and other income | $ | 71,976 | | | $ | 32,723 | | | $ | 156,023 | | | $ | 65,985 | |
| Management fees | 9,148 | | | 8,367 | | | 18,518 | | | 17,482 | |
| | | | | | | |
| $ | 81,124 | | | $ | 41,090 | | | $ | 174,541 | | | $ | 83,467 | |
AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
19. Net charges related to Ukraine Conflict
On February 24, 2022, Russia launched a large-scale military invasion of Ukraine and has since been engaged in a broad military conflict with Ukraine (the “Ukraine Conflict”). In response to the Ukraine Conflict and ongoing related hostilities, the United States, the European Union, the United Kingdom and other countries have imposed broad, far-reaching sanctions against Russia, certain Russian persons and certain activities involving Russia or Russian persons (the “Sanctions”).
In compliance with all applicable sanctions in March 2022, we terminated the leasing of all of our aircraft and engines with Russian airlines. These terminations have resulted in reduced revenues and operating cash flows.
The Ukraine Conflict, the Sanctions and the actions of our former Russian lessees and the Russian government together have represented an unusual and infrequent event and therefore the related net charges are classified separately on our Condensed Consolidated Income Statements. During 2022, we recognized a pre-tax net charge of $2.7 billion to our earnings, comprised of write-offs and impairments of flight equipment, which were partially offset by the derecognition of lease-related assets and liabilities (including maintenance rights and lease premium intangible assets, maintenance liabilities, security deposits and other balances) and the collection of letter of credit proceeds. We recognized a total loss write-off with respect to our assets that remain in Russia and Ukraine, and impairment losses with respect to the assets we have recovered from Russian and Ukrainian airlines.
We are pursuing claims in the London Commercial Court with respect to our assets that remain in Russia against the insurers under our contingent and possessed insurance policy (“C&P Policy”) and, with respect to our assets that remain in Russia and were not the subject of insurance settlements with Russian airlines and their Russian insurers, against the insurers and reinsurers under our former Russian lessees’ insurance and reinsurance policies. Refer to Note 26—Commitments and Contingencies for further details on these legal proceedings. We are also pursuing claims in the London Commercial Court under the airlines’ insurance and reinsurance policies with respect to two aircraft which were in Ukraine at the beginning of the Ukraine Conflict.
During the year ended December 31, 2023, we recognized insurance settlement proceeds of $1.3 billion pursuant to insurance settlements with six Russian airlines and their Russian insurers in respect of 67 aircraft and ten spare engines lost in Russia. Insurance settlement discussions remain ongoing with respect to our claims under the insurance policies of several other Russian airlines. However, it is uncertain whether any of these discussions will result in any insurance settlement or receipt of insurance settlement proceeds and, if so, in what amount. In particular, it remains uncertain whether the necessary approvals and funding to complete any such further insurance settlements can be obtained.
We intend to continue to vigorously pursue all such insurance claims. However, the collection, timing and amount of any potential recoveries under our C&P Policy and under the respective airlines’ insurance and reinsurance policies are uncertain and we have not recognized any claim receivables as of June 30, 2024.
During the six months ended June 30, 2024, we recognized net recovery of $23 million in respect of a Boeing 777-300ER aircraft which was in Ukraine at the beginning of the Ukraine Conflict and subsequently extracted. The recovery amount was based on the lower of depreciated cost and fair value of the aircraft less costs to recover the aircraft.
Net recoveries related to Ukraine Conflict consisted of the following for the three and six months ended June 30, 2024, and 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| (U.S. Dollars in millions) |
| Net recoveries of flight equipment | $ | — | | |