AerCap Holdings N.V. Reports Strong Financial Results for Fourth Quarter 2022

• Net income for the fourth quarter of 2022 was $495 million, or $2.04 per share. Net loss for the full year 2022 was $726 million, or $3.02 per share.
• Adjusted net income for the fourth quarter of 2022 was $645 million, or $2.66 per share. Adjusted net income for the full year 2022 was $2.2 billion, or $9.01 per share.
• New $500 million share repurchase program authorized.

DUBLIN, March 2, 2023 /PRNewswire/ -- AerCap Holdings N.V. (NYSE: AER), the industry leader across all areas of aviation leasing, today reported financial results for the fourth quarter of 2022 ended December 31, 2022.

Aengus Kelly, Chief Executive Officer of AerCap, said: "We are pleased to report a record quarter of results for AerCap. Air travel demand continues to improve as more countries reopen their borders. The strong performance across all of our business lines reflects how well our teams are working together to deliver an extraordinary number of transactions, and clearly demonstrates the success of the GECAS acquisition, the successful integration of the two companies and the recovery in aviation. Broad-based demand, in tandem with a curtailed supply environment, is helping to drive lease rates higher across aircraft, engines and helicopters."

Highlights

• Net income for the fourth quarter of 2022 was $495 million, or $2.04 per share.
• Adjusted net income for the fourth quarter of 2022 was $645 million, or $2.66 per share.
• Adjusted debt/equity ratio of 2.5 to 1 as of December 31, 2022.
• Record 299 transactions executed in the fourth quarter 2022, including 159 lease agreements, 43 purchases and 97 sales.
• $1 billion of sales in the fourth quarter of 2022, at a margin of 14%.
• 93% of new aircraft order book placed through 2024.
• AerCap ratings upgraded to Baa2 by Moody's.

Revenue and Net Spread

		Three months ended December 31,						Year ended December 31,
		2022		2021		% increase/ (decrease)		2022		2021		% increase/ (decrease)
		(U.S. Dollars in millions)						(U.S. Dollars in millions)
Lease revenue:
Basic lease rents		$1,494		$1,283		16 %		$5,982		$3,891		54 %
Maintenance rents and other receipts		140		97		45 %		549		521		5 %
Total lease revenue		1,634		1,380		18 %		6,531		4,412		48 %
Net gain on sale of assets		121		25		395 %		229		89		156 %
Other income		74		38		94 %		254		723		(65 %)
Total Revenues and other income		$1,829		$1,442		27 %		$7,014		$5,224		34 %

Basic lease rents were $1,494 million for the fourth quarter of 2022, compared with $1,283 million for the same period in 2021. The increase was primarily due to the impact of the GECAS acquisition. Basic lease rents were impacted by strong cash collections as well as $47 million of lease premium amortization.

Maintenance rents and other receipts were $140 million for the fourth quarter of 2022, compared with $97 million for the same period in 2021. Maintenance rents were reduced by $111 million as a result of maintenance right assets that were amortized to revenue.

Net gain on sale of assets for the fourth quarter of 2022 was $121 million, relating to 83 assets sold for $1 billion, compared with $25 million for the same period in 2021, relating to 24 assets sold for $412 million. The increase was primarily due to the higher volume and composition of asset sales.

Other income for the fourth quarter of 2022 was $74 million, compared with $38 million for the same period in 2021. The increase was primarily due to the receipt of unsecured claims and settlements.

		Three months ended December 31,						Year ended December 31,
		2022		2021		% increase/ (decrease)		2022		2021		% increase/ (decrease)
		(U.S. Dollars in millions)						(U.S. Dollars in millions)
Basic lease rents		$1,494		$1,283		16 %		$5,982		$3,891		54 %
Adjusted for:
Amortization of lease premium/deficiency		47		40		18 %		206		43		NA
Basic lease rents excluding amortization of lease premium/deficiency		$1,541		$1,323		16 %		$6,188		$3,935		57 %
Interest expense		420		370		14 %		1,592		1,231		29 %
Adjusted for:
Mark-to-market of interest rate caps and swaps		2		9		NA		69		20		NA
Interest expense excluding mark-to-market of interest rate caps and swaps		423		378		12 %		1,661		1,250		33 %
Adjusted net interest margin (*)		$1,118		$945		18 %		$4,527		$2,684		69 %
Depreciation and amortization		(594)		(556)		7 %		(2,390)		(1,738)		38 %
Adjusted net interest margin, less depreciation and amortization (*)		$524		$389		35 %		$2,137		$946		126 %
Average lease assets (*)		$59,009		$54,110		9 %		$59,745		$40,646		47 %
Annualized net spread (*)		7.6 %		7.0 %				7.6 %		6.6 %
Annualized net spread less depreciation and amortization (*)		3.6 %		2.9 %				3.6 %		2.3 %

(*) Refer to "Notes Regarding Financial Information Presented in This Press Release" for details relating to these non-GAAP measures and metrics

Interest expense excluding mark-to-market of interest rate caps and swaps was $423 million for the fourth quarter of 2022, compared with $378 million for the same period in 2021. AerCap's average cost of debt was 3.3% for the fourth quarter of 2022, compared with 3.2% for the same period in 2021, excluding debt issuance costs, upfront fees and other impacts.

Selling, General and Administrative Expenses

		Three months ended December 31,						Year ended December 31,
		2022		2021		% increase/ (decrease)		2022		2021		% increase/ (decrease)
		(U.S. Dollars in millions)						(U.S. Dollars in millions)
Selling, general and administrative expenses		$68		$87		(21 %)		$297		$222		34 %
Share-based compensation expenses		24		32		(26 %)		103		96		7 %
Total selling, general and administrative expenses		$92		$119		(23 %)		$400		$318		26 %

Selling, general and administrative expenses decreased to $92 million for the fourth quarter of 2022, compared with $119 million for the same period in 2021. The decrease was primarily driven by lower compensation-related expenses.

Other Expenses

Asset impairment charges were $53 million for the fourth quarter of 2022, compared to $6 million recorded for the same period in 2021. Asset impairment charges recorded in the fourth quarter of 2022 related to lease terminations, sales transactions and leasing transactions and were more than offset by related maintenance revenue. Leasing expenses were $261 million for the fourth quarter of 2022, compared with $162 million for the same period in 2021. The increase was primarily due to lease premium and maintenance rights assets amortization as a result of the GECAS acquisition.

Effective Tax Rate

AerCap's effective tax rate for the full year 2022 was 16.4%, compared with the effective tax rate of 14.2% for the full year 2021. The effective tax rate is impacted by the source and amount of earnings among our different tax jurisdictions as well as the amount of permanent tax differences relative to pre-tax income or loss, and certain other discrete items.

Book Value Per Share

		December 31, 2022		December 31, 2021
		(U.S. Dollars in millions, except share and per share data)
Total AerCap Holdings N.V. shareholders' equity		$16,118		$16,571
Ordinary shares outstanding		245,931,275		245,395,448
Unvested restricted stock		(4,837,602)		(5,822,811)
Ordinary shares outstanding (excl. unvested restricted stock)		241,093,673		239,572,637
Book value per ordinary share outstanding (excl. unvested restricted stock)		$66.85		$69.17

Financial Position

		December 31, 2022		December 31, 2021		% increase/ (decrease) over December 31, 2021
		(U.S. Dollars in millions)
Total cash, cash equivalents and restricted cash		$1,757		$1,915		(8 %)
Total assets		69,727		74,570		(6 %)
Debt		46,533		50,205		(7 %)
Total liabilities		53,532		57,922		(8 %)
Total AerCap Holdings N.V. shareholders' equity		16,118		16,571		(3 %)
Total equity		16,195		16,647		(3 %)

Aircraft Portfolio

As of December 31, 2022, AerCap's portfolio consisted of 3,532 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company's owned aircraft fleet as of December 31, 2022 was 7.2 years (4.0 years for new technology aircraft, 13.4 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.

Share Repurchase Program

In March 2023, our Board of Directors approved a new share repurchase program authorizing total repurchases of up to $500 million of AerCap ordinary shares through September 30, 2023. Repurchases under the program may be made through open market purchases or privately negotiated transactions in accordance with applicable U.S. federal securities laws. The timing of repurchases and the exact number of ordinary shares to be purchased will be determined by the Company's management, in its discretion, and will depend upon market conditions and other factors. The program will be funded using the Company's cash on hand and cash generated from operations. The program may be suspended or discontinued at any time.

Notes Regarding Financial Information Presented in This Press Release

The financial information presented in this press release is not audited.

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.

The following are definitions of non-GAAP measures and metrics used in this press release. We believe these measures and metrics may further assist investors in their understanding of our performance. These measures and metrics should not be viewed in isolation and should only be used in conjunction with and as a supplement to our U.S. GAAP financial measures. Non-GAAP measures and metrics are not uniformly defined by all companies, including those in our industry, and so this additional information may not be comparable with similarly-titled measures and metrics and disclosures by other companies.

Adjusted net income / earnings per share

Adjusted net income is calculated as net loss excluding the after-tax impact of net (recoveries) charges related to the Ukraine Conflict, the amortization of maintenance rights and lease premium assets recognized under purchase accounting, and GECAS transaction and integration-related expenses. Adjusted earnings per share is calculated by dividing adjusted net income by the weighted average of our ordinary shares outstanding. Given the relative significance of these items during 2022, we have chosen to present this measure in order to assist investors in their understanding of the changes and trends related to our earnings.

		Three months ended December 31, 2022				Year ended December 31, 2022
		Net income		Earnings per share		Net income		Earnings per share
		(U.S. Dollars in millions, except per share data)
Net earnings (loss) / earnings (loss) per share		$495		$2.04		($726)		($3.02)
Adjusted for:
Net (recoveries) charges related to Ukraine Conflict		(47)		(0.19)		2,666		11.02
Amortization of maintenance rights and lease premium assets recognized under purchase accounting		215		0.89		629		2.59
Transaction and Integration-related expenses		3		0.01		33		0.14
Income tax effect of the above adjustments		(21)		(0.09)		(416)		(1.71)
Adjusted net income / earnings per share*		$645		$2.66		$2,185		$9.01
*Denominator for adjusted earnings per share:
Weighted average shares outstanding – diluted								240,486,849
Potentially dilutive shares, whose effect would have been anti-dilutive								2,087,414
Adjusted weighted average shares outstanding – diluted								242,574,263
Adjusted earnings per share								$9.01

Adjusted debt/equity ratio

This measure is the ratio obtained by dividing adjusted debt by adjusted equity.

• Adjusted debt means consolidated total debt less cash and cash equivalents, and less a 50% equity credit with respect to certain long-term subordinated debt.
• Adjusted equity means total equity, plus the 50% equity credit relating to the long-term subordinated debt.

Adjusted debt and adjusted equity are adjusted by the 50% equity credit to reflect the equity nature of those financing arrangements and to provide information that is consistent with definitions under certain of our debt covenants. We believe this measure may further assist investors in their understanding of our capital structure and leverage.

		December 31, 2022		December 31, 2021
		(U.S. Dollars in millions,  except debt/equity ratio)
Debt		$46,533		$50,205
Adjusted for:
Cash and cash equivalents		(1,597)		(1,729)
50% credit for long-term subordinated debt		(1,125)		(1,125)
Adjusted debt		$43,811		$47,351
Equity		$16,195		$16,647
Adjusted for:
50% credit for long-term subordinated debt		1,125		1,125
Adjusted equity		$17,320		$17,772
Adjusted debt/equity ratio		2.5 to 1		2.7 to 1

Adjusted net interest margin, annualized net spread, annualized net spread less depreciation and amortization and average cost of debt

Adjusted net interest margin is calculated as the difference between basic lease rents, excluding the impact of the amortization of lease premium/deficiency recognized under purchase accounting, and interest expense, excluding the impact of the mark-to-market of interest rate caps and swaps. Annualized net spread is adjusted net interest margin expressed as a percentage of average lease assets. Annualized net spread less depreciation and amortization is adjusted net interest margin less depreciation and amortization expressed as a percentage of average lease assets.

Average cost of debt is calculated as interest expense, excluding mark-to-market on interest rate caps and swaps, debt issuance costs, upfront fees and other impacts, divided by average debt balance.

		Three months ended December 31,
		2022		2021
		(U.S. Dollars in millions)
Interest expense		$420		$370
Adjusted for:
Mark-to-market on interest rate caps and swaps		2		9
Debt issuance costs, upfront fees and other impacts		(34)		(33)
Interest expense, excluding mark-to-market on interest rate caps and swaps, debt issuance costs, upfront fees and other impacts		$388		$346
Average debt balance		$47,358		$43,780
Average cost of debt (*)		3.3 %		3.2 %

(*) Refer to "Notes Regarding Financial Information Presented in This Press Release" for details relating to this non-GAAP measure

Lease assets

Lease assets include flight equipment held for operating leases, flight equipment held for sale, net investment in finance leases and maintenance rights assets.

Conference Call

In connection with its report of fourth quarter 2022 results, management will host a conference call with members of the investment community today, Thursday, March 2, 2023, at 8:30 am Eastern Time. The call can be accessed live via webcast by AerCap's website at www.aercap.com under "Investors", or by dialing (U.S./Canada) [phone] or (International) [phone] and referencing code 2051958 at least 5 minutes before start time.

The webcast replay will be archived in the "Investors" section of the company's website for one year.

For further information, contact Joseph McGinley: [phone] ([e-mail]).

About AerCap

AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is based in Dublin with offices in Shannon, Miami, Singapore, Memphis, Amsterdam, Shanghai, Dubai, Seattle, Toulouse and other locations around the world.

Forward-Looking Statements

This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "should," "expect," "plan," "intend," "will," "aim," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements, including, among other things, the availability of capital to us and to our customers and changes in interest rates; the ability of our lessees and potential lessees to make lease payments to us; our ability to successfully negotiate flight equipment (which includes aircraft, engines and helicopters) purchases, sales and leases, to collect outstanding amounts due and to repossess flight equipment under defaulted leases, and to control costs and expenses; changes in the overall demand for commercial aviation leasing and aviation asset management services; the continued impacts of the Ukraine Conflict, including the resulting sanctions by the United States, the European Union, the United Kingdom and other countries, on our business and results of operations, financial condition and cash flows; the rate of recovery in air travel related to the Covid-19 pandemic, the aviation industry and global economic conditions; the potential impacts of the pandemic and responsive government actions on our business and results of operations, financial condition and cash flows; the effects of terrorist attacks on the aviation industry and on our operations; the economic condition of the global airline and cargo industry and economic and political conditions; development of increased government regulation, including travel restrictions, sanctions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers; a downgrade in any of our credit ratings; competitive pressures within the industry; regulatory changes affecting commercial flight equipment operators, flight equipment maintenance, engine standards, accounting standards and taxes.

As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. These and other important factors and risks are discussed in AerCap's annual report on Form 20-F and other filings with the United States Securities Exchange Commission. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except as required by applicable law, we do not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information regarding AerCap and to be added to our email distribution list, please visit www.aercap.com and follow us on Twitter www.twitter.com/aercapnv.

 

	AerCap Holdings N.V.
	Unaudited Consolidated Balance Sheets
	(U.S. Dollars in thousands)
			December 31, 2022		December 31, 2021
	Assets
	Cash and cash equivalents		$ 1,597,147		$ 1,728,794
	Restricted cash		159,623		185,959
	Trade receivables		132,202		181,455
	Flight equipment held for operating leases, net		55,220,809		57,825,056
	Investment in finance leases, net		1,356,072		1,929,220
	Flight equipment held for sale		292,808		304,362
	Prepayments on flight equipment		3,806,602		4,586,848
	Maintenance rights and lease premium, net		3,364,453		4,444,520
	Other intangibles, net		185,210		208,879
	Deferred tax assets		210,334		121,571
	Associated companies		811,219		705,087
	Other assets		2,590,439		2,348,017
	Total Assets		$ 69,726,918		$ 74,569,768
	Liabilities and Equity
	Accounts payable, accrued expenses and other liabilities		$ 1,494,953		$ 1,958,096
	Accrued maintenance liability		2,503,202		2,900,651
	Lessee deposit liability		806,655		773,753
	Debt		46,532,960		50,204,678
	Deferred tax liabilities		2,194,098		2,085,230
	Total Liabilities		53,531,868		57,922,408
	Ordinary share capital €0.01 par value, 450,000,000 ordinary shares authorized as of December 31, 2022 and 2021 respectively;
	250,347,345 and 250,347,345 ordinary shares issued and 245,931,275 and 245,395,448 ordinary shares outstanding
	(including 4,837,602 and 5,822,811 unvested restricted stock) as of December 31, 2022 and 2021, respectively		3,024		3,024
	Additional paid-in capital		8,586,034		8,522,694
	Treasury shares, at cost (4,416,070 and 4,951,897 ordinary shares as of December 21, 2022 and 2021, respectively)		(254,699)		(285,901)
	Accumulated other comprehensive income (loss)		108,226		(79,335)
	Accumulated retained earnings		7,674,922		8,410,261
	Total AerCap Holdings N.V. shareholders' equity		16,117,507		16,570,743
	Non-controlling interest		77,543		76,617
	Total Equity		16,195,050		16,647,360
	Total Liabilities and Equity		$ 69,726,918		$ 74,569,768

 

	AerCap Holdings N.V.
	Unaudited Consolidated Income Statements
	(U.S. Dollars in thousands, except share and per share data)
			Three months ended December 31,				Year ended December 31,
			2022		2021		2022		2021
	Revenues and other income
	Lease revenue:
	Basic lease rents		$ 1,493,556		$ 1,283,115		$ 5,981,812		$ 3,891,089
	Maintenance rents and other receipts		140,499		96,662		548,734		520,914
	Total lease revenue		1,634,055		1,379,777		6,530,546		4,412,003
	Net gain on sale of assets		121,227		24,547		228,930		89,428
	Other income		73,515		37,857		254,074		722,574
	Total Revenues and other income		1,828,797		1,442,181		7,013,550		5,224,005
	Expenses
	Depreciation and amortization		593,715		555,839		2,389,807		1,737,925
	Net (recoveries) charges related to Ukraine Conflict		(46,930)		-		2,665,651		-
	Asset impairment		53,114		5,822		96,591		128,409
	Interest expense		420,282		369,549		1,591,870		1,230,466
	(Gain) loss on debt extinguishment		(4,099)		758		(2,041)		9,713
	Leasing expenses		260,898		161,961		823,600		319,022
	Selling, general and administrative expenses		91,864		119,269		399,530		317,888
	Transaction and integration-related expenses		3,088		139,432		33,286		334,966
	Total Expenses		1,371,932		1,352,630		7,998,294		4,078,389
	Gain (loss) on investment at fair value		2,466		2,608		(17,676)		2,301
	Income (loss) before income taxes and income of investments accounted for under the equity method		459,331		92,159		(1,002,420)		1,147,917
	Income tax (expense) benefit		141		(20,010)		164,097		(162,537)
	Equity in net earnings of investments accounted for under the equity method		38,141		18,348		117,165		24,051
	Net income (loss)		$ 497,613		$ 90,497		($ 721,158)		$ 1,009,431
	Net income attributable to non-controlling interest		(2,606)		(1,687)		(4,883)		(8,924)
	Net income (loss) attributable to AerCap Holdings N.V		$ 495,007		$ 88,810		($ 726,041)		$ 1,000,507
	Basic earnings (loss) per share		$ 2.05		$ 0.44		($ 3.02)		$ 6.83
	Diluted earnings (loss) per share		$ 2.04		$ 0.44		($ 3.02)		$ 6.71
	Weighted average shares outstanding - basic		241,065,826		200,825,881		240,486,849		146,421,188
	Weighted average shares outstanding - diluted		242,857,553		203,641,504		240,486,849		149,005,981

 

	AerCap Holdings N.V.
	Unaudited Consolidated Statements of Cash Flows
	(U.S. Dollars in thousands)
			Year ended December 31,
			2022		2021
	Net (loss) income		($ 721,158)		$ 1,009,431
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
	Depreciation and amortization		2,389,807		1,737,925
	Net charges related to Ukraine Conflict		2,922,350		-
	Asset impairment		96,591		128,409
	Amortization of debt issuance costs, debt discount, debt premium and lease premium		338,032		113,981
	Amortization of fair value adjustments on debt		(4,790)		(16,977)
	Maintenance rights write-off		389,852		138,780
	Maintenance liability release to income		(203,490)		(273,146)
	Net gain on sale of assets		(228,930)		(89,428)
	Deferred tax benefit		(9,586)		(5,905)
	Share-based compensation		102,848		96,087
	Collections of finance leases		630,427		124,325
	Loss / (gain) on investment at fair value		17,676		(2,301)
	(Gain) / loss on debt extinguishment		(2,041)		9,713
	Transaction and integration-related expenses		-		186,474
	Other		(157,143)		61,212
	Changes in operating assets and liabilities:
	Trade receivables		39,162		232,119
	Other assets		113,374		112,790
	Accounts payable, accrued expenses and other liabilities		(542,019)		130,333
	Net cash provided by operating activities		5,170,962		3,693,822
	Purchase of flight equipment		(3,480,074)		(1,703,395)
	Proceeds from sale or disposal of assets		1,635,777		796,613
	Prepayments on flight equipment		(391,498)		(86,386)
	Acquisition of GECAS, net of cash acquired		-		(22,493,195)
	Other		75,296		27,427
	Net cash used in investing activities		(2,160,499)		(23,458,936)
	Issuance of debt		467,996		26,496,660
	Repayment of debt		(4,230,082)		(5,973,508)
	Debt issuance and extinguishment costs paid, net of debt premium received		379		(422,260)
	Maintenance payments received		779,824		448,516
	Maintenance payments returned		(245,294)		(209,087)
	Security deposits received		332,822		210,781
	Security deposits returned		(245,084)		(290,758)
	Dividend paid to non-controlling interest holders		(3,957)		(323)
	Repurchase of shares and tax withholdings on share-based compensation		(17,419)		(76,220)
	Net cash (used in) / provided by financing activities		(3,160,815)		20,183,801
	Net (decrease) increase in cash, cash equivalents and restricted cash		(150,352)		418,687
	Effect of exchange rate changes		(7,631)		776
	Cash, cash equivalents and restricted cash at beginning of period		1,914,753		1,495,290
	Cash, cash equivalents and restricted cash at end of period		$ 1,756,770		$ 1,914,753

 

 

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SOURCE AerCap Holdings N.V.