• Net loss for the first quarter of 2022, including net charges related to the Ukraine Conflict, was $2.0 billion, or $8.35 per share.
  • Net income for the first quarter of 2022 was $540 million, or $2.23 per share, after adjustments for net charges related to the Ukraine Conflict and other items.

DUBLIN, May 17, 2022 /PRNewswire/ -- AerCap Holdings N.V. (NYSE: AER), the global leader in aviation leasing, today reported financial results for the first quarter of 2022 ended March 31, 2022.

"During the first quarter, we continued to see a broad-based recovery in travel around the world as governments lifted travel restrictions and demand for travel continued to increase. We expect to see demand for travel continue to grow as the recovery progresses," said Aengus Kelly, Chief Executive Officer of AerCap.

"During the first quarter, we ceased all of our leasing activity to Russian airlines and took a charge primarily related to our aircraft and engines that remain in Russia. We have filed insurance claims related to these assets and will vigorously pursue all available remedies to recover our losses," Mr. Kelly added.

Highlights:

  • Executed 157 transactions in the first quarter of 2022, including 102 lease agreements, 25 purchases and 30 sales.
  • First quarter cash flow from operating activities was $1.3 billion, more than three times higher than the first quarter of 2021.
  • Continued to see significant improvements in cash collections, trade receivables and deferral requests.
  • Adjusted debt/equity ratio of 2.9 to 1 at March 31, 2022.
  • 92% of new aircraft order book placed through 2023.
  • $17 billion in total sources of liquidity, representing next 12 months' sources-to-uses coverage ratio of 2.1x.

Revenue and Net Spread



Three months ended March 31,



2022


2021


% increase/
  (decrease)



(U.S. Dollars in millions)

Lease revenue:







   Basic lease rents


$1,554


$889


75%

   Maintenance rents and other receipts


186


183


2%

Total lease revenue


1,740


1,072


62%

Net gain on sale of assets


3


5


(31%)

Other income


47


19


154%

Total Revenues and other income


$1,790


$1,095


63%








Basic lease rents were $1,554 million for the first quarter of 2022, compared with $889 million for the same period in 2021. The increase was primarily due to the impact of the GECAS acquisition. Basic lease rents were reduced by $57 million in the first quarter of 2022 as a result of the amortization of lease premium assets.

Maintenance rents and other receipts were $186 million for the first quarter of 2022, compared with $183 million for the same period in 2021.

Net gain on sale of assets for the first quarter of 2022 was $3 million, relating to 23 assets sold for $452 million, compared with $5 million for the same period in 2021, relating to nine aircraft sold for $184 million. The decrease was primarily due to the composition of asset sales.

Other income for the first quarter of 2022 was $47 million, compared with $19 million for the same period in 2021. The increase was primarily due to higher management fee income, interest income and other income as a result of the GECAS acquisition.



Three months ended March 31,



2022


2021


% increase/
  (decrease)



(U.S. Dollars in millions)








Basic lease rents


$1,554


$889


75%








Interest expense


381


281


36%

Adjusted for:







   Mark-to-market of interest rate caps and swaps


36


10


261%

Interest expense excluding mark-to-market of interest rate caps and swaps


417


291


43%

Net interest margin (*)


$1,137


$598


90%

Depreciation and amortization, including maintenance rights expense


(684)


(401)


71%

Net interest margin, less depreciation and amortization


$453


$197


129%








Average lease assets (*)


$62,137


$36,362


71%








Annualized net spread (*)


7.3%


6.6%



Annualized net spread less depreciation and amortization (*)


2.9%


2.2%










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

Interest expense excluding mark-to-market of interest rate caps and swaps was $417 million for the first quarter of 2022, compared with $291 million for the same period in 2021. AerCap's average cost of debt was 3.0% for the first quarter of 2022, and 3.7% for the same period in 2021, excluding debt issuance costs, upfront fees and other impacts.

Net Charges Related to Ukraine Conflict

In response to the Russian invasion of Ukraine and sanctions imposed by the United States, the European Union, the United Kingdom and other countries, we terminated the leasing of all our aircraft and engines with Russian airlines. Prior to the Russian invasion, we had 135 aircraft and 14 engines on lease with Russian airlines, which represented approximately 5% of AerCap's fleet by net book value as of December 31, 2021. We have removed 22 aircraft and 3 engines outside of Russia, and 113 aircraft and 11 engines remain in Russia.

During the first quarter of 2022, we recognized a pre-tax charge of $2.7 billion ($2.4 billion after-tax) to our earnings, comprised of flight equipment write-offs and impairments, which were partially offset by the derecognition of lease-related assets and liabilities. We recognized a total loss on our assets that remain in Russia and Ukraine and impairment losses on the assets we have recovered from Russian and Ukrainian airlines.



Three Months Ended
March 31, 2022




(U.S. Dollars in millions)


Write-offs and impairments of flight equipment


$3,176


Derecognition of lease-related assets and liabilities


(237)


Letters of credit receipts


(210)


Net charges related to Ukraine Conflict (pre-tax)


$2,729


Income tax effect


(341)


Net charges related to Ukraine Conflict (after-tax)


$2,388


We had letters of credit related to our aircraft and engines leased to Russian airlines as of February 24, 2022 of approximately $260 million, confirmed by nine financial institutions in Western Europe. We have presented requests for payment to all these institutions. To date, we have received payments of $210 million related to these letters of credit. We have initiated legal proceedings against one financial institution which rejected our payment demands in respect of certain letters of credit.

Our lessees are required to provide insurance coverage with respect to leased aircraft and we are named as insureds under those policies in the event of a total loss of an aircraft or engine. We also purchase insurance which provides us with coverage when our flight equipment are not subject to a lease or where a lessee's policy fails to indemnify us. We have submitted an insurance claim for approximately $3.5 billion with respect to all aircraft and engines remaining in Russia and intend to pursue all of our claims under these policies with respect to our assets leased to Russian airlines as of February 24, 2022. However, the timing and amount of any recoveries under these policies are uncertain and we have not recognized any claim receivables as of March 31, 2022.

Selling, General and Administrative Expenses



Three months ended March 31,



2022


2021


% increase/
  (decrease)



(U.S. Dollars in millions)








Selling, general and administrative expenses


$70


$41


69%

Share-based compensation expenses


28


16


73%

Total selling, general and administrative expenses


$97


$57


70%

Selling, general and administrative expenses increased to $97 million for the first quarter of 2022, compared with $57 million for the same period in 2021. The increase was primarily driven by higher expenses as a result of the GECAS acquisition and is consistent with our $150 million annual expense savings target from the GECAS acquisition.

Other Expenses

Asset impairment charges were $2 million for the first quarter of 2022, compared to $16 million for the same period in 2021. Asset impairment charges recorded in the first quarter of 2022 related to lease terminations and were offset by related maintenance revenue. Leasing expenses were $208 million for the first quarter of 2022, compared with $45 million for the same period in 2021. The increase was primarily due to higher leasing expenses and an increase in maintenance rights expense as a result of the GECAS acquisition.

Effective Tax Rate

AerCap's effective tax rate was 12.2% for the first quarter of 2022, compared to 15% for the first quarter of 2021. During the first quarter of 2022, we recorded an income tax benefit due to the recognition of net charges related to the Ukraine Conflict. Excluding these charges, our effective tax rate was 14%. 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



March 31, 2022


March 31, 2021



(U.S. Dollars in millions,
except share and per share data)






Total AerCap Holdings N.V. shareholders' equity


$14,653


$9,139






Ordinary shares outstanding


245,618,872


130,734,441

Unvested restricted stock


(5,845,011)


(2,591,959)

Ordinary shares outstanding (excl. unvested restricted stock)


239,773,861


128,142,482






Book value per ordinary share outstanding (excl. unvested restricted stock)


$61.11


$71.32

Financial Position



March 31, 2022


December 31, 2021


% increase/

(decrease) over

December 31, 2021



(U.S. Dollars in millions)








Total cash, cash equivalents and restricted cash


$1,346


$1,915


(30%)

Total assets


70,208


74,570


(6%)

Debt


48,913


50,205


(3%)

Total liabilities


55,478


57,922


(4%)

Total AerCap Holdings N.V. shareholders' equity


14,653


16,571


(12%)

Total equity


14,730


16,647


(12%)








Flight Equipment Portfolio

As of March 31, 2022, AerCap's portfolio consisted of 3,615 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company's owned aircraft fleet as of March 31, 2022 was 7.0 years (3.6 years for new technology aircraft, 12.9 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.

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 used in this press release. We believe these measures may further assist investors in their understanding of our operational performance.

Adjusted net income / earnings per share

Adjusted net income is calculated as net loss excluding the after-tax impact of net 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 the first quarter of 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 March 31, 2022




Net (loss) income


(Loss) earnings

per share




(U.S. Dollars in millions,

 except share and per share data)








Net loss / loss per share


($2,001)


($8.35)








Adjusted for:






Net charges related to Ukraine Conflict


2,729


11.35


Amortization of maintenance rights and lease premium assets recognized under purchase accounting


158


0.65


Transaction and integration-related expenses


17


0.07


Income tax effect of above adjustments


(363)


(1.50)








Adjusted net income / earnings per share*


$540


$2.23








* Denominator for adjusted earnings per share:






Weighted average shares outstanding - diluted




239,645,460


Potentially dilutive shares, whose effect would have been anti-dilutive




2,815,813


Adjusted weighted average shares outstanding - diluted




242,461,273


Adjusted earnings per share




$2.23


 

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.



March 31, 2022


December 31, 2021








Debt


$48,913


$50,205






Adjusted for:





   Cash and cash equivalents


(1,186)


(1,729)

   50% credit for long-term subordinated debt


(1,125)


(1,125)

Adjusted debt


$46,602


$47,351











Equity


$14,730


$16,647






Adjusted for:





   50% credit for long-term subordinated debt


1,125


1,125

Adjusted equity


$15,855


$17,772






Adjusted debt/equity ratio


2.94 to 1


2.66 to 1

 

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

Net interest margin is calculated as the difference between basic lease rents and interest expense, excluding the impact of the mark-to-market of interest rate caps and swaps. Annualized net spread is net interest margin expressed as a percentage of average lease assets. Annualized net spread less depreciation and amortization is net interest margin less depreciation and amortization, including maintenance rights expense, 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. We believe these measures may further assist investors in their understanding of the changes and trends related to the earnings of our leasing activities. These measures reflect the impact from changes in the number of aircraft leased, lease rates and utilization rates, as well as the impact from changes in the amount of debt and interest rates.

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 first quarter 2022 results, management will host a conference call with members of the investment community today, Tuesday, May 17, 2022, 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) +1 929 477 0448 or (International) +353 1 246 5638 and referencing code 5103066 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: +353 1 418 0428 (jmcginley@aercap.com).

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, Amsterdam, Shanghai, Abu Dhabi, 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, including the impacts of, and associated responses to: the Ukraine Conflict; the Covid-19 pandemic; our ability to successfully integrate GECAS' operations and employees and realize anticipated synergies and cost savings; and the potential impact of the consummation of the GECAS transaction on relationships, including with employees, suppliers, customers and competitors, 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. As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. 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, and will not, 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, except share data)
















March 31, 2022


December 31, 2021










Assets







Cash and cash equivalents


$1,185,702


$1,728,794



Restricted cash


160,532


185,959



Trade receivables


128,204


181,455



Flight equipment held for operating leases, net


54,568,482


57,825,056



Investment in finance leases, net


2,112,421


1,929,220



Flight equipment held for sale


165,482


304,362



Prepayments on flight equipment


4,539,807


4,586,848



Maintenance rights and lease premium, net


3,916,453


4,444,520



Other intangibles, net


201,834


208,879



Deferred tax assets


113,766


121,571



Associated companies


708,631


705,087



Other assets


2,406,871


2,348,017



Total Assets


$70,208,185


$74,569,768

















Liabilities and Equity







Accounts payable, accrued expenses and other liabilities


$1,774,761


$1,958,096



Accrued maintenance liability


2,241,084


2,900,651



Lessee deposit liability


742,076


773,753



Debt


48,912,874


50,204,678



Deferred tax liabilities


1,807,612


2,085,230



Total liabilities


55,478,407


57,922,408










Ordinary share capital €0.01 par value, 450,000,000 ordinary shares authorized as of March 31, 2022 and







 December 31, 2021; 250,347,345 and 250,347,345 ordinary shares issued and 245,618,872 and 245,395,448







 ordinary shares outstanding (including 5,845,011 and 5,822,811 unvested restricted stock) as of







 March 31, 2022 and December 31, 2021, respectively


3,024


3,024



Additional paid-in capital


8,541,022


8,522,694



Treasury shares, at cost (4,728,473 and 4,951,897 ordinary shares as of March 31, 2022 and







 December 31, 2021)


(273,320)


(285,901)



Accumulated other comprehensive loss


(25,687)


(79,335)



Accumulated retained earnings


6,408,091


8,410,261



Total AerCap Holdings N.V. shareholders' equity


14,653,130


16,570,743



Non-controlling interest


76,648


76,617



Total Equity


14,729,778


16,647,360










Total Liabilities and Equity


$70,208,185


$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 March 31,





2022


2021










Revenues and other income







Lease revenue:







  Basic lease rents


$1,553,646


$889,087



  Maintenance rents and other receipts


185,895


182,895



Total lease revenue


1,739,541


1,071,982



Net gain on sale of assets


3,285


4,795



Other income


47,190


18,573



Total Revenues and other income


1,790,016


1,095,350










Expenses







Depreciation and amortization


634,414


396,558



Net charges related to Ukraine Conflict


2,728,718




Asset impairment


2,425


16,332



Interest expense


380,785


280,817



Loss on debt extinguishment


1,140


6,061



Leasing expenses


208,055


44,532



Selling, general and administrative expenses


97,475


57,351



Transaction and integration-related expenses


17,388


25,478



Total Expenses


4,070,400


827,129










Gain (loss) on investment at fair value


113


(2,463)










Loss (income) before income taxes and income of investments







  accounted for under the equity method


(2,280,271)


265,758










Income tax benefit (expense)


278,307


(39,864)



Equity in net earnings of investments accounted for under the equity method


1,283


2,152










Net (loss) income


($2,000,681)


$228,046










Net income attributable to non-controlling interest


(149)


(21)










Net (loss) income attributable to AerCap Holdings N.V.


($2,000,830)


$228,025










Basic (loss) earnings per share


($8.35)


$1.78



Diluted (loss) earnings per share


($8.35)


$1.76










Weighted average shares outstanding - basic


239,645,460


127,883,690



Weighted average shares outstanding - diluted


239,645,460


129,484,250









 

 









AerCap Holdings N.V.







Unaudited Consolidated Statements of Cash Flows







(U.S. Dollars in thousands)
















Three months ended March 31,





2022


2021










Net (loss) income


($2,000,681)


$228,046



Adjustments to reconcile net income to net cash provided by operating activities:







Depreciation and amortization


634,414


396,558



Net charges related to Ukraine Conflict


2,938,487




Asset impairment


2,425


16,332



Amortization of debt issuance costs, debt discount, debt premium and lease premium


83,210


15,944



Amortization of fair value adjustment on debt


(1,991)


(4,119)



Maintenance rights write-off


101,114


15,209



Maintenance liability release to income


(101,162)


(68,472)



Net gain on sale of assets


(3,285)


(4,795)



Deferred tax (benefit) expense


(277,674)


40,382



Share-based compensation


27,503


15,926



Collections of finance leases


61,009


25,763



(Gain) loss on investment at fair value


(113)


2,463



Loss on debt extinguishment


1,140


6,061



Transaction and integration-related expenses



14,595



Other


(77,370)


10,984



 Changes in operating assets and liabilities:







   Trade receivables


39,590


(45,496)



   Other assets


10,778


(90,206)



   Accounts payable, accrued expenses and other liabilities


(100,838)


(174,823)



Net cash provided by operating activities


1,336,556


400,352










Purchase of flight equipment


(881,608)


(11,039)



Proceeds from sale or disposal of assets


405,107


160,198



Prepayments on flight equipment


(177,176)


(79,879)



Other


7,125




Net cash (used in) provided by investing activities


(646,552)


69,280










Issuance of debt


84,996


1,188,357



Repayment of debt


(1,412,038)


(1,357,263)



Debt issuance and extinguishment costs paid, net of debt premium received


(8,684)


(170,002)



Maintenance payments received


202,541


75,917



Maintenance payments returned


(127,541)


(30,237)



Security deposits received


98,132


56,382



Security deposits returned


(92,826)


(49,869)



Dividend paid to non-controlling interest holders and others


(118)


(128)



Repurchase of shares and tax withholdings on share-based compensation


(3,517)


(1,841)



Net cash used in financing activities


(1,259,055)


(288,684)










Net (decrease) increase in cash, cash equivalents and restricted cash


(569,051)


180,948



Effect of exchange rate changes on cash, cash equivalents and restricted cash


532


(782)



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


$1,346,234


$1,675,456









 

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