AerCap Holdings N.V. Reports Financial Results for the Third Quarter 2024

  • Net income for the third quarter of 2024 was $375 million, or $1.95 per share.
  • Adjusted net income for the third quarter of 2024 was $463 million, or $2.41 per share.
  • Raising full year adjusted earnings per share guidance from approximately $10.25 to approximately $10.70, not including any gains on sale for the fourth quarter of 2024.

DUBLIN, Oct. 30, 2024 /PRNewswire/ -- AerCap Holdings N.V. (NYSE: AER), the industry leader across all areas of aviation leasing, today reported strong financial results for the third quarter of 2024.

"This was another strong quarter for AerCap. Demand for aircraft remains high, as evidenced by our 99% utilization rate, 92% extension rate for used aircraft and 27% gain-on-sale margin for the quarter. Reflecting our confidence in AerCap's future, we are raising our full year guidance for 2024. We recently announced another $500 million share repurchase program, taking total authorizations for this year to $1.5 billion. These actions are underpinned by our industry leading operating cash flow, which was a record $5.6 billion for the last twelve months," said Aengus Kelly, Chief Executive Officer of AerCap.

Highlights:

  • Unlevered gain-on-sale margin of 27% for assets sold in the third quarter of 2024, or 2.0x book value on an equity basis.
  • Cash flow from operating activities was $1.4 billion for the third quarter of 2024, and a record $5.6 billion for the last twelve months.
  • Signed financing transactions for approximately $10.5 billion in the third quarter of 2024 and completed inaugural Sukuk financing in October 2024.
  • Adjusted debt/equity ratio of 2.4 to 1 as of September 30, 2024.
  • Book value per share of $90.66 as of September 30, 2024, an increase of approximately 16% from September 30, 2023.
  • Repurchased 5.5 million shares for $497 million and authorized a $500 million share repurchase program during the third quarter of 2024.
  • Increased full-year 2024 adjusted earnings per share guidance from approximately $10.25 to approximately $10.70, not including any gains on sale for the fourth quarter of 2024.

 

Revenue and Net Spread








Three Months Ended September 30,


Nine months ended September 30,



2024


2023


% increase/
(decrease)


2024


2023


% increase/
(decrease)



(U.S. Dollars in millions)


(U.S. Dollars in millions)

Lease revenue:













   Basic lease rents


$1,605


$1,575


2 %


$4,758


$4,673


2 %

   Maintenance rents and other receipts


161


126


28 %


521


469


11 %

Total lease revenue


1,767


1,701


4 %


5,279


5,142


3 %

Net gain on sale of assets


102


130


(21 %)


391


395


(1 %)

Other income


79


61


30 %


254


144


76 %

Total Revenues and other income


$1,948


$1,892


3 %


$5,924


$5,682


4 %














Basic lease rents were $1,605 million for the third quarter of 2024, compared with $1,575 million for the same period in 2023. Basic lease rents for the third quarter of 2024 were negatively impacted by $31 million of lease premium amortization.

Maintenance rents and other receipts were $161 million for the third quarter of 2024, compared with $126 million for the same period in 2023. Maintenance rents for the third quarter of 2024 were negatively impacted by $44 million as a result of maintenance rights assets that were amortized to revenue.

Net gain on sale of assets for the third quarter of 2024 was $102 million, relating to 22 assets sold for $479 million, compared with $130 million for the same period in 2023, relating to 45 assets sold for $682 million. The decrease was primarily due to the volume and composition of asset sales.

Other income for the third quarter of 2024 was $79 million, compared with $61 million for the same period in 2023. The increase was primarily driven by higher interest income.


Three Months Ended September 30,


Nine months ended September 30,


2024


2023


% increase/
(decrease)


2024


2023


% increase/
(decrease)


(U.S. Dollars in millions)


(U.S. Dollars in millions)













Basic lease rents

$1,605


$1,575


2 %


$4,758


$4,673


2 %

Adjusted for:












   Amortization of lease premium/deficiency

31


41


(24 %)


97


125


(22 %)

Basic lease rents excluding amortization of lease premium/

deficiency

$1,637


$1,616


1 %


$4,856


$4,798


1 %













Interest expense

516


447


16 %


1,486


1,311


13 %

Adjusted for:












   Mark-to-market of interest rate derivatives

(22)


(7)


NA


(30)


(17)


NA

Interest expense excluding mark-to-market of interest rate derivatives

494


440


12 %


1,456


1,293


13 %

Adjusted net interest margin (*)

$1,142


$1,176


(3 %)


$3,400


$3,505


(3 %)

Depreciation and amortization

(653)


(623)


5 %


(1,923)


(1,849)


4 %

Adjusted net interest margin, less depreciation and amortization

$489


$553


(11 %)


$1,477


$1,656


(11 %)













Average lease assets (*)

$61,131


$59,951


2 %


$60,609


$59,605


2 %













Annualized net spread (*)

7.5 %


7.8 %




7.5 %


7.8 %



Annualized net spread less depreciation and amortization (*)

3.2 %


3.7 %




3.2 %


3.7 %















(*) 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 derivatives was $494 million for the third quarter of 2024, compared with $440 million for the same period in 2023. AerCap's average cost of debt was 4.0% for the third quarter of 2024 and 3.5% for the same period in 2023, excluding debt issuance costs, upfront fees and other impacts.

Selling, General and Administrative Expenses






Three Months Ended September 30,


Nine months ended September 30,


2024


2023


%
increase/
(decrease)


2024


2023


%
increase/
(decrease)


(U.S. Dollars in millions)


(U.S. Dollars in millions)













Selling, general and administrative expenses (excluding share-based

compensation expenses)

$97


$90


8 %


$284


$272


4 %

Share-based compensation expenses

24


21


12 %


82


70


17 %

Selling, general and administrative expenses

$121


$112


8 %


$366


$342


7 %

 

Selling, general and administrative expenses were $121 million for the third quarter of 2024, compared with $112 million for the same period in 2023.

Other Expenses

Leasing expenses were $275 million for the third quarter of 2024, compared with $166 million for the same period in 2023. The increase was primarily due to an increase of $140 million in our credit loss provision. Leasing expenses for the third quarter of 2024 were negatively impacted by $32 million of maintenance rights amortization.

Effective Tax Rate

AerCap's effective tax rate was 15.5% for the third quarter of 2024, compared to an effective tax rate of 9.4% for the third quarter of 2023. 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








September 30, 2024


September 30, 2023



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






Total AerCap Holdings N.V. shareholders' equity


$16,752


$16,294






Ordinary shares outstanding


189,731,024


212,379,835

Unvested restricted stock


(4,948,175)


(4,233,182)

Ordinary shares outstanding (excl. unvested restricted stock)


184,782,849


208,146,653






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


$90.66


$78.28






Dividend declared per ordinary share for the nine months ended September 30, 2024


$0.50


 

Financial Position










September 30, 2024


December 31, 2023


% increase/

(decrease) over

December 31, 2023



(U.S. Dollars in millions)








Total cash, cash equivalents and restricted cash


$3,955


$1,825


117 %

Total assets


73,825


71,275


4 %

Debt


48,353


46,484


4 %

Total liabilities


57,072


54,686


4 %

Total AerCap Holdings N.V. shareholders' equity


16,752


16,589


1 %








 

Flight Equipment 

As of September 30, 2024, AerCap's portfolio consisted of 3,491 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company's owned aircraft fleet as of September 30, 2024 was 7.4 years (4.7 years for new technology aircraft, 14.7 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.

Dividend

In October 2024, AerCap's Board of Directors declared a quarterly cash dividend of $0.25 per share, with a payment date of December 5, 2024, to shareholders of record of AerCap ordinary shares as of the close of business on November 13, 2024.

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 return on equity and adjusted earnings per share guidance

Adjusted net income is calculated as net income excluding the after-tax impact of the amortization of maintenance rights and lease premium assets recognized under purchase accounting and net recoveries related to the Ukraine Conflict. Adjusted earnings per share is calculated by dividing adjusted net income by the weighted average of our ordinary shares outstanding. Adjusted return on equity is calculated by dividing adjusted net income by average shareholders' equity. Given the relative significance of these items during 2024, 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 September 30,


Nine months ended September 30,



Net income


Earnings

per share


Net income


Earnings

per share



(U.S. Dollars in millions,

except per share data)










Net income / earnings per share


$375


$1.95


$1,427


$7.27










Adjusted for:









   Amortization of maintenance rights and lease premium

   assets recognized under purchase accounting (*)


107


0.56


362


1.84

   Net recoveries related to Ukraine Conflict


(4)


(0.02)


(27)


(0.14)

   Income tax effect of above adjustments


(16)


(0.08)


(50)


(0.26)










Adjusted net income / earnings per share


$463


$2.41


$1,713


$8.72










Average AerCap Holdings N.V. shareholders' equity




$16,884




$16,828










Return on equity




9 %




11 %










Adjusted return on equity




11 %




14 %










(*) Includes $31 million adjustment to basic lease rents, $44 million adjustment to maintenance revenues and $32 million adjustment to leasing expenses for the three months ended September 30, 2024 and $97 million adjustment to basic lease rents, $178 million adjustment to maintenance revenues and $87 million adjustment to leasing expenses for the nine months ended September 30, 2024

 

Adjusted earnings per share guidance for full year 2024 is calculated as projected net income excluding the after-tax impact of the amortization of maintenance rights and lease premium assets recognized under purchase accounting and net recoveries related to the Ukraine Conflict, divided by the weighted average of our projected ordinary shares outstanding.



Projected FY 2024
Net income / Earnings
per Share



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

Net income


$1.7

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


0.5

Net recoveries related to Ukraine Conflict


0.0

Income tax effect of above adjustments


(0.1)

Adjusted net income


$2.1

Adjusted earnings per share


$10.70

 

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.



September 30, 2024


December 31, 2023



(U.S. Dollars in millions,
except debt/equity ratio)








Debt


$48,353


$46,484








Adjusted for:






   Unrestricted cash and cash equivalents


(3,755)


(1,627)


   50% equity credit for long-term subordinated debt (*)


(1,125)


(1,125)


Adjusted debt


$43,473


$43,732














Equity


$16,752


$16,589








Adjusted for:






   50% equity credit for long-term subordinated debt (*)


1,125


1,125


Adjusted equity


$17,877


$17,714








Adjusted debt/equity ratio


2.4 to 1


2.5 to 1



(*) 50% equity credit for long-term subordinated debt is pro forma for the redemption of $750 million of subordinated debt in October 2024.


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 derivatives. 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 derivatives, debt issuance costs, upfront fees and other impacts, divided by average debt balance.



Three Months Ended September 30,



2024


2023


(U.S. Dollars in millions)






Interest expense


$516


$447






Adjusted for:





   Mark-to-market on interest rate derivatives


(22)


(7)

   Debt issuance costs, upfront fees and other impacts


(29)


(35)

Interest expense, excluding mark-to-market on interest rate derivatives, debt issuance

costs, upfront fees and other impacts


$466


$405






Average debt balance


$46,937


$46,895






Average cost of debt


4.0 %


3.5 %






 

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.

Aviation assets

Aviation assets include aircraft, engines and helicopters.

Conference Call

In connection with its report of third quarter 2024 results, management will host a conference call with members of the investment community today, Wednesday, October 30, 2024, 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) + 1 646 828 8193 or (International) +353 1 246 5638 and referencing code 7036670 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, 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 but not limited to 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 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; the impact of current hostilities in the Middle East, or any escalation thereof, on the aviation industry or our business; 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; and disruptions and security breaches affecting our information systems or the information systems of our third-party providers.

 

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 and 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, 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.









AerCap Holdings N.V.







Unaudited Consolidated Balance Sheets







(U.S. Dollars in thousands, except share data)
















September 30, 2024


December 31, 2023










Assets







Cash and cash equivalents


$3,754,539


$1,627,181



Restricted cash


199,974


198,285



Trade receivables


64,723


73,667



Flight equipment held for operating leases, net


57,935,609


57,091,166



Investment in finance leases, net


1,250,944


1,254,451



Flight equipment held for sale


520,866


296,696



Prepayments on flight equipment


3,723,784


3,576,187



Maintenance rights and lease premium, net


2,281,831


2,729,962



Other intangibles, net


145,177


163,167



Deferred tax assets


279,853


275,756



Associated companies


1,084,855


971,517



Other assets


2,582,735


3,016,524



Total Assets


$73,824,890


$71,274,559

















Liabilities and Equity







Accounts payable, accrued expenses and other liabilities


$1,817,091


$1,793,058



Accrued maintenance liability


3,145,360


2,863,730



Lessee deposit liability


1,050,352


1,018,702



Debt


48,352,710


46,483,903



Deferred tax liabilities


2,706,901


2,526,120



Total Liabilities


57,072,414


54,685,513










Ordinary share capital €0.01 par value, 450,000,000 ordinary shares authorized as of September 30, 2024 and







 December 31, 2023; 204,543,739 and 215,543,739 ordinary shares issued and 189,731,024 and 202,493,168







 ordinary shares outstanding (including 4,948,175 and 4,561,249 shares of unvested restricted stock) as of







September 30, 2024 and December 31, 2023, respectively


2,558


2,676



Additional paid-in capital


5,802,351


6,594,556



Treasury shares, at cost (14,812,715 and 13,050,571 ordinary shares as of September 30, 2024 and







December 31, 2023, respectively)


(1,139,955)


(819,305)



Accumulated other comprehensive (loss) income


(42,051)


8,304



Accumulated retained earnings


12,129,365


10,802,599



Total AerCap Holdings N.V. shareholders' equity


16,752,268


16,588,830



Non-controlling interest


208


216



Total Equity


16,752,476


16,589,046










Total Liabilities and Equity


$73,824,890


$71,274,559









 












AerCap Holdings N.V.










Unaudited Consolidated Income Statements










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





















Three Months Ended September 30,


Nine months ended September 30,




2024


2023


2024


2023













Revenues and other income










Lease revenue:










Basic lease rents

$1,605,340


$1,574,649


$4,758,497


$4,672,680



Maintenance rents and other receipts

161,376


126,229


520,872


469,385



Total lease revenue

1,766,716


1,700,878


5,279,369


5,142,065



Net gain on sale of assets

102,135


129,908


391,174


395,357



Other income

79,278


60,881


253,819


144,348



Total Revenues and other income

1,948,129


1,891,667


5,924,362


5,681,770













Expenses










Depreciation and amortization

652,994


623,012


1,922,891


1,849,133



Net recoveries related to Ukraine Conflict

(3,934)


(645,807)


(26,683)


(673,879)



Asset impairment

2,446


107


32,802


36,540



Interest expense

516,265


446,977


1,486,062


1,310,575



Loss on debt extinguishment

462


246


7,482


4,097



Leasing expenses

274,833


165,986


596,238


621,233



Selling, general and administrative expenses

121,307


111,908


365,932


342,249



Total Expenses

1,564,373


702,429


4,384,724


3,489,948













Gain (loss) on investments at fair value

8,252


(10,577)


3,568


(6,591)













Income before income taxes and income of investments










accounted for under the equity method

392,008


1,178,661


1,543,206


2,185,231













Income tax expense

(60,742)


(110,677)


(231,197)


(252,018)



Equity in net earnings of investments accounted for under

the equity method

43,763


41,019


115,397


107,937













Net income

$375,029


$1,109,003


$1,427,406


$2,041,150













Net loss (income) attributable to non-controlling interest

5


(3,749)


8


(10,897)













Net income attributable to AerCap Holdings N.V.

$375,034


$1,105,254


$1,427,414


$2,030,253













Basic earnings per share

$2.00


$4.93


$7.44


$8.77



Diluted earnings per share

$1.95


$4.86


$7.27


$8.65













Weighted average shares outstanding - basic

187,510,161


224,239,197


191,917,111


231,586,646



Weighted average shares outstanding - diluted

191,886,520


227,379,759


196,309,483


234,818,115












 









AerCap Holdings N.V.







Unaudited Consolidated Statements of Cash Flows







(U.S. Dollars in thousands)
















Nine months ended September 30,





2024


2023










Net income


$1,427,406


$2,041,150



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







Depreciation and amortization


1,922,891


1,849,133



Net recoveries related to Ukraine Conflict


(26,683)


(660,878)



Asset impairment


32,802


36,540



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


171,287


191,512



Maintenance rights write-off


260,107


286,581



Maintenance liability release to income


(144,115)


(164,193)



Net gain on sale of assets


(391,174)


(395,357)



Deferred tax expense


184,588


258,842



Share-based compensation


81,723


70,079



Collections of finance leases


313,570


309,453



(Gain) loss on investments at fair value


(3,568)


6,591



Loss on debt extinguishment


7,482


4,097



Other


140,207


(35,449)



Changes in operating assets and liabilities:







   Trade receivables


9,232


42,148



   Other assets


189,281


(134,419)



   Accounts payable, accrued expenses and other liabilities


(22,729)


156,009



Net cash provided by operating activities


4,152,307


3,861,839










Purchase of flight equipment


(3,628,330)


(3,273,890)



Proceeds from sale or disposal of assets


1,857,878


1,556,713



Prepayments on flight equipment


(1,360,208)


(1,378,339)



Cash proceeds from insurance claim settlements


3,933


645,807



Net proceeds from (issuances of) loans receivable


73,236


(81,545)



Other


(11,518)


(23,122)



Net cash used in investing activities


(3,065,009)


(2,554,376)










Issuance of debt


6,441,379


5,009,330



Repayment of debt


(4,533,668)


(4,016,056)



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


(97,198)


(74,336)



Maintenance payments received


695,568


600,664



Maintenance payments returned


(212,668)


(150,224)



Security deposits received


214,443


300,765



Security deposits returned


(157,342)


(150,940)



Dividend paid to non-controlling interest holders



(9,973)



Repurchase of shares and tax withholdings on share-based compensation


(1,220,450)


(1,966,392)



Dividends paid on ordinary shares


(89,806)




Net cash provided by (used in) financing activities


1,040,258


(457,162)










Net increase in cash, cash equivalents and restricted cash


2,127,556


850,301



Effect of exchange rate changes


1,491


(407)



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


$3,954,513


$2,606,664









 

AerCap Holdings N.V. (PRNewsfoto/AerCap Holdings N.V.)

 

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SOURCE AerCap Holdings N.V.