Company Overview - AerCap Holdings N.V. is a global leader in aviation leasing, serving approximately 300 customers worldwide with comprehensive fleet solutions [2] - The company is listed on the New York Stock Exchange under the ticker AER and is headquartered in Dublin, with offices in various global locations including Miami, Singapore, and Shanghai [2] Financial Reporting - AerCap has filed its annual report on Form 20-F, which includes audited financial statements for the fiscal year ended December 31, 2023, with the U.S. Securities and Exchange Commission [1] - The Form 20-F can be accessed on AerCap's website and the SEC's website, and interested parties can request a complimentary paper copy [1]

Financial Performance - AerCap achieved a record GAAP Net Income of $3.1 billion in 2023 and an Adjusted Net Income of $2.4 billion[6] - The company returned $2.6 billion to shareholders in 2023 and announced a new $500 million share repurchase authorization[6] - AerCap's book value per share has grown by a CAGR of 20% since March 2022[14] - The company projects an adjusted EPS of $7.50 - $8.50 for FY 2024, not including any gains on sale[6, 30] Market Dynamics - Demand continues to outstrip supply across aircraft, engines, and helicopters[6] - 2023 commercial aircraft deliveries remain behind even 2015 levels[8] - Strong demand for mid-life and older aircraft supports secondary sales at attractive margins[11] Capital Management - AerCap recovered $1.3 billion in insurance settlement proceeds to date[6] - The company has a strong liquidity position, with next 12 months' sources-to-uses coverage of 1.4x and ~$19 billion in sources of liquidity[23] - Approximately 10.3 million shares were repurchased in 4Q 2023 at an average price of $62.86, for a total of ~$649 million[24] Portfolio and Assets - New technology aircraft comprise approximately 70% of the aircraft fleet[40] - The company reported a net gain on sale of assets of $94 million in 4Q 2023, representing an 18% unlevered gain-on-sale margin[21]

Core Insights - AerCap Holdings N.V. reported record financial results for the full year 2023, achieving a net income of $3.1 billion or $13.78 per share, and $1.1 billion or $5.37 per share for the fourth quarter of 2023 [1][19] - The company returned $2.6 billion to shareholders in 2023 and announced a new $500 million share repurchase authorization [1][15] - The CEO highlighted strong operating conditions and positive momentum in the aviation leasing market, with over $600 million in insurance settlements collected in the fourth quarter [2][3] Financial Performance - The adjusted net income for the full year 2023 was $2.4 billion or $10.73 per share, with $641 million or $3.11 per share for the fourth quarter [1][19] - Return on equity was 27% for the fourth quarter, with an adjusted return on equity of 16% [3] - Book value per share increased approximately 25% to $83.81 as of December 31, 2023, compared to the previous year [3][12] Revenue and Income Breakdown - Total lease revenue for the fourth quarter was $1.718 billion, a 5% increase from the previous year, with basic lease rents contributing $1.576 billion [4][32] - The net gain on sale of assets for the fourth quarter was $94 million, down 22% from the previous year, while total revenues and other income reached $1.899 billion [4][32] - The company recognized recoveries related to the Ukraine conflict amounting to $614 million in the fourth quarter [7][30] Expenses and Cash Flow - Selling, general, and administrative expenses for the fourth quarter were $122 million, a 32% increase from the previous year, driven by higher compensation and operational costs [8] - Cash flow from operating activities for the fourth quarter was $1.4 billion, totaling $5.3 billion for the full year [3][30] - Interest expense for the fourth quarter was $496 million, with an average cost of debt of 3.7% [7][22] Shareholder Returns and Equity - The company repurchased 44.3 million shares at an average price of $59.09 during 2023 [3][15] - The adjusted debt/equity ratio as of December 31, 2023, was 2.47 to 1, reflecting the company's capital structure [3][20] - Total shareholders' equity increased to $16.589 billion as of December 31, 2023, compared to $16.118 billion the previous year [13][12]

Debt and Financial Exposure - As of December 31, 2023, the principal amount of outstanding floating rate debt was $10.3 billion, representing 22% of the total indebtedness[35] - Negative changes in credit ratings could limit financing options and increase borrowing costs, impacting financial results[39] - Interest rate increases may lead to higher borrowing costs and negatively impact net income, especially if not hedged[36] Lease Revenue and Market Dependence - During 2023, 98.5% of basic lease rents from flight equipment under operating leases were from fixed lease rates, while only 1.5% were from floating rate leases[36] - Lease revenue from emerging market countries accounted for 53% in 2023, highlighting the company's reliance on these markets[46] - The financial condition of lessees is critical, as their ability to meet lease obligations is affected by factors such as fuel prices, economic conditions, and operational disruptions[72] Geopolitical and Economic Risks - The company is exposed to geopolitical risks that may disrupt operations and affect revenue, particularly due to the ongoing Ukraine Conflict[42] - High inflation rates during 2022 and 2023 have increased operational costs and may diminish the value of fixed-rate leases[38] - A deterioration in lessees' financial conditions could lead to delays or failures in rental payments, impacting the company's revenue[74] Regulatory and Compliance Challenges - Compliance with international regulations and sanctions is critical, as violations could result in severe penalties and adversely affect financial performance[49] - The company may incur significant fines of up to 4% of its annual global revenue for non-compliance with the GDPR[51] - The company faces potential substantial costs related to environmental regulations, including capital expenditures and fines for non-compliance[52] Environmental and Sustainability Factors - The aviation industry is under scrutiny regarding environmental impacts, which may reduce demand for the company's aircraft and affect financial performance[54] - Future emissions limitations and sustainability regulations could adversely affect the company's operations and financial condition[55] - The company may face increased costs and reduced demand due to the transition to lower-carbon technologies and sustainable aviation fuels[54] Aircraft and Market Dynamics - Demand for flight equipment is influenced by long-term trends in passenger air travel and air cargo demand, which are affected by economic growth, regulation, and fuel prices[64] - New aircraft types introduced by manufacturers like Boeing and Airbus may decrease the desirability and residual value of older aircraft, impacting lease rates[66] - The concentration of aircraft manufacturing among a few companies can lead to delivery delays, affecting the company's ability to meet customer obligations[71] Insurance and Risk Management - The company has experienced a significant increase in insurance costs and a reduction in coverage due to the Ukraine Conflict, affecting financial stability[57] - As of December 31, 2023, the company's captive insurance company, Aistrigh, provides approximately 25% of its hull war insurance[57] - The company has submitted insurance claims related to losses from the Ukraine Conflict, with uncertain recovery timelines[59] Taxation and Financial Implications - The introduction of the EU Minimum Tax Directive mandates a minimum effective tax rate of 15% for the group, effective in 2024[107] - Changes in tax laws or practices could lead to additional income or other taxes, adversely affecting financial results[106] - The U.S. Corporate Alternative Minimum Tax (CAMT) imposes a 15% tax on adjusted financial statement income for certain corporations, with potential implications for the company's effective tax rate[111] Operational Challenges and Cybersecurity - Financial instability or manufacturing delays from aircraft manufacturers could negatively impact cash flow and operational results, particularly if delivery delays exceed one year[89] - Recent quality control issues with Boeing aircraft, including the 737 MAX 9, have led to delivery delays that could materially affect revenues and operating cash flows[90] - The company has experienced a cybersecurity incident in January 2024, but there was no material disruption to operations, and financial loss has not been incurred[98]

Core Viewpoint - AerCap Holdings N.V. has signed lease agreements with Thai Airways for a total of 17 aircraft, which includes seven widebody aircraft and ten Airbus A321NEO aircraft, as part of Thai Airways' fleet modernization strategy [1][2]. Group 1: Lease Agreements - The lease agreements include four Airbus A350-900 aircraft and three Boeing 787-9 aircraft, with deliveries of the A350s scheduled for the first and second quarters of 2024 [1]. - Deliveries of the Boeing 787s are set to begin in the second quarter of 2024 and continue through the fourth quarter of 2025, while the A321NEOs will be delivered from the third quarter of 2025 to the second quarter of 2026 [1]. Group 2: Company Statements - AerCap's Chief Commercial Officer expressed satisfaction with the transaction, highlighting the long-standing partnership with Thai Airways that began in the mid-1990s [2]. - The CEO of Thai Airways emphasized that the new generation aircraft will enhance operational capacity and passenger comfort, marking a significant milestone in their partnership with AerCap [2]. Group 3: Company Overview - AerCap is recognized as a global leader in aviation leasing, serving approximately 300 customers worldwide and maintaining a strong order book [3]. - The company is listed on the New York Stock Exchange and has a global presence with offices in various major cities [3].

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are underva ...

DUBLIN, Jan. 3, 2024 /PRNewswire/ -- AerCap Holdings N.V. ("AerCap") (NYSE: AER) has announced its major business transactions during the full year and fourth quarter 2023: Full Year 2023 Transactions Signed 592 lease agreements, completed 173 purchases and 188 sale transactions. Received cash insurance settlement proceeds of approximately $1.3 billion. Repurchased approximately 44 million shares, at an average price of $59.09 per share, for a total of approximately $2.6 billion. Signed financing transacti ...

Core Viewpoint - Investors are advised to avoid airlines and consider AerCap (NYSE:AER) for exposure to the airline industry due to its superior performance and business model [2][5]. Business Model and Performance - AerCap's business model is akin to structured finance, collateralized by aircraft and engines, allowing it to manage risks effectively compared to airlines, which face various operational risks [6]. - Despite challenges such as COVID-19 and geopolitical issues, AerCap has shown resilience and has made strategic acquisitions, such as GECAS, at discounts to book value [6][10]. Valuation Insights - AerCap typically trades at a slight discount to its growing book value, with historical trading around 0.9x-0.95x book value [7]. - The current book value is believed to be materially understated, with estimates suggesting a "true" book value of approximately $123 compared to the reported $78 [10]. Capital Allocation Strategy - AerCap does not pay dividends but focuses on share buybacks and opportunistic acquisitions, which have historically yielded significant returns on book equity [11]. - Recent asset sales have been at a premium of around 25% above book value, enhancing shareholder value through strategic capital allocation [11]. Future Outlook - The consensus earnings estimate for Q4 is significantly lower than expected, with projections of $3 EPS compared to the consensus of $2.44 [13]. - AerCap is on track to buy back approximately 20% of outstanding shares by the end of 2023 and 15% in 2024, indicating strong capital management [13]. - Favorable industry dynamics are anticipated to persist for several years, supporting growth in book value and share price [13].

AerCap Holdings N.V. (NYSE:AER) Q3 2023 Results Conference Call October 27, 2023 8:30 AM ET Company Participants Joseph McGinley - Head of Investor Relations Aengus Kelly - Chief Executive Officer Pete Juhas - Chief Financial Officer Conference Call Participants Jamie Baker - JP Morgan Stephen Trent - Citigroup Helane Becker - TD Cowen Catherine O'Brien - Goldman Sachs Hillary Cacanando - Deutsche Bank Vincent Caintic - Stephens Jordan Lyonnais - Bank of America Operator Good day, and welcome to the AerCap ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's unaudited financial statements and management's discussion for the reporting period [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents AerCap's unaudited condensed consolidated financial statements and detailed notes for Q3 and 9M 2023 and 2022 [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20September%2030%2C%202023%20and%20December%2031%2C%202022) Details AerCap's financial position, including assets, liabilities, and equity, as of September 30, 2023, and December 31, 2022 Unaudited Condensed Consolidated Balance Sheets | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :--------------------------------- | :------------------------------ | :------------------------------ | | Total Assets | 71,593,664 | 69,726,918 | | Total Liabilities | 55,221,543 | 53,531,868 | | Total Equity | 16,372,121 | 16,195,050 | | Cash and cash equivalents | 2,415,297 | 1,597,147 | | Flight equipment held for operating leases, net | 56,237,266 | 55,220,809 | | Debt | 47,492,809 | 46,532,960 | [Unaudited Condensed Consolidated Income Statements](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Income%20Statements%20for%20the%20Three%20and%20Nine%20Months%20ended%20September%2030%2C%202023%20and%202022) Presents AerCap's revenues, expenses, and net income for the three and nine months ended September 30, 2023 and 2022 Unaudited Condensed Consolidated Income Statements | Metric | 3 Months Ended Sep 30, 2023 (USD in thousands) | 3 Months Ended Sep 30, 2022 (USD in thousands) | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total Revenues and other income | 1,891,667 | 1,724,025 | 5,681,770 | 5,184,753 | | Net (recoveries) charges related to Ukraine Conflict | (645,807) | (16,137) | (673,879) | 2,712,581 | | Net income (loss) attributable to AerCap Holdings N.V. | 1,105,254 | 439,956 | 2,030,253 | (1,221,048) | | Basic earnings (loss) per share | 4.93 | 1.83 | 8.77 | (5.08) | | Diluted earnings (loss) per share | 4.86 | 1.82 | 8.65 | (5.08) | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20Three%20and%20Nine%20Months%20ended%20September%2030%2C%202023%20and%202022) Reports AerCap's total comprehensive income for the three and nine months ended September 30, 2023 and 2022 Unaudited Condensed Consolidated Statements of Comprehensive Income | Metric | 3 Months Ended Sep 30, 2023 (USD in thousands) | 3 Months Ended Sep 30, 2022 (USD in thousands) | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :-------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total comprehensive income (loss) attributable to AerCap Holdings N.V. | 1,132,644 | 512,409 | 2,082,040 | (1,066,334) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Nine%20Months%20ended%20September%2030%2C%202023%20and%202022) Outlines AerCap's cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2023 and 2022 Unaudited Condensed Consolidated Statements of Cash Flows | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by operating activities | 3,861,839 | 3,620,390 | | Net cash used in investing activities | (2,554,376) | (1,706,874) | | Net cash used in financing activities | (457,162) | (2,560,487) | | Cash, cash equivalents and restricted cash at end of period | 2,606,664 | 1,256,716 | - During the nine months ended September 30, 2023, flight equipment held for operating leases in the amount of **$184 million** was reclassified to investment in finance leases, net/inventory[26](index=26&type=chunk) - An additional **$1.1 billion** was reclassified to flight equipment held for sale, net[27](index=27&type=chunk) - Accrued maintenance liability of **$74 million** was settled with buyers upon sale or disposal of assets[27](index=27&type=chunk) - Other assets and accounts payable, accrued expenses and other liabilities increased by **$144 million** and **$124 million**, respectively, due to the Azul Restructuring[27](index=27&type=chunk) [Unaudited Condensed Consolidated Statements of Equity](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20and%20Nine%20Months%20ended%20September%2030%2C%202023%20and%202022) Details changes in AerCap's shareholders' equity, including share repurchases and cancellations, for the reporting periods Unaudited Condensed Consolidated Statements of Equity | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | Sep 30, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Total AerCap Holdings N.V. shareholders' equity | 16,293,654 | 16,117,507 | 15,567,684 | | Repurchase of shares (9 Months Ended Sep 30, 2023) | (1,969,154) | N/A | N/A | | Share cancellation (9 Months Ended Sep 30, 2023) | (148) (Ordinary share capital) | N/A | N/A | - During the nine months ended September 30, 2023, the company repurchased **$1.97 billion** in shares and cancelled **14.8 million** ordinary shares[34](index=34&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of AerCap's accounting policies, financial instruments, and significant events impacting the financial statements [1. General](index=15&type=section&id=1.%20General) Provides an overview of AerCap Holdings N.V.'s business as a global leader in aviation leasing - AerCap Holdings N.V. is a global leader in aviation leasing, with a portfolio of 2,113 aircraft owned, managed or on order, approximately 1,000 engines, over 300 owned helicopters, and total assets of **$72 billion** as of September 30, 2023[36](index=36&type=chunk) [2. Basis of presentation](index=15&type=section&id=2.%20Basis%20of%20presentation) Outlines the accounting principles and currency used for the condensed consolidated financial statements - The Condensed Consolidated Financial Statements are presented in accordance with U.S. GAAP and are stated in U.S. dollars, which is the company's functional currency[38](index=38&type=chunk)[41](index=41&type=chunk) - The company manages its business and reports its results of operations on the basis of one business segment: leasing, financing, sales and management of commercial flight equipment[46](index=46&type=chunk) [3. Summary of significant accounting policies](index=16&type=section&id=3.%20Summary%20of%20significant%20accounting%20policies) Highlights key accounting policies, including the adoption of Topic 848 and the transition to SOFR for financial instruments - The company adopted Topic 848 (Reference Rate Reform) in the fourth quarter of 2022, which did not have a material impact on its financial statements[47](index=47&type=chunk) - The transition of LIBOR-based instruments to Secured Overnight Financing Rate (SOFR) was completed in October 2023[48](index=48&type=chunk)[50](index=50&type=chunk) - As of September 30, 2023, the company had **$8.6 billion** floating rate debt outstanding linked to a SOFR index and approximately **$6.0 billion** notional amount of floating rate derivatives outstanding linked to a SOFR index[50](index=50&type=chunk) [4. Cash, cash equivalents and restricted cash](index=17&type=section&id=4.%20Cash%2C%20cash%20equivalents%20and%20restricted%20cash) Details the composition and changes in AerCap's cash, cash equivalents, and restricted cash balances Cash, cash equivalents and restricted cash | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | Sep 30, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Cash and cash equivalents | 2,415,297 | 1,597,147 | 1,098,542 | | Restricted cash | 191,367 | 159,623 | 158,174 | | Total cash, cash equivalents and restricted cash | 2,606,664 | 1,756,770 | 1,256,716 | [5. Flight equipment held for operating leases, net](index=17&type=section&id=5.%20Flight%20equipment%20held%20for%20operating%20leases%2C%20net) Provides a breakdown of changes in the net book value of flight equipment held for operating leases Flight equipment held for operating leases, net | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net book value at beginning of period | 55,220,809 | 57,825,056 | | Additions | 4,555,169 | 2,789,138 | | Depreciation | (1,823,425) | (1,773,155) | | Disposals and transfers to held for sale | (1,505,220) | (833,785) | | Transfers from/to investment in finance leases, net/inventory | (183,835) | (192,582) | | Write-offs and impairments | (26,232) | (3,203,604) | | Net book value at end of period | 56,237,266 | 54,611,068 | [6. Investment in finance leases, net](index=17&type=section&id=6.%20Investment%20in%20finance%20leases%2C%20net) Reports the net investment in finance leases and related interest income for the reporting periods Investment in finance leases, net | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Investment in finance leases, net | 1,337,153 | 1,356,072 | Interest income from investment in finance leases, net | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Interest income from investment in finance leases, net | 76,700 | 105,600 | [7. Flight equipment held for sale](index=18&type=section&id=7.%20Flight%20equipment%20held%20for%20sale) Details the net book value of flight equipment designated as held for sale at period-end Flight equipment held for sale | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Flight equipment held for sale (net book value) | 420,599 | 292,808 | [8. Intangibles](index=18&type=section&id=8.%20Intangibles) Presents the net book value and amortization expense for maintenance rights, lease premiums, and other intangibles Intangibles | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Maintenance rights and lease premium, net | 2,852,540 | 3,364,453 | | Other intangibles, net | 168,488 | 185,210 | Amortization expense | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Amortization expense for lease premium assets | 134,400 | 172,900 | | Amortization expense for customer relationships | 15,900 | 15,900 | [9. Associated companies](index=19&type=section&id=9.%20Associated%20companies) Lists AerCap's investments in associated companies, including Shannon Engine Support and AerDragon Aviation Partners Associated Companies | Associated Company | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Shannon Engine Support | 741,134 | 634,701 | | AerDragon Aviation Partners Limited | 89,442 | 88,240 | | Other | 81,192 | 88,278 | | Total Associated Companies | 911,768 | 811,219 | [10. Other assets](index=20&type=section&id=10.%20Other%20assets) Details the composition of other assets, including notes and loans receivable, and impacts of the Azul Restructuring Other assets | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Total Other assets | 2,887,050 | 2,590,439 | | Notes receivable, net | 654,863 | 486,223 | | Loans receivable, net | 435,631 | 351,357 | - The company participated in the Azul S.A. restructuring on September 29, 2023, exchanging **$156 million** net carrying value of existing notes for new notes and recognizing deferred revenue due to lease modifications[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [11. Derivative financial instruments](index=21&type=section&id=11.%20Derivative%20financial%20instruments) Explains AerCap's use of interest rate derivatives for hedging and reports their fair values and net gains - The company uses interest rate derivatives, such as interest rate swaps and caps, to hedge current and future interest rate payments on variable rate debt[71](index=71&type=chunk) - The transition of derivative instruments from LIBOR to Term SOFR was completed in October 2023[73](index=73&type=chunk) Derivative financial instruments | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Total derivative assets | 244,463 | 211,993 | | Total derivative liabilities | 193 | — | Net gain on derivatives | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net gain on derivatives, net of tax | 50,008 | 154,714 | - Approximately **$100 million** is expected to be reclassified from accumulated other comprehensive income (AOCI) as a reduction in interest expense over the next 12 months[78](index=78&type=chunk) [12. Accounts payable, accrued expenses and other liabilities](index=23&type=section&id=12.%20Accounts%20payable%2C%20accrued%20expenses%20and%20other%20liabilities) Details the company's accounts payable, accrued expenses, and other liabilities, including deferred revenue Accounts payable, accrued expenses and other liabilities | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Total Accounts payable, accrued expenses and other liabilities | 1,618,240 | 1,494,953 | | Deferred revenue | 720,350 | 547,662 | - Deferred revenue increased by **$124 million** in September 2023 due to the Azul Restructuring[80](index=80&type=chunk) [13. Accrued maintenance liability](index=23&type=section&id=13.%20Accrued%20maintenance%20liability) Reports the accrued maintenance liability and maintenance payments received for the reporting periods Accrued maintenance liability | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Accrued maintenance liability at end of period | 2,720,624 | 2,405,995 | | Maintenance payments received | 600,664 | 574,856 | [14. Debt](index=24&type=section&id=14.%20Debt) Summarizes AerCap's outstanding indebtedness, undrawn credit lines, and significant debt activities during the period - As of September 30, 2023, the principal amount of outstanding indebtedness totaled **$47.8 billion**, and undrawn lines of credit were **$11.8 billion**[83](index=83&type=chunk) Debt (excluding issuance costs) | Debt Type | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Unsecured debt outstanding | 35,980,000 | 34,710,500 | | Secured debt outstanding | 9,537,947 | 9,814,176 | | Subordinated debt outstanding | 2,250,000 | 2,277,007 | | Total Debt (excluding issuance costs) | 47,767,947 | 46,801,683 | - Key debt activities in 2023 included extending the Citi Revolver I maturity to February 2027, amending Citi Revolvers to replace LIBOR with Term SOFR, entering into a **$900 million** secured facility, redeeming **$600 million** of 4.125% Senior Notes, co-issuing **$1.0 billion** of 5.75% senior unsecured notes, redeeming **$1.0 billion** of 4.50% Senior Notes, and co-issuing **$900 million** of 6.10% senior unsecured notes and **$850 million** of 6.15% senior unsecured notes[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) [15. Income taxes](index=25&type=section&id=15.%20Income%20taxes) Presents effective tax rates and the impact of Ukraine Conflict-related recoveries and charges on income tax expense Effective tax rate | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Effective tax rate | 9.4% | 13.9% | 11.5% | 11.2% | - During the nine months ended September 30, 2023, the company recorded **$84 million** of income tax expense due to Ukraine Conflict recoveries and **$44 million** of income tax benefit from a deferred tax liability release[94](index=94&type=chunk) - In the prior year, **$339 million** of income tax benefit was recorded due to Ukraine Conflict charges[94](index=94&type=chunk) - Excluding these items, the effective tax rate for the full year 2023 is expected to be **14.0%**[95](index=95&type=chunk) [16. Equity](index=26&type=section&id=16.%20Equity) Details share repurchase programs, shares repurchased from GE, and ordinary shares outstanding Share Repurchase Programs | Program Approval Date | Authorized Amount (USD in thousands) | Program Completion Date | | :-------------------- | :--------------------------------- | :---------------------- | | March 2023 | 500,000 | March 13, 2023 | | April 2023 | 500,000 | September 14, 2023 | | July 2023 | 500,000 | September 14, 2023 | | September 2023 | 650,000 | Not yet completed | - During the nine months ended September 30, 2023, the company repurchased **34.0 million** ordinary shares at an average price of **$57.94** per share, including **28.4 million** shares from General Electric (GE)[98](index=98&type=chunk) - As of September 30, 2023, GE held approximately **14.5%** of the company's issued and outstanding ordinary shares[99](index=99&type=chunk) - The company cancelled **14.8 million** ordinary shares during the three months ended September 30, 2023[99](index=99&type=chunk) [17. Other income](index=26&type=section&id=17.%20Other%20income) Reports total other income and explains the decrease primarily due to lower proceeds from unsecured claims Other income | Metric | 3 Months Ended Sep 30, 2023 (USD in thousands) | 3 Months Ended Sep 30, 2022 (USD in thousands) | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total Other income | 60,881 | 62,181 | 144,348 | 180,559 | | Proceeds from unsecured claims | — | 29,385 | 2,913 | 68,737 | - The decrease in other income for the nine months ended September 30, 2023, was primarily due to lower proceeds from unsecured claims, which were **$69 million** in 2022, mainly related to LATAM and Aeromexico[101](index=101&type=chunk) [18. Net charges related to Ukraine Conflict](index=27&type=section&id=18.%20Net%20charges%20related%20to%20Ukraine%20Conflict) Discusses the financial impact of the Ukraine Conflict, including insurance settlements and related recoveries or charges - In March 2022, the company terminated leasing of all aircraft and engines with Russian airlines due to sanctions related to the Ukraine Conflict, resulting in reduced revenues and operating cash flows[103](index=103&type=chunk) - In September 2023, the company received **$646 million** in cash insurance settlement proceeds from two Russian airlines and their Russian insurer for 17 aircraft and five spare engines lost in Russia[106](index=106&type=chunk) Net (recoveries) charges related to Ukraine Conflict | Metric | 3 Months Ended Sep 30, 2023 (USD in millions) | 3 Months Ended Sep 30, 2022 (USD in millions) | 9 Months Ended Sep 30, 2023 (USD in millions) | 9 Months Ended Sep 30, 2022 (USD in millions) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net (recoveries) charges related to Ukraine Conflict | (646) | (16) | (674) | 2,713 | [19. Asset impairment](index=28&type=section&id=19.%20Asset%20impairment) Details asset impairment charges, including those related to sales transactions, lease terminations, and the Ukraine Conflict Asset impairment charges | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | Asset impairment charges | 36,540 | 43,477 | - Impairment charges for the nine months ended September 30, 2023, were primarily related to sales transactions or lease terminations[110](index=110&type=chunk) - The first three months of 2022 included **$3.2 billion** in write-offs and impairments related to the Ukraine Conflict[112](index=112&type=chunk) [20. Selling, general and administrative expenses](index=28&type=section&id=20.%20Selling%2C%20general%20and%20administrative%20expenses) Reports total selling, general and administrative expenses, highlighting increases due to personnel and travel costs Selling, general and administrative expenses | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Total Selling, general and administrative expenses | 342,249 | 307,666 | | Personnel expenses | 154,370 | 136,429 | | Travel expenses | 30,431 | 17,077 | - The increase in selling, general and administrative expenses was primarily due to higher personnel and travel-related expenses[203](index=203&type=chunk) [21. Allowance for credit losses](index=29&type=section&id=21.%20Allowance%20for%20credit%20losses) Details the allowance for credit losses, including current period provisions and write-offs against the allowance Allowance for credit losses | Metric | Sep 30, 2023 (USD in thousands) | Sep 30, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Allowance for credit losses at end of period | 34,899 | 108,398 | | Current period (decrease) increase in provision for expected credit losses | 5,034 | 80,229 | | Write-offs charged against the allowance | (107,996) | (89,378) | [22. Earnings per share](index=30&type=section&id=22.%20Earnings%20per%20share) Presents basic and diluted earnings per share and the number of ordinary shares outstanding Earnings per share | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Basic EPS | 8.77 | (5.08) |\ | Diluted EPS | 8.65 | (5.08) | Ordinary shares outstanding | Metric | Sep 30, 2023 (Number of ordinary shares) | Dec 31, 2022 (Number of ordinary shares) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Ordinary shares outstanding, excluding shares of unvested restricted stock | 208,146,653 | 241,093,673 | [23. Variable interest entities](index=31&type=section&id=23.%20Variable%20interest%20entities) Discusses AerCap's involvement with Variable Interest Entities (VIEs) and maximum exposure to loss in non-consolidated VIEs - Substantially all assets and liabilities presented in the Condensed Consolidated Balance Sheets are held in consolidated Variable Interest Entities (VIEs) for which AerCap is deemed the Primary Beneficiary[122](index=122&type=chunk)[123](index=123&type=chunk) Maximum exposure to loss in non-consolidated VIEs | Metric | Sep 30, 2023 (USD in thousands) | Dec 31, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Maximum exposure to loss in non-consolidated VIEs | 117,952 | 118,403 | [24. Related party transactions](index=33&type=section&id=24.%20Related%20party%20transactions) Details transactions with related parties, including share repurchases from GE and rental income from associated companies - During the nine months ended September 30, 2023, the company repurchased 28,401,892 ordinary shares from GE for **$1.6 billion**[135](index=135&type=chunk) - As of September 30, 2023, GE held approximately **14.5%** of the company's issued and outstanding ordinary shares[136](index=136&type=chunk) Related party transactions | Metric | 9 Months Ended Sep 30, 2023 (USD in millions) | 9 Months Ended Sep 30, 2022 (USD in millions) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Rental income from engines on lease to GE | 118 | 99 | | Purchases from GE | 193 | 114 | | Sales to GE | 29 | 19 | | Lease rental income from Shannon Engine Support (SES) | 93 | 53 | [25. Commitments and contingencies](index=34&type=section&id=25.%20Commitments%20and%20contingencies) Outlines purchase commitments for aircraft and engines, and ongoing legal proceedings related to the Ukraine Conflict and other litigations - As of September 30, 2023, the company had commitments to purchase **380** new aircraft through 2028, **11** engines through 2024, and **12** new helicopters through 2025[139](index=139&type=chunk) Prepayments on flight equipment | Metric | Sep 30, 2023 (USD in thousands) | Sep 30, 2022 (USD in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Prepayments on flight equipment at end of period | 3,883,402 | 4,715,608 | - The company is pursuing claims in the London Commercial Court under its contingent and possessed insurance policy (C&P Policy) for approximately **$3.5 billion** against AIG Europe S.A. and **$1.2 billion** against Lloyds Insurance Company S.A. for 113 aircraft and 23 spare engines lost in Russia[143](index=143&type=chunk) - The trial is scheduled for October 2024[143](index=143&type=chunk) - Parallel claims under Operator Reinsurance Policies cover 96 aircraft and nine spare engines for approximately **$2.9 billion**, with a jurisdictional hearing scheduled for February 2024[144](index=144&type=chunk) - Ongoing VASP Litigation in Brazil since 1992 regarding repossession of 13 aircraft and three engines[147](index=147&type=chunk) - The company believes it is not probable that VASP will ultimately recover damages[148](index=148&type=chunk) - Ongoing Transbrasil Litigation in Brazil since 2001 regarding promissory notes[150](index=150&type=chunk) - The company believes it has strong arguments against the remaining Indemnity Claim[152](index=152&type=chunk) [26. Fair value measurements](index=37&type=section&id=26.%20Fair%20value%20measurements) Explains the classification of fair value measurements and provides fair value data for debt and receivables - Fair value measurements are classified into Level 1 (quoted prices in active markets), Level 2 (observable market data), and Level 3 (unobservable inputs/management's assumptions)[154](index=154&type=chunk)[155](index=155&type=chunk) - Derivative assets and liabilities are classified as Level 2, while investments at fair value are primarily Level 1[157](index=157&type=chunk) - Fair value measurements of flight equipment and definite-lived intangible assets are classified as Level 3[160](index=160&type=chunk) Fair Value Measurements - Debt | Metric | Sep 30, 2023 Carrying Value (USD in thousands) | Sep 30, 2023 Fair Value (USD in thousands) | Sep 30, 2023 Fair Value Level 2 (USD in thousands) | | :-------------------- | :--------------------------------------------- | :------------------------------------------- | :----------------------------------------------- | | Debt | 47,767,947 | 44,141,259 | 44,141,259 | Fair Value Measurements - Receivables | Metric | Sep 30, 2023 Carrying Value (USD in thousands) | Sep 30, 2023 Fair Value (USD in thousands) | Sep 30, 2023 Fair Value Level 3 (USD in thousands) | | :-------------------- | :--------------------------------------------- | :------------------------------------------- | :----------------------------------------------- | | Loans receivable | 435,631 | 427,430 | 427,430 | | Notes receivable | 654,863 | 654,863 | 654,863 | [27. Subsequent events](index=40&type=section&id=27.%20Subsequent%20events) Reports on significant events occurring after the reporting period, including a new share repurchase program - In October 2023, the Board of Directors approved a share repurchase program authorizing up to **$500 million** of ordinary shares through March 31, 2024[170](index=170&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses AerCap's financial performance, condition, and results of operations for Q3 and 9M 2023, covering portfolio, liquidity, and key metrics [Flight equipment portfolio](index=42&type=section&id=Flight%20equipment%20portfolio) Provides an overview of AerCap's owned, on order, or managed aircraft, engines, and helicopters portfolio - As of September 30, 2023, the company's portfolio consisted of **3,451** aircraft, engines, and helicopters that were owned, on order, or managed[175](index=175&type=chunk) - During the nine months ended September 30, 2023, the company executed **686** aviation asset transactions[175](index=175&type=chunk) [Aircraft portfolio](index=42&type=section&id=Aircraft%20portfolio) Details the number of owned and managed aircraft, purchase commitments, and fleet utilization rates - As of September 30, 2023, the company owned **1,553** aircraft and managed **180** aircraft, with commitments to purchase **380** new aircraft scheduled for delivery through 2028[176](index=176&type=chunk) - The weighted average age of the owned aircraft fleet was **7.3 years**, and the owned aircraft utilization rate was **98%** for the three and nine months ended September 30, 2023[176](index=176&type=chunk) Aircraft Activity (9 Months Ended Sep 30, 2023) | Aircraft Activity (9 Months Ended Sep 30, 2023) | Number of Aircraft | | :---------------------------------------------- | :----------------- | | Number of owned aircraft at beginning of period | 1,572 | | Aircraft purchases | 59 | | Aircraft sold or designated for part-out | (78) | | Number of owned aircraft at end of period | 1,553 | [Critical accounting estimates](index=43&type=section&id=Critical%20accounting%20estimates) Confirms no significant changes to critical accounting estimates from the prior annual report - There have been no significant changes to the company's critical accounting estimates from those disclosed in its Annual Report on Form 20-F for the year ended December 31, 2022[180](index=180&type=chunk) [Comparative results of operations (Three Months Ended September 30)](index=44&type=section&id=Results%20of%20operations%20for%20the%20three%20months%20ended%20September%2030%2C%202023%20as%20compared%20to%20the%20three%20months%20ended%20September%2030%2C%202022) Compares AerCap's financial results for the three months ended September 30, 2023, against the same period in 2022 Comparative results of operations (Three Months Ended September 30) | Metric | 3 Months Ended Sep 30, 2023 (USD in thousands) | 3 Months Ended Sep 30, 2022 (USD in thousands) | Increase/(Decrease) (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------- | | Total Revenues and other income | 1,891,667 | 1,724,025 | 167,642 | | Basic lease rents | 1,574,649 | 1,473,084 | 101,565 | | Net gain on sale of assets | 129,908 | 69,218 | 60,690 | | Net recoveries related to Ukraine Conflict | (645,807) | (16,137) | (629,670) | | Interest expense | 446,977 | 390,809 | 56,168 | | Net income attributable to AerCap Holdings N.V. | 1,105,254 | 439,956 | 665,298 | - Basic lease rents increased by **$102 million (7%)**, primarily due to **$137 million** from asset acquisitions, partially offset by a **$50 million** decrease from asset sales[183](index=183&type=chunk)[184](index=184&type=chunk) - Net gain on sale of assets increased by **$61 million** due to higher volume and composition of asset sales (**45** assets sold for **$682 million** in Q3 2023 vs. **30** assets for **$373 million** in Q3 2022)[185](index=185&type=chunk) - Interest expense increased by **$56 million (14%)**, driven by a higher average cost of debt (**3.5%** in Q3 2023 vs. **3.2%** in Q3 2022) and mark-to-market movements on interest rate caps and swaps[189](index=189&type=chunk) [Comparative results of operations (Nine Months Ended September 30)](index=47&type=section&id=Results%20of%20operations%20for%20the%20nine%20months%20ended%20September%2030%2C%202023%20as%20compared%20to%20the%20nine%20months%20ended%20September%2030%2C%202022) Compares AerCap's financial results for the nine months ended September 30, 2023, against the same period in 2022 Comparative results of operations (Nine Months Ended September 30) | Metric | 9 Months Ended Sep 30, 2023 (USD in thousands) | 9 Months Ended Sep 30, 2022 (USD in thousands) | Increase/(Decrease) (USD in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------- | | Total Revenues and other income | 5,681,770 | 5,184,753 | 497,017 | | Basic lease rents | 4,672,680 | 4,488,256 | 184,424 | | Net gain on sale of assets | 395,357 | 107,703 | 287,654 | | Net (recoveries) charges related to Ukraine Conflict | (673,879) | 2,712,581 | (3,386,460) | | Interest expense | 1,310,575 | 1,171,588 | 138,987 | | Net income (loss) attributable to AerCap Holdings N.V. | 2,030,253 | (1,221,048) | 3,251,301 | - Basic lease rents increased by **$184 million (4%)**, driven by **$342 million** from asset acquisitions, partially offset by **$139 million** from asset sales and **$19 million** from Ukraine Conflict-related lease terminations and restructurings[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - Net gain on sale of assets increased by **$288 million** due to higher volume and composition of asset sales (**132** assets for **$2.1 billion** in 9M 2023 vs. **82** assets for **$1.2 billion** in 9M 2022)[197](index=197&type=chunk) - Net (recoveries) charges related to the Ukraine Conflict shifted from a **$2.7 billion** charge in 9M 2022 to a **$674 million** recovery in 9M 2023, primarily due to **$646 million** in insurance settlement proceeds[199](index=199&type=chunk) - Interest expense increased by **$139 million (12%)**, primarily due to a higher average cost of debt (**3.4%** in 9M 2023 vs. **3.1%** in 9M 2022) and mark-to-market movements on derivatives, partially offset by a decrease in the average outstanding debt balance[201](index=201&type=chunk) - Equity in net earnings of investments accounted for under the equity method increased by **$29 million** due to higher earnings from equity method investees[205](index=205&type=chunk) [Liquidity and capital resources](index=50&type=section&id=Liquidity%20and%20capital%20resources) Assesses AerCap's cash flow, available liquidity, and capital structure, including debt and equity ratios Cash Flow Summary | Cash Flow Metric | 9 Months Ended Sep 30, 2023 (USD in millions) | 9 Months Ended Sep 30, 2022 (USD in millions) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | 3,862 | 3,620 | | Net cash used in investing activities | (2,554) | (1,707) | | Net cash used in financing activities | (457) | (2,560) | - Net cash used in investing activities in 9M 2023 primarily consisted of **$4.8 billion** for flight equipment purchases and prepayments, partially offset by **$1.6 billion** from asset sales and **$646 million** in insurance settlement proceeds[208](index=208&type=chunk) - Net cash used in financing activities in 9M 2023 primarily included **$919 million** for net debt repayments/costs and **$2.0 billion** for share repurchases[209](index=209&type=chunk) - As of September 30, 2023, total available liquidity was **$15 billion**, and total sources of liquidity (including estimated operating cash flows for the next 12 months) were **$20 billion**, sufficient to cover approximately **1.7x** of debt maturities and contracted capital requirements for the next 12 months[211](index=211&type=chunk) - The average cost of debt (excluding mark-to-market movements) for the nine months ended September 30, 2023, was **3.4%**[213](index=213&type=chunk) - The adjusted debt to equity ratio was **2.51 to 1**[213](index=213&type=chunk) [Contractual obligations](index=51&type=section&id=Contractual%20obligations) Outlines AerCap's total contractual obligations, including debt, interest payments, and purchase commitments Contractual Obligations | Obligation Type | Total (USD in millions) | | :-------------------------- | :---------------------- | | Unsecured debt facilities | 35,980.0 | | Secured debt facilities | 9,536.7 | | Subordinated debt facilities | 2,250.0 | | Estimated interest payments | 15,877.4 | | Purchase obligations | 20,106.4 | | Operating leases | 108.8 | | **Total** | **83,859.3** | - As of September 30, 2023, the company had commitments to purchase **380** aircraft, **11** engines, and **12** helicopters through 2028[216](index=216&type=chunk) [Off-balance sheet arrangements](index=52&type=section&id=Off-balance%20sheet%20arrangements) Discusses AerCap's interests in variable interest entities not consolidated in its financial statements - The company has interests in variable interest entities, some of which are not consolidated into its Condensed Consolidated Financial Statements[218](index=218&type=chunk) [Book value per share](index=52&type=section&id=Book%20value%20per%20share) Reports the book value per ordinary share outstanding, excluding unvested restricted stock Book value per ordinary share | Metric | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :---------------------------------------------------- | :----------- | :----------- | :----------- | | Book value per ordinary share outstanding, excluding shares of unvested restricted stock | **$78.28** | **$66.85** | **$64.59** | [Non-GAAP measures and metrics](index=52&type=section&id=Non-GAAP%20measures%20and%20metrics) Presents key non-GAAP financial metrics, including the adjusted debt-to-equity ratio and average cost of debt Adjusted debt/equity ratio | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Adjusted debt/equity ratio | 2.51 to 1 | 2.53 to 1 | Average cost of debt | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Average cost of debt | 3.5% | 3.2% | 3.4% | 3.1% | [Summarized financial information of issuers and guarantors](index=54&type=section&id=Summarized%20financial%20information%20of%20issuers%20and%20guarantors) Provides summarized financial data for AerCap's issuers and guarantors, including total assets, liabilities, and net income Summarized financial information | Metric | Sep 30, 2023 (USD in millions) | Dec 31, 2022 (USD in millions) | | :-------------------- | :----------------------------- | :----------------------------- | | Total assets | 45,449 | 44,131 | | Total liabilities | 43,348 | 41,567 | Net income attributable to AerCap Holdings N.V. | Metric | 9 Months Ended Sep 30, 2023 (USD in millions) | | :------------------------------------ | :-------------------------------------------- | | Net income attributable to AerCap Holdings N.V. | 1,414 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses AerCap's market risk exposures, including interest rate and foreign currency risks, and their management, along with inflation impacts [Interest rate risk](index=56&type=section&id=Interest%20rate%20risk) Explains how AerCap manages interest rate exposure using derivatives and details the transition to SOFR-based instruments - The company manages interest rate exposure primarily through interest rate caps and interest rate swaps using a cash flow-based risk management model[240](index=240&type=chunk) - The transition of LIBOR-based instruments to daily SOFR, Term SOFR, or three-month U.S. dollar LIBOR was completed in October 2023[242](index=242&type=chunk) Derivative Type | Derivative Type | 2023 - remaining (USD in millions) | | :---------------- | :--------------------------------- | | Interest rate caps (Average notional amounts) | 2,279.5 | | Interest rate swaps (Average notional amounts) | 3,817.1 | [Foreign currency risk and foreign operations](index=57&type=section&id=Foreign%20currency%20risk%20and%20foreign%20operations) Assesses the impact of foreign currency fluctuations on AerCap's financial results, noting its functional currency is USD - The company's functional currency is U.S. dollars, with substantially all revenue and most expenses denominated in U.S. dollars, leading to foreign currency transaction gains and losses not being significant[244](index=244&type=chunk) - A change in foreign exchange rates would not have a material impact on the company's results of operations or cash flows[244](index=244&type=chunk) [Inflation](index=57&type=section&id=Inflation) Discusses the potential impact of high inflation on AerCap's costs, expenses, and the value of fixed-rate lease payments - High rates of inflation may increase the costs of goods, services, and labor, thereby increasing expenses[245](index=245&type=chunk) - For fixed-rate leases, high inflation could decrease the value of payments, with a potential lag in adjusting lease rates[245](index=245&type=chunk) [PART II. OTHER INFORMATION](index=58&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents other required information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 25 for detailed discussions on legal proceedings, including those related to the Ukraine Conflict [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) Reports no material changes to the company's risk factors since the Annual Report for December 31, 2022 [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details share repurchase activities for the nine months ended September 30, 2023, including shares purchased and remaining authorization Unregistered Sales of Equity Securities and Use of Proceeds | Metric | 9 Months Ended Sep 30, 2023 | | :---------------------------------------------------- | :-------------------------- | | Total number of ordinary shares purchased | 33,972,440 | | Average price paid per ordinary share | **$57.94** | | Maximum dollar value of ordinary shares that may yet be purchased under the program (USD in millions) | **$181.7** | [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults upon senior securities occurred during the reporting period - None[250](index=250&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company's operations - Not applicable[251](index=251&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) Indicates that no other information is required to be reported in this section - None[252](index=252&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) Confirms that there are no exhibits appended to this report - None[253](index=253&type=chunk) [Signature](index=59&type=section&id=Signature) Contains the authorized signatory's confirmation of the report's submission for AerCap Holdings N.V - The report was signed by Aengus Kelly, Authorized Signatory, on October 27, 2023[256](index=256&type=chunk)