AerCap N.V.(AER) - 2023 Q2 - Quarterly Report

Financial Performance - Total revenues and other income for Q2 2023 reached $1,924,381 thousand, a 15.1% increase from $1,670,712 thousand in Q2 2022[17] - Lease revenue for Q2 2023 was $1,717,382 thousand, up 9.8% from $1,564,324 thousand in Q2 2022[17] - Net income for Q2 2023 was $496,870 thousand, compared to $340,562 thousand in Q2 2022, representing a 46% increase[17] - Basic earnings per share for Q2 2023 were $2.13, an increase from $1.41 in Q2 2022[17] - Net income for the six months ended June 30, 2023, was $932,147 thousand, a significant improvement from a loss of $1,660,119 thousand in the same period of 2022[22] - Total comprehensive income attributable to AerCap Holdings N.V. for the three months ended June 30, 2023, was $547,079 thousand, compared to $368,439 thousand for the same period in 2022[20] - For the six months ended June 30, 2023, AerCap reported total comprehensive income of $949.4 million, compared to $368.4 million for the same period in 2022[36] - Basic Earnings Per Share (EPS) for the six months ended June 30, 2023, was $3.93, compared to a loss of $(6.92) for the same period in 2022[140] - The company reported net income of $924.999 million for the six months ended June 30, 2023, compared to a net loss of $(1.661 billion) for the same period in 2022[140] Assets and Liabilities - Total assets as of June 30, 2023, were $69,928,407 thousand, slightly up from $69,726,918 thousand as of December 31, 2022[15] - Total liabilities stood at $53,537,899 thousand as of June 30, 2023, compared to $53,531,868 thousand at the end of 2022[15] - The company’s accumulated retained earnings increased to $8,598,005 thousand as of June 30, 2023, from $7,674,922 thousand at the end of 2022[14] - As of June 30, 2023, AerCap Holdings N.V. had total assets of $70 billion, with 2,132 aircraft owned, managed, or on order[40] - The total equity of AerCap Holdings N.V. as of June 30, 2023, was $16.39 billion, which includes $8.60 billion in additional paid-in capital[36] - The principal amount of AerCap's outstanding indebtedness totaled $46.5 billion, with undrawn lines of credit amounting to $11.3 billion[103] Cash Flow and Expenses - Net cash provided by operating activities for the six months ended June 30, 2023, was $2,556,596 thousand, slightly up from $2,508,450 thousand in the prior year[22] - Interest expense for Q2 2023 was $427,376 thousand, an increase from $399,994 thousand in Q2 2022[17] - Selling, general and administrative expenses for the six months ended June 30, 2023, totaled $230.341 million, an increase from $202.347 million in the same period of 2022[130] - Interest paid, net of amounts capitalized, for the six months ended June 30, 2023, was $821,700 thousand, an increase from $760,509 thousand in the same period of 2022[25] Asset Management - The company reported a net gain on the sale of assets of $165,909 thousand in Q2 2023, significantly higher than $35,200 thousand in Q2 2022[17] - The company experienced a net gain on the sale of assets of $265,449 thousand for the six months ended June 30, 2023, compared to a loss of $38,485 thousand in the same period of 2022[22] - The net book value of flight equipment held for operating leases at the end of the period was $55,604.91 million, an increase of 0.7% from $54,306.78 million as of June 30, 2022[59] - Flight equipment held for sale had a total net book value of $808.5 million as of June 30, 2023, compared to $292.8 million as of December 31, 2022[63] - Maintenance rights and lease premium, net, decreased to $2,977.73 million as of June 30, 2023, from $3,364.45 million as of December 31, 2022[65] Debt and Financing - The company issued debt totaling $2,327,579 thousand during the six months ended June 30, 2023, compared to $84,996 thousand in the same period of 2022[22] - The company has $12.03 million in secured debt, with a weighted average interest rate of 6.07%[104] - Total unsecured debt outstanding is $43.52 million, with a weighted average interest rate of 3.06%[104] - The company completed the redemption of $600 million of 4.125% Senior Notes due 2023 in February 2023[108] - A secured facility agreement of $900 million was entered into in March 2023, maturing on November 29, 2030[108] Shareholder Actions - The company repurchased 5,057,892 ordinary shares at an average price of $58.54 per share during the three months ended June 30, 2023[112] - A new share repurchase program was approved for up to $500 million through December 31, 2023[112] - AerCap repurchased 8,788,890 ordinary shares from GE for $500 million, with an average repurchase price of $58.96 per share during the three months ended June 30, 2023[156] Insurance and Claims - The company submitted claims totaling approximately $4.1 billion against Russian airlines' insurers for aircraft and engines lost in Russia, with ongoing legal proceedings initiated in June 2023[123] - The company submitted an insurance claim for approximately $3.5 billion under its contingent and possessed insurance policy related to aircraft and engines leased to Russian airlines[169] - The company has not recognized any claim receivables related to its claims under the C&P Policy and Russian airlines' insurance policies as of June 30, 2023, due to uncertainties in recovery[124] - AerCap intends to vigorously pursue claims under its insurance policies, with potential recoveries being uncertain as of June 30, 2023[171] Market and Operational Risks - The company is facing significant risks due to the ongoing Ukraine Conflict, which has led to sanctions affecting its business operations and financial condition[207] - Recovery in air travel post-Covid-19 remains uncertain, impacting the aviation industry's demand for leasing services[207] - Competitive pressures within the aviation leasing industry are increasing, potentially impacting market share and profitability[207] - Regulatory changes, including travel restrictions and trade regulations, could further complicate operational strategies[207] - Economic conditions in the global airline and cargo industry are being closely evaluated for their potential impact on business performance[207] Transition and Compliance - The company has transitioned its LIBOR-based instruments to SOFR, with the transition expected to conclude by September 30, 2023[51] - AerCap has transitioned its longer-dated derivative instruments from LIBOR to Term SOFR since October 2022, with completion expected by September 30, 2023[83] - The company remains in compliance with financial covenants across its various debt obligations as of June 30, 2023[103]