AerCap N.V.(AER) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) AerCap's unaudited Q1 2024 and 2023 financial statements, including balance sheets, income, cash flows, and detailed accounting notes Unaudited Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (USD in thousands) | Metric | March 31, 2024 | December 31, 2023 | Change (QoQ) | Percentage Change (QoQ) | | :-------------------------------- | :------------- | :---------------- | :----------- | :---------------------- | | Total Assets | $71,105,025 | $71,274,559 | $(169,534) | -0.24% | | Total Liabilities | $54,149,219 | $54,685,513 | $(536,294) | -0.98% | | Total Equity | $16,955,806 | $16,589,046 | $366,760 | 2.21% | - Cash and cash equivalents decreased by $335.2 million (20.6%) from $1,627.2 million at December 31, 2023, to $1,292.0 million at March 31, 2024[13] - Flight equipment held for operating leases, net, decreased by $553.9 million (0.97%) from $57,091.2 million at December 31, 2023, to $56,537.2 million at March 31, 2024[13] Unaudited Condensed Consolidated Income Statements Condensed Consolidated Income Statement Highlights (USD in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | Percentage Change (YoY) | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :---------------------- | | Total Revenues and other income | $2,018,088 | $1,865,722 | $152,366 | 8.17% | | Total Expenses | $1,372,832 | $1,406,640 | $(33,808) | -2.40% | | Net income | $604,210 | $435,277 | $168,933 | 38.81% | | Net income attributable to AerCap Holdings N.V. | $604,214 | $432,105 | $172,109 | 39.83% | | Basic earnings per share | $3.09 | $1.81 | $1.28 | 70.72% | | Diluted earnings per share | $3.02 | $1.79 | $1.23 | 68.72% | - Net gain on sale of assets increased by $60.0 million (60.3%) to $159.6 million in Q1 2024, compared to $99.5 million in Q1 2023[15] - Interest expense increased by $55.3 million (12.7%) to $491.5 million in Q1 2024, from $436.2 million in Q1 2023[15] Unaudited Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Comprehensive Income Highlights (USD in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | | :---------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net income | $604,210 | $435,277 | $168,933 | | Net gain (loss) on derivatives, net of tax | $67,198 | $(31,566) | $98,764 | | Total comprehensive income (loss) | $671,408 | $405,490 | $265,918 | | Total comprehensive income attributable to AerCap Holdings N.V. | $671,412 | $402,318 | $269,094 | - The company reported a significant shift in derivative performance, moving from a net loss of $31.6 million in Q1 2023 to a net gain of $67.2 million in Q1 2024, net of tax[18] Unaudited Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows Highlights (USD in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change (YoY) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net cash provided by operating activities | $1,375,666 | $1,363,401 | $12,265 | | Net cash used in investing activities | $(841,750) | $(1,278,075) | $436,325 | | Net cash used in financing activities | $(872,665) | $(579,729) | $(292,936) | | Net decrease in cash, cash equivalents and restricted cash | $(338,749) | $(494,403) | $155,654 | - Net cash used in investing activities decreased by $436.3 million, primarily due to lower purchase of flight equipment ($670.4 million in Q1 2024 vs. $1,291.1 million in Q1 2023) and higher proceeds from asset sales ($768.4 million in Q1 2024 vs. $470.3 million in Q1 2023)[21] - Net cash used in financing activities increased by $292.9 million, driven by higher debt repayments ($2,237.8 million in Q1 2024 vs. $1,377.5 million in Q1 2023) and increased share repurchases ($347.9 million in Q1 2024 vs. $501.0 million in Q1 2023)[21] Unaudited Condensed Consolidated Statements of Equity Condensed Consolidated Statements of Equity Highlights (USD in thousands) | Metric | March 31, 2024 | December 31, 2023 | Change (QoQ) | | :--------------------------------------- | :------------- | :---------------- | :----------- | | Total AerCap Holdings N.V. shareholders' equity | $16,955,594 | $16,588,830 | $366,764 | | Treasury shares, at cost | $(1,144,579) | $(819,305) | $(325,274) | | Accumulated other comprehensive income | $75,502 | $8,304 | $67,198 | | Accumulated retained earnings | $11,407,200 | $10,802,599 | $604,601 | - Share repurchases amounted to $335.8 million during the three months ended March 31, 2024[31] - Accumulated other comprehensive income significantly increased by $67.2 million, primarily due to net gains on derivatives[31] Notes to the Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations for the financial statements, covering general information, accounting policies, asset and liability movements, debt, tax, equity, and commitments Note 1. General - AerCap Holdings N.V. is a global leader in aviation leasing, with a portfolio of 2,044 aircraft, over 1,000 engines, and over 300 helicopters, totaling $71 billion in assets as of March 31, 2024[33] Note 2. Basis of presentation - The Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP and presented in U.S. dollars, consolidating all companies under effective control and variable interest entities (VIEs) where AerCap is the Primary Beneficiary[35][36][38] - The company manages and reports its results based on a single business segment: leasing, financing, sales, and management of commercial flight equipment[43] Note 3. Summary of significant accounting policies - The company is evaluating the impact of new accounting standards, ASU 2023-09 (Income Tax Disclosures) and ASU 2023-07 (Segmental Reporting), effective for fiscal years beginning after December 15, 2024 and 2023 respectively, but does not expect a material effect on its consolidated financial statements[45][46] Note 4. Cash, cash equivalents and restricted cash Cash, Cash Equivalents and Restricted Cash (USD in thousands) | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | :------------- | | Cash and cash equivalents | $1,291,962 | $1,627,181 | $1,089,046 | | Restricted cash | $193,533 | $198,285 | $174,621 | | Total cash, cash equivalents and restricted cash | $1,485,495 | $1,825,466 | $1,263,667 | - Restricted cash primarily relates to Export Credit Agency (ECA) financings, Export-Import Bank of the United States (Ex-Im) financings, AerFunding revolving credit facility, and Brazilian Development Bank (BNDES) financing[47] Note 5. Flight equipment held for operating leases, net Movements in Flight Equipment Held for Operating Leases (USD in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net book value at beginning of period | $57,091,166 | $55,220,809 | | Additions | $1,013,055 | $1,677,164 | | Depreciation | $(625,549) | $(602,294) | | Disposals and transfers to held for sale | $(808,102) | $(739,562) | | Net book value at end of period | $56,537,244 | $55,487,268 | - Additions to flight equipment held for operating leases decreased by $664.1 million (39.6%) in Q1 2024 compared to Q1 2023[50] Note 6. Investment in finance leases, net Investment in Finance Leases, Net (USD in thousands) | Component | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Future minimum lease payments to be received, net | $1,294,619 | $1,156,693 | | Estimated residual values of leased flight equipment | $552,272 | $597,184 | | Less: Unearned income | $(523,799) | $(490,502) | | Less: Allowance for credit losses | $(8,985) | $(8,924) | | Total Investment in finance leases, net | $1,314,107 | $1,254,451 | - Interest income from investment in finance leases, net, was $25 million for Q1 2024, a decrease from $27 million in Q1 2023[51] Note 7. Flight equipment held for sale - Flight equipment held for sale increased to $459 million as of March 31, 2024, from $297 million as of December 31, 2023[53][54] Note 8. Maintenance rights and lease premium, net Maintenance Rights and Lease Premium, Net (USD in thousands) | Component | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Maintenance rights | $2,013,001 | $2,099,513 | | Lease premium, net | $584,362 | $630,449 | | Total | $2,597,363 | $2,729,962 | - Amortization expense for lease premium assets was $42 million in Q1 2024, down from $46 million in Q1 2023[56] Note 9. Other intangibles, net Other Intangibles, Net (USD in thousands) | Component | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Customer relationships, net | $150,765 | $156,059 | | Other intangible assets | $5,432 | $7,108 | | Total | $156,197 | $163,167 | - Amortization expense for customer relationships remained consistent at $5 million for both Q1 2024 and Q1 2023[57] Note 10. Associated companies Associated Companies (Equity Method, USD in thousands) | Company | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Shannon Engine Support (50.0% ownership) | $839,293 | $797,185 | | AerDragon Aviation Partners Limited (16.7% ownership) | $90,370 | $91,898 | | Other (9.5-39.3% ownership) | $78,507 | $82,434 | | Total | $1,008,170 | $971,517 | Note 11. Other assets Other Assets (USD in thousands) | Component | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Straight-line rents, prepaid expenses and other | $689,974 | $692,521 | | Notes receivable, net | $649,506 | $663,644 | | Loans receivable, net | $649,089 | $654,925 | | Derivative assets | $153,228 | $130,614 | | Total Other Assets | $3,000,827 | $3,016,524 | - Interest income from loans receivable, net of allowance for credit losses, increased to $14 million in Q1 2024 from $6 million in Q1 2023[60] Note 12. Derivative financial instruments - AerCap uses interest rate derivatives (swaps, caps, U.S. treasury locks) to hedge variable rate debt, with derivative assets increasing to $153.2 million and derivative liabilities decreasing to $16.2 million as of March 31, 2024[62][66][67] Derivative Financial Instruments Fair Values (USD in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Total derivative assets | $153,228 | $130,614 | | Total derivative liabilities | $16,220 | $80,840 | - A net gain of $67.2 million on derivatives, net of tax, was recorded in other comprehensive income in Q1 2024, a significant improvement from a $31.6 million loss in Q1 2023[68] Note 13. Accounts payable, accrued expenses and other liabilities Accounts Payable, Accrued Expenses and Other Liabilities (USD in thousands) | Component | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Deferred revenue | $808,870 | $827,525 | | Accounts payable and accrued expenses | $429,405 | $444,042 | | Accrued interest | $421,051 | $348,568 | | Operating lease liabilities | $109,445 | $92,083 | | Derivative liabilities | $16,220 | $80,840 | | Total | $1,784,991 | $1,793,058 | Note 14. Accrued maintenance liability Movements in Accrued Maintenance Liability (USD in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Accrued maintenance liability at beginning of period | $2,863,730 | $2,503,202 | | Maintenance payments received | $215,207 | $177,737 | | Maintenance payments returned | $(26,748) | $(31,185) | | Release to income upon sale | $(2,922) | $(42,434) | | Release to income other than upon sale | $(50,407) | $(110,953) | | Accrued maintenance liability at end of period | $2,975,140 | $2,487,969 | Note 15. Debt - As of March 31, 2024, total outstanding indebtedness was $46.0 billion, with $11.2 billion in undrawn lines of credit, and the company remained in compliance with financial covenants[73] Summary of Indebtedness (USD in thousands) | Debt Type | March 31, 2024 Amount Outstanding | December 31, 2023 Amount Outstanding | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Unsecured Debt | $33,915,349 | $34,295,349 | | Secured Debt | $9,793,413 | $10,151,176 | | Subordinated Debt | $2,250,000 | $2,250,000 | | Debt issuance costs, discounts and premium | $(235,095) | $(212,622) | | Total Debt | $45,723,667 | $46,483,903 | - In January 2024, AerCap Trust and AICDC co-issued $800 million of 5.10% Senior Notes due 2029 and $700 million of 5.30% Senior Notes due 2034[78] Note 16. Income taxes - The effective tax rate was 14.3% for Q1 2024, up from 14.0% for Q1 2023, primarily due to the introduction of Pillar Two rules in Ireland from January 1, 2024[79][80] - Income tax expense in Q1 2024 was reduced by $8 million due to a non-recurring tax deduction from a prior period[79] Note 17. Equity - During Q1 2024, AerCap repurchased 4.3 million ordinary shares at an average price of $77.89 per share[82] - Between April 1 and April 26, 2024, an additional 1.1 million ordinary shares were repurchased at an average price of $83.66 per share[83] Note 18. Other income Other Income (USD in thousands) | Component | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Interest and other income | $84,047 | $33,262 | | Management fees | $9,370 | $9,115 | | Total Other Income | $93,417 | $42,377 | - Other income increased significantly by $51.0 million (120.3%) in Q1 2024, primarily driven by higher interest and other income[84] Note 19. Net charges related to Ukraine Conflict - AerCap recognized a net recovery of $23 million in Q1 2024 for a Boeing 777-300ER aircraft recovered from Ukraine, compared to $14 million in Q1 2023 primarily from letters of credit[91][92] - The company is vigorously pursuing claims under its Contingent and Possessed (C&P) Policy and Operator Reinsurance/Insurance Policies for assets remaining in Russia and Ukraine, with claims totaling approximately $2.2 billion under the C&P Policy and $1.8 billion under Operator Policies as of March 31, 2024[88][90][123][125][126] Note 20. Asset impairment - Asset impairment charges decreased significantly to $3 million in Q1 2024 from $34 million in Q1 2023, primarily related to lease terminations and sales transactions[94] - In Q1 2024, impairment charges were fully offset by maintenance revenue, while in Q1 2023, they were only partially offset[95] Note 21. Selling, general and administrative expenses Selling, General and Administrative Expenses (USD in thousands) | Component | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Personnel expenses | $54,501 | $48,448 | | Share-based compensation | $25,378 | $26,863 | | Professional services | $10,773 | $8,893 | | Travel expenses | $8,424 | $10,819 | | Office expenses | $7,811 | $6,442 | | Other expenses | $12,405 | $9,139 | | Total SG&A | $119,292 | $110,604 | Note 22. Allowance for credit losses Movements in Allowance for Credit Losses (USD in thousands) | Metric | March 31, 2024 Total | March 31, 2023 Total | | :--------------------------------------- | :------------------- | :------------------- | | Allowance for credit losses at beginning of period | $33,887 | $137,861 | | Current period increase (decrease) in provision | $(219) | $(8,585) | | Write-offs charged against the allowance | $0 | $(36,883) | | Allowance for credit losses at end of period | $33,668 | $92,393 | - The total allowance for credit losses decreased to $33.7 million at March 31, 2024, from $92.4 million at March 31, 2023, primarily due to significant write-offs in Q1 2023[97] Note 23. Earnings per share Earnings Per Share (EPS) (USD) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Basic EPS | $3.09 | $1.81 | | Diluted EPS | $3.02 | $1.79 | | Weighted average ordinary shares outstanding—basic | 195,773,846 | 239,368,415 | | Weighted average ordinary shares outstanding—diluted | 200,085,734 | 241,559,712 | - Basic EPS increased by 70.7% and diluted EPS increased by 68.7% year-over-year, driven by higher net income and a lower weighted average number of shares outstanding[99] Note 24. Variable interest entities - Substantially all assets and liabilities on the balance sheet are held in consolidated Variable Interest Entities (VIEs) for which AerCap is deemed the Primary Beneficiary[103][104] - The maximum exposure to loss in non-consolidated VIEs was $119.4 million as of March 31, 2024[112] Note 25. Related party transactions - Lease rental income from Shannon Engine Support (SES) increased to $32 million in Q1 2024 from $28 million in Q1 2023[115] Amounts Received from Other Related Parties (USD in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Management fees and other | $4,322 | $3,009 | | Dividends | $3,540 | $2,512 | | Total | $7,862 | $5,521 | - GE is no longer a related party as of November 16, 2023, following the completion of its sale of AerCap's outstanding ordinary shares[117] Note 26. Commitments and contingencies - As of March 31, 2024, AerCap had commitments to purchase 327 new aircraft, 32 engines, and 7 new helicopters for delivery through 2029, 2026, and 2025 respectively[119] Movements in Prepayments on Flight Equipment (USD in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Prepayments on flight equipment at beginning of period | $3,576,187 | $3,806,602 | | Prepayments and additions during the period, net | $923,694 | $432,932 | | Prepayments on flight equipment at end of period | $4,229,152 | $3,946,422 | - The company is actively pursuing legal claims related to the Ukraine Conflict under its C&P Policy and Operator Reinsurance/Insurance Policies, with the C&P Policy claim amounting to approximately $2.2 billion as of March 31, 2024[123][125][126] Note 27. Fair value measurements - Derivative financial instruments are classified as Level 2 fair value measurements, based on dealer quotes and counterparty credit risk[139] Financial Assets and Liabilities Measured at Fair Value (USD in thousands) | Metric | March 31, 2024 Total | December 31, 2023 Total | | :--------------------------------------- | :------------------- | :------------------- | | Derivative assets | $153,228 | $130,614 | | Investments, at fair value | $96,708 | $84,130 | | Derivative liabilities | $16,220 | $80,840 | - Fair value measurements of flight equipment and definite-lived intangible assets on a non-recurring basis are classified as Level 3 valuations, relying on management's estimates of future cash flows and discount rates[143][144][147] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations AerCap's Q1 2024 financial performance, liquidity, and capital resources are analyzed, detailing revenue, expenses, portfolio, and key metrics Special note about forward looking statements - The report includes forward-looking statements based on current beliefs and projections, subject to various risks and uncertainties, including capital availability, lessee payment ability, market demand, the Ukraine Conflict, and regulatory changes[155][156] Flight equipment portfolio - As of March 31, 2024, AerCap's portfolio comprised 3,427 aircraft, engines, and helicopters owned, on order, or managed, with 152 aviation asset transactions executed during the quarter[157] Flight Equipment Portfolio by Type (as of March 31, 2024) | Type | Number of owned assets | % Net Book Value | Number of managed assets | Number of assets on order | Total assets owned, managed and on order | | :------------------- | :--------------------- | :--------------- | :----------------------- | :------------------------ | :--------------------------------------- | | Passenger Aircraft | 1,465 | 85% | 176 | 327 | 1,968 | | Freighter Aircraft | 69 | 2% | 7 | — | 76 | | Engines | 433 | 7% | 598 | 32 | 1,063 | | Helicopters | 313 | 6% | — | 7 | 320 | | Total | 2,280 | 100% | 781 | 366 | 3,427 | Aircraft portfolio - As of March 31, 2024, AerCap owned 1,534 aircraft with a weighted average age of 7.4 years and a 98% utilization rate[160] - The company had commitments to purchase 327 new aircraft for delivery through 2029[160] Owned Aircraft Activity (Three Months Ended March 31, 2024) | Metric | Number of owned aircraft | | :--------------------------------------- | :----------------------- | | Number of owned aircraft at beginning of period | 1,556 | | Aircraft purchases | 13 | | Aircraft sold or designated for part-out | (35) | | Number of owned aircraft at end of period | 1,534 | Critical accounting estimates - There have been no significant changes to critical accounting estimates from those disclosed in the Annual Report on Form 20-F for the year ended December 31, 2023[162] Comparative results of operations Key Financial Performance Changes (Q1 2024 vs. Q1 2023, USD in thousands) | Metric | Q1 2024 | Q1 2023 | Change | % Change | | :--------------------------------------- | :------ | :------ | :----- | :------- | | Basic lease rents | $1,585,631 | $1,536,663 | $48,968 | 3% | | Net gain on sale of assets | $159,580 | $99,540 | $60,040 | 60% | | Other income | $93,417 | $42,377 | $51,040 | 120% | | Depreciation and amortization | $633,478 | $610,517 | $22,961 | 4% | | Net recoveries related to Ukraine Conflict | $(22,749) | $(14,108) | $(8,641) | -61% | | Asset impairment | $2,670 | $34,335 | $(31,665) | -92% | | Interest expense | $491,515 | $436,222 | $55,293 | 13% | | Leasing expenses | $148,614 | $226,009 | $(77,395) | -34% | | Selling, general and administrative expenses | $119,292 | $110,604 | $8,688 | 8% | | Income tax expense | $(94,109) | $(65,594) | $(28,515) | -44% | | Equity in net earnings of investments accounted for under the equity method | $39,540 | $32,544 | $6,996 | 21% | - Basic lease rents increased by $49 million (3%), driven by asset acquisitions ($143 million increase) and lease transitions ($63 million increase), partially offset by asset sales ($45 million decrease) and lower PBH rent/redeliveries ($112 million decrease)[164][166] - Interest expense increased by $55 million (13%), primarily due to a $66 million increase from a higher average cost of debt (3.9% in Q1 2024 vs. 3.3% in Q1 2023), partially offset by an $11 million decrease from mark-to-market movements on interest rate caps and swaps[171][172] Liquidity and capital resources Consolidated Cash Flows (Q1 2024 vs. Q1 2023, USD in millions) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--------------------------------------- | :------ | :------ | | Net cash provided by operating activities | $1,376 | $1,363 | | Net cash used in investing activities | $(842) | $(1,278) | | Net cash used in financing activities | $(873) | $(580) | - As of March 31, 2024, total available liquidity was $14 billion, including $1.5 billion cash and $11.2 billion undrawn lines of credit, sufficient to cover approximately 1.7x of debt maturities and contracted capital requirements for the next 12 months[184] - The company expects to fund contractual purchase obligations and business growth through internally generated cash flows, new debt, refinancing, and other capital-raising initiatives[184][185] Contractual obligations Contractual Obligations and Payment Dates (as of March 31, 2024, USD in millions) | Obligation Type | 2024 - remaining | 2025 | 2026 | 2027 | 2028 | Thereafter | Total | | :--------------------------------------- | :--------------- | :----- | :----- | :----- | :----- | :--------- | :------ | | Unsecured debt facilities | $3,365.3 | $3,650.0 | $7,294.5 | $4,755.5 | $5,500.0 | $9,350.0 | $33,915.3 | | Secured debt facilities | $722.6 | $2,222.8 | $1,194.5 | $2,014.7 | $2,244.1 | $1,393.9 | $9,792.6 | | Subordinated debt facilities | — | — | — | — | — | $2,250.0 | $2,250.0 | | Estimated interest payments | $1,536.1 | $1,874.2 | $1,581.0 | $1,225.3 | $914.6 | $8,829.0 | $15,960.2 | | Purchase obligations | $4,706.2 | $5,768.5 | $4,028.8 | $1,556.5 | $254.6 | $162.1 | $16,476.7 | | Operating leases | $47.8 | $16.1 | $12.0 | $11.8 | $11.4 | $15.6 | $114.7 | | Total | $10,378.0 | $13,531.6 | $14,110.8 | $9,563.8 | $8,924.7 | $22,000.6 | $78,509.5 | - Purchase obligations include commitments for 327 aircraft, 32 engines, and 7 helicopters through 2029, with timing based on current estimates and expected delivery delays[190] Off-balance sheet arrangements - AerCap has interests in variable interest entities (VIEs), some of which are not consolidated into its financial statements, with further details provided in Note 24[193] Book value per share Book Value Per Share (USD) | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | :------------- | | Total AerCap Holdings N.V. shareholders' equity | $16,956 | $16,589 | $16,045 | | Ordinary shares outstanding, excluding shares of unvested restricted stock | 193,839,180 | 197,931,919 | 232,632,094 | | Book value per ordinary share outstanding, excluding shares of unvested restricted stock | $87.47 | $83.81 | $68.97 | - Book value per ordinary share increased to $87.47 as of March 31, 2024, from $83.81 at December 31, 2023, and $68.97 at March 31, 2023, reflecting growth in shareholders' equity and share repurchases[194] Non-GAAP measures and metrics Adjusted Debt to Equity Ratio | Metric | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Adjusted debt | $43,307 | $43,732 | | Adjusted equity | $18,081 | $17,714 | | Adjusted debt/equity ratio | 2.40 to 1 | 2.47 to 1 | Average Cost of Debt | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Interest expense excluding mark-to-market on interest rate caps and swaps, debt issuance costs, upfront fees and other impacts | $457.4 | $387.2 | | Average debt balance | $46,536 | $46,551 | | Average cost of debt | 3.9% | 3.3% | - The adjusted debt to equity ratio improved to 2.40 to 1 as of March 31, 2024, from 2.47 to 1 at December 31, 2023[197] Summarized financial information of issuers and guarantors - The AGAT/AICDC Notes are jointly and severally and fully and unconditionally guaranteed by AerCap Holdings N.V. and certain subsidiaries (the "Obligor Group")[200] Summarized Combined Financial Information of Obligor Group (USD in millions) | Metric | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Total assets | $46,374 | $46,858 | | Total liabilities | $41,744 | $41,945 | | Debt | $35,456 | $35,863 | | Metric | Three Months Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------- | | Total revenues and other income | $892 | | Total expenses | $687 | | Net income | $178 | Item 3. Quantitative and Qualitative Disclosures About Market Risk AerCap's market risk exposures, including interest rate and foreign currency, and management strategies using derivatives and addressing inflation Interest rate risk - AerCap manages interest rate exposure, arising from mismatches between floating rate debt and fixed rate leases, primarily through interest rate caps and swaps using a cash flow-based risk management model[214] Derivative Financial Instruments Sensitive to Interest Rates (as of March 31, 2024, USD in millions) | Instrument | 2024 - remaining | 2025 | 2026 | 2027 | 2028 | Thereafter | Fair value | | :------------------- | :--------------- | :----- | :----- | :----- | :----- | :--------- | :--------- | | Interest rate caps (Avg. notional) | $1,871.3 | $1,129.2 | $469.3 | $35.2 | — | — | $80.9 | | Weighted average strike rate | 1.6% | 2.2% | 2.4% | 2.3% | — | — | | | Interest rate swaps (Avg. notional) | $4,630.0 | $4,605.0 | $3,442.5 | $2,582.5 | $1,004.2 | — | $55.6 | | Weighted average pay rate | 3.6% | 3.6% | 3.9% | 4.0% | 4.1% | — | | Foreign currency risk and foreign operations - AerCap's functional currency is the U.S. dollar, and substantially all revenues and aircraft purchase agreements are denominated in USD, limiting material foreign currency transaction gains and losses[218] - A change in foreign exchange rates is not expected to have a material impact on results of operations or cash flows due to the predominant use of U.S. dollars in revenues and expenses[218] Inflation - High inflation rates could adversely affect AerCap by increasing operational costs and decreasing the value of fixed-rate lease payments, with potential lags in adjusting lease rates[219] PART II. OTHER INFORMATION Item 1. Legal Proceedings Detailed legal proceedings, including Ukraine Conflict cases, are discussed in Note 26 to the financial statements - For details on legal proceedings, refer to "Part I. Financial Information—Item 1. Financial Statements (Unaudited)—Note 26—Commitments and contingencies" in this report[221] Item 1A. Risk Factors No material changes to risk factors were reported since the Annual Report on Form 20-F for December 31, 2023 - There have been no material changes in risk factors since those reported in the Annual Report on Form 20-F for the year ended December 31, 2023[222] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details on the company's share repurchase activities for Q1 2024, including shares purchased and average price paid Ordinary Share Repurchases (Three Months Ended March 31, 2024) | Month | Number of ordinary shares purchased | Average price paid per ordinary share (USD) | Total number of ordinary shares purchased as part of publicly announced program | | :------------ | :-------------------------------- | :------------------------------------------ | :---------------------------------------------------------------- | | January 2024 | 1,317,219 | $75.16 | 1,317,219 | | February 2024 | 1,709,291 | $77.52 | 1,709,291 | | March 2024 | 1,284,967 | $81.18 | 1,284,967 | | Total | 4,311,477 | $77.89 | 4,311,477 | - As of March 31, 2024, the maximum dollar value of ordinary shares that may yet be purchased under the program was $446.6 million[223] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[224] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to AerCap Holdings N.V.[225] Item 5. Other Information No other information is reported under this item - No other information is reported under this item[226] Item 6. Exhibits No exhibits are reported under this item - No exhibits are reported under this item[227]