AerCap Holdings N.V. Reports Financial Results for the Fourth Quarter 2021
AerCap Holdings reported Q4 2021 net income of $89 million ($0.44 per share), with a full-year net income of $1 billion ($6.71 per share). Excluding GECAS transaction expenses, Q4 income rose to $211 million ($1.04 per share). The GECAS acquisition in November diversified the fleet and customer base, anticipating increased revenues. Despite the conflict in Ukraine affecting 5% of its fleet, AerCap expects a recovery in air travel to bolster performance in 2022. Q4 operating cash flow surged to $1.7 billion, with lease revenues growing 39% year-over-year.
- Q4 cash flow from operating activities increased to $1.7 billion, up 2.5x from Q4 2020.
- Completed the GECAS acquisition, enhancing fleet and customer diversity.
- Lease revenue for Q4 grew 39% year-over-year, driven by basic lease rents increase of 45%.
- Approximately 5% of the fleet is leased to Russian airlines, posing potential asset impairment.
- Selling, general and administrative expenses rose by 87% in Q4, primarily due to GECAS acquisition costs.
- Maintenance rents decreased by 12% year-over-year in Q4.
- Net income for the fourth quarter of 2021 was
$89 million , or$0.44 per share. Net income for the full year 2021 was$1,001 million , or$6.71 per share. - Excluding expenses related to the GECAS transaction, net income was
$211 million , or$1.04 per share for the fourth quarter of 2021, and$1,294 million , or$8.68 per share for the full year 2021. - The airline industry continues to experience a rapid recovery in air travel in many of the world's major markets.
DUBLIN, March 30, 2022 /PRNewswire/ -- AerCap Holdings N.V. (NYSE: AER), the global leader in aviation leasing, today reported financial results for the fourth quarter of 2021 ended December 31, 2021.
Aengus Kelly, Chief Executive Officer of AerCap, said: "2021 was a milestone year for AerCap as we closed the GECAS transaction on November 1st. This transaction significantly enhanced and diversified our fleet, broadened our customer base and geographic reach, increased our product offering and added outstanding new talent - the combination of which we expect to lead to increased revenues, earnings and cash flows in the future. Notwithstanding the Ukraine invasion and the broad sanctions imposed against Russia, where we had approximately
Highlights
- Completed the GECAS acquisition on November 1, 2021, making AerCap the worldwide industry leader across all areas of aviation leasing: aircraft, engines and helicopters.
- Executed 230 transactions in the fourth quarter 2021, including 158 lease agreements, 42 purchases and 30 sales.
- Completed the offering of
$21 billion of senior unsecured notes in October 2021 and a$2 billion secured institutional term loan in November 2021 to finance the GECAS acquisition with an average coupon of approximately2.6% and an average tenor of 7.1 years. - Adjusted debt/equity ratio of 2.66 to 1 at December 31, 2021.
- Fourth quarter cash flow from operating activities was
$1.7 billion , more than 2.5x higher than the fourth quarter of 2020. - Continued to see significant improvements in cash collections, trade receivables and deferral requests.
- Special items in the fourth quarter of 2021 included
$139 million ($122 million after-tax) of expenses related to the GECAS transaction.
Revenue and Net Spread
Three months ended December 31, | Year ended December 31, | |||||||||||
2021 | 2020 | % increase/ | 2021 | 2020 | % increase/ | |||||||
(U.S. Dollars in millions) | (U.S. Dollars in millions) | |||||||||||
Lease revenue: | ||||||||||||
Basic lease rents | ||||||||||||
Maintenance rents and other receipts | 97 | 110 | ( | 521 | 559 | ( | ||||||
Total lease revenue | 1,380 | 995 | 4,412 | 4,321 | ||||||||
Net gain on sale of assets | 25 | 14 | 89 | 90 | ||||||||
Other income | 38 | 22 | 723 | 83 | ||||||||
Total Revenues and other income | ||||||||||||
Basic lease rents were
Maintenance rents and other receipts were
Net gain on sale of assets for the fourth quarter of 2021 was
Other income for the fourth quarter of 2021 was
Three months ended December 31, | Year ended December 31, | |||||||||||
2021 | 2020 | % increase/ | 2021 | 2020 | % increase/ | |||||||
(U.S. Dollars in millions) | (U.S. Dollars in millions) | |||||||||||
Basic lease rents | ||||||||||||
Interest expense | 370 | 311 | 1,230 | 1,248 | ( | |||||||
Adjusted for: | ||||||||||||
Mark-to-market of interest rate caps and swaps | 9 | — | NA | 20 | (14) | NA | ||||||
Interest expense excluding mark-to-market of interest rate caps and swaps | 379 | 311 | 1,250 | 1,234 | ||||||||
Net interest margin (*) | ||||||||||||
Depreciation and amortization, including maintenance rights expense | (557) | (408) | (1,745) | (1,691) | ||||||||
Net interest margin, less depreciation and amortization (*) | ||||||||||||
Average lease assets (*) | ||||||||||||
Annualized net spread (*) | ||||||||||||
Annualized net spread less depreciation and amortization (*) | ||||||||||||
(*) Refer to "Notes Regarding Financial Information Presented in This Press Release" for details relating to these non-GAAP measures | ||||||||||||
Interest expense excluding mark-to-market of interest rate caps and swaps was
Selling, General and Administrative Expenses
Three months ended December 31, | Year ended December 31, | |||||||||||
2021 | 2020 | % increase/ | 2021 | 2020 | % increase/ | |||||||
(U.S. Dollars in millions) | (U.S. Dollars in millions) | |||||||||||
Selling, general and administrative expenses | ||||||||||||
Share-based compensation expenses | 32 | 20 | 96 | 69 | ||||||||
Total selling, general and administrative expenses | ||||||||||||
Selling, general and administrative expenses increased to
Other Expenses
Asset impairment charges were
Leasing expenses were
Effective Tax Rate
AerCap's effective tax rate for the full year 2021 was
The company's effective tax rate was
Book Value Per Share
December 31, | December 31, | |||
(U.S. Dollars in millions, | ||||
Total AerCap Holdings N.V. shareholders' equity | ||||
Ordinary shares outstanding | 245,395,448 | 130,398,538 | ||
Unvested restricted stock | (5,822,811) | (2,552,346) | ||
Ordinary shares outstanding (excl. unvested restricted stock) | 239,572,637 | 127,846,192 | ||
Book value per ordinary share outstanding (excl. unvested restricted stock) | ||||
Financial Position
December 31, | December 31, | % increase/ (decrease) over December 31, | ||||
(U.S. Dollars in millions) | ||||||
Total cash, cash equivalents and restricted cash | ||||||
Total assets | 74,570 | 42,048 | ||||
Debt | 50,205 | 28,742 | ||||
Total liabilities | 57,922 | 33,116 | ||||
Total AerCap Holdings N.V. shareholders' equity | 16,571 | 8,864 | ||||
Total equity | 16,647 | 8,932 | ||||
Aircraft Portfolio
As of December 31, 2021, AerCap's portfolio consisted of 3,701 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company's owned aircraft fleet as of December 31, 2021 was 7.1 years (3.4 years for new technology aircraft, 13.0 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.
Ukraine Conflict
In response to the Russian invasion of Ukraine on February 24, 2022, the United States, the European Union, the United Kingdom and other countries have imposed broad, far-reaching sanctions against Russia, certain Russian persons and certain activities involving Russia or Russian persons. These sanctions include prohibitions regarding the supply of aircraft and aircraft components to Russian persons or for use in Russia, subject to certain wind-down periods. AerCap intends to fully comply with all applicable sanctions and we have terminated the leasing of all our aircraft and engines with Russian airlines. As of December 31, 2021, approximately
Notes Regarding Financial Information Presented in This Press Release
The financial information presented in this press release is not audited.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
The following are definitions of non-GAAP measures used in this press release. We believe these measures may further assist investors in their understanding of our operational performance.
Net income / earnings per share excluding GECAS transaction and integration-related expenses
Net income excluding GECAS transaction and integration-related expenses is calculated as net income excluding the after-tax impact of transaction and integration-related expenses. Earnings per share excluding GECAS transaction and integration-related expenses is calculated by dividing net income excluding GECAS transaction and integration-related expenses by the weighted average of our ordinary shares outstanding. Given the relative significance of this item during 2021, we have chosen to present this measure in order to assist investors in their understanding of the changes and trends related to our earnings.
Three months ended December 31, 2021 | Year ended December 31, 2021 | |||||||
Net income | Earnings per share | Net income | Earnings per share | |||||
(U.S. Dollars in millions, except per share data) | ||||||||
Net income / earnings per share | ||||||||
Transaction and Integration-related expenses | 139 | 0.68 | 335 | 2.25 | ||||
Income tax effect | (17) | (0.09) | (42) | (0.28) | ||||
Net income / earnings per share excluding GECAS | ||||||||
Adjusted debt/equity ratio
This measure is the ratio obtained by dividing adjusted debt by adjusted equity.
- Adjusted debt means consolidated total debt less cash and cash equivalents, and less a
50% equity credit with respect to certain long-term subordinated debt. - Adjusted equity means total equity, plus the
50% equity credit relating to the long-term subordinated debt.
Adjusted debt and adjusted equity are adjusted by the
December 31, | December 31, | |||
(U.S. Dollars in millions, | ||||
Debt | ||||
Adjusted for: | ||||
Cash and cash equivalents | (1,729) | (1,249) | ||
| (1,125) | (1,125) | ||
Adjusted debt | ||||
Equity | ||||
Adjusted for: | ||||
| 1,125 | 1,125 | ||
Adjusted equity | ||||
Adjusted debt/equity ratio | 2.66 to 1 | 2.62 to 1 | ||
Net interest margin, annualized net spread, annualized net spread less depreciation and amortization and average cost of debt
Net interest margin is calculated as the difference between basic lease rents and interest expense, excluding the impact of the mark-to-market of interest rate caps and swaps. Annualized net spread is net interest margin expressed as a percentage of average lease assets. Annualized net spread less depreciation and amortization is net interest margin less depreciation and amortization, including maintenance rights expense, expressed as a percentage of average lease assets. Average cost of debt is calculated as interest expense, excluding mark-to-market on interest rate caps and swaps, divided by average debt balance. We believe these measures may further assist investors in their understanding of the changes and trends related to the earnings of our leasing activities. These measures reflect the impact from changes in the number of aircraft leased, lease rates and utilization rates, as well as the impact from changes in the amount of debt and interest rates.
Lease assets
Lease assets include flight equipment held for operating leases, flight equipment held for sale, net investment in finance leases and maintenance rights assets.
Conference Call
In connection with its report of fourth quarter 2021 results, management will host a conference call with members of the investment community today, Wednesday, March 30, 2022, at 8:30 am Eastern Time. The call can be accessed live via webcast by AerCap's website at www.aercap.com under "Investors", or by dialing (U.S./Canada) +1 929 477 0402 or (International) +353 1 246 5638 and referencing code 8067205 at least 5 minutes before start time.
The webcast replay will be archived in the "Investors" section of the company's website for one year.
For further information, contact Joseph McGinley: +353 1 418 0428 (jmcginley@aercap.com).
About AerCap
AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is based in Dublin with offices in Shannon, Miami, Singapore, Amsterdam, Shanghai, Abu Dhabi, Seattle, Toulouse and other locations around the world.
Forward-Looking Statements
This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "should," "expect," "plan," "intend," "will," "aim," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors, including the impacts of, and associated responses to: the Covid-19 pandemic, our ability to successfully integrate GECAS' operations and employees and realize anticipated synergies and cost savings; and the potential impact of the consummation of the GECAS transaction on relationships, including with employees, suppliers, customers and competitors, that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements. As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except as required by applicable law, we do not undertake any obligation to, and will not, update any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information regarding AerCap and to be added to our email distribution list, please visit www.aercap.com and follow us on Twitter www.twitter.com/aercapnv.
AerCap HoldingsNV | ||||||
Unaudited Consolidated Balance Sheets | ||||||
(U.S. Dollars in thousands) | ||||||
December 31, | December 31, | |||||
Assets | ||||||
Cash and cash equivalents | ||||||
Restricted cash | 185,959 | 246,518 | ||||
Trade receivables | 181,455 | 170,675 | ||||
Flight equipment held for operating leases, net | 57,825,056 | 35,156,450 | ||||
Investment in finance leases, net | 1,929,220 | 878,451 | ||||
Flight equipment held for sale | 304,362 | — | ||||
Prepayments on flight equipment | 4,586,848 | 2,111,659 | ||||
Maintenance rights and lease premium, net | 4,444,520 | 649,914 | ||||
Other intangibles, net | 208,879 | 224,634 | ||||
Deferred tax assets | 121,571 | 131,532 | ||||
Associated companies | 705,087 | 122,654 | ||||
Other assets | 2,348,017 | 1,106,780 | ||||
Total Assets | ||||||
Liabilities and Equity | ||||||
Accounts payable, accrued expenses and other liabilities | ||||||
Accrued maintenance liability | 2,900,651 | 1,750,395 | ||||
Lessee deposit liability | 773,753 | 600,321 | ||||
Debt | 50,204,678 | 28,742,081 | ||||
Deferred tax liabilities | 2,085,230 | 913,431 | ||||
Total liabilities | 57,922,408 | 33,115,553 | ||||
Ordinary share capital | ||||||
2021 and 2020, respectively; 250,347,345 and 138,847,345 ordinary shares issued and 245,395,448 and | ||||||
130,598,538 ordinary shares outstanding (including 5,822,811 and 2,552,346 unvested restricted stock) as of | ||||||
December 31, 2021 and 2020, respectively | 3,024 | 1,721 | ||||
Additional paid-in capital | 8,522,694 | 2,078,125 | ||||
Treasury shares, at cost (4,951,897 and 8,448,807 ordinary shares as of December 31, 2021 and 2020, respectively) | (285,901) | (459,994) | ||||
Accumulated other comprehensive loss | (79,335) | (155,085) | ||||
Accumulated retained earnings | 8,410,261 | 7,399,703 | ||||
Total AerCap Holdings N.V. shareholders' equity | 16,570,743 | 8,864,470 | ||||
Non-controlling interest | 76,617 | 68,016 | ||||
Total Equity | 16,647,360 | 8,932,486 | ||||
Total Liabilities and Equity | ||||||
AerCap HoldingsNV | ||||||||||
Unaudited Consolidated Income Statements | ||||||||||
(U.S. Dollars in thousands, except share and per share data) | ||||||||||
Three months ended December 31, | Year ended December 31, | |||||||||
2021 | 2020 | 2021 | 2020 | |||||||
Revenues and other income | ||||||||||
Lease revenue: | ||||||||||
Basic rents | ||||||||||
Maintenance rents and other receipts | 96,662 | 110,143 | 520,914 | 559,395 | ||||||
Lease revenue | 1,379,777 | 995,476 | 4,412,003 | 4,321,006 | ||||||
Net gain on sale of assets | 24,547 | 14,099 | 89,428 | 89,618 | ||||||
Other income | 37,857 | 22,042 | 722,574 | 83,005 | ||||||
Total Revenues and other income | 1,442,181 | 1,031,617 | 5,224,005 | 4,493,629 | ||||||
Expenses | ||||||||||
Depreciation and amortization | 555,839 | 401,787 | 1,737,925 | 1,645,373 | ||||||
Asset impairment | 5,822 | 26,694 | 128,409 | 1,086,983 | ||||||
Interest expense | 369,549 | 310,534 | 1,230,466 | 1,248,225 | ||||||
Loss on debt extinguishment | 758 | 75,625 | 9,713 | 118,460 | ||||||
Leasing expenses | 161,961 | 91,453 | 319,022 | 323,535 | ||||||
Selling, general and administrative expenses | 119,269 | 63,746 | 317,888 | 242,161 | ||||||
Transaction and integration-related expenses | 139,432 | — | 334,966 | — | ||||||
Total Expenses | 1,352,630 | 969,839 | 4,078,389 | 4,664,737 | ||||||
Gain (loss) on investment at fair value | 2,608 | (29,089) | 2,301 | (143,510) | ||||||
Income (loss) before income taxes and income of investments | ||||||||||
accounted for under the equity method | 92,159 | 32,689 | 1,147,917 | (314,618) | ||||||
Income tax (expense) benefit | (20,010) | (7,080) | (162,537) | 17,231 | ||||||
Equity in net earnings of investments accounted for under the equity method | 18,348 | 2,861 | 24,051 | 2,464 | ||||||
Net income (loss) | ( | |||||||||
Net loss (income) attributable to non-controlling interest | (1,687) | 8 | (8,924) | (3,643) | ||||||
Net income (loss) attributable to AerCap Holdings N.V. | ( | |||||||||
Basic earnings (loss) per share | ( | |||||||||
Diluted earnings (loss) per share | ( | |||||||||
Weighted average shares outstanding - basic | 200,825,881 | 127,662,360 | 146,421,188 | 127,743,828 | ||||||
Weighted average shares outstanding - diluted | 203,641,504 | 128,840,968 | 149,005,981 | 127,743,828 | ||||||
AerCap HoldingsNV | ||||||
Unaudited Consolidated Statements of Cash Flows | ||||||
(U.S. Dollars in thousands) | ||||||
Year ended December 31, | ||||||
2021 | 2020 | |||||
Net income (loss) | ( | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization | 1,737,925 | 1,645,373 | ||||
Asset impairment | 128,409 | 1,086,983 | ||||
Amortization of debt issuance costs, debt discount, debt premium and lease premium | 113,981 | 64,970 | ||||
Amortization of fair value adjustment on debt | (16,977) | (47,279) | ||||
Maintenance rights write-off | 138,780 | 133,015 | ||||
Maintenance liability release to income | (273,146) | (344,210) | ||||
Net gain on sale of assets | (89,428) | (89,618) | ||||
Deferred tax benefit | (5,905) | (20,882) | ||||
Share-based compensation | 96,087 | 69,187 | ||||
Collections of finance leases | 124,325 | 68,128 | ||||
(Gain) loss on investment at fair value | (2,301) | 143,510 | ||||
Loss on debt extinguishment | 9,713 | 118,460 | ||||
Transaction and integration-related expenses | 186,474 | — | ||||
Other | 61,212 | 252,350 | ||||
Changes in operating assets and liabilities: | ||||||
Trade receivables | 232,119 | (128,188) | ||||
Other assets | 112,790 | (400,316) | ||||
Accounts payable, accrued expenses and other liabilities | 130,333 | (126,177) | ||||
Net cash provided by operating activities | 3,693,822 | 2,130,383 | ||||
Purchase of flight equipment | (1,703,395) | (778,547) | ||||
Proceeds from sale or disposal of assets | 796,613 | 471,437 | ||||
Prepayments on flight equipment | (86,386) | (405,178) | ||||
Acquisition of GECAS, net of cash acquired | (22,493,195) | — | ||||
Other | 27,427 | — | ||||
Net cash used in investing activities | (23,458,936) | (712,288) | ||||
Issuance of debt | 26,496,660 | 10,946,333 | ||||
Repayment of debt | (5,973,508) | (11,560,015) | ||||
Debt issuance and extinguishment costs paid, net of debt premium received | (422,260) | (253,806) | ||||
Maintenance payments received | 448,516 | 345,699 | ||||
Maintenance payments returned | (209,087) | (412,492) | ||||
Security deposits received | 210,781 | 137,130 | ||||
Security deposits returned | (290,758) | (297,469) | ||||
Dividend paid to non-controlling interest holders and others | (323) | (2,935) | ||||
Repurchase of shares and tax withholdings on share-based compensation | (76,220) | (127,777) | ||||
Net cash provided by (used in) financing activities | 20,183,801 | (1,225,332) | ||||
Net increase in cash, cash equivalents and restricted cash | 418,687 | 192,763 | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 776 | 2,180 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 1,495,290 | 1,300,347 | ||||
Cash, cash equivalents and restricted cash at end of period | ||||||
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SOURCE AerCap Holdings N.V.
FAQ
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