Record net income for the full year 2023 of $3.1 billion, or $13.78 per share, and $1.1 billion, or $5.37 per share, for the fourth quarter of 2023.
Record adjusted net income for the full year 2023 of $2.4 billion, or $10.73 per share, and $641 million, or $3.11 per share, for the fourth quarter of 2023.
Returned $2.6 billion to shareholders in 2023. New $500 million share repurchase authorization announced today.
DUBLIN, Feb. 23, 2024 /PRNewswire/ — AerCap Holdings N.V. (NYSE:AER), the industry leader across all areas of aviation leasing, today reported record financial results for the fourth quarter and full year of 2023 ended December 31, 2023.
Aengus Kelly, Chief Executive Officer of AerCap, said: “We are pleased to announce another record quarter for AerCap, completing a record year for our company across many fronts. These results reflect the continued strong operating environment across our businesses and the positive momentum for leasing and sales of aircraft, engines and helicopters. In addition, this quarter we collected over $600 million of insurance settlements, for a total of $1.3 billion collected during 2023. This strong performance is a testament to the talent, dedication and commitment of the entire AerCap team and our industry leadership. Given the strong tailwinds that we see for demand for aircraft, engines and helicopters, we are confident about the outlook for AerCap in 2024 and beyond.”
Highlights:
Return on equity of 27% and adjusted return on equity of 16% for the fourth quarter of 2023.
Book value per share of $83.81 as of December 31, 2023, an increase of approximately 25% from December 31, 2022.
Unlevered gain on sale margin of 18% for assets sold in the fourth quarter of 2023, or 1.62x book value on an equity basis.
Cash flow from operating activities of $1.4 billion for the fourth quarter of 2023, bringing the total for the full year 2023 to $5.3 billion.
Recovered $1.3 billion in cash insurance settlement proceeds to date, including $609 million in the fourth quarter of 2023.
Returned $2.6 billion to shareholders through the repurchase of 44.3 million shares during 2023, at an average price of $59.09 per share.
Following a successful secondary offering of 30.7 million shares in the fourth quarter of 2023, GE has now sold all of its AerCap shares.
Adjusted debt/equity ratio of 2.47 to 1 as of December 31, 2023.
Revenue and Net Spread
Three months ended December 31,
Year ended December 31,
2023
2022
% increase/
(decrease)
2023
2022
% increase/
(decrease)
(U.S. Dollars in millions)
(U.S. Dollars in millions)
Lease revenue:
Basic lease rents
$1,576
$1,494
6 %
$6,249
$5,982
4 %
Maintenance rents and other receipts
142
140
1 %
611
549
11 %
Total lease revenue
1,718
1,634
5 %
6,860
6,531
5 %
Net gain on sale of assets
94
121
(22 %)
490
229
114 %
Other income
86
74
17 %
231
254
(9 %)
Total Revenues and other income
$1,899
$1,829
4 %
$7,580
$7,014
8 %
Basic lease rents were $1,576 million for the fourth quarter of 2023, compared with $1,494 million for the same period in 2022. Basic lease rents for the fourth quarter of 2023 were impacted by $40 million of lease premium amortization.
Maintenance rents and other receipts were $142 million for the fourth quarter of 2023, compared with $140 million for the same period in 2022. Maintenance rents for the fourth quarter of 2023 were impacted by $25 million as a result of maintenance right assets that were amortized to revenue.
Net gain on sale of assets for the fourth quarter of 2023 was $94 million, relating to 35 assets sold for $625 million, compared with $121 million for the same period in 2022, relating to 83 assets sold for $1 billion. The decrease was primarily due to the volume and composition of asset sales.
Other income for the fourth quarter of 2023 was $86 million, compared with $74 million for the same period in 2022. The increase was primarily driven by higher interest income.
Three months ended December 31,
Year ended December 31,
2023
2022
% increase/
(decrease)
2023
2022
% increase/
(decrease)
(U.S. Dollars in millions)
(U.S. Dollars in millions)
Basic lease rents
$1,576
$1,494
6 %
$6,249
$5,982
4 %
Adjusted for:
Amortization of lease premium/deficiency
40
47
(14 %)
166
206
(19 %)
Basic lease rents excluding amortization of lease premium/deficiency
$1,617
$1,541
5 %
$6,415
$6,188
4 %
Interest expense
496
420
18 %
1,806
1,592
13 %
Adjusted for:
Mark-to-market of interest rate caps and swaps
(19)
2
NA
(37)
69
NA
Interest expense excluding mark-to-market of interest rate caps and swaps
477
423
13 %
1,770
1,661
7 %
Adjusted net interest margin (*)
$1,140
$1,118
2 %
$4,645
$4,527
3 %
Depreciation and amortization
(631)
(594)
6 %
(2,481)
(2,390)
4 %
Adjusted net interest margin, less depreciation and amortization
$509
$524
(3 %)
$2,164
$2,137
1 %
Average lease assets (*)
$60,283
$59,009
2 %
$59,775
$59,745
—
Annualized net spread (*)
7.6 %
7.6 %
7.8 %
7.6 %
Annualized net spread less depreciation and amortization (*)
3.4 %
3.6 %
3.6 %
3.6 %
(*) Refer to “Notes Regarding Financial Information Presented in This Press Release” for details relating to these non-GAAP measures and metrics
Interest expense excluding mark-to-market of interest rate caps and swaps was $477 million for the fourth quarter of 2023, compared with $423 million for the same period in 2022. AerCap’s average cost of debt was 3.7% for the fourth quarter of 2023 and 3.3% for the same period in 2022, excluding debt issuance costs, upfront fees and other impacts.
Recoveries Related to Ukraine Conflict
During the fourth quarter of 2023, we recognized recoveries related to the Ukraine Conflict of $614 million, primarily consisting of cash insurance settlement proceeds received from four Russian airlines and their Russian insurers in settlement of our insurance claims in respect of 50 aircraft and five spare engines on lease to these airlines at the time of Russia’s invasion of Ukraine in February 2022.
Selling, General and Administrative Expenses
Three months ended December 31,
Year ended December 31,
2023
2022
% increase/
(decrease)
2023
2022
% increase/
(decrease)
(U.S. Dollars in millions)
(U.S. Dollars in millions)
Selling, general and administrative expenses (excluding share-
based compensation expenses)
$95
$68
38 %
$367
$297
24 %
Share-based compensation expenses
27
24
14 %
97
103
(6 %)
Selling, general and administrative expenses
$122
$92
32 %
$464
$400
16 %
Selling, general and administrative expenses were $122 million for the fourth quarter of 2023, compared with $92 million for the same period in 2022. The increase was primarily driven by higher compensation-related expenses and higher travel, IT and other expenses.
Other Expenses
Leasing expenses were $135 million for the fourth quarter of 2023, compared with $261 million for the same period in 2022. The decrease in leasing expenses was primarily due to lower amortization of maintenance rights and lease premium assets and lower other leasing expenses recognized during the fourth quarter of 2023, compared with the same period in 2022. Asset impairment charges were $50 million for the fourth quarter of 2023, compared with $53 million recorded for the same period in 2022. Asset impairment charges recorded in the fourth quarter of 2023 related to sales transactions and leasing transactions and were partially offset by related maintenance revenue.
Effective Tax Rate
AerCap’s effective tax rate for the full year 2023 was 8.9%, compared with an effective tax rate of 16.4% for the full year 2022. The effective tax rate is impacted by the source and amount of earnings among our different tax jurisdictions as well as the amount of permanent tax differences relative to pre-tax income or loss, and certain other discrete items.
Book Value Per Share
December 31, 2023
December 31, 2022
(U.S. Dollars in millions,
except share and per share data)
Total AerCap Holdings N.V. shareholders’ equity
$16,589
$16,118
Ordinary shares outstanding
202,493,168
245,931,275
Unvested restricted stock
(4,561,249)
(4,837,602)
Ordinary shares outstanding (excl. unvested restricted stock)
197,931,919
241,093,673
Book value per ordinary share outstanding (excl. unvested restricted stock)
$83.81
$66.85
Financial Position
December 31,
2023
December 31,
2022
% increase/
(decrease) over
December 31, 2022
(U.S. Dollars in millions)
Total cash, cash equivalents and restricted cash
$1,825
$1,757
4 %
Total assets
71,275
69,727
2 %
Debt
46,484
46,533
—
Total liabilities
54,686
53,532
2 %
Total AerCap Holdings N.V. shareholders’ equity
16,589
16,118
3 %
Total equity
16,589
16,195
2 %
Flight Equipment
As of December 31, 2023, AerCap’s portfolio consisted of 3,452 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, 2023 was 7.3 years (4.5 years for new technology aircraft, 14.2 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.
Share Repurchase Program
In February 2024, …
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