- Net income for the second quarter of 2022 was $340 million, or $1.40 per share.
- Adjusted net income for the second quarter of 2022 was $464 million, or $1.91 per share.
AerCap Holdings N.V. the global leader in aviation leasing, has reported financial results for the second quarter of 2022 ended June 30, 2022.
“AerCap generated strong results in the second quarter, with a significant increase in activity across all of our businesses. The ongoing recovery in air travel continued to strengthen across all major regions, and was manifested in high levels of cash collections and greater utilization of our fleet during the quarter. The strength in passenger demand, coupled with supply constraints across the industry, is resulting in a favorable leasing environment,” said Aengus Kelly, Chief Executive Officer of AerCap.
Highlights:
- Executed 184 transactions in the second quarter of 2022, including 125 lease agreements, 16 purchases and 43 sales.
- Significant deleveraging in the second quarter of 2022: adjusted debt/equity ratio of 2.8 to 1 at June 30, 2022.
- Cash flow from operating activities was approximately $1.2 billion in the second quarter of 2022.
- Strong cash collections, higher utilization and a decrease in deferral balances.
- 100% of new aircraft order book placed through 2023.
- 10% margin on gain on sale of assets sold in the second quarter of 2022.
- $17 billion in total sources of liquidity, representing next 12 months’ sources-to-uses coverage ratio of 2.1x.
- Rating outlook revised to positive by Fitch
Basic lease rents were $1,462 million for the second quarter of 2022, compared with $871 million for the same period in 2021. The increase was primarily due to the impact of the GECAS acquisition. Basic lease rents were negatively impacted by the loss of revenues from Russian aircraft and were reduced by $52 million as a result of the amortization of lease premium assets.
Maintenance rents and other receipts were $103 million for the second quarter of 2022, compared with $131 million for the same period in 2021. The decrease was primarily due to lower maintenance revenue recognized as a result of lease terminations during the second quarter of 2022. Maintenance rents were reduced by $53 million as a result of maintenance rights assets that were amortized to revenue.
Net gain on sale of assets for the second quarter of 2022 was $35 million, relating to 29 assets sold for $386 million, compared with $22 million for the same period in 2021, relating to 12 aircraft sold for $139 million. The increase was primarily due to the volume and composition of asset sales.
Other income for the second quarter of 2022 was $71 million, compared with $207 million for the same period in 2021. The decrease was primarily driven by the amount of proceeds from unsecured claims. Other income in the second quarter of 2022 included $39 million of proceeds from unsecured claims, whereas other income in the second quarter of 2021 included $193 million of proceeds from unsecured claims.
Interest expense excluding mark-to-market of interest rate caps and swaps was $403 million for the second quarter of 2022, compared with $293 million for the same period in 2021. AerCap’s average cost of debt was 3.0% for the second quarter of 2022 and 3.8% for the same period in 2021, excluding debt issuance costs, upfront fees and other impacts.
Selling, general and administrative expenses increased to $105 million for the second quarter of 2022, compared with $73 million for the same period in 2021. The increase was primarily driven by higher expenses as a result of the GECAS acquisition.
Other Expenses
Asset impairment charges were $12 million for the second quarter of 2022, compared to $57 million for the same period in 2021. Asset impairment charges recorded in the second quarter of 2022 related to lease terminations and sales transactions and were largely offset by related maintenance revenue. Leasing expenses were $193 million for the second quarter of 2022, compared with $59 million for the same period in 2021. The increase was primarily due to higher transition costs, lessor maintenance contributions and other leasing expenses and an increase in maintenance rights expense as a result of the GECAS acquisition.
Effective Tax Rate
AerCap’s effective tax rate was 14% for the second quarter of 2022 and the second quarter of 2021. 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.
Flight Equipment Portfolio
As of June 30, 2022, AerCap’s portfolio consisted of 3,599 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company’s owned aircraft fleet as of June 30, 2022 was 7.2 years (3.8 years for new technology aircraft, 13.1 years for current technology aircraft) and the average remaining contractual lease term was 7.2 years.
