UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2020
Commission File Number 001-33159
AERCAP HOLDINGS N.V.
(Translation of Registrant’s Name into English)
AerCap House, 65 St. Stephen’s Green, Dublin D02 YX20, Ireland, +353 1 819 2010
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x
Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Note:  Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
 
 





Other Events
On May 5, 2020, AerCap Holdings N.V. filed its interim financial report for the quarter ended March 31, 2020.
The information contained in this Form 6-K is incorporated by reference into the Company’s Form F-3 Registration Statements File Nos. 333-224192, 333-234028 and 333-235323 and Form S-8 Registration Statements File Nos. 333-180323, 333-154416, 333-165839, 333-194637 and 333-194638, and related Prospectuses, as such Registration Statements and Prospectuses may be amended from time to time.



2
 


INDEX
 
 
 
 
Signature

3
 


PART I FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)
 
 
 

4
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
As of March 31, 2020 and December 31, 2019

 
Note
 
March 31, 2020
 
December 31, 2019
 
 
 
(U.S. Dollars in thousands, except share data)
Assets
 
 
 
 
 
Cash and cash equivalents
4
 
$
4,693,872

 
$
1,121,396

Restricted cash
4
 
188,671

 
178,951

Trade receivables
 
 
94,558

 
47,935

Flight equipment held for operating leases, net
5
 
35,670,631

 
35,870,781

Maintenance rights and lease premium, net
7
 
774,039

 
809,615

Flight equipment held for sale
8
 
331,387

 
336,592

Net investment in finance and sales-type leases
6, 19
 
978,783

 
1,011,549

Prepayments on flight equipment
23
 
3,108,703

 
2,954,478

Other intangibles, net
7
 
302,100

 
307,394

Deferred income tax assets
14
 
106,267

 
95,077

Other assets
9
 
895,817

 
1,015,476

Total Assets
 
 
$
47,144,828

 
$
43,749,244

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
11
 
$
1,108,037

 
$
1,032,623

Accrued maintenance liability
12
 
2,149,884

 
2,190,159

Lessee deposit liability
 
 
723,949

 
747,790

Debt
13
 
32,760,773

 
29,486,131

Deferred income tax liabilities
14
 
950,199

 
910,336

Commitments and contingencies
23
 
 
 
 
Total Liabilities
 
 
37,692,842

 
34,367,039

 
 
 
 
 
 
Ordinary share capital, €0.01 par value, 350,000,000 ordinary shares authorized as of March 31, 2020 and December 31, 2019; 138,847,345 and 141,847,345 ordinary shares issued and 129,637,008 and 131,583,489 ordinary shares outstanding (including 2,300,595 and 2,354,318 shares of unvested restricted stock) as of March 31, 2020 and December 31, 2019, respectively
15, 20
 
1,721

 
1,754

Additional paid-in capital
 
 
2,067,647

 
2,209,462

Treasury shares, at cost (9,210,337 and 10,263,856 ordinary shares as of March 31, 2020 and December 31, 2019, respectively)
15
 
(498,003
)
 
(537,341
)
Accumulated other comprehensive loss
 
 
(174,581
)
 
(93,587
)
Accumulated retained earnings
 
 
7,986,142

 
7,734,609

Total AerCap Holdings N.V. shareholders’ equity
 
 
9,382,926

 
9,314,897

Non-controlling interest
 
 
69,060

 
67,308

Total Equity
 
 
9,451,986

 
9,382,205

Total Liabilities and Equity
 
 
$
47,144,828

 
$
43,749,244

 
 
 
 
 
 
Supplemental balance sheet informationamounts related to assets and liabilities of consolidated Variable Interest Entities (VIE) for which creditors do not have recourse to our general credit:
 
 
 
 
Restricted cash
 
 
$
74,928

 
$
78,187

Flight equipment held for operating leases and held for sale
 
 
2,295,840

 
2,091,022

Other assets
 
 
61,933

 
64,908

 
 
 
 
 
 
Accrued maintenance liability
 
 
$
45,564

 
$
42,603

Debt
 
 
1,365,894

 
1,395,022

Other liabilities
 
 
307,559

 
81,335


The accompanying notes are an integral part of these Unaudited Financial Statements.

5
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Income Statements
For the Three Months Ended March 31, 2020 and 2019
 
 
 
Three Months Ended March 31,
 
Note
 
2020
 
2019
 
 
 
(U.S. Dollars in thousands,
 except share and per share data)
Revenues and other income
 
 
 
 
 
Lease revenue:
 
 


 

Basic lease rents
 
 
$
1,030,794

 
$
1,075,282

Maintenance rents and other receipts
 
 
134,285

 
86,811

Total lease revenue
 
 
1,165,079

 
1,162,093

Net gain on sale of assets
 
 
58,366

 
21,541

Other income
17
 
14,732

 
21,393

Total Revenues and other income
 
 
1,238,177

 
1,205,027

Expenses
 
 
 
 
 
Depreciation and amortization
5, 7
 
415,798

 
425,849

Asset impairment
18
 
13,947

 
5,031

Interest expense
 
 
318,617

 
334,179

Leasing expenses
 
 
103,297

 
91,721

Selling, general and administrative expenses
16
 
64,584

 
66,873

Total Expenses
 
 
916,243

 
923,653

Income before income taxes and income of investments accounted for under the equity method
 
 
321,934

 
281,374

Provision for income taxes
14
 
(43,461
)
 
(36,579
)
Equity in net earnings of investments accounted for under the equity method
 
 
1,331

 
2,102

Net income
 
 
$
279,804

 
$
246,897

Net income attributable to non-controlling interest
 
 
(2,980
)
 
(12,711
)
Net income attributable to AerCap Holdings N.V.
 
 
$
276,824

 
$
234,186

 
 
 
 
 
 
Basic earnings per share
20
 
$
2.16

 
$
1.70

Diluted earnings per share
20
 
$
2.14

 
$
1.68

 
 
 
 
 
 
Weighted average shares outstanding - basic
 
 
128,299,745

 
138,153,456

Weighted average shares outstanding - diluted
 
 
129,340,501

 
139,618,644
















The accompanying notes are an integral part of these Unaudited Financial Statements.

6
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income
For the Three Months Ended March 31, 2020 and 2019
 
Three Months Ended March 31,
 
2020
 
2019
 
(U.S. Dollars in thousands)
Net income
$
279,804

 
$
246,897

 
 
 
 
Other comprehensive loss:
 
 
 
Net change in fair value of derivatives (Note 10), net of tax of $11,571 and $5,092, respectively
(80,994
)
 
(35,646
)
Total other comprehensive loss
(80,994
)
 
(35,646
)
 
 
 
 
Comprehensive income
198,810

 
211,251

Comprehensive income attributable to non-controlling interest
(2,980
)
 
(12,711
)
Total comprehensive income attributable to AerCap Holdings N.V.
$
195,830

 
$
198,540







































The accompanying notes are an integral part of these Unaudited Financial Statements.

7
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2020 and 2019
 
Three Months Ended March 31,
 
2020
 
2019
 
(U.S. Dollars in thousands)
Net income
$
279,804

 
$
246,897

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
415,798

 
425,849

Asset impairment
13,947

 
5,031

Amortization of debt issuance costs, debt discount, debt premium and lease premium
16,298

 
19,033

Amortization of fair value adjustments on debt
(16,267
)
 
(27,060
)
Maintenance rights write-off (a)
33,393

 
52,357

Maintenance liability release to income
(63,422
)
 
(46,285
)
Net gain on sale of assets
(58,366
)
 
(21,541
)
Deferred income taxes
44,616

 
37,769

Collections of finance and sales-type leases
19,115

 
19,890

Other
75,395

 
56,079

Changes in operating assets and liabilities:
 
 
 
Trade receivables
(49,342
)
 
(55,039
)
Other assets
(96,013
)
 
(10,172
)
Accounts payable, accrued expenses and other liabilities
13,962

 
42,892

Net cash provided by operating activities
628,918

 
745,700

Purchase of flight equipment
(61,326
)
 
(815,274
)
Proceeds from sale or disposal of assets
176,961

 
312,431

Prepayments on flight equipment
(350,836
)
 
(280,335
)
Other

 
(11
)
Net cash used in investing activities
(235,201
)
 
(783,189
)
Issuance of debt
4,200,000

 
1,816,306

Repayment of debt
(918,422
)
 
(537,246
)
Debt issuance costs paid, net of debt premium received
(1,739
)
 
(13,863
)
Maintenance payments received
144,876

 
174,390

Maintenance payments returned
(95,189
)
 
(108,437
)
Security deposits received
28,392

 
86,860

Security deposits returned
(48,608
)
 
(78,270
)
Dividend paid to non-controlling interest holders and others
(1,228
)
 
(1,674
)
Repurchase of shares and tax withholdings on share-based compensation
(118,571
)
 
(140,978
)
Net cash provided by financing activities
3,189,511

 
1,197,088

Net increase in cash, cash equivalents and restricted cash
3,583,228

 
1,159,599

Effect of exchange rate changes
(1,032
)
 
(403
)
Cash, cash equivalents and restricted cash at beginning of period
1,300,347

 
1,415,035

Cash, cash equivalents and restricted cash at end of period
$
4,882,543

 
$
2,574,231









The accompanying notes are an integral part of these Unaudited Financial Statements.

8
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows (Continued)
For the Three Months Ended March 31, 2020 and 2019
 
Three Months Ended March 31,
 
2020
 
2019
 
(U.S. Dollars in thousands)
Supplemental cash flow information:
 
 
 
Interest paid, net of amounts capitalized
$
298,321

 
$
273,591

Income taxes paid (refunded), net
1,104

 
(877
)

 
(a) Maintenance rights write-off consisted of the following:
 
 
 
 
 
 
 
      End of Lease (EOL) and Maintenance Reserved (MR) contract maintenance rights expense
$
16,220

 
$
21,409

      MR contract maintenance rights write-off due to maintenance liability release
467

 
3,956

      EOL contract maintenance rights write-off due to cash receipt
16,706

 
26,992

      Maintenance rights write-off
$
33,393

 
$
52,357






































The accompanying notes are an integral part of these Unaudited Financial Statements.

9
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows (Continued)
For the Three Months Ended March 31, 2020 and 2019

Non-Cash Investing and Financing Activities

Three Months Ended March 31, 2020:
Flight equipment held for operating leases in the amount of $21.8 million was reclassified to net investment in finance and sales-type leases.
Flight equipment held for operating leases in the amount of $145.5 million was reclassified to flight equipment held for sale.
Accrued maintenance liability in the amount of $61.3 million was settled with buyers upon sale or disposal of assets.
Three Months Ended March 31, 2019:
Flight equipment held for operating leases in the amount of $12.3 million was reclassified to net investment in finance and sales-type leases.
Flight equipment held for operating leases in the amount of $653.0 million was reclassified to flight equipment held for sale.
Accrued maintenance liability in the amount of $19.1 million was settled with buyers upon sale or disposal of assets.

































The accompanying notes are an integral part of these Unaudited Financial Statements.

10
 


AerCap Holdings N.V. and Subsidiaries
Unaudited Condensed Consolidated Statements of Equity
For the Three Months Ended March 31, 2020 and 2019
 
Number of ordinary shares issued
 
Ordinary share capital
 
Additional
paid-in
capital
 
Treasury
shares
 
Accumulated other comprehensive loss
 
Accumulated retained earnings
 
AerCap Holdings N.V. shareholders’ equity
 
Non-controlling interest
 
Total equity
 
(U.S. Dollars in thousands, except share data)
Balance as of December 31, 2019
141,847,345

 
$
1,754

 
$
2,209,462

 
$
(537,341
)
 
$
(93,587
)
 
$
7,734,609

 
$
9,314,897

 
$
67,308

 
$
9,382,205

Dividends paid

 

 

 

 

 

 

 
(1,228
)
 
(1,228
)
Repurchase of shares

 

 

 
(117,302
)
 

 

 
(117,302
)
 

 
(117,302
)
Share cancellation
(3,000,000
)
 
(33
)
 
(149,203
)
 
149,236

 

 

 

 

 

Ordinary shares issued, net of tax withholdings

 

 
(10,369
)
 
7,404

 

 
487

 
(2,478
)
 

 
(2,478
)
Share-based compensation

 

 
17,757

 

 

 

 
17,757

 

 
17,757

Cumulative effect due to adoption of new accounting standard

 

 

 

 

 
(25,778
)
 
(25,778
)
 

 
(25,778
)
Total comprehensive income (loss)

 

 

 

 
(80,994
)
 
276,824

 
195,830

 
2,980

 
198,810

Balance as of March 31, 2020
138,847,345

 
$
1,721

 
$
2,067,647

 
$
(498,003
)
 
$
(174,581
)
 
$
7,986,142

 
$
9,382,926

 
$
69,060

 
$
9,451,986


 
Number of ordinary shares issued
 
Ordinary share capital
 
Additional
paid-in
capital
 
Treasury
shares
 
Accumulated other comprehensive loss
 
Accumulated retained earnings
 
AerCap Holdings N.V. shareholders’ equity
 
Non-controlling interest
 
Total equity
 
(U.S. Dollars in thousands, except share data)
Balance as of December 31, 2018
151,847,345

 
$
1,866

 
$
2,712,417

 
$
(476,085
)
 
$
(1,824
)
 
$
6,591,674

 
$
8,828,048

 
$
52,566

 
$
8,880,614

Dividends paid

 

 

 

 

 

 

 
(1,674
)
 
(1,674
)
Repurchase of shares

 

 

 
(137,155
)
 

 

 
(137,155
)
 

 
(137,155
)
Ordinary shares issued, net of tax withholdings

 

 
(1,759
)
 
1,639

 

 
(548
)
 
(668
)
 

 
(668
)
Share-based compensation

 

 
17,413

 

 

 

 
17,413

 

 
17,413

Total comprehensive income (loss)

 

 

 

 
(35,646
)
 
234,186

 
198,540

 
12,711

 
211,251

Balance as of March 31, 2019
151,847,345

 
$
1,866

 
$
2,728,071

 
$
(611,601
)
 
$
(37,470
)
 
$
6,825,312

 
$
8,906,178

 
$
63,603

 
$
8,969,781









The accompanying notes are an integral part of these Unaudited Financial Statements.

11
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

1. General
The Company
AerCap Holdings N.V. and its subsidiaries (“AerCap”, “we”, “us”, the “Company”) are the global leader in aircraft leasing with 1,372 aircraft owned, managed or on order, and total assets of $47.1 billion as of March 31, 2020. Our ordinary shares are listed on the New York Stock Exchange under the ticker symbol AER. Our headquarters is located in Dublin, and we have offices in Shannon, Los Angeles, Singapore, Amsterdam, Shanghai and Abu Dhabi. We also have representative offices at the world’s largest aircraft manufacturers, The Boeing Company (“Boeing”) in Seattle and Airbus S.A.S. (“Airbus”) in Toulouse.
The Condensed Consolidated Financial Statements presented herein include the accounts of AerCap Holdings N.V. and its subsidiaries. AerCap Holdings N.V. was incorporated in the Netherlands as a public limited liability company (“naamloze vennootschap” or “N.V.”) on July 10, 2006.
2. Basis of presentation
General
Our Condensed Consolidated Financial Statements are presented in accordance with Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”).
We consolidate all companies in which we have direct and indirect legal or effective control and all VIEs for which we are deemed the Primary Beneficiary (“PB”) under Accounting Standards Codification (“ASC”) 810. All intercompany balances and transactions with consolidated subsidiaries are eliminated. The results of consolidated entities are included from the effective date of control or, in the case of VIEs, from the date that we are or become the PB. The results of subsidiaries sold or otherwise deconsolidated are excluded from the date that we cease to control the subsidiary or, in the case of VIEs, when we cease to be the PB.
Unconsolidated investments where we have significant influence are reported using the equity method of accounting.
Our Condensed Consolidated Financial Statements are stated in U.S. dollars, which is our functional currency.
Our interim financial statements have been prepared pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”) and U.S. GAAP for interim financial reporting, and reflect all normally recurring adjustments that are necessary to fairly state the results for the interim periods presented. Certain information and footnote disclosures required by U.S. GAAP for complete annual financial statements have been omitted and, therefore, our interim financial statements should be read in conjunction with our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the SEC on March 5, 2020. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of those for a full fiscal year.
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.
Use of estimates
The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The use of estimates is or could be a significant factor affecting the reported carrying values of flight equipment, intangibles, investments, trade and notes receivables, deferred income tax assets and accruals and reserves. Actual results may differ from our estimates under different conditions, sometimes materially.
Reportable segments
We manage our business and analyze and report our results of operations on the basis of one business segment: leasing, financing, sales and management of commercial aircraft and engines.     

12
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
3. Summary of significant accounting policies


Revenue Recognition
We periodically evaluate the collectability of our operating lease payments to determine the appropriate revenue recognition and measurement model to apply to each lessee. We cease accrual-based revenue recognition on an operating lease contract when the collection of the rental payments is no longer probable and we then recognize rental revenues using a cash accounting method (“Cash Accounting”). In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease income. Subsequently, we recognize revenues based on the lesser of the straight-line rental income or the lease payments collected from the lessee until such time that collection is probable.
Our other significant accounting policies are described in our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the SEC on March 5, 2020.
Recent accounting standards and policy elections adopted during 2020:
Allowance for credit losses
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (“ASC 326”). ASC 326 replaces the incurred loss methodology with an expected loss methodology referred to as the current expected credit loss (“CECL”) methodology. The CECL methodology utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for most financial assets measured at amortized cost and certain other instruments, including loan and other receivables and net investment in finance and sales-type leases. Our net investment in finance and sales-type leases and notes receivable are the primary financial assets within the scope of ASC 326. Our trade receivables related to aircraft operating leases are not within the scope of ASC 326.
On January 1, 2020, we adopted ASC 326 under a modified retrospective approach. As a result of adopting ASC 326, our allowance for credit losses will reflect our estimate of credit losses over the remaining expected life of the financial assets measured at amortized cost. Expected credit losses for newly recognized financial assets as well as changes to expected credit losses during the period, will be recognized in earnings and classified within leasing expenses. These expected credit losses will be measured based on historical loss data, current conditions and forecasts that affect the collectability of the reported amount. Results for reporting periods after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with the previously applicable GAAP.
The cumulative effect of measuring the allowance for credit losses under the CECL methodology, as a result of adopting ASC 326 on January 1, 2020, was an increase to the allowance for credit losses of $30.3 million and a decrease to retained earnings of $25.8 million, net of tax.
Current expected credit loss provisions are recognized in our income statement and are classified as leasing expenses, with a corresponding allowance for credit loss amount reported as a reduction in the carrying amount of the related net investment in finance and sales-type leases and notes receivable balance sheet amount. A write-off is made when all or part of the net investment in finance and sales-type leases or notes receivable asset is deemed uncollectible. Write-offs are charged against previously established allowances for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the provision for credit losses.

13
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
3. Summary of significant accounting policies (Continued)


Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASC 848”). ASC 848 provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to reduce the financial reporting burden in light of the market transition from London Interbank Offered Rates (“LIBOR”) and other reference interest rates to alternative reference rates.
Under ASC 848 companies can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform if certain criteria are met. An entity that makes this election would not be required to remeasure the contracts at the modification date or reassess a previous accounting determination. The amendments of ASC 848 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU are effective from March 12, 2020 through December 31, 2022 and can be adopted prospectively for any interim period that includes or is subsequent to March 12, 2020. We have not adopted ASC 848 for this interim period and are currently evaluating the adoption impact the standard may have on our financial statements.
Accounting for lease concessions related to the effects of the Covid-19 pandemic
In April 2020, the FASB issued an interpretive guidance Staff Q&A Accounting for lease concessions related to the effects of the Covid-19 pandemic (the “Q&A”). The Q&A is applicable to companies whose leases are affected by the economic disruptions caused by the Covid-19 pandemic. The Q&A provides that a company may elect to account for lease concessions as though those concessions existed regardless of whether the enforceable rights and obligations for the concessions explicitly exist in the contract. As a result, an entity is not required to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in ASC 842, Leases, to those contracts. This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract.
Effective beginning in the period ended March 31, 2020, we have elected to account for lease concessions related to the effects of the Covid-19 pandemic consistent with how those concessions would be accounted for under ASC 842 as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). This election is available for concessions related to the effects of the Covid-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee.
Simplifying the Test for Goodwill Impairment
In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The standard also clarifies the treatment of the income tax effect of tax-deductible goodwill when measuring goodwill impairment loss. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. We adopted ASU 2017-04 on January 1, 2020 and it did not have an impact on our consolidated financial statements.
We recognized goodwill in connection with our acquisition of ILFC. Goodwill is not amortized, but is tested at least annually, as of December 31 of each year, for impairment, or more frequently if indicators of impairment are present.
We qualitatively assess whether it is more likely than not that our goodwill is impaired. If we conclude based on the qualitative assessment that it is more likely than not that the fair value of AerCap is less than its equity carrying amount, we are required to perform a quantitative impairment test.
The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of AerCap with its equity carrying amount, including goodwill. If the carrying amount of AerCap’s equity exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.



14
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

4. Restricted cash
Our restricted cash balance was $188.7 million and $179.0 million as of March 31, 2020 and December 31, 2019, respectively, and was primarily related to our Export Credit Agency (“ECA”) financings and Export-Import Bank of the United States (“Ex-Im”) financings, our AerFunding revolving credit facility and other debt. See Note 13Debt.
In March 2020, AICDC borrowed $4.0 billion under a senior unsecured revolving credit facility (the “Citi Revolver”). In April 2020, we repaid $3.0 billion of the outstanding amount.
The following is a reconciliation of cash, cash equivalents and restricted cash as of March 31, 2020, December 31, 2019 and March 31, 2019:
 
March 31, 2020
 
December 31, 2019
 
March 31, 2019
Cash and cash equivalents
$
4,693,872

 
$
1,121,396

 
$
2,348,132

Restricted cash
188,671

 
178,951

 
226,099

Total cash, cash equivalents and restricted cash
$
4,882,543

 
$
1,300,347

 
$
2,574,231

5. Flight equipment held for operating leases, net
Movements in flight equipment held for operating leases during the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended March 31,
 
2020
 
2019
Net book value at beginning of period
$
35,870,781

 
$
35,052,335

Additions
426,858

 
1,225,140

Depreciation
(409,448
)
 
(419,493
)
Disposals and transfers to held for sale
(187,298
)
 
(757,944
)
Transfers to net investment in finance and sales-type leases/inventory
(21,798
)
 
(12,309
)
Impairment (Note 18)
(8,464
)
 
(5,031
)
Net book value at end of period
$
35,670,631

 
$
35,082,698

 
 
 
 
Accumulated depreciation as of March 31, 2020 and 2019
$
(7,794,243
)
 
$
(6,864,996
)
6. Net investment in finance and sales-type leases
Components of net investment in finance and sales-type leases as of March 31, 2020 and December 31, 2019 were as follows:
 
March 31, 2020
 
December 31, 2019
Future minimum lease payments to be received
$
692,332

 
$
715,085

Estimated residual values of leased flight equipment
588,144

 
577,353

Less: Unearned income
(269,256
)
 
(280,889
)
Allowance for credit losses
(32,437
)
 

 
$
978,783

 
$
1,011,549

During the three months ended March 31, 2020 and 2019, we recognized interest income from net investment in finance and sales-type leases of $13.7 million and $16.4 million, respectively, included in basic lease rents.

15
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

7. Intangibles
Maintenance rights and lease premium, net
Maintenance rights and lease premium, net consisted of the following as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
Maintenance rights
$
761,001

 
$
794,798

Lease premium, net
13,038

 
14,817

 
$
774,039

 
$
809,615

Movements in maintenance rights during the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended March 31,
 
2020
 
2019
Maintenance rights at beginning of period
$
794,798

 
$
1,088,246

EOL and MR contract maintenance rights expense
(16,220
)
 
(21,409
)
MR contract maintenance rights write-off due to maintenance liability release
(467
)
 
(3,956
)
EOL contract maintenance rights write-off due to cash receipt
(16,706
)
 
(26,992
)
EOL and MR contract maintenance rights write-off due to sale of aircraft
(404
)
 
(132
)
Maintenance rights at end of period
$
761,001

 
$
1,035,757

Other intangibles
Other intangibles consisted of the following as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
Goodwill
$
58,094

 
$
58,094

Customer relationships, net
235,471

 
240,765

Contractual vendor intangible assets
8,535

 
8,535

 
$
302,100

 
$
307,394

The following tables present details of customer relationships and related accumulated amortization as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
Gross carrying amount
 
Accumulated
amortization
 
Net carrying amount
Customer relationships
$
360,000

 
$
(124,529
)
 
$
235,471

 
 
 
 
 
 
 
December 31, 2019
 
Gross carrying amount
 
Accumulated
amortization
 
Net carrying amount
Customer relationships
$
360,000

 
$
(119,235
)
 
$
240,765

During the three months ended March 31, 2020 and 2019, we recorded amortization expense for customer relationships of $5.3 million.


16
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

8. Flight equipment held for sale
Generally, an aircraft is classified as held for sale when the sale is probable, the aircraft is available for sale in its present condition, and the aircraft is expected to be sold within one year. Aircraft are reclassified from flight equipment held for operating leases to flight equipment held for sale at the lower of the aircraft carrying value or fair value, less costs to sell. Depreciation is no longer recognized for aircraft classified as held for sale.
As of March 31, 2020, 13 aircraft with a total net book value of $331.4 million met the held for sale criteria and were classified as flight equipment held for sale in our Condensed Consolidated Balance Sheet. Aggregate maintenance and security deposit amounts received from the lessees of approximately $45 million will be assumed by the buyers of these aircraft upon consummation of the individual sale transactions.
As of December 31, 2019, 14 aircraft with a total net book value of $336.6 million met the held for sale criteria and were classified as flight equipment held for sale in our Consolidated Balance Sheet. During the first quarter of 2020, the sale of eight of those aircraft closed and the remaining aircraft were held for sale as of March 31, 2020.
9. Other assets
Other assets consisted of the following as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
Lease incentives
$
217,170

 
$
239,607

Notes receivable, net of allowance for credit losses (a) (b)
173,179

 
87,745

Investments
124,682

 
123,279

Straight-line rents, prepaid expenses and other
103,506

 
98,443

Operating lease right of use assets
43,013

 
43,668

Other tangible fixed assets
25,018

 
26,018

Debt issuance costs
22,724

 
26,393

Derivative assets (Note 10)
1,839

 
11,664

Inventory

 
3,157

Other receivables
184,686

 
355,502

 
$
895,817

 
$
1,015,476


(a)
Notes receivable as of March 31, 2020 and December 31, 2019 include $141 million and $49 million, respectively, related to agreements we have executed with customers to reschedule certain lease payments under our leases that are due at the reporting dates (“Deferral Agreements”). Notes receivable as of March 31, 2020 and December 31, 2019 also include $32 million and $39 million, respectively, related to aircraft sale transactions.
(b)
As of March 31, 2020, we had a $6.4 million allowance for credit losses on notes receivable. As of December 31, 2019, we did not have an allowance for credit losses on notes receivables. Please refer to Note 19—Allowance for credit losses for further details.

10. Derivative financial instruments
We have entered into interest rate derivatives to hedge the current and future interest rate payments on our variable rate debt. These derivative financial instruments can include interest rate swaps, caps, floors, options and forward contracts.
As of March 31, 2020, we had interest rate caps and swaps outstanding, with underlying variable benchmark interest rates ranging from one to six-month U.S. dollar LIBOR.
Some of our agreements with derivative counterparties require a two-way cash collateralization of derivative fair values. As of March 31, 2020 and December 31, 2019, we had cash collateral of $0.3 million and $0.6 million, respectively, from various counterparties and the obligation to return such collateral was recorded in accounts payable, accrued expenses and other liabilities. We had not advanced any cash collateral to counterparties as of March 31, 2020 or December 31, 2019.

17
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
10. Derivative financial instruments (Continued)


The counterparties to our interest rate derivatives are primarily major international financial institutions. We continually monitor our positions and the credit ratings of the counterparties involved and limit the amount of credit exposure to any one party. We could be exposed to potential losses due to the credit risk of non-performance by these counterparties. We have not experienced any material losses to date.
Our derivative assets are recorded in other assets and our derivative liabilities are recorded in accounts payable, accrued expenses and other liabilities in our Condensed Consolidated Balance Sheets. The following tables present notional amounts and fair values of derivatives outstanding as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
 
Notional amount (a)
 
Fair value
 
Notional amount (a)
 
Fair value
Derivative assets not designated as accounting hedges:
 
 
 
 
 
 
 
Interest rate caps
$
2,492,000

 
$
506

 
$
2,442,000

 
$
3,727

Derivative assets designated as accounting cash flow hedges:
 
 
 
 
 
 
 
Interest rate swaps
$

 
$

 
$
488,616

 
$
1,578

Interest rate caps
400,000

 
1,333

 
400,000

 
6,359

Total derivative assets
 
 
$
1,839

 
 
 
$
11,664

 
(a)
The notional amount is excluded for caps and swaps which are not yet effective.
 
March 31, 2020
 
December 31, 2019
 
Notional amount (a)
 
Fair value
 
Notional amount (a)
 
Fair value
Derivative liabilities not designated as cash flow hedges:
 
 
 
 
 
 
 
Interest rate swaps
$
300,000

 
$
15,414

 
$

 
$

Derivative liabilities designated as accounting cash flow hedges:
 
 
 
 
 
 
 
Interest rate swaps
$
3,609,674

 
$
177,227

 
$
3,776,000

 
$
97,066

Total derivative liabilities
 
 
$
192,641

 
 
 
$
97,066

 
(a)
The notional amount is excluded for swaps which are not yet effective.
We recorded the following in other comprehensive loss related to derivative financial instruments for the three months ended March 31, 2020 and 2019:
 
Three Months Ended March 31,
 
2020
 
2019
Gain (Loss)
 
 
 
Effective portion of change in fair market value of derivatives designated as accounting cash flow hedges:
 
 
 
Interest rate swaps
$
(87,778
)
 
$
(40,738
)
Interest rate caps
(4,787
)
 

Income tax effect
11,571

 
5,092

Net changes in cash flow hedges, net of tax
$
(80,994
)
 
$
(35,646
)

18
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
10. Derivative financial instruments (Continued)


We expect to reclassify approximately $57 million from accumulated other comprehensive income (loss) (“AOCI”) as an increase in interest expense in our Condensed Consolidated Income Statements over the next 12 months. The following table presents the effect of derivatives recorded as reductions to or (increases) in interest expense in our Condensed Consolidated Income Statements for the three months ended March 31, 2020 and 2019:
 
Three Months Ended March 31,
 
2020
 
2019
Gain (Loss)
 
 
 
Derivatives not designated as accounting hedges:
 
 
 
Interest rate caps and swaps
$
(12,550
)
 
$
(15,887
)
Reclassification to Condensed Consolidated Income Statements:
 
 
 
Reclassification of amounts previously recorded within AOCI
(5,463
)
 
3,931

Effect from derivatives on interest expense
$
(18,013
)
 
$
(11,956
)
11. Accounts payable, accrued expenses and other liabilities
Accounts payable, accrued expenses and other liabilities consisted of the following as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
Deferred revenue
$
362,327

 
$
389,958

Accrued interest
263,626

 
255,369

Accounts payable and accrued expenses
240,365

 
239,086

Derivative liabilities (Note 10)
192,641

 
97,066

Operating lease liabilities
49,078

 
51,144

 
$
1,108,037

 
$
1,032,623

12. Accrued maintenance liability
Movements in accrued maintenance liability during the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended March 31,
 
2020
 
2019
Accrued maintenance liability at beginning of period
$
2,190,159

 
$
2,237,494

Maintenance payments received
144,876

 
174,390

Maintenance payments returned
(95,189
)
 
(108,437
)
Release to income upon sale
(61,347
)
 
(19,103
)
Release to income other than upon sale
(58,989
)
 
(45,522
)
Lessor contribution, top ups and other
30,374

 
22,227

Accrued maintenance liability at end of period
$
2,149,884

 
$
2,261,049


19
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt


As of March 31, 2020, the principal amount of our outstanding indebtedness totaled $32.8 billion, which excluded fair value adjustments of $79.8 million and debt issuance costs, debt discounts and debt premium of $129.0 million, and our undrawn lines of credit and other available secured debt were approximately $2.9 billion, availability of which is subject to certain conditions, including compliance with certain financial covenants. As of March 31, 2020, we remained in compliance with the financial covenants across our various debt obligations.
The following table provides a summary of our indebtedness as of March 31, 2020 and December 31, 2019:
 
 
March 31, 2020
 
December 31, 2019
Debt obligation
 
Collateral (Number of
 aircraft)
 
Commitment
 
Undrawn amounts
 
Amount outstanding
 
Weighted average interest rate (a)
 
Maturity
 
Amount outstanding
Unsecured
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Lease Finance Corporation (“ILFC”) Legacy Notes
 
 
 
$
2,900,000

 
$

 
$
2,900,000

 
7.09
%
 
2020-2022
 
$
2,900,000

AerCap Trust (b) & AICDC (c) Notes
 
 
 
12,500,000

 

 
12,500,000

 
4.13
%
 
2020-2028
 
12,500,000

Asia Revolving Credit Facility
 
 
 
950,000

 
950,000

 

 

 
2022
 

Citi Revolving Credit Facility
 
 
 
4,000,000

 

 
4,000,000

 
2.13
%
 
2024
 

Other unsecured debt
 
 
 
1,874,000

 

 
1,874,000

 
2.39
%
 
2021-2023
 
2,024,000

Fair value adjustment
 
 
 
NA

 
NA

 
82,554

 
NA

 
NA
 
99,093

TOTAL UNSECURED
 
 
 
$
22,224,000

 
$
950,000

 
$
21,356,554

 
 
 
 
 
$
17,523,093

Secured
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Export credit facilities
 
17

 
520,909

 

 
520,909

 
2.37
%
 
2021-2030
 
565,312

Institutional secured term loans & secured portfolio loans
 
171

 
6,828,716

 

 
6,828,716

 
3.27
%
 
2022-2030
 
7,303,496

AerFunding Revolving Credit Facility
 
16

 
2,500,000

 
1,636,934

 
863,066

 
2.86
%
 
2022
 
875,145

Other secured debt
 
42

 
1,383,665

 
353,900

 
1,029,765

 
3.92
%
 
2021-2037
 
1,062,756

Fair value adjustment
 
 
 
NA

 
NA

 
(2,563
)
 
NA

 
NA
 
(2,835
)
TOTAL SECURED
 
 
 
$
11,233,290

 
$
1,990,834

 
$
9,239,893

 
 
 
 
 
$
9,803,874

Subordinated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subordinated Notes
 
 
 
2,250,000

 

 
2,250,000

 
4.93
%
 
2025-2079
 
2,250,000

Subordinated debt issued by joint ventures
 
 
 
43,521

 

 
43,521

 

 
2021-2023
 
47,521

Fair value adjustment
 
 
 
NA

 
NA

 
(222
)
 
NA

 
NA
 
(222
)
TOTAL SUBORDINATED
 
 
 
$
2,293,521

 
$

 
$
2,293,299

 
 
 
 
 
$
2,297,299

Debt issuance costs, debt discounts and debt premium
 
 
 
NA

 
NA

 
(128,973
)
 
NA

 
NA
 
(138,135
)
 
 
246

 
$
35,750,811

 
$
2,940,834

 
$
32,760,773

 
 
 
 
 
$
29,486,131


(a)
The weighted average interest rate for our floating rate debt is calculated based on the U.S. dollar LIBOR rate as of the last interest payment date of the respective debt, and excludes the impact of related derivative financial instruments which we hold to hedge our exposure to floating interest rates, as well as any amortization of debt issuance costs, debt discounts and debt premium. The institutional secured term loans and secured portfolio loans also contain base rate alternatives.
(b)
AerCap Global Aviation Trust (“AerCap Trust”)
(c)
AerCap Ireland Capital Designated Activity Company, a designated activity company with limited liability incorporated under the laws of Ireland (“AICDC”)


20
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)


Additional details of the principal terms of our indebtedness can be found in our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the SEC on March 5, 2020. The material changes to our indebtedness since the filing of that report, except for scheduled repayments, are described below.
Revolving credit facilities
In March 2014, AICDC entered the Citi Revolver which was subsequently upsized and amended. In October 2019, AICDC amended the Citi Revolver, increased the size to $4.0 billion (with an option to increase the size by an additional $0.5 billion) and extended the maturity to February 2024.
In March 2020, AICDC borrowed the full amount available under the Citi Revolver. In April 2020, we repaid $3.0 billion of the outstanding amount.
The obligations under the Citi Revolver are guaranteed by AerCap Holdings N.V. and certain of its subsidiaries. Availability of borrowings under the Citi Revolver is subject to the satisfaction of customary conditions precedent.
The Citi Revolver contains covenants customary for unsecured financings of this type, including financial covenants that require us to maintain compliance with a maximum ratio of consolidated indebtedness to shareholders’ equity, a minimum fixed charge coverage ratio and a maximum ratio of unencumbered assets to certain financial indebtedness. The facilities also contain covenants that, among other things, restrict, subject to certain exceptions, the ability of AerCap to sell assets, make certain restricted payments and incur certain liens.
14. Income taxes
Our effective tax rate was 13.5% for the three months ended March 31, 2020, and 13.0% for the three months ended March 31, 2019. Our effective tax rate in any period can be impacted by revisions to the estimated full year rate.
15. Equity
The following table presents our share repurchase programs from January 1, 2019 through March 31, 2020:
Program approval date
 
Program end date
 
Authorized amount
 
Program completion date
February 2019
 
September 30, 2019
 
$
200,000

 
July 22, 2019
June 2019
 
December 31, 2019
 
200,000

 
December 5, 2019
November 2019
 
June 30, 2020
 
200,000

 
Not yet completed
January 2020
 
June 30, 2020
 
250,000

 
Not yet completed
During the three months ended March 31, 2020, we repurchased an aggregate of 2,130,509 of our ordinary shares under our share repurchase programs at an average price, including commissions, of $55.06 per ordinary share.
In March 2020, we suspended our share repurchase programs. We retain the ability to resume repurchases of our ordinary shares under our share repurchase programs as circumstances warrant.
During the three months ended March 31, 2020, we cancelled 3,000,000 ordinary shares which were acquired through the share repurchase programs in accordance with authorizations obtained from the Company’s shareholders.

21
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

16. Selling, general and administrative expenses
Selling, general and administrative expenses consisted of the following for the three months ended March 31, 2020 and 2019:
 
Three Months Ended March 31,
 
2020
 
2019
Personnel expenses
$
26,920

 
$
31,192

Share-based compensation
17,757

 
17,413

Travel expenses
3,794

 
4,253

Professional services
5,690

 
6,224

Office expenses
3,400

 
3,499

Other expenses
7,023

 
4,292

 
$
64,584

 
$
66,873


17. Other income
Other income consisted of the following for the three months ended March 31, 2020 and 2019:
 
Three Months Ended March 31,
 
2020
 
2019
Management fees
$
4,638

 
$
3,410

Interest and other income
10,094

 
17,983

 
$
14,732

 
$
21,393

18. Asset Impairment
Our long-lived assets include flight equipment and definite-lived intangible assets. We test long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. We perform event-driven impairment assessments of our aircraft held for operating leases each quarter. These quarterly impairment assessments primarily result from potential aircraft sale transactions or aircraft repossessions.
During the three months ended March 31, 2020 and 2019, we recognized impairment charges of $13.9 million and $5.0 million, respectively.
These impairments, for all periods mentioned, related to sales transactions or lease terminations and were more than offset by maintenance revenue recognized when we retained maintenance-related balances or received EOL compensation.
The impairment charges of $13.9 million recognized during the three months ended March 31, 2020 included $5.4 million relating to four aircraft which met the held for sale criteria and were classified as flight equipment held for sale in our Condensed Consolidated Balance Sheet.

22
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

19. Allowance for credit losses
We are exposed to credit losses on our net investments in finance and sales-type leases (“Finance Leases”) and notes receivable related to the sale of aircraft and restructured operating lease payment amounts, which are included as notes receivable in other assets. Our Finance Leases credit exposure reflects the risk that our finance lease customers fail to meet their payment obligations and the risk that aircraft value is less than the unguaranteed residual value assumed in the Finance Leases receivable balance.
We estimate the expected risk of loss over the remaining life of our Finance Leases and notes receivable using a probability of default and net exposure analysis. The probability of default is estimated based on historical cumulative default data, adjusted for current conditions, of similarly risk-rated counterparties over the contractual term. The net exposure is estimated based on the Finance Lease or notes receivable balance exposure, net of the estimated aircraft value, in the case of a Finance Lease, and other cash collateral, including security deposits and maintenance-related deposits, over the contractual term. The expected loss provision for each individual contractual exposure is calculated by multiplying the probability of default by the net exposure over the contractual term.
Movements in the allowance for credit losses during the three months ended March 31, 2020 were as follows:
 
Three Months Ended March 31, 2020
Allowance for credit losses at beginning of period
$

Cumulative effect due to adoption of new accounting standard
30,264

Current period provision for expected credit losses
8,571

Write-offs charged against the allowance

Allowance for credit losses at end of period
$
38,835

During the three months ended March 31, 2020, we increased our credit provision, classified in leasing expenses, by $8.6 million to reflect the increased credit risk due to the Covid-19 outbreak. As of March 31, 2020, $1.5 million of payments relating to Finance Leases and notes receivable were 30-60 days past due, which represented less than 1% of our total Finance Leases and notes receivable.
We monitor the credit quality of our lessee customers through an internal credit review assessment process that assigns each lessee with a credit score between 1 (Excellent) and 10 (Poor). All airline customers are assessed at least annually, and more frequently depending on risk.

23
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

20. Earnings per share
Basic Earnings Per Share (“EPS”) is calculated by dividing net income by the weighted average of our ordinary shares outstanding, which excludes 2,300,595 and 2,418,788 shares of unvested restricted stock as of March 31, 2020 and 2019, respectively. For the calculation of diluted EPS, the weighted average of our ordinary shares outstanding for basic EPS is adjusted by the effect of dilutive securities, provided under our equity compensation plans. The number of shares excluded from diluted shares outstanding was 196,051 and 203,870 for the three months ended March 31, 2020 and 2019, respectively, because the effect of including these shares in the calculation would have been anti-dilutive.
Basic and diluted EPS for the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended March 31,
 
2020
 
2019
Net income for the computation of basic EPS
$
276,824

 
$
234,186

Weighted average ordinary shares outstanding - basic
128,299,745

 
138,153,456

Basic EPS
$
2.16

 
$
1.70

 
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
Net income for the computation of diluted EPS
$
276,824

 
$
234,186

Weighted average ordinary shares outstanding - diluted
129,340,501

 
139,618,644

Diluted EPS
$
2.14

 
$
1.68


Ordinary shares outstanding, excluding shares of unvested restricted stock, as of March 31, 2020 and December 31, 2019 were as follows:
 
March 31, 2020
 
December 31, 2019
 
Number of ordinary shares
Ordinary shares issued
138,847,345

 
141,847,345

Treasury shares
(9,210,337
)
 
(10,263,856
)
Ordinary shares outstanding
129,637,008

 
131,583,489

Shares of unvested restricted stock
(2,300,595
)
 
(2,354,318
)
Ordinary shares outstanding, excluding shares of unvested restricted stock
127,336,413

 
129,229,171


24
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
21. Variable interest entities


We use many forms of entities to achieve our leasing and financing business objectives and we have participated to varying degrees in the design and formation of these entities. Our involvement in VIEs varies and includes being a passive investor in the VIE with involvement from other parties, managing and structuring all of the VIE’s activities, or being the sole shareholder of the VIE.
During the three months ended March 31, 2020, we did not provide any financial support to any of our VIEs that we were not contractually obligated to provide.
Consolidated VIEs
As of March 31, 2020 and December 31, 2019, substantially all assets and liabilities presented in our Condensed Consolidated Balance Sheets were held in consolidated VIEs.
We have determined that we are the primary beneficiary (“PB”) of these entities because we control and manage all aspects of these entities, including directing the activities that most significantly affect the entities’ economic performance, absorb the majority of the risks and rewards of these entities and guarantee the activities of these entities.
The assets of our consolidated VIEs that can only be used to settle obligations of these entities, and the liabilities of these VIEs for which creditors do not have recourse to our general credit, are disclosed in our Condensed Consolidated Balance Sheets under Supplemental balance sheet information. Further details of debt held by our consolidated VIEs are disclosed in Note 13Debt.
Wholly-owned ECA and Ex-Im financing vehicles
We have created certain wholly-owned subsidiaries for the purpose of purchasing aircraft and obtaining financing secured by such aircraft. The secured debt is guaranteed by the European ECAs and the Export-Import Bank of the United States. These entities meet the definition of a VIE because they do not have sufficient equity to operate without subordinated financial support from us in the form of intercompany notes.
Other secured financings
We have created a number of wholly-owned subsidiaries for the purpose of obtaining secured financings. These entities meet the definition of a VIE because they do not have sufficient equity to operate without subordinated financial support from us in the form of intercompany notes.
Wholly-owned leasing entities
We have created wholly-owned subsidiaries for the purpose of facilitating aircraft leases with airlines. These entities meet the definition of a VIE because they do not have sufficient equity to operate without subordinated financial support from us in the form of intercompany notes, which serve as equity.
Limited recourse financing structures
We have established entities to obtain secured financings for the purchase of aircraft in which we have variable interests. These entities meet the definition of a VIE because they do not have sufficient equity to operate without subordinated financial support from us in the form of intercompany notes. The loans of these entities are non-recourse to us except under limited circumstances.
AerCap Partners I Holding Limited (“AerCap Partners I”), AerCap Partners 767 Limited (“AerCap Partners 767”) and AerFunding are entities where we have determined we are the PB of the entity because we direct the activities that most significantly affect the economic performance of the entity and we absorb a significant portion of the risks and rewards of the entity. We provide lease management, insurance management and aircraft asset management services to AerCap Partners I, AerCap Partners 767 and AerFunding for a fee.


25
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
21. Variable interest entities (Continued)

AerCap Partners I and AerCap Partners 767
AerCap Partners I and AerCap Partners 767 are 50%-50% joint ventures owned by us and Deucalion Aviation Funds.
As of March 31, 2020, AerCap Partners I had $54.4 million of subordinated debt outstanding, consisting of $27.2 million due to us and $27.2 million due to our joint venture partner.
As of March 31, 2020, AerCap Partners 767 had $32.6 million of subordinated debt outstanding, consisting of $16.3 million due to us and $16.3 million due to our joint venture partner.
AerFunding
We hold a 5% equity investment and 100% of the subordinated notes (“AerFunding Class E-1 Notes”) in AerFunding.
As of March 31, 2020, AerFunding had $863.1 million outstanding under a secured revolving credit facility and $294.0 million of AerFunding Class E-1 Notes outstanding due to us.
Non-consolidated VIEs
The following table presents our maximum exposure to loss in non-consolidated VIEs as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
December 31, 2019
Carrying value of debt and equity investments
$
124,682

 
$
123,279

Debt guarantees
10,021

 
68,901

Maximum exposure to loss
$
134,703

 
$
192,180

The maximum exposure to loss represents the amount that would be absorbed by us in the event that all of our assets held in the VIEs, for which we are not the PB, had no value and outstanding debt guarantees were called upon in full.
AerDragon Aviation Partners Limited and its subsidiaries (“AerDragon”), AerLift Leasing Limited (“AerLift”), Acsal Holdco, LLC (“ACSAL”) and Peregrine Aviation Company and its subsidiaries (“Peregrine”) are investments that are VIEs in which we have determined that we do not have control and are not the PB. We do have significant influence and, accordingly, we account for our investments in AerDragon, AerLift and ACSAL under the equity method of accounting. We account for our equity investment in Peregrine under the cost method of accounting. We have variable interests in other entities in which we have determined we are not the PB because we do not have the power to direct the activities that most significantly affect the entities’ economic performance.
AerDragon
AerDragon is a joint venture with 50% owned by China Aviation Supplies Holding Company and the other 50% owned in equal parts by us, affiliates of Crédit Agricole Corporate and Investment Bank, and East Epoch Limited. We provide accounting related services to AerDragon.
AerLift
AerLift is a joint venture in which we have a 39% interest. We provide asset and lease management, insurance management and cash management services to AerLift for a fee. As of March 31, 2020, we guaranteed $10.0 million of AerLift debt. Other than the debt that we have guaranteed, the debt obligations of AerLift are non-recourse to us.
ACSAL
We have a 19% investment in ACSAL and provide aircraft asset and lease management services for a fee.
Peregrine
We have a 9.5% investment in Peregrine and provide asset and lease management, insurance management, accounting and cash management services for a fee.

26
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)

22. Related party transactions
The following table presents amounts received from related parties for management fees and dividends for the three months ended March 31, 2020 and 2019:
 
Three Months Ended March 31,
 
2020
 
2019
 
Management fees
 
Dividends
 
Management fees
 
Dividends
AerDragon
$
137

 
$

 
$
233

 
$

ACSAL
120

 
45

 
120

 
259

AerLift
157

 

 
390

 

 
$
414

 
$
45

 
$
743

 
$
259

23. Commitments and contingencies
Aircraft on order
As of March 31, 2020, we had commitments to purchase 342 new aircraft scheduled for delivery through 2026. These commitments are based upon purchase agreements with Boeing, Airbus and Embraer S.A. (“Embraer”). These agreements establish the pricing formulas (including adjustments for certain contractual escalation provisions) and various other terms with respect to the purchase of aircraft. Under certain circumstances, we have the right to alter the mix of aircraft types ultimately acquired.
Movements in prepayments on flight equipment during the three months ended March 31, 2020 and 2019 were as follows:
 
Three Months Ended March 31,
 
2020
 
2019
Prepayments on flight equipment at beginning of period
$
2,954,478

 
$
3,024,520

Prepayments during the period
328,222

 
252,316

Interest paid and capitalized during the period
19,168

 
28,067

Prepayments and capitalized interest applied to the purchase of flight equipment
(193,165
)
 
(320,580
)
Prepayments on flight equipment at end of period
$
3,108,703

 
$
2,984,323


27
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
23. Commitments and contingencies (Continued)

Legal proceedings
General
In the ordinary course of our business, we are a party to various legal actions, which we believe are incidental to the operations of our business. The Company regularly reviews the possible outcome of such legal actions, and accrues for such legal actions at the time a loss is probable and the amount of the loss can be estimated. In addition, the Company also reviews indemnities and insurance coverage, where applicable. Based on information currently available, we believe the potential outcome of those cases where we are able to estimate reasonably possible losses, and our estimate of the reasonably possible losses exceeding amounts already recognized, on an aggregated basis, is immaterial to our Condensed Consolidated Financial Statements.
VASP Litigation
We are party to a group of related cases arising from the leasing of 13 aircraft and three spare engines to Viação Aerea de São Paulo (“VASP”), a Brazilian airline. In 1992, VASP defaulted on its lease obligations and we commenced litigation against VASP to repossess our equipment and obtained a preliminary injunction for the repossession and export of 13 aircraft and three spare engines from VASP. We repossessed and exported the aircraft and engines. VASP appealed and, in 1996, the Appellate Court of the State of São Paulo (“TJSP”) ruled that the aircraft and engines should be returned or that VASP could recover proven damages arising from the repossession.
We have defended this case in the Brazilian courts through various motions and appeals. In 2004, the Superior Court of Justice (the “STJ”) dismissed our then-pending appeal. In 2005, we filed an extraordinary appeal with the Federal Supreme Court (the “STF”). On April 4, 2018, the STF declined to accept our extraordinary appeal for trial. We appealed this decision on April 25, 2018. Our appeal remains pending.
In 2006, VASP commenced a related proceeding to calculate the amount of alleged damages owed under the TJSP’s 1992 judgment. In 2017, the court decided that VASP had suffered no damages even if the TJSP’s 1992 judgment regarding liability were affirmed. On April 20, 2018, VASP appealed this decision, which appeal remains pending. We believe, however, and we have been advised, that it is not probable that VASP will ultimately be able to recover damages from us even if VASP prevails on the issue of liability. The outcome of the legal process is, however, uncertain. The ultimate amount of damages, if any, payable to VASP cannot reasonably be estimated at this time. We continue to actively pursue all courses of action that may reasonably be available to us and intend to defend our position vigorously.
In 2006, we brought actions against VASP in English and Irish courts seeking damages arising from the 1992 lease defaults. These actions resulted in judgments by the English court in the aggregate amount of approximately $40 million plus interest and judgments by the Irish court in the aggregate amount of approximately $36.9 million, all in our favor. VASP had meanwhile in 2008 been adjudicated as insolvent by a Brazilian bankruptcy court, which commenced bankruptcy proceedings. We have caused the English and Irish judgment to be domesticated in Brazil and submitted them as claims in the bankruptcy proceeding. The bankruptcy court has allowed the claims in the amount of $40 million in respect of the English judgments and $24 million in respect of the Irish judgments. We have been advised that it is not probable that VASP’s bankruptcy estate will have funds to pay its creditors but our court approved claims may be used to offset any damages that VASP might be awarded in the Brazilian courts if for any reason we are not successful in defending ourselves against VASP’s claim for damages.
Transbrasil Litigation
We are party to a group of related actions arising from the leasing of an aircraft and two engines to Transbrasil S/A Linhas Areas (“Transbrasil”), a now-defunct Brazilian airline. By 1998, Transbrasil had defaulted on various obligations under its leases with two AerCap-related companies (the “AerCap Lessors”), along with other leases it had entered into with General Electric Capital Corporation (“GECC”) and certain of its affiliates (collectively with GECC, the “GE Lessors”). General Electric Capital Aviation Services Limited (“GECAS”) was the servicer for all these leases at the time. Subsequently, Transbrasil issued promissory notes (the “Notes”) to the AerCap Lessors and GE Lessors (collectively the “Lessors”) in connection with restructurings of the leases. Transbrasil defaulted on the Notes and the AerCap Lessors and the GE Lessors, individually brought enforcement actions against Transbrasil in 2001 (GECC also filed an action for the involuntary bankruptcy of Transbrasil).

28
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
23. Commitments and contingencies (Continued)

Transbrasil brought a lawsuit against the Lessors in February 2001 (the “Transbrasil Lawsuit”), claiming that the Notes had in fact been paid at the time the Lessors brought the enforcement actions. In 2007, the trial judge ruled in favor of Transbrasil and the Lessors appealed. In April 2010, the appellate court published a judgment (the “2010 Judgment”) rejecting the Lessors’ appeal, ordering them to pay Transbrasil statutory penalties equal to double the face amount of the Notes (plus interest and monetary adjustments) as well as damages for any losses incurred as a result of the attempts to collect on the Notes. The 2010 Judgment provided that the amount of such losses would be calculated in separate proceedings in the trial court (the “Indemnity Claim”). In June 2010, the AerCap Lessors and GE Lessors separately filed special appeals before the STJ in Brazil. In October 2013, the STJ granted the special appeals filed by the GE Lessors, effectively reversing the 2010 Judgment in most respects as to all of the Lessors. Transbrasil appealed this order, but the appellate panel in November 2016 rejected Transbrasil’s appeal, preserving the 2013 reversal of the 2010 Judgment. All appeals in respect of the Transbrasil Lawsuit based on the merit of the dispute have now concluded.
However, in July 2011, while the various appeals of the 2010 Judgment were pending, Transbrasil brought three actions for provisional enforcement of the 2010 Judgment (the “Provisional Enforcement Actions”): one to enforce the award of statutory penalties; a second to recover attorneys’ fees related to that award, and a third to enforce the Indemnity Claim. Transbrasil submitted its alleged calculation of statutory penalties, which, according to Transbrasil, amounted to approximately $210 million in the aggregate against all defendants, including interest and monetary adjustments. Transbrasil also initiated proceedings to determine the amount of its alleged Indemnity Claim.
In light of the STJ’s ruling in October 2013, the trial court has ordered the dismissal of two of Transbrasil’s Provisional Enforcement Actions—those seeking statutory penalties and attorneys’ fees. The TJSP has since affirmed the dismissals of those actions and Transbrasil has appealed that order. Transbrasil’s Provisional Enforcement Action with respect to the Indemnity Claim remains pending. We believe we have strong arguments to convince the court that Transbrasil suffered no material damage as a result of the defendants’ attempts to collect on the Notes.
In February 2012, AerCap brought a civil complaint against GECAS and GECC in the State of New York (the “New York Action”), alleging, among other things, that GECAS and GECC had violated certain duties to AerCap in connection with their attempts to enforce the Notes and their defense of Transbrasil’s lawsuit. In November 2012, AerCap, GECAS, and the GE Lessors entered into a settlement agreement resolving all of the claims raised in the New York Action. The terms of the settlement agreement are confidential.


29
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
24. Fair value measurements

The Company determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy as described below. Where limited or no observable market data exists, fair value measurements for assets and liabilities are primarily based on management’s own estimates and are calculated based upon the economic and competitive environment, the characteristics of the asset or liability and other such factors. Therefore, the results may not be realized in actual sale or immediate settlement of the asset or liability.
The degree of judgment used in measuring the fair value of a financial and non-financial asset or liability generally correlates with the level of pricing observability. We classify our fair value measurements based on the observability and significance of the inputs used in making the measurement, as provided below:
Level 1 — Quoted prices available in active markets for identical assets or liabilities as of the reported date.
Level 2 — Observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow value to be determined.
Level 3 — Unobservable inputs from our own assumptions about market risk developed based on the best information available, subject to cost benefit analysis. Inputs may include our own data.
Fair value measurements are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.
Assets and liabilities measured at fair value on a recurring basis
As of March 31, 2020 and December 31, 2019, our derivative portfolio consisted of interest rate swaps and caps. The fair value of derivatives is based on dealer quotes for identical instruments. We have also considered the credit rating and risk of the counterparty of the derivative contract based on quantitative and qualitative factors. As such, the valuation of these instruments was classified as Level 2.
The following tables present our financial assets and liabilities that we measured at fair value on a recurring basis by level within the fair value hierarchy as of March 31, 2020 and December 31, 2019:
 
March 31, 2020
 
Total
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Derivative assets
$
1,839

 
$

 
$
1,839

 
$

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Derivative liabilities
$
192,641

 
$

 
$
192,641

 
$

 
 
 
 
 
 
 
 
 
December 31, 2019
 
Total
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Derivative assets
$
11,664

 
$

 
$
11,664

 
$

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Derivative liabilities
$
97,066

 
$

 
$
97,066

 
$



30
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
24. Fair value measurements (Continued)

Assets and liabilities measured at fair value on a non-recurring basis
We measure the fair value of certain definite-lived intangible assets and our flight equipment on a non-recurring basis, when U.S. GAAP requires the application of fair value, including when events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Additional details of recoverability assessments performed on certain definite-lived intangible assets and our flight equipment are described in our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the SEC on March 5, 2020.
Management develops the assumptions used in the fair value measurements. Therefore, the fair value measurements of definite-lived intangible assets and flight equipment are classified as Level 3 valuations.
Flight equipment
Inputs to non-recurring fair value measurements categorized as Level 3
We use the income approach to measure the fair value of flight equipment, which is based on the present value of estimated future cash flows. Key inputs to the income statement approach include the discount rate, current contractual lease cash flows, projected future non-contractual lease or sale cash flows, extended to the end of the aircraft’s estimated holding period in its highest and best use, and a contractual or estimated disposition value.
The current contractual lease cash flows are based on the in-force lease rates. The projected future non-contractual lease cash flows are estimated based on the aircraft type, age, and the airframe and engine configuration of the aircraft. The projected non-contractual lease cash flows are applied to follow-on lease terms, which are estimated based on the age of the aircraft at the time of re-lease and are assumed through the estimated holding period of the aircraft. The estimated holding period is the period over which future cash flows are assumed to be generated. Shorter holding periods can result when a potential sale or future disassembly of an aircraft for the sale of its parts (“part-out”) of an individual aircraft has been contracted for, or is likely. In instances of a potential sale or part-out, the holding period is based on the estimated sale or part-out date. The disposition value is generally estimated based on aircraft type. In situations where the aircraft will be disposed of, the disposition value assumed is based on an estimated part-out value or the contracted sale price.
The estimated future cash flows, as described above, are then discounted to present value. The discount rate used is based on the aircraft type and incorporates assumptions market participants would use regarding the likely debt and equity financing components, and the required returns of those financing components.
Sensitivity to changes in unobservable inputs
When estimating the fair value measurement of flight equipment, we consider the effect of a change in a particular assumption independently of changes in any other assumptions. In practice, simultaneous changes in assumptions may not always have a linear effect on inputs.
The significant unobservable inputs utilized in the fair value measurement of flight equipment are the discount rate, the remaining estimated holding period and the non-contractual cash flows. The discount rate is affected by movements in the aircraft funding markets, including fluctuations in required rates of return in debt and equity, and loan to value ratios. The remaining estimated holding period and non-contractual cash flows represent management’s estimate of the remaining service period of an aircraft and the estimated non-contractual cash flows over the remaining life of the aircraft. An increase in the discount rate would decrease the fair value measurement of the aircraft, while an increase in the remaining estimated holding period or the estimated non-contractual cash flows would increase the fair value measurement of the aircraft.

31
 


AerCap Holdings N.V. and Subsidiaries
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
24. Fair value measurements (Continued)

Fair value disclosures of financial instruments
The fair value of restricted cash and cash and cash equivalents approximates their carrying value because of their short-term nature (Level 1). The fair value of our long-term unsecured debt is estimated using quoted market prices for similar or identical instruments, depending on the frequency and volume of activity in the market. The fair value of our long-term secured debt is estimated using a discounted cash flow analysis based on current market interest rates and spreads for debt with similar characteristics (Level 2). Derivatives are recognized in our Condensed Consolidated Balance Sheets at their fair value. The fair value of derivatives is based on dealer quotes for identical instruments. We have also considered the credit rating and risk of the counterparties of the derivative contracts based on quantitative and qualitative factors (Level 2).
All of our financial instruments are measured at amortized cost, other than derivatives which are measured at fair value on a recurring basis. The carrying amounts and fair values of our most significant financial instruments as of March 31, 2020 and December 31, 2019 were as follows:
 
March 31, 2020
 
Carrying value
 
Fair value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
4,693,872

 
$
4,693,872

 
$
4,693,872

 
$

 
$

Restricted cash
188,671

 
188,671

 
188,671

 

 

Derivative assets
1,839

 
1,839

 

 
1,839

 

 
$
4,884,382

 
$
4,884,382

 
$
4,882,543

 
$
1,839

 
$

Liabilities
 
 
 
 
 
 
 
 
 
Debt
$
32,889,746

(a)
$
30,043,332

 
$

 
$
30,043,332

 
$

Derivative liabilities
192,641

 
192,641

 

 
192,641

 

 
$
33,082,387

 
$
30,235,973

 
$

 
$
30,235,973

 
$

 
(a)
Excludes debt issuance costs, debt discounts and debt premium.  
 
December 31, 2019
 
Carrying value
 
Fair value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,121,396

 
$
1,121,396

 
$
1,121,396

 
$

 
$

Restricted cash
178,951

 
178,951

 
178,951

 

 

Derivative assets
11,664

 
11,664

 

 
11,664

 

 
$
1,312,011

 
$
1,312,011

 
$
1,300,347