Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

AeroTurbine restructuring

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AeroTurbine restructuring
12 Months Ended
Dec. 31, 2017
Restructuring and Related Activities [Abstract]  
AeroTurbine restructuring
AeroTurbine restructuring
At the end of 2015, we decided to restructure and downsize the AeroTurbine business. Since we made this decision, AeroTurbine has been actively reducing its debt and total assets by disposing of engines from its engine leasing portfolio as well as parts from its inventory.
In connection with the downsizing, during the year ended December 31, 2015, we performed recoverability assessments of AeroTurbine’s long-lived assets. These recoverability assessments indicated that the book value of certain AeroTurbine intangible assets and leased engines were no longer supported by their future expected cash flows. The resulting impairment was measured as the excess of the carrying amount of each asset over its fair value. Fair value was estimated based on the present value of future cash flows expected to be generated from the asset, including its expected residual value, discounted at a rate commensurate with the associated risk. During the year ended December 31, 2015, we also recognized a lower of cost or market adjustment of $38.7 million related to AeroTurbine’s parts inventory. Please refer to Note 22Other income.
During 2016, AeroTurbine entered into a letter of intent to sell its storage and maintenance facility located in Goodyear, Arizona, which resulted in a write-down of assets and associated intangible assets. We also completed a review of AeroTurbine’s engine leasing portfolio and identified specific engines for longer-term use and support of AerCap’s core aircraft leasing business, as well as the specific engines to be sold by AeroTurbine to third parties. As a result, we recognized impairments related primarily to older, out-of-production engines. The sale of the Goodyear operations and the engine portfolio review, together, triggered our decision in the second half of 2016, to accelerate the final phase of the AeroTurbine downsizing. We performed a review of AeroTurbine’s parts inventory, and during 2016, we recognized a lower of cost or market adjustment of $36.0 million based on current available market information. Please refer to Note 22Other income.
During 2017, AeroTurbine completed the sale of its Goodyear operations and the AeroTurbine revolving credit facility was fully repaid and terminated. In addition, AeroTurbine executed an amendment to the existing lease agreement for its facility in Florida and, as a result, we recognized lease termination fees of $7.6 million.
We recorded the following charges in transaction, integration and restructuring related expenses in our Consolidated Income Statements during the years ended December 31, 2017, 2016 and 2015:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Lease termination fees
$
7,645

 
$

 
$

Severance expenses and other
4,298

 
19,801

 
2,072

Leased engines impairment
2,662

 
15,392

 
22,402

Other intangible assets impairment

 
14,868

 
24,837

Write-down of fixed assets and consumable inventory

 
3,328

 

 
$
14,605

 
$
53,389

 
$
49,311