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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
Commission file number 001-33159
AerCap Holdings N.V.
(Exact name of Registrant as specified in its charter)
The Netherlands
(Jurisdiction of incorporation or organization)
AerCap House
65 St. Stephen’s Green
Dublin D02 YX20
Ireland
+ 353 1 819 2010
(Address of principal executive offices)
Vincent Drouillard, AerCap House, 65 St. Stephen’s Green, Dublin D02 YX20, Ireland
Telephone number: +353 1 819 2010, Fax number: +353 1 672 0270
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Ordinary Shares AER The New York Stock Exchange
5.875% Fixed-Rate Reset Junior Subordinated Notes due 2079 AER79 The New York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or ordinary stock as of the close of the period covered by the annual report.
Ordinary Shares, Euro 0.01 par value 130,398,538 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒    No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐    No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non accelerated filer
(Do not check if a
smaller reporting company)
☐ Emerging growth company ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☒ International Financial Reporting Standards as
issued by the International Accounting Standards Board 		☐ Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒



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F-1

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SPECIAL NOTE ABOUT FORWARD LOOKING STATEMENTS
This annual report includes “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, principally under the captions “Item 3. Key Information—Risk Factors,” “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects.” We have based these forward looking statements largely on our current beliefs and projections about future events and financial trends affecting our business. Many important factors, in addition to those discussed in this annual report, could cause our actual results to differ substantially from those anticipated in our forward looking statements, including, among other things:
•the severity, extent and duration of the Covid-19 pandemic and the rate of recovery in air travel, the aviation industry and global economic conditions; the potential impacts of the pandemic and responsive government actions on our business and results of operations, financial condition and cash flows;
•the availability of capital to us and to our customers and changes in interest rates;
•the ability of our lessees and potential lessees to make lease payments to us;
•our ability to successfully negotiate aircraft purchases, sales and leases, to collect outstanding amounts due and to repossess aircraft under defaulted leases, and to control costs and expenses;
•changes in the overall demand for commercial aircraft leasing and aircraft management services;
•the effects of terrorist attacks on the aviation industry and on our operations;
•the economic condition of the global airline and cargo industry and economic and political conditions;
•development of increased government regulation, including travel restrictions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers;
•competitive pressures within the industry;
•the negotiation of aircraft management services contracts;
•regulatory changes affecting commercial aircraft operators, aircraft maintenance, engine standards, accounting standards and taxes; and
•the risks set forth in “Item 3. Key Information—Risk Factors” included in this annual report.
The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify forward looking statements. Forward looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward looking statements speak only as of the date they were made and we undertake no obligation to update publicly or to revise any forward looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward looking events and circumstances described in this annual report might not occur and are not guarantees of future performance.

2

PART I
Item 1.    Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2.    Offer Statistics and Expected Timetable
Not applicable.
3

Item 3.    Key Information
RISK FACTORS

Summary Risk Factors
Risks related to disease, natural disasters, terrorist attacks and other world events
•The Covid-19 pandemic may continue to have a material and adverse impact on the aviation industry.
•Global or regional public health developments, extreme weather or natural disasters or other force majeure events may adversely affect the demand for air travel, the financial condition of our lessees and the aviation industry more broadly, and ultimately our financial condition, results and cash flows.
•The effects of terrorist attacks and the threat of terrorist attacks, war or armed hostilities may adversely affect the financial condition of the airline industry.
Risks relating to our funding and liquidity
•We require significant capital to fund our business and service our debt, and changes in the availability of capital or in the interest rates we pay on our debt may affect our operations or financial results.
•We have a substantial level of indebtedness and we might incur significantly more debt, which could adversely impact our operating flexibility and subject us to covenants that impose restrictions that may affect our ability to operate our business.
Risks relating to market demand for, and lease rates and value of, aircraft in our fleet
•Our business depends heavily on the level of demand for the aircraft in our fleet, which may decline as a result of factors outside our control, thereby affecting the returns on our aircraft investments.
•Our operations depend on aircraft manufacturers, whose behavior may change in ways that adversely affect the lease rates and value of aircraft in our fleet or our results of operations more broadly.
•If a decline in demand for certain aircraft causes a decline in their projected lease rates, or if we dispose of aircraft for a price that is less than their depreciated book value on our balance sheet, then we will recognize impairments or make fair value adjustments.
Risks related to the financial strength of our lessees
•Our financial condition depends, in part, on the financial strength of our lessees, and factors outside of our control may adversely affect our lessees’ operations, their ability to meet their payment obligations to us or their demand for our aircraft.
•Airline bankruptcy proceedings or reorganizations may limit our ability to collect lease rentals and other payments, depress aircraft market values and adversely affect our ability to re-lease or sell aircraft at favorable rates, if at all, particularly where such proceedings involve our lessees.
Risks related to our relationship with our lessees
•We have limited control over the operation of our aircraft and engine assets while they are under lease and we depend on our lessees to properly maintain and insure our aircraft, which may expose us to additional and unexpected costs.
•If our lessees encounter financial difficulties and we restructure or terminate our leases, our ability to re-lease aircraft on favorable lease terms, collect outstanding amounts due to us, and repossess aircraft under defaulted leases may be limited and require us to incur additional costs and expenses.

4

Risks related to competition and the aviation industry
•We face significant competition and our business may be adversely affected if market participants change as a result of restructuring or bankruptcies, mergers and acquisitions, or new entities entering or exiting the industry, or if existing competitors enter into new or different market segments.
•We rely on a small number of manufacturers for the supply of commercial aircraft, and any disruption in these manufacturers’ operating abilities may cause us to experience delivery delays on our aircraft orders. We may experience additional delivery delays and associated costs if aircraft manufacturers deliver aircraft that fail to meet our lessees’ expectations or the requirements of air travel regulators.
Risks related to the geopolitical, regulatory and legal exposure of our business
•We are exposed to geopolitical, economic and legal risks associated with the international operations of our business and those of our lessees, including many of the economic and political risks associated with emerging markets. We are exposed to concentrated political and economic risks in certain geographical regions in which our lessees are concentrated, particularly China.
•Our aircraft are subject to various environmental regulations and concerns that may be supplemented by additional regulations and requirements or become more stringent, which may negatively affect our operations.
Risks related to our IT, structure and taxation
•We depend on our information technology systems and those of third parties, and our business may suffer if they are damaged or interrupted, including by cyberattack.
•We are incorporated in the Netherlands and it may be difficult to obtain or enforce judgments against us or our executive officers, some of our directors and some of our named experts in the United States.
•We are subject to taxation regimes in various jurisdictions, and we may become subject to additional taxes in those jurisdictions, taxes in other jurisdictions, or experience changes in our tax status in certain jurisdictions, which may affect the effective tax rates that we are subject to and the results of our operations.
5

Risks related to disease, natural disasters, terrorist attacks and other world events
The Covid-19 pandemic may continue to have a material and adverse impact on our business.
On March 11, 2020, the World Health Organization declared that the Covid-19 outbreak was a pandemic. The Covid-19 pandemic and responsive government actions have caused significant economic disruption and a dramatic reduction in commercial airline traffic, resulting in a broad adverse impact on air travel, the aviation industry and demand for commercial aircraft globally, all of which has impacted our results of operations. The continued impact of the Covid-19 pandemic on our business will depend, among other things, on the duration of the pandemic and the speed and effectiveness of vaccination efforts; the rate of recovery in air travel and the aviation industry, including the future demand for commercial aircraft; and global economic conditions.
We have agreed with many of our lessees to defer rent obligations. We expect that we may grant additional rent deferrals and extend the periods of repayment. If the financial condition of our customers continues to weaken, we may grant further accommodations.
If we determine that the collectability of lessee rental payments is no longer probable (including any deferral thereof), we are then required to recognize rental revenues using a cash accounting method rather than an accrual method. 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 revenue. Subsequently, we recognize revenues based on the lesser of the straight-line rental income and the lease payments collected from the lessee until such time that collection is probable, which could materially reduce our reported revenue. During the year ended December 31, 2020, we recognized rent payments from a number of our lessees, using the cash method, which resulted in a decrease in basic lease rents of approximately $310.6 million. If the financial condition of any additional lessees worsens, we may determine to recognize rent payments from these lessees using the cash method, which could, in future periods, further decrease basic lease rents.
Many national governments have provided, have introduced plans to provide, or have indicated that they may provide financial assistance to airlines. In some cases, governments have imposed conditions on airline recipients of assistance, and governments may also impose conditions on any future assistance, such as requiring airlines to remove less environmentally-friendly aircraft from their fleets or obtain concessions from their creditors, including aircraft lessors, which could adversely impact our business. See “Item 3. Key Information—Risk Factors—Risks related to the financial strength of our lessees—Our financial condition is dependent, in part, on the financial strength of our lessees”.
In addition to a reduction in basic lease rents, the significant decline in air travel has resulted, and may continue to result, in lower utilization of our aircraft, which is likely to reduce future supplemental maintenance rent and EOL compensation payable to us. We may also experience delayed or lost revenue if key aircraft manufacturers are unable to deliver aircraft on schedule due to Covid-19-related issues, such as supply chain disruptions, production cuts, facility shutdowns or liquidity constraints, although it is difficult for us to predict with certainty the impact that Covid-19 will have on manufacturers.
We are observing, as a result of the significant and sustained decline in international air passenger traffic and an expectation of a long recovery time for international air traffic, a shift by some airlines away from current technology widebody aircraft in favor of new technology widebody aircraft. This has led us to recognize an impairment charge of $1.1 billion, primarily related to current technology aircraft, in particular Airbus A330 and Boeing 777 aircraft, during the year ended December 31, 2020. Further, a number of our lessees have initiated bankruptcy or comparable proceedings, and current market conditions have increased the likelihood that other lessees will default on their obligations to us or experience bankruptcy. If airlines continue to experience prolonged financial hardship or bankruptcies, or there are other adverse developments to the air travel industry arising from the pandemic, aircraft values may decline further, thereby increasing the likelihood that in future quarters we recognize additional impairment charges with respect to our aircraft. See “Item 5. Critical accounting policies and estimates—Event-driven impairment and impairment calculation charges.” Additionally, any such developments could increase the likelihood that our definite-lived customer relationships intangible assets could be impaired. In addition, any bankruptcy, insolvency, reorganization or other restructuring of our lessees may result in their grounding our aircraft, negotiating reductions in aircraft lease rentals or altogether rejecting their leases, all of which could depress aircraft market value and adversely affect our ability to timely re-lease or sell aircraft at favorable rates, if at all. See “Item 3. Key Information—Risk Factors—Risks related to the financial strength of our lessees—If our lessees encounter financial difficulties and we restructure or terminate our leases, including as a result of airline reorganizations or bankruptcies, we are likely to obtain less favorable lease terms.”
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While we expect that, even with current market conditions, our liquidity is more than sufficient to satisfy our anticipated operational and other business needs over the next 12 months, we cannot assure you that operating cash flow will not be lower than we expect due to, for example, higher than expected deferral arrangements or payment defaults. Although we currently have a number of sources of liquidity, in some cases the availability of these sources is contingent upon our ability to satisfy certain financial covenants. See Note 13—Debt to our Consolidated Financial Statements included in this annual report. To the extent that the Covid-19 pandemic adversely affects our ability to comply with any of these covenants, it may also have the effect of exacerbating many of the other risks identified in “Item 3—Risk Factors—Risks related to our funding and liquidity—The agreements governing our debt contain various covenants that impose restrictions on us that may affect our ability to operate our business.” Even though we do not currently foresee any difficulty or inability to remain in compliance with these financial covenants, to the extent we do not do so, we may be in default under, and/or unable to draw upon, these sources of liquidity or may be required to negotiate amendments with our counterparties, the terms of which could be unfavorable to us.
Additionally, the Covid-19 pandemic has led us to adopt remote working arrangements (which remain in place in some of our locations), which could negatively affect our operations or internal controls over financial reporting and may require us to implement new processes, procedures and controls to respond to further changes in our business environment. We also depend on certain key officers and employees; should any of them become ill and unable to work, it could impact our productivity and business continuity.
Global or regional public health developments, extreme weather or natural disasters or other force majeure events may adversely affect the demand for air travel, the financial condition of our lessees and the aviation industry more broadly, and ultimately our financial condition, results and cash flows.
Our international operations expose us to risks associated with unforeseen global and regional events. Epidemic diseases such as Covid-19, Ebola, measles, Severe Acute Respiratory Syndrome (SARS), H1N1 (swine flu) and Zika virus could materially and adversely affect the overall amount of air travel. These epidemic diseases or the fear of these diseases could result in government-imposed travel restrictions and reduced passenger demand for travel. The occurrence of severe weather events or natural disasters, including floods, earthquakes and volcanic eruptions, may make airlines unable to operate to or from certain regions or impact demand for air travel. The occurrence or outbreak of any of the above events or other force majeure events could adversely affect commercial airline traffic, reduce demand for aircraft leases or impair the financial condition of the aviation industry, including our lessees. As a result, our lessees may not be able to satisfy their payment obligations to us. These events may also cause damage to our aircraft and engine assets, the extent of losses from which may not be fully covered by insurance. For these and other reasons, our financial results may be materially and adversely affected by the occurrence of such events.
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The effects of terrorist attacks, war or armed hostilities may adversely affect the financial condition of the airline industry and our lessees’ ability to meet their lease payment obligations to us.
Terrorist attacks and the threat of terrorist attacks, war or armed hostilities, or the fear of such events, have historically had a negative impact on the aviation industry and could result in:
•higher costs to the airlines due to the increased security measures;
•decreased passenger and air cargo demand and revenue;
•the imposition of “no-fly zone” or other restrictions on commercial airline traffic in certain regions;
•uncertainty of the price and availability of jet fuel and the cost and practicability of obtaining fuel hedges;
•higher financing costs and difficulty in raising the desired amount of proceeds on favorable terms, if at all;
•significantly higher premiums or reduced coverage amounts for aviation insurance coverage for future claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, which may be insufficient to comply with the current requirements of aircraft lenders and lessors or applicable government regulations, or the unavailability of certain types of insurance;
•reliance by aircraft lenders or lessors on government programs for specified types of aviation insurance, which may not be available at the relevant time or under which governments may not pay in a timely fashion;
•inability of airlines to reduce their operating costs and conserve financial resources, taking into account the increased costs incurred as a consequence of such events;
•special charges recognized by some operators, such as those related to the impairment of aircraft and engines and other long-lived assets stemming from the grounding of aircraft as a result of terrorist attacks, economic conditions and airline reorganizations; and
•an airline becoming insolvent and/or ceasing operations.
Such events are likely to cause our lessees to incur higher costs and to generate lower revenues, which could result in a material adverse effect on their financial condition and liquidity, including their ability to make rental and other lease payments to us or to obtain the types and amounts of insurance we require. This in turn could lead to aircraft groundings or additional lease restructurings and repossessions, increase our cost of re-leasing or selling aircraft, impair our ability to re-lease or otherwise dispose of aircraft on favorable terms or at all, or reduce the proceeds we receive for our aircraft in a disposition.

8

Risks relating to our funding and liquidity
We require significant capital to fund our business.
As of December 31, 2020, we had 286 new aircraft on order, which will require substantial aircraft purchase contract payments. In order to meet these commitments and to maintain an adequate level of unrestricted cash, we will need to raise additional funds by accessing committed debt facilities, securing additional financing from banks or through capital markets transactions, or possibly by selling aircraft.
If we are unable to meet our aircraft purchase commitments as they come due, we will be subject to several risks, including:
•forfeiting deposits and progress payments to manufacturers and having to pay certain significant costs related to these commitments such as actual damages and legal, accounting and financial advisory expenses;
•defaulting on our lease commitments, which could result in monetary damages and strained relationships with lessees;
•failing to realize the benefits of purchasing and leasing such aircraft; and
•risking harm to our business reputation, which would make it more difficult to purchase and lease aircraft in the future on agreeable terms, if at all.
Any of these events could materially and adversely affect our financial results.
To service our debt and meet our other cash needs, we will require a significant amount of cash, which may not be available.
Our ability to make payments on, and to repay or refinance, our debt, depends largely upon our operating performance, which is in part subject to factors beyond our control. In addition, our ability to borrow funds to make payments on our debt depends on our maintaining specified financial ratios and satisfying financial condition tests and other covenants in certain of the agreements governing our debt. Our business may not generate sufficient cash flow from operations and future borrowings may not be available in amounts sufficient to pay our debt and to satisfy our other liquidity needs.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to seek alternatives, such as to reduce or delay investments and aircraft purchases, sell assets, restructure or refinance our indebtedness, or seek additional capital, including through new types of debt, equity or hybrid securities. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and might require us to comply with more onerous covenants, which could further restrict our business operations. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations or to meet our aircraft purchase commitments as they come due. Failure to make payments on our debt would result in a default under those agreements and could result in a default under other agreements containing cross default provisions. Moreover, the issuance of additional equity may be dilutive to existing shareholders or otherwise may be on terms not favorable to us or existing shareholders.
Despite our substantial indebtedness, we might incur significantly more debt.
Despite our current indebtedness levels, we may increase our levels of debt in the future to finance our operations, including to purchase aircraft or to meet our contractual obligations, or for any other purpose. The agreements relating to our debt, including our indentures, term loan facilities, Export Credit Agency (“ECA”)-guaranteed financings, revolving credit facilities, securitizations, other commercial bank financings, and other financings do not prohibit us from incurring additional debt. As of December 31, 2020, we had approximately $5.6 billion of undrawn lines of credit available under our revolving credit and term loan facilities and other available secured debt, subject to certain conditions, including compliance with certain financial covenants. If we increase our total indebtedness, our debt service obligations will increase, and we will become more exposed to the risks arising from our substantial level of indebtedness.
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Our level of indebtedness, which requires significant debt service payments, could adversely impact our operating flexibility and financial results.
The principal amount of our outstanding indebtedness, which excludes fair value adjustments of $19.7 million and debt issuance costs, debt discounts and debt premium of $192.8 million, was approximately $28.9 billion as of December 31, 2020 (approximately 69% of our total assets as of December 31, 2020), and our interest payments, net of amounts capitalized, were $1.2 billion for the year ended December 31, 2020. Due to the capital-intensive nature of our business, we expect that we will incur additional indebtedness in the future and continue to maintain significant levels of indebtedness.
Our level of indebtedness:
•requires a substantial portion of our cash flows from operations to be dedicated to interest and principal payments and therefore not available to fund our operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes;
•may impair our ability to obtain additional financing on favorable terms or at all in the future;
•may limit our flexibility in planning for, or reacting to, changes in our business and industry; and
•may make us more vulnerable to downturns in our business, our industry or the economy in general.
The agreements governing our debt contain various covenants that impose restrictions on us that may affect our ability to operate our business.
Certain of our indentures, term loan facilities, ECA-guaranteed financings, revolving credit facilities, securitizations, other commercial bank financings, and other agreements governing our debt impose operating and financial restrictions on our activities that limit our operational flexibility. Among other negative covenants customary for such financings, certain of these restrictions limit our ability to incur additional indebtedness, create liens on, sell or access certain assets, declare or pay certain dividends and distributions or enter into certain transactions, investments, acquisitions, loans, guarantees or advances. Additionally, a substantial portion of our owned aircraft are held through SPEs or finance structures that finance or refinance the aircraft through funding agreements that place restrictions on distributions of funds to us.
Agreements governing certain of our indebtedness also contain financial covenants, including requirements that we comply with certain loan-to-value, interest coverage and leverage ratios. These restrictions could impede our ability to operate our business by, among other things, limiting our ability to take advantage of financing, merger and acquisition and other corporate opportunities. Our ability to comply with these covenants may be affected by events beyond our control. Failure to comply with any of the covenants in our financing agreements would result in a default under those agreements and could result in a default under other agreements containing cross default provisions. Under these circumstances, we may have insufficient funds or other resources to satisfy all our obligations.
Changes in interest rates may increase our cost of borrowing or otherwise adversely affect our net income.
We use a mix of fixed rate and floating rate debt to finance our business. Any increase in our cost of borrowing directly impacts our net income. Our cost of borrowing is affected by the interest rates that we obtain on our debt financings, which can fluctuate based on, among other things, general market conditions, the market’s assessment of our credit risk, prevailing interest rates in the market, fluctuations in U.S. Treasury rates and other benchmark rates, changes in credit spreads or swap spreads, and the duration of the debt we issue. If interest rates increase, we will be obligated to make higher interest payments to the lenders of our floating rate debt to the extent that it is not hedged. Please refer to “Item 11—Quantitative and Qualitative Disclosures About Market Risk—Interest rate risk” for further details on our interest rate risk. In addition, we are exposed to the credit risk that the counterparties to our derivative contracts will default on their obligations.
Decreases in interest rates may adversely affect our interest revenue on cash deposits and our lease revenue. During the year ended December 31, 2020, approximately 3% of our basic lease rents from aircraft under operating leases was attributable to leases with lease rates tied to floating interest rates and approximately 97% was derived from leases with fixed lease rates. A decrease in interest rates would cause a decrease in our lease revenue from leases with lease rates tied to floating interest rates. We could also experience reduced lease revenue from our fixed rate leases if interest rates decrease because these are based, in part, on prevailing interest rates at the time we enter into the lease. As a result, new fixed rate leases we enter into at a time of lower interest rates may be at lower lease rates than had no such interest rate decrease occurred, adversely affecting our lease revenue.
Moreover, if interest rates were to rise sharply, we would not immediately be able to fully offset the negative impact on our net income by increasing lease rates, even if the market were able to bear the increased lease rates. Our leases are generally for multiple years with fixed lease rates over the life of the lease and, therefore, lags will exist because our lease rates with respect to a particular aircraft cannot generally be increased until the expiration of the lease.
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Negative changes in our credit ratings may limit our ability to obtain financing or increase our borrowing costs
Our cost of borrowing and access to the capital markets are affected by our credit ratings.
We are currently subject to periodic review by independent credit rating agencies S&P, Moody’s and Fitch, each of which currently maintains an investment grade rating with respect to us.
We cannot assure you that these credit ratings will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn. Any actual or anticipated changes in our credit ratings, could negatively impact our ability to obtain secured or unsecured financing, increase our borrowing costs or limit our access to the capital markets, which could adversely impact our financial results.
The discontinuation, reform or replacement of benchmark indices may negatively affect our interest rate exposure.
Interest rate benchmarks, including the London Interbank Offered Rates (“LIBOR”) and the Euro Overnight Index Average (“EONIA”), are the subject of ongoing reform and, in some cases, discontinuation. The discontinuation or replacement of such benchmarks may disrupt the broader financial markets or could negatively impact our interest expense, and hedging transactions that we use in respect of floating rate instruments based on such benchmarks may not be effective to protect us against any such negative impact. On July 27, 2017, the Chief Executive of the U.K. Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. In addition, the European Money Markets Institute, which regulates and administers EONIA, is set to discontinue administration of EONIA on January 3, 2022. We are party to certain debt instruments, derivative contracts and leases that use benchmark rates, such as LIBOR, which will require us to transition these instruments, contracts and leases to alternative reference rates in the event of their discontinuation. We cannot guarantee that we will be able to reach agreement with our lenders and other counterparties with respect to any such amendments and the replacement of an existing benchmark rate with an alternate benchmark rate may negatively impact the value of those contracts to us, expose us to additional financial, tax, legal, operational or other costs, or expose us to additional interest rate-related risks, such as different alternative reference rates applying to our assets compared to our liabilities.
Risks relating to market demand for, and lease rates and value of, aircraft in our fleet
We may be unable to generate sufficient returns on our aircraft investments.
Our results depend on our ability to consistently acquire strategically attractive aircraft, continually and profitably lease and re-lease them, and finally sell or otherwise dispose of them, in order to generate returns on the investments we have made, provide cash to finance our growth and operations, and service our existing debt. Upon acquiring new aircraft, we may not be able to enter into leases that generate sufficient cash flow to justify the cost of purchase. When our leases expire or our aircraft are returned prior to the date contemplated in the lease, we bear the risk of re-leasing, selling or parting-out the aircraft. Because our leases are predominantly operating leases, only a portion of an aircraft’s value is recovered by the revenues generated from the lease and we may not be able to realize the aircraft’s residual value after lease expiration.
Our ability to profitably purchase, lease, re-lease, sell or otherwise dispose of our aircraft will depend in part on conditions in the airline industry and general market and competitive conditions at the time of purchase, lease and disposition, which are outside of our control.
Our business depends heavily on the level of demand for aircraft in our fleet, which may decline as a result of changes in market conditions and the overall health of air travel.
Aircraft are long-lived assets and aircraft demand can change over time as a result of changes in market conditions outside of our control. Customer demand for our aircraft is primarily driven by long-term trends in passenger air travel and air cargo demand, and is limited by airport and air traffic control infrastructure constraints. Demand is also influenced by changes in economic growth, regulation, airline profitability, fuel prices, the availability of aircraft financing, pricing and other competitive factors. For example, the Covid-19 pandemic has significantly affected passenger air travel worldwide, and the extent, duration and severity of the pandemic and the rate of recovery in air travel, the aviation industry and global economic conditions will impact demand for our aircraft. In addition, the imposition of more stringent regulation on air travel, including travel restrictions imposed in reaction to the Covid-19 pandemic, may adversely impact the profitability of air travel and reduce demand for our aircraft and engines. Types of regulation that could impact aircraft demand include environmental rules, noise or emissions limitations, aircraft age constraints, trade and import and export controls, tariffs and other trade barriers. If aircraft demand declines, lease rates and residual values of aircraft could be negatively impacted and we may be unable to lease our aircraft on favorable terms, if at all. Aircraft values and lease rates have occasionally experienced sharp decreases in response to market conditions or otherwise.
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Demand for an aircraft can also be affected by factors unique to that aircraft, including the maintenance and operating history of the airframe and engines, the compatibility of aircraft configurations and specifications with other aircraft owned by operators of that type, the number of operators using the particular type of aircraft, the availability of documentary records for the aircraft and aircraft age. The desirability of an aircraft may also be impacted by factors pertinent to the model of an aircraft, such as the performance and reliability of the specific engine type installed on a particular aircraft model, technical limitations and technical problems associated with an aircraft model or the operating histories of an aircraft model. For example, the 2019 grounding of the Boeing 737 MAX has affected demand and our ability to lease these aircraft, which, together with potential reputational damage pertaining to the aircraft model, may affect our future lease rates and residual values for these aircraft.
In addition, new aircraft types that are introduced to the market could be more attractive for the target lessees of our aircraft, increasing the supply of older aircraft in the marketplace. This may cause the retirement and obsolescence of aircraft models, decrease comparative values of aircraft based on newly competitive aircraft and reduce the availability of spare parts for older aircraft. For instance, Airbus S.A.S. (“Airbus”), The Boeing Company (“Boeing”) and Embraer S.A. (“Embraer”) have launched several new aircraft types in recent years, including the Boeing 787 Family, the Boeing 737 MAX Family, the Boeing 777X, the Airbus A320neo Family, the Airbus A330neo Family, the Airbus A350 Family, the Airbus A220 Family and the Embraer E-Jet E2 Family. These new aircraft types, and potential variants of these types, may reduce the desirability of, and have an adverse effect on residual value and future lease rates of, older aircraft types and variants. Additionally, new manufacturers may develop a narrowbody aircraft that competes with established aircraft types from Airbus, Boeing and Embraer, putting downward price pressure on, and decreasing the marketability of, aircraft from these manufacturers. The development of more fuel-efficient engines could make aircraft in our portfolio with engines that are not as fuel-efficient less attractive to potential lessees.
A decrease in demand for our aircraft as a result of any of these factors could materially and adversely affect lease rates and residual values for our aircraft, our ability to lease our aircraft on favorable terms, if at all, and our financial results.
Manufacturer behavior may adversely affect the lease rates and value of aircraft in our fleet or our results of operations more broadly.
The manufacture and supply of commercial aircraft is concentrated among a limited number of manufacturers. Aircraft also have long delivery cycles. We rely, as a result, on these manufacturers responding early and appropriately to changes in the market environment, delivering aircraft that meet our lessees’ expectations and fulfilling contractual obligations they have to us. Failure on the part of manufacturers in relation to any of these requirements may cause us to experience:
•missed or late delivery of aircraft and engines ordered by us and an inability to meet our contractual obligations to our customers, resulting in lost or delayed revenues, lower growth rates and strained customer relationships;
•an inability to acquire aircraft and engines and related components on terms that will allow us to lease those aircraft and engines to customers at a profit, resulting in lower growth rates or a contraction in our aircraft portfolio;
•a market environment with too many aircraft and engines available, creating downward pressure on demand for the aircraft and engines in our fleet and reduced market lease rates and sale prices;
•reduced demand for a manufacturer’s aircraft due to poor customer support or reputational damage to such manufacturer, thereby reducing the demand for those aircraft or engines in our fleet and reduced market lease rates and residual aircraft values for those aircraft and engines;
•a reduction in our competitiveness due to deep discounting by the aircraft or engine manufacturers, which may lead to reduced market lease rates and aircraft values and may affect our ability to remarket for lease or sell at a profit, some of the aircraft in our fleet; and
•technical or other difficulties with aircraft or engines after delivery that subject aircraft to operating restrictions or groundings, reducing value and lease rates of such aircraft and our ability to lease or dispose of such aircraft on favorable terms.
For example, the market is currently experiencing oversupply due to the impacts of the Covid-19 pandemic. In the years preceding the Covid-19 pandemic, the airline industry committed to a significant number of aircraft deliveries through order placements with manufacturers, and in response, aircraft manufacturers raised their production output. In response to the Covid-19 pandemic, manufacturers have significantly reduced their production output. Considering the significant decrease in demand for air travel, these production cuts may not be sufficient to prevent continuing overcapacity. Uncertainty regarding air travel demand may also lead to a reduction in the availability of debt financing for aircraft purchases, which could increase the gap between aircraft production and demand. Any such decrease in aircraft values and lease rates, or increase in the cost or availability of funding, could materially and adversely affect our financial results.
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Additionally, the reintroduction into service of the grounded Boeing 737 MAX aircraft upon regulators recertifying the model for flight has the potential to cause or exacerbate conditions of oversupply, especially in light of the backlog of parked inventory. This may put downward pressure on our aircraft lease rates, values and results of operations.
Risks related to the financial strength of our lessees
Our financial condition is dependent, in part, on the financial strength of our lessees.
We generate our revenue primarily from leases to airlines, and as a result we are exposed to many of the risks that airlines face. The ability of our lessees to perform their obligations depends primarily on their financial condition and cash flows, which are affected by factors outside our control. In addition to general economic and market conditions, airlines are affected by overall changes in passenger and air cargo demand. the price and availability of jet fuel, labor difficulties and costs, the availability of financial or other governmental support and governmental regulation and associated fees, including travel restrictions, restrictions on carbon emissions, environmental regulations and fly-over restrictions.
Generally, airlines with high financial leverage are more likely than airlines with stronger balance sheets to be affected, and are affected more quickly, by these factors. Such airlines are also more likely to seek operating leases.
A deterioration in the financial condition and cash flows of our lessees, including from the ongoing impacts of the Covid-19 pandemic, would increase the risk that they will delay, reduce or fail to make rental payments when due. At any point in time, our lessees may be significantly in arrears. Some lessees encountering financial difficulties may seek a reduction in their lease rates or other concessions, such as a deferral of their obligations to make rent or supplemental maintenance rent payments or a decrease in their contribution toward maintenance obligations. Moreover, we may not correctly assess the credit risk of each lessee or charge lease rates that incorrectly reflect related risks. Many of our lessees are not rated investment grade by the principal U.S. rating agencies and may be more likely to suffer liquidity problems than those that are so rated.
Our financial condition, financial results and cash flows may be materially and adversely affected by any events adversely affecting the financial strength of our lessees.
Increases in fuel prices and fuel price volatility could affect our lessees’ ability to meet their lease payment obligations to us.
The cost of fuel represents a major expense to airlines that is not within their control, and significant increases in fuel costs or hedges that inaccurately assess the direction of fuel costs can materially and adversely affect their operating results. Historically, fuel prices have fluctuated widely depending primarily on international market conditions, geopolitical and environmental events and currency exchange rates, including events, such as natural disasters, that affect fuel supply. Due to the competitive nature of the aviation industry, operators may be unable to increase airfares in a manner that fully offsets increases in fuel costs. In addition, they may not be able to enter appropriate hedging positions to manage their exposure to fuel price fluctuations. Airlines that hedge their fuel costs may suffer adverse impacts to their profitability and liquidity from swift movements in fuel prices, if their hedge agreements require them to post cash collateral. Therefore, if for any reason fuel prices return to historically high levels or show significant volatility, our lessees are likely to incur higher costs or generate lower revenues, which may affect their ability to meet their obligations to us.
Instability in the banking system or financial markets could impair our lessees’ ability to finance their operations, which could affect their ability to comply with payment obligations to us.
Adverse changes in the global banking system or the global financial markets may have a material adverse effect on our business. Many of our lessees have expanded their airline operations through borrowings and some are highly leveraged. These lessees depend on banks and the capital markets to provide working capital and to refinance existing indebtedness. Global financial markets can be highly volatile and the availability of credit from financial markets and financial institutions can vary substantially. Events that adversely impact capital markets could lead to the imposition of stricter capital requirements on borrowers, reduce the general availability of credit or otherwise result in higher borrowing costs, limiting our lessees’ abilities to finance their operations, which could affect their ability to meet payment obligations to us.
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If our lessees encounter financial difficulties and we restructure or terminate our leases, including as a result of airline reorganizations or bankruptcies, we are likely to obtain less favorable lease terms.
If a lessee delays, reduces, or fails to make rental payments when due, or has advised us that it will do so in the future, we may elect or be required to restructure or terminate the lease. In addition, in recent years, several airlines, including several of our lessees, have filed for protection under their local bankruptcy and insolvency laws, and certain airlines have gone into liquidation, and the impact of the Covid-19 pandemic on air travel has caused an increase in the number of airlines filing for such protection. For example, on May 26, 2020, LATAM Airlines Group S.A., one of our significant lessees, filed for Chapter 11 bankruptcy, and other lessees have also commenced Chapter 11 or similar proceedings as a result of the Covid-19 pandemic. A restructured lease will likely contain terms that are less favorable to us. If we are unable to agree on a restructuring and we terminate the lease, we may not receive all or any payments still outstanding, and we may be unable to re-lease the aircraft promptly and at favorable rates, if at all. Moreover, airline bankruptcies historically have led to the grounding of significant numbers of aircraft, rejection of leases and negotiated reductions in aircraft lease rentals, with the effect of depressing aircraft market values. As such, further reorganizations would adversely affect our ability to re-lease or sell aircraft at favorable rates, if at all. We have conducted restructurings and terminations in the ordinary course of our business, and we expect more will occur in the future. If we are obligated to perform a significant number of restructurings and terminations, the associated reduction in lease revenue could materially and adversely affect our financial results and cash flows.
Risks related to our relationship with our lessees
We have limited control over the operation of our aircraft and engine assets while they are under lease and depend on our lessees to properly maintain and insure our aircraft.
While our aircraft are on lease, we do not directly control their operation. Under our leases, our lessees are primarily responsible for maintaining our aircraft, obtaining adequate levels of insurance and complying with all governmental requirements applicable to the lessee and the aircraft, including operational, maintenance, government agency oversight, registration requirements and airworthiness directives. We also require many of our lessees to pay us supplemental maintenance rents. Nevertheless, because we still own and hold title to the aircraft we could be exposed to costs resulting from a lessee’s failure to properly maintain an aircraft under lease or be held liable for losses resulting from its operation while under lease. If a lessee fails to perform required maintenance on our aircraft during the term of the lease, the aircraft’s market value may decline or we might be required to incur maintenance and modification costs, which would result in lower revenues from its subsequent lease or sale, or the aircraft might be grounded. Additionally, if our lessees fail to maintain adequate insurance coverage, default in their indemnification or insurance obligations to us, or are exposed losses for which they do not have coverage, we could face increased costs from pursuing corrective action or face reductions in insurance proceeds that would otherwise be payable to us in the case of loss. If our lessees fail to meet their obligations to pay supplemental maintenance rents or end of lease (“EOL”) compensation, fail to perform required scheduled maintenance, fail to obtain and maintain insurance coverage for losses to which they are exposed, or if we are required to incur unexpected costs associated with any of the above, our financial results may be materially and adversely affected.
If our lessees fail to cooperate in returning our aircraft following lease terminations, we may encounter obstacles and are likely to incur significant costs and expenses conducting repossessions.
Our legal rights and the relative difficulty of repossession vary significantly depending on the jurisdiction in which an aircraft is located and the applicable law. We may need to obtain a court order or consents for deregistration or re-export, a process that can differ substantially in different countries. Where a lessee or other operator flies only domestic routes in the jurisdiction in which the aircraft is registered, repossessing and exporting the aircraft may be challenging, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. When a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations may apply. For example, certain jurisdictions entitle the lessee or another third party to retain possession of the aircraft without paying lease rent or performing all or some of the obligations under the relevant lease. Certain of our lessees are partially or wholly owned by government-related entities, which can complicate our efforts to repossess our aircraft in that government’s jurisdiction. If we encounter any of these difficulties, we may be delayed in, or prevented from, enforcing certain of our rights under a lease and in re-leasing the affected aircraft.
When conducting a repossession, we are likely to incur significant costs and expenses that are unlikely to be recouped, including, for example, legal and regulatory expenses, taxes, lost revenue, aircraft maintenance and refurbishment and repair costs necessary to put the aircraft in suitable condition for re-lease or sale. We may also make payments to discharge liens placed on our aircraft by lessees and, until these liens are discharged, be restricted in our ability to repossess, release or sell our aircraft and engines. Although the financial obligations relating to these liens are the contractual responsibility of our lessees, if they fail to fulfill these obligations, such liens may ultimately become our responsibility and impose additional repossession costs on us. If we incur significant costs in repossessing our aircraft, our financial results may be materially and adversely affected.
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In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine.
Under some legal principles, an engine affixed to an aircraft may become an accession to the aircraft, whereby the ownership rights of the owner of the airframe supersede those of the owner of the engine. In such cases, where an aircraft is security for the owner’s obligations to a third party, the security interest in the aircraft may supersede our rights as owner of the engine. As a substantial part of the value of an aircraft derives from its engines, we would suffer a substantial loss if our ability to repossess a leased engine was limited in the event of a lease default, which could materially and adversely affect our financial results.
Risks related to competition and the aviation industry
Competition and changes in market participants, including lessors, manufacturers and aircraft lessees, may adversely affect our business operations.
The aircraft leasing industry is highly competitive. Our competitors are primarily other major aircraft leasing companies, but we may also encounter competition from emerging aircraft leasing companies that we do not currently consider our main competitors. We may also face competition from other market participants, such as airlines, aircraft manufacturers, aircraft brokers, financial institutions, including those seeking to dispose of repossessed aircraft at distressed prices and other entities that invest in aircraft and engines. Some of these competitors may have greater operating and financial resources than we do and we may not always be able to compete successfully, which could materially and adversely affect our financial results.
Over the past several years, market participants in the aviation industry have changed as a result of restructuring or bankruptcies, mergers and acquisitions, entities entering or exiting the industry or entities entering into new or different market segments. We expect similar transitions to continue to take place into the future. Changes in market participants may affect our business by, for instance, reducing competition amongst manufacturers, changing the offering of aircraft types and models in the market, reducing demand for our aircraft from lessees or increasing the competition we face for new lessees or favorable terms on our transactions. New aircraft manufacturers, such as Mitsubishi Aircraft Corporation in Japan, JSC United Aircraft Corporation in Russia and Commercial Aircraft Corporation of China, Ltd. in China could produce aircraft that compete with current offerings from Airbus, Boeing and Embraer. These changes may materially affect our business.
The financial instability of an aircraft or engine manufacturer could impact delivery of our aircraft on order and negatively affect our cash flow and results of operations.
The supply of commercial aircraft is dominated by Airbus and Boeing and a limited number of engine manufacturers. As a result, we are dependent on these manufacturers remaining in existence and financially stable to fulfill contractual obligations they have to us. Any disruption to these manufacturers’ operating abilities may cause us to experience delivery delays on our aircraft orders. Our leases contain lessee cancellation clauses related to aircraft delivery delays, typically for aircraft delays greater than one year, and our purchase agreements contain similar provisions. If there are manufacturing delays for aircraft for which we have made future lease commitments, some or all of our affected lessees could elect to terminate their lease arrangements with respect to such delayed aircraft. Any such termination could negatively affect our cash flow and results of operations.
Further, we may experience additional delivery delays and associated costs if aircraft manufacturers deliver aircraft that fail to meet our lessees’ expectations or the requirements of air travel regulators. Following the fatal accidents of two Boeing 737 MAX aircraft, the worldwide fleet of these aircraft was grounded by aviation authorities in March 2019 and production was temporarily suspended by Boeing in January 2020, resulting in ongoing delays in the delivery of our aircraft on order from Boeing. During the year ended December 31, 2020 we cancelled our orders for 24 Boeing 737 MAX aircraft. In November 2020, the U.S. Federal Aviation Administration (“FAA”) rescinded the order that halted commercial operations of Boeing 737 MAX aircraft, thus allowing airlines that are under the FAA’s jurisdiction to take the steps necessary to resume service and Boeing to begin making deliveries. In January 2021, the European Union Aviation Safety Agency (“EASA”) also approved the return to service. As of December 31, 2020, we had five Boeing 737 MAX aircraft delivered and on lease. It is uncertain when and under what conditions our Boeing 737 MAX aircraft will return to service and when Boeing will resume making deliveries of our Boeing 737 MAX aircraft on order. As a result, we may incur future delays on our scheduled Boeing 737 MAX deliveries, and any such future delays could have an impact on our financial results. The grounding and its effects continue to present a number of the risks to our business, including risks associated with the financial stability of aircraft and engine manufacturers. See “Item 3. Key Information—Risk Factors—Risks relating to market demand for, and lease rates and value of, aircraft in our fleet—Manufacturer behavior may adversely affect the lease rates and value of aircraft in our fleet or our results of operations more broadly.”
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Risks related to the geopolitical, regulatory and legal exposure of our business
The international operations of our business and those of our lessees expose us to geopolitical, economic and legal risks associated with a global business, including many of the economic and political risks associated with emerging markets.
We and our lessees conduct business in many countries and, as a result, we are exposed to a large number of regulatory and legal regimes. We also face uncertainty from changes in political regimes globally, including from the current transition to a new presidential administration in the United States. Volatility in the political and economic environments associated with international markets could adversely affect our operations. Changes in international regulations, laws, taxes, export controls, tariffs, embargoes, sanctions or other restrictions on trade or travel could adversely affect the profitability of our lessees’ businesses, the operations of aircraft manufacturers or the results of our operations. For example, tensions with Russia, the situation in Syria and Venezuela, the Israeli/Palestinian conflict, tension over the nuclear programs of North Korea and Iran, political instability in the Middle East and North Africa, the territorial disputes between Japan and China and the tensions in the South China Sea could lead to further instability in these regions and negative impacts on our lessees’ businesses and our results of operations. Additionally, the international distribution of our assets exposes us to risks associated with limitations on the repatriation of our assets or the expropriation of our international assets. These factors may have a material and adverse effect on our financial results.
Furthermore, we derive substantial lease revenue (approximately 53% in 2020, 58% in 2019 and 58% in 2018) from airlines in emerging market countries. Emerging market countries have less developed economies and are more vulnerable to economic and political problems and may experience significant fluctuations in gross domestic product, interest rates and currency exchange rates, as well as civil disturbances, government instability, nationalization and expropriation of private assets and the imposition of taxes or other charges by government authorities. The occurrence of any of these events could result in economic instability that adversely affects the value of our ownership interest in aircraft subject to lease in such countries, or the ability of our lessees that serve such markets to meet their lease obligations. As a result, lessees that operate in emerging market countries may be more likely to default than lessees that operate in developed countries. In addition, legal systems in emerging market countries may be less developed, which could make it more difficult for us to enforce our legal rights in such countries. For these and other reasons, our financial results may be materially and adversely affected by economic and political developments in emerging market countries.
Existing and future litigation against us could materially and adversely affect our business, financial position, liquidity or results of operations.
We are, and from time to time in the future may be, a defendant in lawsuits relating to our business. We cannot accurately predict the ultimate outcome of any litigation due to its inherent uncertainties. These uncertainties may be increased by our exposure to different liability standards and legal systems internationally, including some that may be less developed and less predictable than those in advanced economies. An unfavorable outcome could materially and adversely affect our business, financial position, liquidity or results of operations. In addition, regardless of the outcome of any litigation, we may be required to devote substantial resources and executive time to the defense of such actions. For a description of certain pending litigation involving our business, please refer to Note 27—Commitments and contingencies to our Consolidated Financial Statements included in this annual report.
Because our lessees are concentrated in certain geographical regions, we have concentrated exposure to the political and economic risks associated with those regions, particularly China.
Through our lessees and the countries in which they operate, we are exposed to the specific economic and political conditions and associated risks of those jurisdictions, including the regional impacts of the Covid-19 pandemic. These risks can include economic recessions, burdensome local regulations or, in extreme cases, increased risks of requisition of our aircraft. An adverse political or economic event in any region or country in which our lessees or our aircraft are concentrated could affect the ability of our lessees to meet their obligations to us, or expose us to various legal or political risks associated with the affected jurisdictions, all of which could have a material and adverse effect on our financial results.
We have a large concentration of lessees in China and therefore have increased exposure to the economic and political conditions in that country and from the increasingly adversarial relationship between China and the West. Recent and future political developments, including the trade dispute between the U.S. and China and other evolving policies pursued in Europe, could result in increased and unexpected regulations on trade, which could adversely impact the results of our operations. Further deterioration in China’s relationship with the West could result in the imposition of more stringent trade or travel restrictions, which would harm the operations of our lessees and could materially affect our financial results.
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We are subject to various risks and requirements associated with transacting business in many countries.
Our international operations expose us to trade and economic sanctions, export controls and other restrictions imposed by the United States, the United Kingdom, or other governments or organizations. For example, the U.S. Departments of Justice, Commerce, State and Treasury and other U.S. federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of economic sanctions laws, export control laws, the Foreign Corrupt Practices Act, and other U.S. federal statutes and regulations, including those established by the Office of Foreign Asset Control. Under these laws and regulations, the U.S. government may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries, and modifications to compliance programs, which may increase compliance costs, and may subject us to fines, penalties and other sanctions. A violation of any of these laws or regulations could materially and adversely impact our business, operating results, and financial condition.
We have implemented and maintain in effect policies and procedures designed to ensure compliance by us, our subsidiaries and our directors, officers, employees, consultants and agents with respect to various export control, anti-corruption, anti-terrorism and anti-money laundering laws and regulations. However, such personnel could engage in unauthorized conduct for which we may be held responsible. Violations of such laws and regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could materially and adversely affect our financial results.
The General Data Protection Regulation (“GDPR”), which became law in the EU on May 25, 2018, regulates the ways in which businesses process personal data in Europe. There are extensive documentation obligations and transparency requirements, which may impose significant costs on us. Failure to comply with the GDPR may subject us to significant litigation or enforcement actions, fines, claims for compensation by customers and other affected individuals, damage to our reputation, orders to remedy breaches or criminal prosecutions, any of which could have a material adverse impact on our business, operating results, and financial condition. For example, under the GDPR, we could incur significant fines of up to 4% of our annual global revenue.
Our aircraft are subject to various environmental regulations and concerns.
Governmental regulations regarding aircraft and engine noise and emissions levels apply based on where the relevant airframe is registered and where the aircraft is operated. For example, jurisdictions throughout the world have adopted noise regulations that require all aircraft to comply with noise level standards. In addition, the United States and the International Civil Aviation Organization (“ICAO”) have adopted a more stringent set of standards for noise levels that apply to engines manufactured or certified beginning in 2006, as well as a more stringent set of standards in respect of aircraft with a maximum certificated takeoff weight greater than or equal to 55,000 kg and aircraft with a maximum certificated takeoff weight less than 55,000 kg, effective December 31, 2017 and December 31, 2020, respectively. Currently, United States regulations do not require any phase-out of aircraft that qualify with the older standards, but the EU has established a framework for the imposition of operating limitations on aircraft that do not comply with the newer standards. These regulations could limit the economic life of certain of our aircraft and engines, reduce their value, limit our ability to lease or sell the non-compliant aircraft and engines or, if engine modifications are permitted, require us to make significant additional investments in the aircraft and engines to make them compliant.
In addition to more stringent noise restrictions, the United States, EU and other jurisdictions are moving towards imposing more stringent limits on greenhouse gas emissions from aircraft engines. Although current emissions control laws generally apply to newer engines, new laws could be passed in the future that also impose limits on older engines, thereby subjecting our older engines to existing or new emissions limitations or indirect taxation. For example, the EU issued a directive in January 2009 to include aviation within the scope of its greenhouse gas emissions trading scheme (“ETS”) beginning on January 1, 2012, regardless of the engine type or age. However, the EU subsequently suspended ETS application to flights from or to non-EU countries through 2023. In October 2016, ICAO adopted the Carbon Offset and Reduction Scheme for International Aviation (“CORSIA”), a global market-based scheme aimed at reducing carbon dioxide emission from international aviation that will become mandatory in 2027. At least 77 countries, including the United States, have indicated that they will participate in the voluntary phase-in of CORSIA which begins in 2021, although the United States subsequently indicated that it is reviewing its commitment to CORSIA. Limitations on emissions such as ETS and CORSIA could favor younger, more fuel-efficient aircraft since they generally produce lower levels of emissions per passenger, which could adversely affect our ability to re-lease or otherwise dispose of less efficient aircraft on a timely basis, on favorable terms, or at all. This is an area of law that is rapidly changing and as of yet remains specific to certain jurisdictions. While we do not know at this time whether new emissions restrictions will be passed, and if passed what impact such laws might have on our business, any future emissions limitations could adversely affect us.
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The airline industry has come under increased scrutiny by the press, the public and investors regarding the impact of air travel on the environment, including emissions to the air, discharges to surface and subsurface waters, safe drinking water, aircraft noise, the management of hazardous substances, oils and waste materials and other environmental impacts related to aircraft operations. If such scrutiny results in reduced air travel, it may affect demand for our aircraft, lessees’ ability to make rental and other lease payments and reduce the value we receive for our aircraft upon any disposition, which would negatively affect our financial condition, cash flow and results of operations.
Risks related to accounting and impairments
If a decline in demand for certain aircraft causes a decline in its projected lease rates, or if we dispose of an aircraft for a price that is less than its depreciated book value on our balance sheet, then we will recognize impairments or make fair value adjustments.
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 from their undiscounted cash flows. If the gross cash flow test fails, the difference between the fair value and the carrying amount of the aircraft is recognized as an impairment loss. Factors that may contribute to impairment charges include, but are not limited to, unfavorable airline industry trends affecting the residual values of certain aircraft types, high fuel prices and development of more fuel-efficient aircraft shortening the useful lives of certain aircraft, management’s expectations that certain aircraft are more likely than not to be parted-out or otherwise disposed of sooner than their expected life, and new technological developments. Cash flows supporting carrying values of older aircraft are more dependent upon current lease contracts. In addition, we believe that residual values of older aircraft are more exposed to non-recoverable declines in value in the current economic environment.
If economic conditions deteriorate, we may be required to recognize impairment losses. In that event, our estimates and assumptions regarding forecasted cash flows from our long-lived assets would need to be reassessed, including the duration of the economic downturn and the timing and strength of the pending recovery, both of which are important variables for purposes of our long-lived asset impairment tests. Any of our assumptions may prove to be inaccurate, which could adversely impact forecasted cash flows of certain long-lived assets, especially for older aircraft. If so, it is possible that there may be an event-driven impairment for other long-lived assets in the future and that any such impairment amounts may be material.
During the year ended December 31, 2020, we recognized impairment charges of $1.1 billion primarily related to current technology widebody aircraft, in particular Airbus A330 and Boeing 777 aircraft. These aircraft represented approximately 8.5% of our total flight equipment by net book value as of December 31, 2020.
As of December 31, 2020, 185 of our owned aircraft under operating leases were 15 years of age or older. These aircraft represented approximately 6% of our total flight equipment and lease-related assets and liabilities as of December 31, 2020. Please refer to “Item 5. Operating and Financial Review and Prospects—Critical accounting policies and estimates—Impairment charges” for a detailed description of our impairment policy.
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Risks related to information technology
A cyberattack could lead to a material disruption of our IT systems or the IT systems of our third party providers and the loss of business information, which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.
Parts of our business depend on the secure operation of our information technology, or IT, systems and the IT systems of our third party providers to manage, process, store and transmit information associated with aircraft leasing. Like other global companies, we have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks, internet network scans, systems failures and disruptions. A cyberattack that bypasses our IT security systems or the IT security systems of our third party providers, causing an IT security breach, could lead to a material disruption of our IT systems or the IT systems of our third party providers, as applicable, and adversely impact our daily operations and cause the loss of sensitive information, including our own proprietary information and that of our customers, suppliers and employees. Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs and liability. While we devote substantial resources to maintaining adequate levels of cybersecurity, our resources and technical sophistication may not be adequate to prevent all types of cyberattacks.
We could suffer material damage to, or interruptions in, our IT systems or the IT systems of our third party providers as a result of external factors, staffing shortages or difficulties in updating our existing software or developing or implementing new software.
We depend largely upon our IT systems and the IT systems of our third party providers in the conduct of all aspects of our operations. Such systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, fire and natural disasters. Damage or interruption to these IT systems may require a significant investment to fix or replace them, and we may suffer interruptions in our operations in the interim. In addition, we are currently pursuing a number of IT-related projects that will require ongoing IT-related development and conversion of existing systems. Costs and potential problems or interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or support of existing systems could also disrupt or reduce the efficiency of our operations. Any material interruptions or failures in our IT systems may have a material adverse effect on our business or results of operations.
Risks related to our structure and taxation
We are a public limited liability company incorporated in the Netherlands (“naamloze vennootschap” or “N.V.”) and it may be difficult to obtain or enforce judgments against us or our executive officers, some of our directors and some of our named experts in the United States.
We were incorporated under the laws of the Netherlands and, as such, the rights of holders of our ordinary shares and the civil liability of our directors will be governed by the laws of the Netherlands and our articles of association. The rights of shareholders under the laws of the Netherlands may differ from the rights of shareholders of companies incorporated in other jurisdictions. Many of our directors and executive officers and most of our assets and the assets of many of our directors are located outside the United States. In addition, our articles of association do not provide for U.S. courts as a venue for, or for the application of U.S. law to, lawsuits against us, our directors and executive officers. As a result, you may not be able to serve process on us or on such persons in the United States or obtain or enforce judgments from U.S. courts against us or them based on the civil liability provisions of the securities laws of the United States. There is doubt as to whether the Dutch courts would enforce certain civil liabilities under U.S. securities laws in original actions and enforce claims for punitive damages.
Under our articles of association, we indemnify and hold our directors, officers and employees harmless against all claims and suits brought against them, subject to limited exceptions. Under our articles of association, to the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or former shareholder shall be governed exclusively by the laws of the Netherlands and subject to the jurisdiction of the Dutch courts, unless such rights or obligations do not relate to or arise out of their capacities listed above. Although there is doubt as to whether U.S. courts would enforce such provision in an action brought in the United States under U.S. securities laws, such provision could make judgments obtained outside of the Netherlands more difficult to enforce against our assets in the Netherlands or jurisdictions that would apply Dutch law.
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We may become a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes.
We do not believe we will be classified as a PFIC for 2020. We cannot yet make a determination as to whether we will be classified as a PFIC for 2021 or subsequent years. The determination as to whether a foreign corporation is a PFIC is a complex determination based on all of the relevant facts and circumstances and depends on the classification of various assets and income under PFIC rules. In our case, the determination is further complicated by the application of the PFIC rules to leasing companies and to joint ventures and financing structures common in the aircraft leasing industry. It is unclear how some of these rules apply to us. Further, this determination must be tested annually and our circumstances may change in any given year. We do not intend to make decisions regarding the purchase and sale of aircraft with the specific purpose of reducing the likelihood of our becoming a PFIC. Accordingly, our business plan may result in our engaging in activities that could cause us to become a PFIC. If we are or become a PFIC, U.S. shareholders may be subject to increased U.S. federal income taxes on a sale or other disposition of our ordinary shares and on the receipt of certain distributions and will be subject to increased U.S. federal income tax reporting requirements. See “Item 10. Additional Information—Taxation—U.S. tax considerations” for a more detailed discussion of the consequences to you if we are treated as a PFIC and a discussion of certain elections that may be available to mitigate the effects of that treatment. We urge you to consult your own tax advisors regarding the application of the PFIC rules to your particular circumstances.
We may become subject to income or other taxes in jurisdictions which would adversely affect our financial results.
We and our subsidiaries are subject to the income tax laws of Ireland, the Netherlands, the United States and other jurisdictions in which our subsidiaries are incorporated or based. Our effective tax rate in any period is impacted by the source and the amount of earnings among our different tax jurisdictions. Our ability to defer the payment of some level of income taxes to future periods is dependent upon the continued benefit of accelerated tax depreciation on our flight equipment in some jurisdictions, the continued deductibility of external and intercompany financing arrangements and the application of tax losses prior to their expiration in certain tax jurisdictions, among other factors. A change in the division of our earnings among our tax jurisdictions could have a material impact on our effective tax rate and our financial results. In addition, we or our subsidiaries may be subject to additional income or other taxes in these and other jurisdictions by reason of the management and control of our subsidiaries, our activities and operations, where our aircraft operate, where the lessees of our aircraft (or others in possession of our aircraft) are located or changes in tax laws or practices, regulations or accounting principles. Although we have adopted guidelines and operating procedures to ensure our subsidiaries are appropriately managed and controlled, we may be subject to such taxes in the future and such taxes may be substantial. The imposition of such taxes could have a material adverse effect on our financial results.
We may become subject to additional taxes in Ireland based on the extent of our operations carried on in Ireland.
Our Irish tax resident group companies are currently subject to Irish corporate income tax on trading income at a rate of 12.5%, on capital gains at 33% and on other income at 25%. We expect that substantially all of our Irish income will be treated as trading income for tax purposes in future periods. As of December 31, 2020, we had significant Irish tax losses available to carry forward against our trading income. The continued application of the 12.5% tax rate to trading income generated in our Irish tax resident group companies and the ability to carry forward Irish tax losses to offset future taxable trading income depends in part on the extent and nature of activities carried on in Ireland both in the past and in the future.
We may fail to qualify for benefits under one or more tax treaties.
We do not expect that our subsidiaries located outside of the United States will have any material U.S. federal income tax liability by reason of activities we carry out in the United States and the lease of assets to lessees that operate in the United States. This conclusion will depend, in part, on continued qualification for the benefits of income tax treaties between the United States and other countries in which we are subject to tax (particularly Ireland). That in turn may depend on, among others, the nature and level of activities carried on by us and our subsidiaries in each jurisdiction, the identity of the owners of equity interests in subsidiaries that are not wholly owned and the identities of the direct and indirect owners of our indebtedness.
The nature of our activities may be such that our subsidiaries may not continue to qualify for the benefits under income tax treaties with the United States and that may not otherwise qualify for treaty benefits. Failure to so qualify could result in the imposition of U.S. federal and state taxes, which could have a material adverse effect on our financial results.
20

The introduction of Base Erosion and Profit Shifting (“BEPS”) by the Organization for Economic Cooperation and Development’s (“OECD”) may impact our effective rate of tax in future periods.
In line with the OECD’s BEPS Action Plan, since June 7, 2017, representatives from 95 jurisdictions have signed up to the Multilateral Instrument (“MLI”). The MLI implements agreed tax treaty-related measures combating tax avoidance into bilateral existing tax treaties without the need to renegotiate a new treaty. The MLI took effect on May 1, 2019 in Ireland, with measures relating to withholding taxes taking effect from January 1, 2020.
One of the measures of the MLI is the concept of a “Principal Purpose Test” (“PPT”), which disallows treaty benefits where the main purpose or one of the main purposes of structuring the transaction is to obtain the benefits of the relevant treaty.
Given the nature and substance of our Irish operations, we are satisfied that the PPT should not have a material impact on any of our payments which are reliant on Irish tax treaty positions. However, given the subjective nature of the PPT, there is a risk that a tax authority may take an alternate view and seek to deny the benefits of a double tax treaty based on the interpretation to the PPT in that jurisdiction.
In addition, the OECD announced a further initiative on January 29, 2019, to create an international consensus on new rules for the framework governing international taxation, which was supported by the publication of the Pillar One and Pillar Two Blueprint Reports on October 12, 2020. It is difficult to predict what, if any, changes to international taxation may be introduced as a result of this initiative or to determine whether it may result in an increase in our effective tax rate and cash tax liabilities in future periods.
The EU Anti-tax Avoidance proposals may impact our effective rate of tax in future periods.
Irish tax law will be subject to changes as a result of the implementation of the EU Anti-Tax Avoidance Directive (“EU ATAD”) and the amending Directive (“EU ATAD 2”). One such change will be the implementation of a restriction on the tax deductibility of interest payments. As currently proposed, the EU ATAD would restrict the tax deductibility of net interest expense to 30% of earnings before interest, tax, depreciation and amortization (“EBITDA”) or possibly higher if the third party group interest expense ratio to group EBITDA is higher. This measure could impact our ability to claim a tax deduction for interest payments on debt instruments. The implementation date is expected to be January 1, 2022.

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Item 4.    Information on the Company
History and development of the Company
AerCap Holdings N.V. (together with its subsidiaries, “AerCap,” “we,” “us” or the “Company”) was incorporated in the Netherlands as a public limited liability company (“naamloze vennootschap” or “N.V.”) on July 10, 2006. AerCap is the global leader in aircraft leasing with 1,330 aircraft owned, managed or on order, and total assets of $42.0 billion as of December 31, 2020. Our ordinary shares are listed on the New York Stock Exchange (the “NYSE”) 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, Boeing in Seattle and Airbus in Toulouse.
As of December 31, 2020, we had 138,847,345 ordinary shares issued, including 130,398,538 ordinary shares issued and outstanding, and 8,448,807 ordinary shares held as treasury shares. Our issued and outstanding ordinary shares included 2,552,346 shares of unvested restricted stock.
The address of our headquarters in Dublin is AerCap House, 65 St. Stephen’s Green, Dublin D02 YX20, Ireland, and our general telephone number is +353 1 819 2010. Our website address is www.aercap.com. Information contained on our website does not constitute a part of this annual report. Puglisi & Associates is our authorized representative in the United States. The address of Puglisi & Associates is 850 Liberty Avenue, Suite 204, Newark, DE 19711 and their general telephone number is +1 (302) 738-6680. The U.S. Securities and Exchange Commission (“SEC”) maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. You can review our SEC filings, including this annual report, by accessing the SEC’s Internet website at www.sec.gov.
Our primary capital expenditure is the purchase of aircraft under aircraft purchase agreements with Airbus, Boeing and Embraer. Please refer to “Item 5. Operating and Financial Review and Prospects—Liquidity and capital resources” for a detailed discussion of our capital expenditures. The following table presents our capital expenditures for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
(U.S. Dollars in thousands)
Purchase of flight equipment $ 778,547  $ 3,359,092  $ 4,036,194 
Prepayments on flight equipment 405,178  1,369,400  1,912,215 
Business overview
Aircraft leasing
We are the global leader in aircraft leasing. We focus on acquiring in-demand aircraft at attractive prices, funding them efficiently, hedging interest rate risk prudently and using our platform to deploy these assets with the objective of delivering superior risk-adjusted returns. We believe that by applying our expertise, we will be able to identify and execute on a broad range of market opportunities that we expect will generate attractive returns for our shareholders. We are an independent aircraft lessor, and, as such, we are not affiliated with any airframe or engine manufacturer. This independence provides us with purchasing flexibility to acquire aircraft or engine models regardless of the manufacturer.
We operate our business on a global basis, leasing aircraft to customers in every major geographical region. As of December 31, 2020, we owned 939 aircraft and we managed 105 aircraft. As of December 31, 2020, we also had 286 new aircraft on order, including 157 Airbus A320neo Family aircraft, 71 Boeing 737 MAX aircraft, 35 Embraer E-Jets E2 aircraft, and 23 Boeing 787 aircraft. As of December 31, 2020, the average age of our 939 owned aircraft fleet, weighted by net book value, was 6.4 years and as of December 31, 2019, the average age of our 939 owned aircraft fleet, weighted by net book value, was 6.1 years.
We have the infrastructure, expertise and resources to execute a large number of diverse aircraft transactions in a variety of market conditions. During the year ended December 31, 2020, we executed 179 aircraft transactions. Our teams of dedicated marketing and asset trading professionals have been successful in leasing and managing our aircraft portfolio. During the year ended December 31, 2020, our weighted average owned aircraft utilization rate was 97.5%, calculated based on the number of days each aircraft was on lease during the year, weighted by the net book value of the aircraft.
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Aircraft leases and transactions
We lease most of our aircraft to airlines under operating leases. Under these leases, the lessee is responsible for the maintenance and servicing of the equipment during the lease term and we receive the benefit, and assume the risks, of the residual value of the equipment at the end of the lease. Many airlines lease aircraft under operating leases as this reduces their capital requirements and costs and affords them flexibility to manage their fleet more efficiently as aircraft are returned over time. Since the 1970’s and the creation of aircraft leasing pioneers Guinness Peat Aviation (“GPA”) and International Lease Finance Corporation (“ILFC”), the world’s airlines have increasingly turned to operating leases to meet their aircraft needs. We have active customer relationships with approximately 200 airlines in approximately 80 countries. These customer relationships are either with existing customers or airlines with which we maintain regular dialogue in relation to potential transaction opportunities. Our relationships with these airlines help us place new aircraft and remarket existing aircraft.
Over the life of our aircraft, we seek to increase the returns on our investments by managing the lease rates, time off-lease and financing and maintenance costs, and by carefully timing their sale. Our current operating aircraft leases have initial terms ranging in length up to approximately 16 years. By varying our lease terms, we mitigate the effects of changes in cyclical market conditions at the time aircraft become eligible for re-lease.
Well in advance of the expiration of an operating lease, we prioritize entering into a lease extension with the then-current operator. This reduces our risk of aircraft downtime as well as aircraft transition costs. The terms of our lease extensions reflect the market conditions at the time and typically contain different terms from the original lease. Should a lessee not be interested in extending a lease, or if we believe we can obtain a more favorable return on the aircraft, we will explore other options, including the sale of the aircraft. If we enter into a lease agreement for the same aircraft with a different lessee, we generally do so well in advance of the scheduled return date of the aircraft. When the aircraft is returned, maintenance work may be required before the aircraft transitions to the next lessee.
Our extensive experience, global reach and operating capabilities allow us to rapidly complete numerous aircraft transactions, which enables us to increase the returns on our aircraft investments by minimizing any time that our aircraft are not generating revenue for us.
The following table provides details regarding the aircraft transactions we executed during the years ended December 31, 2020, 2019 and 2018. The trends shown in the table reflect the execution of the various elements of our leasing strategy for our owned and managed portfolio, as described further below:
Year Ended December 31,
2020 2019 2018 Total
Owned portfolio
New leases on new aircraft 10  54  115  179 
New leases on used aircraft 12  37  43  92 
Extensions of lease contracts 67  92  85  244 
New aircraft purchases 36  65  76  177 
Aircraft sales and part-outs (a) 40  88  91  219 
Managed portfolio
New leases on used aircraft 6  5  5  16 
Extensions of lease contracts 2  4  9  15 
Aircraft sales and part-outs 6  8  12  26 
Total aircraft transactions 179  353  436  968 

(a)Disassembly of an aircraft for the sale of its parts (“part-out”)
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We perform a review of all of our prospective lessees, which generally includes reviewing financial statements, business plans, cash flow projections, maintenance capabilities, operational performance histories, hedging arrangements for fuel, foreign currency and interest rates and relevant regulatory approvals and documentation. We perform on-site credit reviews for new lessees, which typically include extensive discussions with the prospective lessee’s management before we enter into a new lease. We also evaluate the jurisdiction in which the lessee operates to ensure we are in compliance with any regulations and evaluate our ability to repossess our assets in the event of a lessee default. Depending on the credit quality and financial condition of the lessee, we may require the lessee to obtain guarantees or other financial support from an acceptable financial institution or other third parties.
We typically require our lessees to provide a security deposit for their performance under a lease, including the return of the aircraft in the specified maintenance condition at the expiration of the lease.
All of our lessees are responsible for the maintenance and repair of the leased aircraft as well as other operating costs during the lease term. Based on the credit quality of the lessee, we require some of our lessees to pay supplemental maintenance rents to cover major scheduled maintenance costs. If a lessee pays supplemental maintenance rents, we reimburse them for their maintenance events (as defined in the lease) up to the amount of their supplemental maintenance rent payments. Under the terms of our leases, at lease expiration, we retain excess maintenance rents to the extent that a lessee has paid us more supplemental maintenance rents than we have reimbursed them for their maintenance events. In most lease contracts that do not require the payment of supplemental maintenance rents, the lessee is generally required to redeliver the aircraft in a similar maintenance condition (normal wear and tear excepted) as when accepted under the lease. To the extent that the redelivery condition is different from the acceptance condition, we generally receive cash compensation for the value difference at the time of redelivery. As of December 31, 2020 and 2019, approximately 35% and 39%, respectively, of our owned aircraft leases provided for supplemental maintenance rental payments.
We require the lessee to compensate us if the aircraft is not in the required condition upon redelivery. All of our leases contain provisions regarding our remedies and rights in the event of default by the lessee, and also include specific provisions regarding the required condition of the aircraft upon its redelivery.
Our lessees are also responsible for compliance with all applicable laws and regulations governing the leased aircraft and all related costs. We require our lessees to comply with either the FAA, EASA or their equivalent standards in other jurisdictions.
During the term of our leases, some of our lessees may experience financial difficulties resulting in the need to restructure their leases. Generally, our restructurings can involve a number of possible changes to the lease terms, including the voluntary termination of leases prior to their scheduled expiration, the arrangement of subleases from the primary lessee to a sublessee, the rescheduling of lease payments and the exchange of lease payments for other consideration. In some cases, we may repossess a leased aircraft and, in those cases, we usually export the aircraft from the lessee’s jurisdiction to prepare it for remarketing. In the majority of repossessions, we obtain the lessee’s cooperation and the return and export of the aircraft are completed without significant delay, generally within two months. In some repossessions, however, our lessees may not cooperate in returning aircraft and we may be required to take legal action. In connection with the repossession of an aircraft, we may be required to settle claims on the aircraft or to which the lessee is subject, including outstanding liens on the repossessed aircraft. See “Item 3. Key Information—Risk Factors—Risks related to our relationship with our lessees—If our lessees fail to cooperate in returning our aircraft following lease terminations, we may encounter obstacles and are likely to incur significant costs and expenses conducting repossessions” for a discussion of how repossessions may affect our financial results.
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Scheduled lease expirations
The following table presents the scheduled lease expirations (for the minimum non-cancelable period) for our owned aircraft under operating leases by aircraft type as of December 31, 2020. The table does not give effect to contracted unexercised lease extension options, lease extensions or re-leases that are subject to a letter of intent, aircraft sales that have been contracted or are subject to a letter of intent, or designations of a certain aircraft for sale or part-out.
Aircraft type 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Thereafter Total
Airbus A320 Family 45  34  37  41  25  23  18  13  1  —  —  237 
Airbus A320neo Family —  —  —  —  1  1  2  7  27  34  87  159 
Airbus A330 3  11  9  13  3  4  5  2  —  —  —  50 
Airbus A350 —  —  —  —  —  —  2  6  4  7  8  27 
Boeing 737NG 10  6  14  34  31  40  25  6  —  4  5  175 
Boeing 737 MAX —  —  —  —  —  —  —  —  —  5  —  5 
Boeing 767 6  4  1  2  —  —  —  —  —  —  —  13 
Boeing 777-200ER 1  3  1  —  —  2  1  —  —  —  —  8 
Boeing 777-300/300ER 1  3  3  2  3  2  4  2  1  —  —  21 
Boeing 787 2  —  3  6  5  9  9  6  13  13  22  88 
Embraer E190/195-E2 —  —  —  1  4  —  —  —  —  —  10  15 
Other 4  3  —  —  —  —  —  —  —  —  —  7 
Total (a) (b) 72  64  68  99  72  81  66  42  46  63  132  805 

(a)Includes aircraft that have been re-leased or for which the lease has been extended as of December 31, 2020. As of December 31, 2020, scheduled lease expirations through the end of 2022 represented less than 7% of the aggregate net book value of our fleet. As of February 25, 2021, 43 of the 72 aircraft with leases expiring in 2021 have been re-leased, have had leases extended, or have been designated for sale or part-out.
(b)Includes one aircraft that was off-lease and under commitment for re-lease as of December 31, 2020.
Principal markets and customers
The following table presents the percentage of basic lease rents of our owned portfolio from our top five lessees for the year ended December 31, 2020:
Lessee Percentage of 2020 basic lease rents
American Airlines 8.7  %
China Southern Airlines 8.3  %
Air France 5.2  %
Azul Airlines 3.9  %
Ethiopian Airlines 3.4  %
Total 29.5  %



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We lease our aircraft to lessees located in every major geographical region. The following table presents the percentage of our total lease revenue by region based on our lessee’s principal place of business for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Asia/Pacific/Russia 38  % 38  % 36  %
Europe 27  % 28  % 30  %
United States/Canada/Caribbean 14  % 13  % 13  %
Latin America 11  % 11  % 11  %
Africa/Middle East 10  % 10  % 10  %
Total 100  % 100  % 100  %
For further geographic information on our total lease revenue and long-lived assets, refer to Note 18—Geographic information to our Consolidated Financial Statements included in this annual report.
Aircraft services
We provide aircraft asset management and corporate services to securitization vehicles, joint ventures and other third parties. As of December 31, 2020, we had aircraft management and corporate administration and/or cash management service contracts with eight parties that owned 105 aircraft. We categorize our aircraft services into aircraft asset management, corporate administrative services and cash management services. Since we have an established operating system to manage our own aircraft, the incremental cost of providing aircraft management services to securitization vehicles, joint ventures and third parties is limited. Our primary aircraft asset management activities include:
•remarketing aircraft for lease or sale;
•collecting rental and supplemental maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance and accepting delivery and redelivery of aircraft;
•conducting ongoing lessee financial performance reviews;
•periodically inspecting the leased aircraft;
•coordinating technical modifications to aircraft to meet new lessee requirements;
•conducting restructuring negotiations in connection with lease defaults;
•repossessing aircraft;
•arranging and monitoring insurance coverage;
•registering and de-registering aircraft;
•arranging for aircraft and aircraft engine valuations; and
•providing market research.
We charge fees for our aircraft management services based on a mixture of fixed and rental-based amounts, and we also receive performance-based fees related to the managed aircraft lease revenues or sale proceeds.
We also provide cash management and administrative services to securitization vehicles and joint ventures. Cash management services consist primarily of treasury services such as the financing, refinancing, hedging and ongoing cash management of these vehicles. Our administrative services consist primarily of accounting and corporate secretarial services, including the preparation of budgets and financial statements.
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Our business strategy
We develop and grow our aircraft leasing business by executing on our focused business strategy, the key components of which are as follows:
Manage the profitability of our aircraft portfolio
Our ability to profitably manage aircraft throughout their lifecycle depends, in part, on our ability to successfully source acquisition opportunities of new and used aircraft at favorable terms, as well as our ability to secure long-term funding for such acquisitions, lease aircraft at profitable rates, minimize downtime between leases and associated maintenance expenses and opportunistically sell aircraft. We manage the long-term profitability of our aircraft portfolio by:
•purchasing aircraft directly from manufacturers;
•entering into purchase and leaseback transactions with airlines;
•using our global customer relationships to obtain favorable lease terms for aircraft and maximizing aircraft utilization;
•maintaining diverse sources of global funding;
•optimizing our portfolio by selling aircraft; and
•providing management services to securitization vehicles, our joint ventures and other aircraft owners at limited incremental cost to us.
Efficiently manage our liquidity
We analyze sources of financing based on pricing and other terms and conditions in order to optimize the return on our investments. We have the ability to access a broad range of liquidity sources globally. In 2020, we raised $8.3 billion of financing, including bank debt, revolving credit facilities and note issuances in the capital markets.
We have access to liquidity in the form of our revolving credit facilities and our term loan facilities, which provide us with flexibility in raising capital and enable us to deploy capital rapidly to accretive aircraft purchase opportunities that may arise. As of December 31, 2020, we had $5.6 billion of undrawn lines of credit available under our revolving credit and term loan facilities and other available secured debt and $1.2 billion of unrestricted cash. We strive to maintain a diverse financing strategy, both in terms of capital providers and structure, through the use of bank debt, note issuance and export credit, including ECA-guaranteed loans, in order to maximize our financial flexibility. We also leverage our longstanding relationships with major aircraft financiers and lenders to secure access to capital. In addition, we attempt to maximize our operating cash flows and continue to pursue the sale of aircraft to generate additional cash flows. Please refer to Note 13—Debt to our Consolidated Financial Statements included in this annual report for a detailed description of our outstanding indebtedness.
Manage our aircraft portfolio
We intend to maintain an attractive portfolio of in-demand aircraft by acquiring new aircraft directly from aircraft manufacturers, executing purchase and leasebacks with airlines, assisting airlines with refleetings and pursuing other opportunistic transactions. We rely on our experienced team of portfolio management professionals to identify and purchase assets we believe are being offered at attractive prices or that we believe will experience an increase in demand over a prolonged period of time. In addition, we intend to continue to rebalance our aircraft portfolio through sales to maintain the appropriate mix of aviation assets by customer concentration, age and aircraft type.
Maintain a diversified and satisfied customer base
We operate our business on a global basis, leasing aircraft to customers in every major geographical region. We have active customer relationships with approximately 200 airlines in approximately 80 countries. These customer relationships are either with existing customers or airlines with which we maintain regular dialogue in relation to potential transaction opportunities. Our relationships with these airlines help us place new aircraft and remarket existing aircraft. We monitor our lessee exposure concentrations by both customer and country jurisdiction and intend to maintain a well-diversified customer base. We believe we offer a quality product, both in terms of assets and service, to all of our customers. We have successfully worked with many airline customers to find mutually beneficial solutions to operational and financial challenges. We believe we maintain excellent relations with our customers. We have been able to achieve a high utilization rate on our aircraft assets as a result of our customer reach, quality product offering and strong portfolio management capabilities.
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Joint ventures
We conduct some of our business through joint ventures. The joint venture arrangements allow us to obtain stable servicing revenues and diversify our exposure to the economic risks related to aircraft.
Please refer to Note 25—Variable interest entities to our Consolidated Financial Statements included in this annual report for a detailed description of our joint ventures.
Relationship with Airbus, Boeing and other manufacturers
We are one of the largest customers of Airbus and Boeing measured by deliveries of aircraft through 2020 and our order backlog. We were also the launch customer of the Embraer E2 program. We are also among the largest purchasers of engines from each of CFM International, GE Aviation, International Aero Engines, Pratt & Whitney and Rolls-Royce. These extensive manufacturer relationships and the scale of our business enable us to place large orders with favorable pricing and delivery terms. In addition, these strategic relationships with manufacturers and market knowledge allow us to participate in new aircraft designs, which gives us increased confidence in our airframe and engine selections. AerCap cooperates broadly with manufacturers seeking mutually beneficial opportunities.
Competition
The aircraft leasing and sales business is highly competitive, and we face competition from other aircraft leasing companies, airlines, aircraft manufacturers, aircraft brokers and financial institutions. Competition for a leasing transaction is based on a number of factors, including delivery dates, lease rates, term of lease, other lease provisions, aircraft condition and the availability in the market place of the types of aircraft that can meet customer requirements. As a result of our geographical reach, diverse aircraft portfolio and success in remarketing our aircraft, we believe we are a strong competitor in all of these areas.
Insurance
Our lessees are required under our leases to bear responsibility, through an operational indemnity subject to customary exclusions, and to carry insurance for any liabilities arising out of the operation of our aircraft or engines, including any liabilities for death or injury to persons and damage to property that ordinarily would attach to the operator of the aircraft.
In addition, our lessees are required to carry other types of insurance that are customary in the air transportation industry, including hull all risks insurance for both the aircraft and each engine whether or not installed on our aircraft, hull war risks insurance covering risks such as hijacking and terrorism and, where permitted, including confiscation, expropriation, nationalization and seizure (in each case at a value stipulated in the relevant lease which typically exceeds the net book value by 10%, subject to adjustment or fleet aggregate limits in certain circumstances). Our lessees are also required to carry aircraft spares insurance and aircraft third party liability insurance, in each case subject to customary deductibles and exclusions. We are named as an additional insured on liability insurance policies carried by our lessees, and we or our lenders are designated as a loss payee in the event of a total loss of an aircraft. We monitor the compliance by our lessees with the insurance provisions of our leases by securing confirmation of coverage from the lessees’ insurance brokers.
We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us. In addition, we carry customary insurance for our property, which is subject to customary deductibles and exclusions. Insurance experts advise and make recommendations to us as to the appropriate amount of insurance coverage that we should obtain.
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Regulation
While the air transportation industry is highly regulated we generally are not directly subject to most of these regulations, as we do not operate our aircraft. Our lessees are subject, however, to extensive regulation under the laws of the jurisdictions in which they are registered and in which they operate. These regulations, among other things, govern the registration, operation and maintenance of our aircraft and engines. Most of our aircraft are registered in the jurisdiction in which the lessee of the aircraft is certified as an air operator. Both our aircraft and engines are subject to the airworthiness and other standards imposed by our lessees’ jurisdictions of operation. Laws affecting the airworthiness of aviation assets are generally designed to ensure that all aircraft, engines and related equipment are continuously maintained in proper condition to enable safe operation of the aircraft. Most countries’ aviation laws require aircraft and engines to be maintained under an approved maintenance program with defined procedures and intervals for inspection, maintenance and repair.
In addition, under our leases, we may be required in some instances to obtain specific licenses, consents or approvals for different aspects of the leases. These required items include consents from governmental or regulatory authorities for certain payments under the leases and for the import, re-export or deregistration of the aircraft and engines. Also, to perform some of our cash management services and insurance services from Ireland under our management arrangements with our joint ventures and securitization entities, we are required to have a license from the Irish regulatory authorities, which we have obtained.
Please refer to “Item 3. Key Information—Risk Factors—Risks related to the geopolitical, regulatory and legal exposure of our business—We are subject to various risks and requirements associated with transacting business in many countries” and “Item 3. Key Information—Risk Factors—Risks related to the geopolitical, regulatory and legal exposure of our business—Our aircraft are subject to various environmental regulations and concerns,” for a detailed discussion of government sanctions, export controls and other regulations that could affect our business.
Litigation
Please refer to Note 27—Commitments and contingencies to our Consolidated Financial Statements included in this annual report for a detailed description of material litigation to which we are a party.
Trademarks
We have registered the “AerCap” name with the European Union Intellectual Property Office and the United States Patent and Trademark Office, as well as filed the “AerCap” trademark with the World Intellectual Property Organization International (Madrid) Registry and various local trademark authorities.
Culture and values
We strive to conduct our business with integrity and in an honest and responsible manner and to build and maintain long-term, mutually beneficial relationships with our customers, suppliers, shareholders, employees and other stakeholders. These values are further specified in our code of conduct and our ethics-related compliance policies, procedures, trainings and programs. Ethical behavior is strongly promoted by the management team. The Company has an excellent track record in relation to ethics and compliance. These ethical values are reflected in the Company’s long-term strategy and our way of doing business.

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Sustainability and community
During 2020, the Board discussed and reviewed our approach to environmental, social and governance (“ESG”) related topics and other values that contribute to a culture focused on long-term value creation. In July 2020, we published a new ESG report, which is publicly available on our website. The report sets forth in detail our commitment to growing our business in a responsible and sustainable way.
Renewing our aircraft portfolio through the acquisition of new, modern technology aircraft while disposing of older aircraft has a positive impact on the environment, as these new technology aircraft produce significantly lower emissions than older aircraft and engines, thus helping our airline customers to reduce their environmental footprint. AerCap is committed to the efficient use of resources and the reduction of unnecessary waste. Our head office in Dublin has been certified for sustainability in the areas of building materials, energy and water use and accessibility. Our office buildings in Los Angeles and Singapore hold similar green building certifications. The Company has invested resources to improve greenhouse gas emissions and corresponding mitigating initiatives.
We participate in a number of charitable events and industry-related educational programs. Through our social responsibility program, we encourage employees to support local and national organizations that strengthen the communities in which they live and operate. Our ESG Steering Committee oversees the selection of charitable themes and charity partners and the implementation of charitable donations. A number of charitable donations involve the matching of funds raised through employee team efforts for the benefit of local community projects. We, along with other major aircraft leasing companies, are a founder and sponsor of a prestigious master’s degree in aviation finance program at a renowned university. In addition to the sponsorship, this program involves lectures by some of our key employees and internships provided by the Company to a number of international students from the program, in line with the global nature and identity of the Company and our business.
Flight equipment
Aircraft portfolio
The following table presents our aircraft portfolio by type of aircraft as of December 31, 2020:
Aircraft type Number of
owned
aircraft 		Percentage of
total
net book value 		Number of
managed
aircraft 		Number of on
order aircraft 		Total owned,
managed and on
order aircraft
Airbus A320 Family 274  13  % 44  —  318 
Airbus A320neo Family 165  23  % 5  157  327 
Airbus A330 60  4  % 9  —  69 
Airbus A350 27  10  % —  —  27 
Boeing 737NG 228  15  % 43  —  271 
Boeing 737 MAX 5  1  % —  71  76 
Boeing 767 22  —  —  —  22 
Boeing 777-200ER 16  1  % 2  —  18 
Boeing 777-300/300ER 21  3  % 1  —  22 
Boeing 787 91  29  % 1  23  115 
Embraer E190/195-E2 15  1  % —  35  50 
Other 15  —  —  —  15 
Total 939  100  % 105  286  1,330 

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The following table presents our owned aircraft portfolio by type of aircraft as a percentage of total net book value as of each of the five years ended December 31, 2020:
As of December 31,
Aircraft type 2020 2019 2018 2017 2016
Airbus A320 Family
13  % 14  % 16  % 21  % 25  %
Airbus A320neo Family
23  % 18  % 14  % 7  % 2  %
Airbus A330
4  % 7  % 9  % 11  % 14  %
Airbus A350
10  % 10  % 10  % 7  % 5  %
Boeing 737NG
15  % 16  % 19  % 22  % 25  %
Boeing 737 MAX
1  % 1  % 1  % —  — 
Boeing 767
—  —  —  1  % 1  %
Boeing 777-200ER
1  % 1  % 1  % 2  % 3  %
Boeing 777-300/300ER
3  % 4  % 5  % 6  % 8  %
Boeing 787
29  % 28  % 25  % 22  % 16  %
Embraer E190/195-E2 1  % 1  % —  —  — 
Other —  —  —  1  % 1  %
Total
100  % 100  % 100  % 100  % 100  %
New technology aircraft (a) 63  % 58  % 49  % 37  % 23  %

(a)New technology aircraft include Airbus A320neo Family, Airbus A350, Boeing 737 MAX, Boeing 787 and Embraer E2 aircraft.
Following the fatal accidents of two Boeing 737 MAX aircraft, the worldwide fleet of these aircraft was grounded by aviation authorities in March 2019 and production was temporarily suspended by Boeing in January 2020, resulting in ongoing delays in the delivery of our aircraft on order from Boeing. As of December 31, 2020, we had five Boeing 737 MAX aircraft delivered and on lease. It is uncertain when and under what conditions our Boeing 737 MAX aircraft will return to service and when Boeing will resume making deliveries of our Boeing 737 MAX aircraft on order. During the year ended December 31, 2020, we cancelled our orders for 24 Boeing 737 MAX aircraft. See “Item 3. Key Information—Risk Factors—Risks related to competition and the aviation industry—The financial instability of an aircraft or engine manufacturer could impact delivery of our aircraft on order and negatively affect our cash flow and results of operations” for a discussion of the uncertainty surrounding the return to service and resumption of deliveries for Boeing 737 MAX aircraft.

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During the year ended December 31, 2020, we had the following activity related to flight equipment:
Held for operating leases Investment in finance and sales-type leases, net Held for sale Total owned aircraft
Number of owned aircraft at beginning of period 848  77  14  939 
Aircraft purchases (a) 40  —  —  40 
Aircraft reclassified to held for sale (4) —  4  — 
Aircraft sold or designated for part-out (22) —  (18) (40)
Aircraft reclassified from investment in finance and sales-type leases, net
1  (1) —  — 
Number of owned aircraft at end of period 863  76  —  939 

(a)During the year ended December 31, 2020, we purchased 36 new aircraft and four used aircraft.
Aircraft on order
The following table details our 286 aircraft on order as of December 31, 2020:
Aircraft type 2021 2022 2023 2024 2025 Thereafter Total
Airbus A320neo Family 23  30  37  29  25  13  157 
Boeing 737 MAX (a) —  2  17  18  19  15  71 
Boeing 787 6  1  1  4  4  7  23 
Embraer E190/195-E2 2  —  —  11  18  4  35 
Total 31  33  55  62  66  39  286 

(a)The delivery positions of our Boeing 737 MAX aircraft are based on our best estimates and incorporate the information currently available to us. Our estimates may be different from the actual delivery dates, and will depend on the speed at which Boeing is able to deliver our aircraft on order to us.
Aircraft acquisitions and dispositions
We purchase new and used aircraft directly from aircraft manufacturers, airlines and financial investors. The aircraft we purchase are both on-lease and off-lease, depending on market conditions and the composition of our portfolio. The buyers of our aircraft include airlines, financial investors and other aircraft leasing companies. We acquire aircraft at attractive prices in three primary ways: by purchasing large quantities of aircraft directly from manufacturers to take advantage of volume discounts, by purchasing portfolios consisting of aircraft of varying types and ages and by entering into purchase and leaseback transactions with airlines. In addition, we also opportunistically purchase individual aircraft that we believe are being offered at attractive prices. Through our marketing team, which is in frequent contact with airlines worldwide, we are also able to identify attractive acquisition and disposition opportunities. We sell aircraft when we believe the market price for the type of aircraft has reached its peak or to rebalance the composition of our aircraft portfolio.
Prior to a purchase or disposition, our dedicated portfolio management group analyzes the aircraft’s price, fit in our aircraft portfolio, specification and configuration, maintenance history and condition, the existing lease terms, financial condition and creditworthiness of the existing lessee, the jurisdiction of the lessee, industry trends, financing arrangements and the aircraft’s redeployment potential and value, among other factors. During the year ended December 31, 2020, we purchased 36 new aircraft and four used aircraft and sold 40 aircraft from our owned portfolio.
Facilities
We lease our Dublin, Ireland headquarters office facility under a 25-year lease (61,000 square feet) that began in December 2015, which has a termination right, at our option, in 2031. We lease our Shannon, Ireland office facility (21,000 square feet) under three separate leases that expire in 2029 with options to terminate in 2024. We occupy space in Los Angeles, California (21,000 square feet) under a lease that expires in August 2025. We lease our Singapore office facility under two leases that expire in February 2024 (33,000 square feet). In addition to the above facilities, we also lease small offices in New York, New York, Amsterdam, The Netherlands, Shanghai, China and Abu Dhabi, United Arab Emirates.
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Organizational structure
AerCap Holdings N.V. is a holding company that holds directly and indirectly consolidated subsidiaries, which in turn own our aircraft assets. As of December 31, 2020, AerCap Holdings N.V. did not own significant assets other than its direct and indirect investments in its subsidiaries. As of December 31, 2020, our major operating subsidiaries, each of which is ultimately 100%-owned by AerCap Holdings N.V., are AerCap Ireland Limited (Ireland) (“AerCap Ireland”) and AerCap Global Aviation Trust (United States) (“AerCap Trust”). See Exhibit 8.1—List of Subsidiaries of AerCap Holdings N.V. for a complete list of all our subsidiaries.
Item 4A.    Unresolved Staff Comments
Not applicable.
Item 5.    Operating and Financial Review and Prospects
        You should read this discussion in conjunction with our audited Consolidated Financial Statements and the related notes included in this annual report. Our financial statements are presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The discussion below contains forward looking statements that are based upon our current expectations and are subject to uncertainty and changes of circumstances. See “Item 3. Key Information—Risk Factors” and “Special Note About Forward Looking Statements.”
Overview
Net loss attributable to AerCap Holdings N.V. for the year ended December 31, 2020 was $298.6 million, as compared to net income of $1,145.7 million for the year ended December 31, 2019. For the year ended December 31, 2020, diluted loss per share was $2.34 and the weighted average number of diluted shares outstanding was 127,743,828. Net interest margin, the difference between basic lease rents and interest expense, excluding the mark-to-market of interest rate caps and swaps, was $2,528 million for the year ended December 31, 2020. Annualized net spread less depreciation and amortization was 2.3% for the year ended December 31, 2020. Please refer to “Item 5. Operating and Financial Review and Prospects—Non-GAAP measures” for a reconciliation of net interest margin, annualized net spread and annualized net spread less depreciation and amortization to the most closely related U.S. GAAP measure for the years ended December 31, 2020 and 2019.
Major developments in 2020
The Covid-19 pandemic and responsive government actions have caused significant economic disruption and a dramatic reduction in commercial airline traffic, resulting in a broad adverse impact on air travel, the aviation industry and the demand for commercial aircraft globally. Despite the challenges of the Covid-19 pandemic, in 2020 AerCap:
•Completed purchases of 36 new technology aircraft for approximately $2.1 billion;
•Completed sales of 40 owned aircraft, with an average age of 17 years, for aggregate proceeds of approximately $0.6 billion;
•Executed a total of 179 aircraft transactions, including 40 widebody aircraft transactions; and
•Raised $8.3 billion of financing, including bank debt, revolving credit facilities and note issuances in the capital markets.
Aviation assets
During the year ended December 31, 2020, we purchased 36 new aircraft for approximately $2.1 billion. As of December 31, 2020, we owned 939 aircraft and we managed 105 aircraft. As of December 31, 2020, we also had 286 new aircraft on order. The average age of our fleet of 939 owned aircraft, weighted by net book value, was 6.4 years as of December 31, 2020.
Significant components of revenues and expenses
Revenues and other income
Our revenues and other income consist primarily of basic lease rents, maintenance rents and other receipts, net gain on sale of assets and other income.
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Basic lease rents and maintenance rents and other receipts
Nearly all of our aircraft lease agreements provide for the periodic payment of a fixed or a floating amount of rent. Floating rents are tied to interest rates during the terms of the respective leases. During the year ended December 31, 2020, approximately 3% of our basic lease rents from aircraft under operating leases was attributable to leases with lease rates tied to floating interest rates. In addition, our leases require the payment of supplemental maintenance rent based on aircraft utilization during the lease term, or EOL compensation calculated with reference to the condition of the aircraft at lease expiration. The amount of basic lease rents and maintenance rents and other receipts (together, “lease revenue”) we recognize is primarily influenced by the following five factors:
•the contracted lease rate, which is highly dependent on the age, condition and type of the leased aircraft;
•for leases with rates tied to floating interest rates, interest rates during the term of the lease;
•the number of aircraft currently subject to lease contracts;
•the lessee’s performance of its lease obligations; and
•the amount of EOL compensation payments we receive, maintenance revenue and other receipts recognized during the lease and accrued maintenance liabilities recognized as revenue at the end of a lease.
In addition to aircraft-specific factors such as the type, condition and age of the aircraft, the lease rates for our leases with fixed rental payments are initially determined in part by reference to the prevailing interest rate for a debt instrument with a term similar to the lease term and with a similar credit quality as the lessee at the time we enter into the lease. Many of the factors described above are influenced by global and regional economic trends, airline market conditions, the supply and demand balance for the type of aircraft we own and our ability to remarket our aircraft subject to expiring lease contracts under favorable economic terms.
As of December 31, 2020, 880 of our 939 owned aircraft were on lease to 131 customers in 60 countries, with no lessee accounting for more than 10% of total lease revenue for the year ended December 31, 2020. As of December 31, 2020, our owned aircraft portfolio included 59 aircraft that were off-lease. As of February 25, 2021, of the 59 aircraft, 28 aircraft were designated for sale or part-out (which represented less than 1% of the aggregate net book value of our fleet), 21 aircraft were being marketed for re-lease (which represented approximately 2% of the aggregate net book value of our fleet), five were re-leased or under commitments for re-lease, and five aircraft were sold or under commitments to be sold.
Net gain on sale of assets
Our net gain on sale of assets is generated from the sale of our aircraft and is largely dependent on the condition of the asset being sold, prevailing interest rates, airline market conditions and the supply and demand balance for the type of asset we are selling. The timing of aircraft sale closings is often uncertain, as a sale may be concluded swiftly or negotiations may extend over several weeks or months. As a result, even if net gain on sale of assets is comparable over a long period of time, during any particular reporting period we may close significantly more or fewer sale transactions than in other reporting periods. Accordingly, net gain on sale of assets recorded in one reporting period may not be comparable to net gain on sale of assets in other reporting periods.
Other income
Other income consists of interest revenue, management fee revenue, lease termination fees, insurance proceeds, and income related to other miscellaneous activities.
Our interest revenue is derived primarily from interest on unrestricted and restricted cash balances and on financial instruments we hold, such as notes receivable and subordinated debt investments in unconsolidated securitization vehicles or affiliates. The amount of interest revenue we recognize in any period is influenced by our unrestricted or restricted cash balances, the principal balance of financial instruments we hold, contracted or effective interest rates, and movements in provisions for financial instruments which can affect adjustments to valuations or provisions.
We generate management fee revenue by providing management services to non-consolidated aircraft securitization vehicles, joint ventures, and other third parties. Our management services include aircraft asset management services, such as leasing, remarketing and technical advisory services, cash management and treasury services, and accounting and administrative services.
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Operating expenses
Our operating expenses consist primarily of depreciation and amortization, interest expense, leasing expenses and selling, general and administrative expenses.
Depreciation and amortization
Our depreciation expense is influenced by the adjusted gross book values, depreciable lives and estimated residual values of our flight equipment. Adjusted gross book value is the original cost of our flight equipment, adjusted for subsequent capitalized improvements, impairments and accounting basis adjustments associated with a business combination or a purchase and leaseback transaction. In addition, we have definite-lived intangible assets which are amortized over the period which we expect to derive economic benefits from such assets.
Interest expense
Our interest expense arises from a variety of debt funding structures and related derivative financial instruments as described in “Item 11—Quantitative and Qualitative Disclosures About Market Risk,” Note 10—Derivative financial instruments and Note 13—Debt to our Consolidated Financial Statements included in this annual report. Interest expense in any period is primarily affected by contracted interest rates, amortization of fair value adjustments, amortization of debt issuance costs and debt discounts and premiums, principal amounts of indebtedness and unrealized mark-to-market gains or losses on derivative financial instruments for which we do not achieve cash flow hedge accounting treatment.
Leasing expenses
Our leasing expenses consist primarily of maintenance rights asset amortization expense, maintenance expenses on our flight equipment, which we incur during the lease through lessor maintenance contributions or when we perform maintenance on our off-lease aircraft, expenses we incur to monitor the maintenance condition of our flight equipment during a lease, expenses to transition flight equipment from an expired lease to a new lease contract, non-capitalizable flight equipment expenses, and provisions for credit losses on notes receivable, trade receivables and receivables from investment in finance and sales-type leases, net.
Maintenance rights assets are recognized when we acquire aircraft subject to existing leases. These assets represent the contractual right to receive the aircraft in a specified maintenance condition at the end of the lease under lease contracts with EOL payment provisions, or our right to receive the aircraft in better maintenance condition due to our obligation to contribute towards the cost of the maintenance events performed by the lessee either through reimbursement of maintenance deposit rents held under lease contracts with maintenance reserve (“MR”) provisions, or through a lessor contribution to the lessee.
For leases with EOL maintenance provisions, upon lease termination, we recognize receipt of EOL cash compensation as lease revenue to the extent those receipts exceed the EOL maintenance rights asset, and we recognize leasing expenses when the EOL maintenance rights asset exceeds the EOL cash received. For leases with maintenance reserve payment provisions, we recognize maintenance rights expense at the time the lessee submits a reimbursement claim and provides the required documentation related to the cost of a qualifying maintenance event that relates to pre-acquisition usage.
Selling, general and administrative expenses
Our selling, general and administrative expenses consist primarily of personnel expenses, including salaries, benefits and severance compensation, share-based compensation expense, professional and advisory costs, office facility expenses and travel expenses, as summarized in Note 19—Selling, general and administrative expenses to our Consolidated Financial Statements included in this annual report. The level of our selling, general and administrative expenses is influenced primarily by the number of our employees and the extent of transactions or ventures we pursue that require the assistance of outside professionals or advisors.
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Income tax benefit (expense)
Our operations are taxable primarily in the two main jurisdictions in which we manage our business: Ireland and the United States. Deferred income taxes are provided to reflect the impact of temporary differences between our income before income taxes and our taxable income. Our effective tax rate has varied from year to year. The primary source of temporary differences is the availability of tax depreciation in our primary operating jurisdictions. Our effective tax rate in any year depends on the tax rates in the jurisdictions from which our income is derived, along with the extent of permanent differences between income or loss before income taxes and taxable income.
We have tax losses in certain jurisdictions that can be carried forward, which we recognize as deferred income tax assets. We evaluate the recoverability of deferred income tax assets in each jurisdiction in each period based upon our estimates of future taxable income in these jurisdictions. If we determine that we are not likely to generate sufficient taxable income in a jurisdiction prior to expiration, if any, of the availability of tax losses, we establish a valuation allowance against the tax loss to reduce the deferred income tax asset to its recoverable value. We evaluate the appropriate level of valuation allowances annually and make adjustments as necessary. Increases or decreases to valuation allowances can affect our income tax benefit (expense) in our Consolidated Income Statements and consequently may affect our effective tax rate in a given year.
Factors affecting our results
Our results of operations have also been affected by a variety of other factors, primarily:
•the severity, extent and duration of the Covid-19 pandemic and the rate of recovery in air travel, the aviation industry and global economic conditions, and the potential impacts of the pandemic and responsive government actions on our business and results of operations, financial condition and cash flows;
•the number, type, age and condition of the aircraft we own;
•aviation industry market conditions, including general economic and political conditions;
•the demand for our aircraft and the resulting lease rates we are able to obtain for our aircraft;
•the availability and cost of debt capital to finance purchases of aircraft;
•the purchase price we pay for our aircraft;
•the number, type and sale price of aircraft, or parts in the event of a part-out of an aircraft, we sell in a period;
•the ability of our lessees to meet their lease obligations, and the timing thereof, and maintain our aircraft in airworthy and marketable condition;
•the utilization rate of our aircraft;
•the recognition of non-cash share-based compensation expense related to the issuance of restricted stock units or restricted stock;
•our expectations of future maintenance reimbursements and lessee maintenance contributions;
•interest rates, which affect our aircraft lease revenues, our interest expense and the market value of our interest rate derivatives; and
•our ability to fund our business.
Factors affecting the comparability of our results
Asset impairment charges
During 2020, we recognized impairment charges of $1.1 billion related primarily to current technology widebody aircraft, in particular Airbus A330 and Boeing 777 aircraft. In addition, we recognized impairment charges related to sales transactions and lease terminations. We also assessed our indefinite-lived goodwill assets for impairment and recognized impairment charges related to goodwill.
During 2019, we recognized impairment charges of $70.1 million related to sales transactions and lease terminations.

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Cash accounting
When we determine that the collection of rental payments is no longer probable, we cease accrual-based revenue recognition on an operating lease contract and we instead recognize lease revenues using a cash accounting method (“Cash Accounting”). During 2020, we recognized a reduction in basic lease rents of $310.6 million due to the application of Cash Accounting.
During 2019, we did not recognize a reduction in basic lease rents due to Cash Accounting.
Losses on debt extinguishment
During 2020, we recognized losses on debt extinguishment of $118.5 million, primarily related to the premium paid on the repurchase of debt pursuant to the July, October and December Tender Offers.
During 2019, we did not recognize losses on debt extinguishment.
Loss on investment at fair value
During 2020, we recognized a loss on investment at fair value of $143.5 million. Please refer to Note 9 —Investments to our Consolidated Financial Statements included in this annual report for further details on our investment at fair value.
During 2019, we did not hold an investment at fair value.
Sales transactions
During 2020, we completed sales of 40 owned aircraft, with an average age of 17 years, for aggregate proceeds of approximately $0.6 billion.
During 2019, we completed sales of 88 owned aircraft, with an average age of 15 years, for aggregate proceeds of approximately $2.1 billion.
Share repurchases
During 2020, we repurchased an aggregate of 2.1 million of our ordinary shares under share repurchase programs authorized in 2020 and 2019, at an average price, including commissions, of $55.06 per ordinary share, for approximately $117.3 million.
During 2019, we repurchased an aggregate of 12.0 million of our ordinary shares under share repurchase programs authorized in 2019 and 2018, at an average price, including commissions, of $50.82 per ordinary share, for approximately $607.3 million.
Trends in our business
The impact of the Covid-19 pandemic has had a dramatic impact on aviation in 2020. Overall global passenger traffic, measured in revenue passenger kilometers, fell by 65.9% in 2020, according to IATA. In December 2020, IATA estimated that global air passenger traffic would recover significantly in 2021 and increase by 50.4%, but would nonetheless remain well below 2019 levels. This forecast is subject to downside risk if continued or more severe travel restrictions are imposed.
Passenger air traffic and airlines’ losses have reduced demand for commercial passenger aircraft, including demand for leased aircraft in 2020. We expect demand for leased aircraft will remain weak in the short term and over the medium term we expect improvements in leased aircraft demand as air traffic recovers from the lows observed in 2020.




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Critical accounting policies and estimates
Our Consolidated Financial Statements are prepared in accordance with U.S. GAAP, and require us to make estimates and assumptions that affect the amounts reported in our Consolidated Financial Statements and accompanying notes. The use of estimates is or could be a significant factor affecting the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities. We evaluate our estimates and assumptions, including those related to flight equipment, lease revenue, net gain on sales of assets, fair value estimates, and income taxes, on a recurring and non-recurring basis. Our estimates and assumptions are based on historical experiences and currently available information that management believes to be reasonable under the circumstances. Actual results may differ from our estimates under different conditions, sometimes materially. A summary of our significant accounting policies is presented in Note 3—Summary of significant accounting policies to our Consolidated Financial Statements included in this annual report. Critical accounting policies and estimates are defined as those that are both most important to the portrayal of our financial condition and results of operations and that require our judgments, estimates and assumptions. Our critical accounting policies and estimates are described below.
Flight equipment held for operating leases, net
Flight equipment held for operating leases is stated at cost less accumulated depreciation and impairment. Flight equipment is depreciated to its estimated residual value on a straight-line basis over the useful life of the aircraft, which is generally 25 years from the date of manufacture, or a different period depending on the disposition strategy. The costs of improvements to flight equipment are normally recorded as leasing expenses unless the improvement increases the long-term value of the flight equipment. In that case, the capitalized improvement cost is depreciated over the estimated remaining useful life of the aircraft. The residual value of our flight equipment is generally 15% of estimated industry price, except where more relevant information indicates that a different residual value is more appropriate.
We periodically review the estimated useful lives and residual values of our flight equipment based on our industry knowledge, external factors, such as current market conditions, and changes in our disposition strategies, to determine if they are appropriate, and record adjustments to depreciation rates prospectively on an individual aircraft basis, as necessary.
Event-driven impairment and impairment calculation charges
We test long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The quantitative impairment test is performed at the lowest level for which identifiable cash flows are largely independent of other groups of assets, which is the individual aircraft, including the lease-related assets and liabilities of that aircraft, such as the maintenance rights assets, lease incentives, and maintenance liabilities (the “Asset Group”). If the sum of the expected undiscounted future cash flows is less than the Asset Group, an impairment loss is recognized. The loss is measured as the excess of the carrying value of the Asset Group over its estimated fair value.
Fair value reflects the present value of future cash flows expected to be generated from the aircraft, including its expected residual value, discounted at a rate commensurate with the associated risk. Future cash flows are assumed to occur under current market conditions and assume adequate time for a sale between a willing buyer and a willing seller. Expected future lease rates are based on all relevant information available, including current contracted rates for similar aircraft and industry trends.
We perform event-driven impairment assessments of our aircraft held for operating leases each quarter. These quarterly impairment assessments are primarily triggered by potential sale transactions, early terminated leases, credit events impacting lessees or forecasted significant and permanent declines in the demand for aircraft types. On an annual basis, we also perform an assessment of all aircraft held for operating leases to identify potential impairment by reference to estimated future cash flows at the Asset Group level, and perform a quantitative impairment test. We apply significant judgment in assessing whether an impairment is necessary and in estimating significant assumptions including the future lease rates, the residual value and the discount rate when performing quantitative impairment tests.
Due to the Covid-19 pandemic, many of our airline customers have significantly curtailed their commercial operations and are under significant financial stress, which could result in lease defaults, lease terminations and related aircraft repossessions. The future cash flows supporting the carrying value of our aircraft are based on current lease contracts and our estimates of future lease rates, useful lives and residual values for these aircraft. As a result of the Covid-19 pandemic and its impact on the aviation industry and the global economic environment, there is more uncertainty regarding the future cash flows relating to our aircraft. A reduction in the future expected cash flows relating to our aircraft could result in impairment losses that could be material to our financial results.
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The Covid-19 pandemic and responsive government actions have had a significant impact on both domestic and international travel. While both domestic and international air travel have increased since the low points experienced in early 2020, in general domestic travel has been faster to recover, and the timeframe for the recovery of domestic travel is generally expected to be more rapid than for international travel. During the year ended December 31, 2020, the Covid-19 pandemic led governments in many countries to impose new restrictions on international travel or to delay the relaxation of existing restrictions. As a result, the expected recovery time for international air traffic has become longer. In addition, we have observed an increased number of airlines shifting away from current technology widebody aircraft in favor of new technology widebody aircraft such as the Boeing 787 and Airbus A350. We expect these factors to impact the future lease rates and long-term values of our Boeing 777 and Airbus A330 aircraft. During the year ended December 31, 2020 we recognized impairment charges of $1.1 billion, primarily related to Boeing 777 and Airbus A330 aircraft.
Due to the significant uncertainties associated with potential sales transactions, we use our judgment to evaluate whether a sale or other disposal is more likely than not. The factors we consider in our assessment include (i) the progress of the potential sales transactions through a review and evaluation of the sales-related documents and other communications, including, but not limited to, letters of intent or sales agreements that have been negotiated or executed; (ii) our general or specific fleet strategies and other business needs and how those requirements bear on the likelihood of sale or other disposal; and (iii) the evaluation of potential execution risks, including the source of potential purchaser funding and other execution risks.
The future cash flows supporting the carrying value of aircraft that are 15 years of age or older are more dependent upon current lease contracts, and these leases are generally more sensitive to weaknesses in the global economic environment. Deterioration of the global economic environment and a decrease in aircraft values might have a negative effect on the undiscounted cash flows of older aircraft and might cause an impairment loss. As of December 31, 2020, 185 aircraft with an aggregate Asset Group value of approximately $2.1 billion were 15 years of age or older, which represented approximately 6% of our total flight equipment and lease-related assets and liabilities. The estimated undiscounted future cash flows of these 185 aircraft were $3.3 billion, which measured on a weighted average basis was 45% in excess of the aggregate carrying value. As of December 31, 2020, all of these aircraft passed the recoverability test. The following assumptions drive the undiscounted cash flows: contracted lease rents through current lease expiry; subsequent re-lease rates based on current marketing information; maintenance cash flow forecasts; and residual values. We review and stress-test our key assumptions to reflect any observed weakness in the global economic environment.
Aircraft that are between five and 15 years of age where future cash flows do not exceed the aircraft carrying value by at least 10% are more susceptible to impairment risk. As of December 31, 2020, 12 aircraft with an Asset Group carrying value of $594.5 million did not exceed our 10% threshold, which represented less than 1.75% of our total flight equipment held for operating leases and lease-related assets and liabilities. The 12 aircraft that were below the 10% threshold did, however, pass the impairment test as of December 31, 2020, and as such no impairment was recognized.
Revenues and other income
We lease flight equipment principally under operating leases and recognize basic lease rents income on a straight-line basis over the life of the lease. At lease inception, we review all necessary criteria to determine proper lease classification. We account for lease agreements that include uneven rental payments on a straight-line basis. The amount of the difference between basic lease rents recognized and cash received is included in other assets, or in the event it is a liability, in accounts payable, accrued expenses and other liabilities.
We periodically evaluate the collectability of our operating lease contracts to determine the appropriate revenue recognition and measurement model to apply to each lessee. Accrual-based revenue recognition ceases on an operating lease contract when the collection of payments is no longer probable and thereafter rental revenues are recognized using a cash receipts basis “Cash Accounting.” In the period where collection of lease payments is no longer probable, 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, is recognized as a current period adjustment to lease revenue. Subsequently, revenues are recognized based on the lesser of the straight-line rental income or the payments collected from the lessee until such time that collection is probable. We apply significant judgment in assessing at each reporting date whether operating rental payments are probable of collection by reference to the credit status of the each lessee, including lessees in bankruptcy-type arrangements, the extent of overdue balances and other relevant factors. During the year ended December 31, 2020, we concluded that collection of basic lease rents payments was not probable from a number of our lessees, resulting in a reduction of basic lease rents of approximately $310.6 million.
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Revenue from investment in finance and sales-type leases is recognized using the interest method to produce a constant yield over the life of the lease and is included in basic lease rents. Expected unguaranteed residual values are based on our assessment of the values of the flight equipment and, if applicable, the estimated end of lease payments expected at the expiration of the lease.
Under our aircraft leases, the lessee is responsible for maintenance, repairs and other operating expenses during the term of the lease. Under the provisions of many of our leases, the lessee is required to make payments of supplemental maintenance rents which are calculated with reference to the utilization of the airframe, engines and other major life-limited components during the lease. We record as lease revenue all supplemental maintenance rent receipts not expected to be reimbursed to the lessee. We estimate the total amount of maintenance reimbursements for the lease term and only record maintenance revenue after we have received sufficient maintenance rents to cover the total amount of estimated maintenance reimbursements during the remaining lease term.
In most lease contracts not requiring the payment of supplemental maintenance rents, and to the extent that the aircraft is redelivered in a different condition than at acceptance, we generally receive EOL cash compensation for the difference at redelivery. Upon lease termination, we recognize receipt of EOL cash compensation as lease revenue to the extent those receipts exceed the EOL maintenance rights asset, and we recognize leasing expenses when the EOL maintenance rights asset exceeds the EOL cash received.
When flight equipment is sold, the portion of the accrued maintenance liability not specifically assigned to the buyer is released net of any maintenance rights asset balance and is included in net gain on sale of assets.
Recent accounting standards adopted during the year ended December 31, 2020
Please refer to Note 3—Summary of significant accounting policies to our Consolidated Financial Statements included in this annual report.
Future application of accounting standards
Please refer to Note 3—Summary of significant accounting policies to our Consolidated Financial Statements included in this annual report.

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Comparative results of operations
Results of operations for the year ended December 31, 2020 as compared to the year ended December 31, 2019
Year Ended
December 31, 		Increase/ (Decrease)
2020 2019
(U.S. Dollars in thousands)
Revenues and other income
Lease revenue:
   Basic lease rents
$ 3,761,611  $ 4,281,260  $ (519,649)
   Maintenance rents and other receipts
559,395  401,006  158,389 
Lease revenue
4,321,006  4,682,266  (361,260)
Net gain on sale of assets 89,618  188,835  (99,217)
Other income 83,005  66,239  16,766 
Total Revenues and other income 4,493,629  4,937,340  (443,711)
Expenses
Depreciation and amortization 1,645,373  1,676,121  (30,748)
Asset impairment 1,086,983  70,149  1,016,834 
Interest expense 1,248,225  1,295,020  (46,795)
Loss on debt extinguishment 118,460  —  118,460 
Leasing expenses 323,535  287,950  35,585 
Selling, general and administrative expenses 242,161  267,458  (25,297)
Total Expenses 4,664,737  3,596,698  1,068,039 
Loss on investment at fair value (143,510) —  (143,510)
(Loss) income before income taxes and income of
investments accounted for under the equity method
(314,618) 1,340,642  (1,655,260)
Income tax benefit (expense) 17,231  (167,714) 184,945 
Equity in net earnings of investments accounted for under
the equity method
2,464  (6,151) 8,615 
Net (loss) income $ (294,923) $ 1,166,777  $ (1,461,700)
Net income attributable to non-controlling interest
(3,643) (21,083) 17,440 
Net (loss) income attributable to AerCap Holdings N.V. $ (298,566) $ 1,145,694  $ (1,444,260)
Basic lease rents.    The decrease in basic lease rents of $519.6 million, or 12%, was attributable to:
•a decrease in basic lease rents of $310.6 million due to the application of Cash Accounting;
•a decrease in basic lease rents of $282.7 million primarily due to re-leases and extensions at lower rates. The accounting for the extensions requires the remaining rental payments to be recorded on a straight-line basis over the remaining term of the original lease plus the extension period; and
•the sale of 128 aircraft between January 1, 2019 and December 31, 2020 with an aggregate net book value of $2.4 billion on their respective sale dates, resulting in a decrease in basic lease rents of $209.2 million;
partially offset by
•the acquisition of 105 aircraft between January 1, 2019 and December 31, 2020, with an aggregate net book value of $6.7 billion on their respective acquisition dates, resulting in an increase in basic lease rents of $282.9 million.
Maintenance rents and other receipts.    The increase in maintenance rents and other receipts of $158.4 million, or 39%, was attributable to:
•an increase of $231.8 million in maintenance revenue and other receipts from early lease terminations;
partially offset by
•a decrease of $73.4 million in regular maintenance rents.
41

Net gain on sale of assets.    The decrease in net gain on sale of assets of $99.2 million, or 53%, was primarily due to the lower volume and composition of asset sales. During the year ended December 31, 2020, we sold 40 aircraft for proceeds of $613.4 million and during the year ended December 31, 2019, we sold 88 aircraft for proceeds of $2,132.4 million.
Other Income.    The increase in other income of $16.8 million, or 25%, was primarily driven by higher interest income.
Depreciation and amortization.    The decrease in depreciation and amortization of $30.7 million, or 2%, was primarily due to aircraft sales, partially offset by aircraft purchases.
Asset impairment.    During the year ended December 31, 2020, we recognized impairment charges of $1.1 billion related primarily to current technology widebody aircraft, in particular Airbus A330 and Boeing 777 aircraft, as well as to the write-off of goodwill. Please refer to “Item 5. Operating and Financial Review and Prospects—Critical accounting policies and estimates” for further information on our event-driven impairment assessments. During the year ended December 31, 2019, we recognized impairment charges of $70.1 million related to sales transactions and lease terminations.
Interest expense.    The decrease in interest expense of $46.8 million, or 4%, was primarily attributable to:
•a decrease in the average cost of debt to 4.1% for the year ended December 31, 2020 as compared to 4.2% for the year ended December 31, 2019. The average cost of debt excludes the effect of mark-to-market movements on interest rate caps and swaps. Please refer to “Item 5. Operating and Financial Review and Prospects—Non-GAAP measures” for further information on the average cost of debt. The decrease in the average cost of debt resulted in a $45.2 million decrease in interest expense; and
•a $15.3 million decrease in interest expense attributable to a decrease in mark-to-market losses on interest rate caps and swaps. For the year ended December 31, 2020, we recognized a loss of $14.4 million related to mark-to-market movements on interest rate caps and swaps, compared to a corresponding loss of $29.7 million recognized during the year ended December 31, 2019;
partially offset by
•a $0.3 billion increase in the average outstanding debt balance to $30.2 billion during the year ended December 31, 2020 from $29.9 billion during the year ended December 31, 2019, resulting in a $13.7 million increase in interest expense.
Loss on debt extinguishment.    During the year ended December 31, 2020, we recognized loss on debt extinguishment of $118.5 million, primarily related to the premium paid on the repurchase of debt pursuant to the July, October and December Tender Offers.
Leasing expenses.    The increase in leasing expenses of $35.6 million, or 12%, was primarily due to $52.2 million of higher aircraft transition costs, lessor maintenance contributions and other leasing expenses and $14.3 million related to airline defaults and restructuring, partially offset by $30.9 million of lower maintenance rights asset amortization.
Selling, general and administrative expenses.   The decrease in selling, general and administrative expenses of $25.3 million, or 9%, was primarily due to lower compensation-related expenses.
Loss on investment at fair value. During the year ended December 31, 2020, we recognized a loss on investment at fair value of $143.5 million. Please refer to Note 9 —Investments to our Consolidated Financial Statements included in this annual report for further details on our investment at fair value.
Income tax benefit (expense).    The effective tax rate was 5.5% for the year ended December 31, 2020, compared to the effective tax rate of 12.5% for the year ended 2019. The effective tax rate is impacted by the source and amount of earnings among our various tax jurisdictions as well as permanent tax differences relative to pre-tax income or loss. Please refer to Note 14—Income taxes to our Consolidated Financial Statements included in this annual report for a detailed description of income taxes.
For Results of Operations for the year ended December 31, 2019, as compared to the year ended December 31, 2018, refer to “Item 5. Operating and Financial Review and Prospects—Comparative results of operations” in our annual report on Form 20-F for the year ended December 31, 2019, filed with the SEC on March 5, 2020.
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Liquidity and capital resources
The following table presents our consolidated cash flows for the years ended December 31, 2020 and 2019:
Year Ended December 31,
2020 2019
(U.S. Dollars in millions)
Net cash provided by operating activities
$ 2,130.4  $ 3,105.7 
Net cash used in investing activities
(712.3) (2,954.7)
Net cash used in financing activities (1,225.3) (265.0)
Cash flows provided by operating activities.    During the year ended December 31, 2020, our cash provided by operating activities of $2,130.4 million was the result of a net loss of $294.9 million, other adjustments to net loss of $3,011.9 million and collections of finance and sales-type leases of $68.1 million, partially offset by the net change in operating assets and liabilities of $654.7 million. During the year ended December 31, 2019, our cash provided by operating activities of $3,105.7 million was the result of net income of $1,166.8 million, other adjustments to net income of $1,922.9 million and collections of finance and sales-type leases of $98.4 million, partially offset by the net change in operating assets and liabilities of $82.4 million.
Cash flows used in investing activities.    During the year ended December 31, 2020, our cash used in investing activities of $712.3 million primarily consisted of cash used for the purchase of aircraft of $1,183.7 million, partially offset by cash provided by asset sale proceeds of $471.4 million. During the year ended December 31, 2019, our cash used in investing activities of $2,954.7 million primarily consisted of cash used for the purchase of aircraft of $4,728.5 million, partially offset by cash provided by asset sale proceeds of $1,773.8 million.
Cash flows used in financing activities.    During the year ended December 31, 2020, our cash used in financing activities of $1,225.3 million primarily consisted of cash used for new financing proceeds, net of debt repayments and debt issuance costs, of $867.5 million, net receipts of maintenance and security deposits of $227.1 million, the repurchase of shares and payments of tax withholdings on share-based compensation of $127.8 million and cash used for the payment of dividends to our non-controlling interest holders of $2.9 million. During the year ended December 31, 2019, our cash used in financing activities of $265.0 million primarily consisted of cash used for the repurchase of shares and payments of tax withholdings on share-based compensation of $639.9 million, cash used for the payment of dividends to our non-controlling interest holders of $6.3 million and new financing proceeds, net of debt repayments and debt issuance costs, of $2.1 million partially offset by cash provided by net receipts of maintenance and security deposits of $383.3 million.
We have significant capital requirements, including making pre-delivery payments and paying the balance of the purchase price for aircraft on delivery. As of December 31, 2020, we had commitments to purchase 286 new aircraft scheduled for delivery through 2027. As a result, we will need to raise additional funds to satisfy these requirements, which we expect to do through a combination of accessing committed debt facilities and securing additional financing, if needed, from capital markets transactions or other sources of capital. If other sources of capital are not available to us, we may need to raise additional funds through selling aircraft or other aircraft investments, including participations in our joint ventures.
As of December 31, 2020, our cash balance was $1.5 billion, including unrestricted cash of $1.2 billion, and we had $5.6 billion of undrawn lines of credit available under our revolving credit and term loan facilities and other available secured debt. As of December 31, 2020, our total available liquidity, including undrawn lines of credit, unrestricted cash, cash flows from contracted asset sales and other sources of funding, was $6.7 billion, and including estimated operating cash flows for the next 12 months, our total sources of liquidity were $9.1 billion. As of December 31, 2020, our existing sources of liquidity were sufficient to operate our business and cover approximately 2.3x of our debt maturities and contracted capital requirements for the next 12 months. As of December 31, 2020, the principal amount of our outstanding indebtedness, which excludes fair value adjustments of $19.7 million and debt issuance costs, debt discounts and debt premium of $192.8 million, totaled $28.9 billion and consisted of senior unsecured, subordinated and senior secured notes, export credit facilities, commercial bank debt, revolving credit debt, securitization debt and capital lease structures.
In order to satisfy our contractual purchase obligations, we expect to source new debt financing through access to the capital markets, including the unsecured and secured bond markets, the commercial bank market, export credit and the asset-backed securities market.
In the longer term, we expect to fund the growth of our business, including acquiring aircraft, through internally generated cash flows, the incurrence of new bank debt, the refinancing of existing bank debt and other capital-raising initiatives.
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During the year ended December 31, 2020, our average cost of debt, excluding the effect of mark-to-market movements on our interest rate caps and swaps, was 4.1%. As of December 31, 2020, our adjusted debt to equity ratio was 2.6 to 1. Please refer to “Item 5. Operating and Financial Review and Prospects—Non-GAAP measures” for further information on our average cost of debt and reconciliations of adjusted debt and adjusted equity to the most closely related U.S. GAAP measures as of December 31, 2020 and 2019.
Please refer to Note 13—Debt to our Consolidated Financial Statements included in this annual report for a detailed description of our outstanding indebtedness.
AerCap Holdings N.V. is incorporated in the Netherlands and headquartered in Ireland, and is not directly engaged in business within, nor has a permanent establishment in, the United States. Only our U.S. subsidiaries are subject to U.S. net income tax or would potentially have to withhold U.S. taxes upon a distribution of our earnings.
While we were tax resident in the Netherlands, we did not accrue or pay taxes as a result of repatriation of earnings from any of our foreign subsidiaries to the Netherlands. Effective February 1, 2016, we became tax resident in Ireland and we would typically expect that the repatriation of earnings from our foreign subsidiaries should not, except where recognized in our financial statements, give rise to material additional Irish taxation due to the availability of foreign tax credits. As of December 31, 2020, $108.1 million out of $1,248.8 million of cash and short-term investments was held by our foreign subsidiaries outside of Ireland. Additionally, legal restrictions in relation to dividend payments from our subsidiaries to us are described in “Item 10. Additional Information—Taxation—Withholding tax.”
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Contractual obligations
Our contractual obligations consist of principal and interest payments on debt (excluding fair value adjustments, debt issuance costs, debt discounts and debt premium), executed purchase agreements to purchase aircraft and rent payments pursuant to our office and facility leases. We intend to fund our contractual obligations through unrestricted cash, lines-of-credit and other borrowings, operating cash flows and cash flows from asset sales. We believe that our sources of liquidity will be sufficient to meet our contractual obligations.
The following table provides details regarding our contractual obligations and their payment dates as of December 31, 2020, as adjusted to reflect the developments described in footnotes (b) and (c) below:
2021 2022 2023 2024 2025 Thereafter Total
(U.S. Dollars in millions)
Unsecured debt
facilities
$ 1,379.8  $ 3,405.1  $ 3,120.1  $ 2,550.0  $ 2,650.0  $ 2,650.0  $ 15,755.0 
Secured debt
facilities
993.6  1,397.0  2,023.3  1,715.3  3,207.3  1,530.2  10,866.7 
Subordinated debt
facilities
—  —  —  —  —  2,293.5  2,293.5 
Estimated interest
payments (a)
1,123.2  995.5  795.6  604.7  419.5  4,111.0  8,049.5 
Purchase obligations
(b) (c)
1,511.4  2,519.3  3,099.7  2,962.1  2,525.2  1,508.0  14,125.7 
Operating leases (d) 9.7  9.1  9.1  6.8  5.7  24.3  64.7 
Total $ 5,017.7  $ 8,326.0  $ 9,047.8  $ 7,838.9  $ 8,807.7  $ 12,117.0  $ 51,155.1 

(a)Estimated interest payments for floating rate debt are based on rates as of December 31, 2020 and include the estimated impact of our interest rate swap agreements.
(b)As of December 31, 2020, we had commitments to purchase 284 aircraft and two purchase and leaseback transactions. The timing of our purchase obligations is based on current estimates. Due to the current Covid-19 pandemic, we expect that the delivery of many of our aircraft on order will be delayed to future periods. We have incorporated expected delivery delays into the table above. In addition, we have the right to reschedule the delivery dates of certain of our aircraft to future dates. See Note 27—Commitments and contingencies to our Consolidated Financial Statements included in this annual report for further details on our purchase obligations.
(c)The delivery positions of our Boeing 737 MAX aircraft are based on our best estimates and incorporate the information currently available to us. Our estimates may be different from the actual delivery dates, and will depend on the speed at which Boeing is able to deliver our aircraft on order to us.
(d)Represents contractual payments on our office and facility leases. See Note 15—Leases to our Consolidated Financial Statements included in this annual report for further details on our operating lease obligations.
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Off-balance sheet arrangements
We have interests in variable interest entities, some of which are not consolidated into our Consolidated Financial Statements. Please refer to Note 25—Variable interest entities to our Consolidated Financial Statements included in this annual report for a detailed description of these interests and our other off-balance sheet arrangements.
Book value per share
The following table presents our book value per share as of December 31, 2020 and 2019:
As of December 31,
2020 2019
(U.S. Dollars in millions,
except share and per share data)
Total AerCap Holdings N.V. shareholders’ equity $ 8,864  $ 9,315 
Ordinary shares issued 138,847,345  141,847,345 
Treasury shares (8,448,807) (10,263,856)
Ordinary shares outstanding 130,398,538  131,583,489 
Shares of unvested restricted stock (2,552,346) (2,354,318)
Ordinary shares outstanding, excluding shares of unvested restricted stock 127,846,192  129,229,171 
Book value per ordinary share outstanding, excluding shares of unvested restricted
stock
$ 69.34  $ 72.08 
Non-GAAP measures
The following are definitions of non-GAAP measures used in this report on Form 20-F and a reconciliation of such measures to the most closely related U.S. GAAP measures.
Net interest margin, annualized net spread, annualized net spread less depreciation and amortization and average cost of debt
Net interest margin is calculated as the difference between basic lease rents and interest expense, excluding the impact of the mark-to-market of interest rate caps and swaps. Annualized net spread is net interest margin expressed as a percentage of average lease assets. Annualized net spread less depreciation and amortization is net interest margin less depreciation and amortization, including maintenance rights expense, expressed as a percentage of average lease assets. Average cost of debt is calculated as interest expense, excluding mark-to-market on interest rate caps and swaps, divided by the average debt balance. We believe these measures may further assist investors in their understanding of the changes and trends related to the earnings of our leasing activities. These measures reflect the impact from changes in the number of aircraft leased, lease rates and utilization rates, as well as the impact from changes in the amount of debt and interest rates.
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The following is a reconciliation of basic lease rents to net interest margin, annualized net spread and annualized net spread less depreciation and amortization for the years ended December 31, 2020 and 2019:
Year Ended December 31, Percentage
Difference
2020 2019
(U.S. Dollars in millions)
Basic lease rents $ 3,762  $ 4,281  (12  %)
Interest expense 1,248  1,295  (4  %)
Adjusted for:
Mark-to-market of interest rate caps and swaps (14) (30) (52  %)
Interest expense excluding mark-to-market on interest rate caps and swaps 1,234  1,265  (3  %)
Net interest margin $ 2,528  $ 3,016  (16  %)
Depreciation and amortization, including maintenance rights expense (1,691) (1,753) (4  %)
Net interest margin less depreciation and amortization $ 837  $ 1,263  (34  %)
Average lease assets $ 37,145  $ 37,590  (1  %)
Annualized net spread 6.8  % 8.0  %
Annualized net spread less depreciation and amortization
2.3  % 3.4  %

Adjusted debt to equity ratio
This measure is the ratio obtained by dividing adjusted debt by adjusted equity. Adjusted debt represents consolidated total debt less cash and cash equivalents, and less a 50% equity credit with respect to certain long-term subordinated debt. Adjusted equity represents total equity, plus the 50% equity credit with respect to the long-term subordinated debt. Adjusted debt and adjusted equity are adjusted by the 50% equity credit to reflect the equity nature of those financing arrangements and to provide information that is consistent with definitions under certain of our debt covenants. We believe this measure may further assist investors in their understanding of our capital structure and leverage.
The following is a reconciliation of debt to adjusted debt and equity to adjusted equity as of December 31, 2020 and 2019:
As of December 31,
2020 2019
(U.S. Dollars in millions
except debt/equity ratio)
Debt $ 28,742  $ 29,486 
Adjusted for:
Cash and cash equivalents (1,249) (1,121)
50% credit for long-term subordinated debt (1,125) (1,125)
Adjusted debt $ 26,368  $ 27,240 
Equity $ 8,932  $ 9,382 
Adjusted for:
50% credit for long-term subordinated debt 1,125  1,125 
Adjusted equity $ 10,057  $ 10,507 
Adjusted debt/equity ratio 2.6 to 1 2.6 to 1


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Summarized financial information of issuers and guarantors
Historically, in accordance with Rule 3-10 of Regulation S-X, AerCap has presented separate financial statements and other disclosures with respect to the entities that issue and guarantee its registered debt securities in a note to its consolidated financial statements.
In March 2020, the SEC adopted amendments to reduce and simplify the financial disclosure requirements for guarantors and issuers of guaranteed registered securities. The amendments became effective on January 4, 2021, but voluntary compliance in advance of January 4, 2021 was permitted. We elected to comply with the amended regulation starting with our Interim Report on Form 6-K for the quarter ended March 31, 2020, filed with the SEC on May 5, 2020.
AerCap Trust & AerCap Ireland Capital Designated Activity Company Notes
From time to time since the completion of the acquisition of ILFC, AerCap Trust and AerCap Ireland Capital Designated Activity Company (“AICDC”) have co-issued senior unsecured notes (the “AGAT/AICDC Notes”). Please refer to Note 13—Debt to our Consolidated Financial Statements included in this annual report for further details on the AGAT/AICDC Notes. The AGAT/AICDC Notes are jointly and severally and fully and unconditionally guaranteed by AerCap Holdings N.V. (the “Parent Guarantor”) and by AerCap Ireland, AerCap Aviation Solutions B.V., ILFC and AerCap U.S. Global Aviation LLC (the “Subsidiary Guarantors” and, together with the Parent Guarantor, the “AGAT/AICDC Guarantors”).
Subject to the provisions of the indenture governing the AGAT/AICDC Notes (the “AGAT/AICDC Indenture”), a Subsidiary Guarantor will be automatically and unconditionally released from its guarantee with respect to a series of AGAT/AICDC Notes under the following circumstances: (1) the sale, disposition or other transfer of (i) the capital stock of a Subsidiary Guarantor after which such Subsidiary Guarantor is no longer a Restricted Subsidiary (as defined in the AGAT/AICDC Indenture) or (ii) all or substantially all of the assets of a Subsidiary Guarantor; (2) the permitted designation of the Subsidiary Guarantor as an Unrestricted Subsidiary as defined in and pursuant to the AGAT/AICDC Indenture; (3) the consolidation, amalgamation or merger of a Subsidiary Guarantor with and into AerCap Trust, AICDC or another AGAT/AICDC Guarantor with such person being the surviving entity, or upon the liquidation of a Subsidiary Guarantor following the transfer of all of its assets to AerCap Trust, AICDC or another AGAT/AICDC Guarantor; or (4) legal defeasance or covenant defeasance with respect to such series, each as described in the AGAT/AICDC Indenture, or if the obligations of AerCap Trust and AICDC with respect to such series under the AGAT/AICDC Indenture are discharged.
The guarantee obligations of each Subsidiary Guarantor are limited (i) to an amount not to exceed the maximum amount that can be guaranteed by a Subsidiary Guarantor (after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of all other AGAT/AICDC Guarantors in respect of the obligations under their respective guarantees) without rendering the guarantee, as it relates to such Subsidiary Guarantor, voidable under applicable fraudulent conveyance or transfer laws, and (ii) as necessary to recognize certain defenses generally available to guarantors, including voidable preference, financial assistance, corporate purpose, capital maintenance or similar laws, regulations or defenses affecting the rights of creditors generally or other considerations under applicable law. In addition, given that some of the AGAT/AICDC Guarantors are Irish and Dutch companies, it may be more difficult for holders of the AGAT/AICDC Notes to obtain or enforce judgments against such guarantors.
Because AICDC and certain AGAT/AICDC Guarantors are holding companies with very limited operations, their only significant assets are the equity interests of their directly held subsidiaries. As a result, AICDC and certain AGAT/AICDC Guarantors are dependent primarily upon dividends and other payments from their subsidiaries to generate the funds necessary to meet their outstanding debt service and other obligations, and such dividends or other payments will in turn depend on factors, such as their subsidiaries’ earnings, covenants in instruments governing their subsidiaries’ indebtedness, other contractual restrictions and applicable laws (including local law restricting payments of dividends).
Junior Subordinated Notes
In October 2019, AerCap Holdings N.V. issued $750.0 million aggregate principal amount of 5.875% fixed-rate reset junior subordinated notes due 2079 (the “Junior Subordinated Notes”). See Note 13—Debt to our Consolidated Financial Statements included in this annual report. The Junior Subordinated Notes are jointly and severally and fully and unconditionally guaranteed by AerCap Trust, AICDC, AerCap Ireland, AerCap Aviation Solutions B.V., ILFC and AerCap U.S. Global Aviation LLC (the “Subordinated Notes Guarantors”).
48

Subject to the provisions of the indenture governing the Junior Subordinated Notes (the “Subordinated Notes Indenture”), a Subordinated Notes Guarantor will be automatically and unconditionally released from its guarantee under the following circumstances: (1) the sale, disposition or other transfer of all or substantially all of the assets of a Subordinated Notes Guarantor; (2) the consolidation, amalgamation or merger of a Subordinated Notes Guarantor with and into AerCap Holdings N.V. or another Subordinated Notes Guarantor with such person being the surviving entity, or upon the liquidation of a Subordinated Notes Guarantor following the transfer of all of its assets to AerCap Holdings N.V. or another Subordinated Notes Guarantor; or (3) legal defeasance or covenant defeasance, each as described in the Subordinated Notes Indenture, or if the obligations of AerCap Holdings N.V. under the Subordinated Notes Indenture are discharged.
The guarantee obligations of each Subordinated Notes Guarantor are limited (i) to an amount not to exceed the maximum amount that can be guaranteed by a Subordinated Notes Guarantor (after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of all other Subordinated Notes Guarantors in respect of the obligations under their respective guarantees) without rendering the guarantee, as it relates to such Subordinated Notes Guarantor, voidable under applicable fraudulent conveyance or transfer laws, and (ii) as necessary to recognize certain defenses generally available to guarantors, including voidable preference, financial assistance, corporate purpose, capital maintenance or similar laws, regulations or defenses affecting the rights of creditors generally or other considerations under applicable law. In addition, given that some of the Subordinated Notes Guarantors are Irish and Dutch companies, it may be more difficult for holders of the Junior Subordinated Notes to obtain or enforce judgments against such guarantors.
Because AerCap Holdings N.V. and certain Subordinated Notes Guarantors are holding companies with very limited operations, their only significant assets are the equity interests of their directly held subsidiaries. As a result, AerCap Holdings N.V. and certain Subordinated Notes Guarantors are dependent primarily upon dividends and other payments from their subsidiaries to generate the funds necessary to meet their outstanding debt service and other obligations, and such dividends or other payments will in turn depend on their subsidiaries’ earnings, covenants in instruments governing their subsidiaries’ indebtedness, other contractual restrictions and applicable laws (including local law restricting payments of dividends).
49

Summarized Combined Financial Information
Summarized financial information (the “SFI”), as defined under Rule 1-02(bb) of Regulation S-X, is provided below for the issuers and the guarantor entities and includes AerCap Holdings N.V., AerCap Trust, AICDC, AerCap U.S. Global Aviation LLC, AerCap Aviation Solutions B.V., AerCap Ireland and ILFC (collectively, the “Obligor Group”) as of December 31, 2020, and for the year ended December 31, 2020. The SFI is presented on a combined basis with intercompany transactions and balances among the entities included in the Obligor Group eliminated. The Obligor Group SFI excludes investments in non-obligor entities.
Summarized combined financial information of issuers and guarantors
December 31, 2020
(U.S. Dollars in millions)

Flight equipment held for operating leases, net
$ 9,607 
Intercompany receivables
15,155 
Total assets
28,913 
Debt
17,557 
Intercompany payables
4,154 
Total liabilities
24,661 
Non-controlling interest
77 

Year Ended
December 31, 2020
(U.S. Dollars in millions)
Total revenues and other income (a) $ 2,323 
Total expenses (b) 2,538 
Income before income taxes and income of investments accounted for under the equity method (215)
Net income (180)
Net income attributable to AerCap Holdings N.V. (182)

(a)Total revenues include interest income from non-obligor entities of $605 million.
(b)Total expenses include interest expense to non-obligor entities of $55 million.
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Item 6.    Directors, Senior Management and Employees
Directors and officers
Name Age Position Date of First
Appointment 		End Current
Term (a)
Directors  
Paul Dacier 63 Non-Executive Chairman of the Board of Directors May 2010 2022 AGM
Aengus Kelly 47 Executive Director and Chief Executive Officer May 2011 2023 AGM
Julian (Brad) Branch 66 Non-Executive Director April 2018 2022 AGM
Stacey Cartwright 57 Non-Executive Director April 2019 2023 AGM
Rita Forst 65 Non-Executive Director April 2019 2023 AGM
Richard (Michael) Gradon 61 Non-Executive Director May 2010 2022 AGM
James (Jim) Lawrence 68 Non-Executive Director May 2017 2021 AGM
Michael Walsh 54 Non-Executive Director May 2017 2021 AGM
Robert (Bob) Warden 48 Non-Executive Director July 2006 2022 AGM
Officers        
Philip Scruggs (b) 56 President and Chief Commercial Officer    
Peter Juhas 49 Chief Financial Officer    
Peter Anderson (b) 45 Head of EMEA    
Risteard Sheridan 46 Company Secretary and Chief Compliance Officer
Brian Canniffe 48 Group Treasurer    
Vincent Drouillard 45 General Counsel    
Bashir Hajjar 53 Head of Americas
Emmanuel Herinckx 48 Head of Asia Pacific
Anton Joiner 50 Chief Risk Officer
Tom Kelly 57 Chief Executive Officer, AerCap Ireland Limited
Jorg Koletzki 53 Chief Information Officer
Bart Ligthart 39 Head of Trading and Portfolio Management
Theresa Murray 53 Head of Human Resources
Martin Olson 58 Head of OEM Relations
Joe Venuto 61 Chief Technical Officer

(a)The term for each director ends at the Annual General Meeting of Shareholders (“AGM”) typically held in April or May of each year.
(b)On February 1, 2021, the Company announced Mr. Scruggs will be retiring as President and Chief Commercial Officer in March, 2021 (the “Retirement Date”). On February 1, 2021 our Company announced Mr. Anderson would take over as the Company’s Chief Commercial Officer, effective as of the Retirement Date.
Directors
Our Board of Directors currently consists of nine directors, eight of whom are non-executive directors.
The Board appointed Mr. Paul Dacier to succeed Mr. Pieter Korteweg as Chairman of the Board with effect from the close of the 2020 AGM. Mr. Dacier has been a non-executive director of AerCap since 2010 and was Vice Chairman of the Board of Directors from 2013 to 2020.
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Paul Dacier.    Mr. Dacier has been a Director of AerCap since May 27, 2010. He is also currently the general counsel at Indigo Agriculture, a privately held start-up company, and he is on the Board of Directors of Progress Software Inc. (a software application development company). Until 2016, Mr. Dacier was Executive Vice President and General Counsel of EMC Corporation (an information infrastructure technology and solutions company), where he worked in various positions from 1990. He was a Non-Executive Director of GTY Technology Holdings Inc. from October 2016 until November 2019 and a Non-Executive Director of Genesis from November 2007 until the date of its amalgamation with AerCap International Bermuda Limited in March 2010. Prior to joining EMC, Mr. Dacier was an attorney with Apollo Computer Inc. (a computer work station company) from 1984 to 1990. Mr. Dacier received a B.A. in history and a J.D. in 1983 from Marquette University. He is admitted to practice law in the Commonwealth of Massachusetts and the state of Wisconsin.

Aengus Kelly.    Mr. Kelly was appointed Executive Director and Chief Executive Officer of AerCap on May 18, 2011. Previously he served as Chief Executive Officer of AerCap’s U.S. operations from January 2008 to May 2011. Mr. Kelly served as AerCap’s Group Treasurer from 2005 through December 31, 2007. He started his career in the aviation leasing and financing business with Guinness Peat Aviation (“GPA”) in 1998 and continued working with its successors AerFi in Ireland and debis AirFinance and AerCap in Amsterdam. Prior to joining GPA in 1998, he spent three years with KPMG in Dublin. Mr. Kelly is a Chartered Accountant and holds a Bachelor’s degree in Commerce and a Master’s degree in Accounting from University College, Dublin.
Julian (Brad) Branch. Mr. Branch has been a Director of AerCap since April 25, 2018. Mr. Branch most recently served Deloitte Touche Tohmatsu Ltd (Deloitte’s global organization) as Senior Advisor in the Office of the CEO and served the Boards of Deloitte Northwest Europe LP and of Deloitte’s Middle East practice. Mr. Branch’s professional career has spanned 40 years; he first qualified as a Certified Public Accountant in June 1979, and was a general partner of Deloitte entities in the U.S. including Deloitte & Touche LLP (accounting and auditing) and Deloitte Consulting LLP (consulting) for 29 years. His industry focus has been the air transportation industry; large global air carriers. Mr. Branch held a variety of global leadership roles with Deloitte, having lived and practiced outside of the U.S. for over a decade. Mr. Branch has vigorously supported the community through not-for-profit Board service, such as the Advisory Board of Emory University School of Ethics and the Duke University Heart Center. He received a B.A. and M.B.A. from the University of North Carolina.
Stacey Cartwright.    Ms. Cartwright has been a Director of AerCap since April 24, 2019. She is also currently Chair of the Board of Ovo Energy and a Non-Executive Director of Savills PLC, Genpact and Majid al Futtaim LEC. She also Chairs the Advisory Committee of Majid al Futtaim Lifestyle. Ms. Cartwright previously served as Chief Executive Officer of Harvey Nichols Group from 2014 to 2017 (and as Deputy Chairman in 2018), Executive Vice President and Chief Financial Officer of Burberry Group from 2004 to 2013, and Chief Financial Officer of Egg PLC from 1999 to 2003, having spent her early career with Granada Group. Ms. Cartwright was also a Non-Executive Director of GlaxoSmithKline PLC and a Senior Independent Director of the Football Association Ltd. Ms. Cartwright is a qualified chartered accountant and she received a BSc from the London School of Economics.
Rita Forst.    Ms. Forst has been a Director of AerCap since April 24, 2019. She is also currently an independent business consultant in powertrain and vehicle technology, and serves as a member of the supervisory board of Norma Group SE and ElringKlinger AG in Germany. Effective April 29, 2020, Ms. Forst became a Non-Executive Director of Westport Fuel Systems Inc. in Vancouver, Canada. In addition, Ms. Forst holds an advisory board position at iwis SE & Co. KG in Germany. Ms. Forst spent more than 35 years at the Opel European division of General Motors in senior engineering and management positions, and as a member of Opel’s management board. As such, Ms. Forst has been responsible for the development of new generations of engines and car models for Opel and General Motors. Ms. Forst holds Bachelor’s degrees in mechanical engineering from the Kettering University (U.S.) and the Darmstadt University of Applied Technology (Germany).
Richard (Michael) Gradon.    Mr. Gradon has been a Director of AerCap since May 27, 2010. He is also currently a Non-Executive Director of Exclusive Hotels. He was a Non-Executive Director of Genesis from November 2007 until the date of its amalgamation with AerCap International Bermuda Limited in March 2010. He practiced law at Slaughter & May before joining the UK FTSE 100 company The Peninsular & Oriental Steam Navigation Company (P&O) where he was a main Board Director from 1998 until its takeover in 2006. His roles at P&O included the group commercial & legal director function and he served as Chairman of P&O’s property division. Mr. Gradon served on the board of The Wimbledon Tennis Championships from 2005 to 2019 and on the board of Grosvenor Limited from 2007 to 2015. In addition, Mr. Gradon served as Chairman of La Manga Club, Spain, and Chief Executive Officer of the London Gateway projects. Mr. Gradon holds an M.A. degree in law from Cambridge University.
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James (Jim) Lawrence. Mr. Lawrence has been a Director of AerCap since May 5, 2017. He is currently Chairman of Lake Harriet Capital, a private investment firm. Previously, Mr. Lawrence served as Chairman of Rothschild North America and earlier as Chief Executive Officer of Rothschild North America and as co-head of global investment banking at Rothschild from 2010 to 2015. Prior to Rothschild, Mr. Lawrence was Chief Financial Officer of Unilever and he served as Executive Director on the boards of Unilever NV and Unilever PLC. He joined Unilever in 2007 after serving as the Vice Chairman and Chief Financial Officer of General Mills for nine years. Prior to General Mills, Mr. Lawrence was Executive Vice President and Chief Financial Officer of Northwest Airlines from 1996 to 1998, and before that Mr. Lawrence was a division President at PepsiCo, serving as CEO of Pepsi-Cola Asia, Middle East, Africa from 1992 to 1996. In 1983, he cofounded The LEK Partnership, a corporate strategy and merger/acquisition firm, headquartered in London. Before that he was a Partner of Bain and Company having opened their London and Munich offices. Prior to that, he worked for The Boston Consulting Group. Mr. Lawrence is currently a Non-Executive Director of Avnet Inc. and Smurfit Kappa Group. His aviation industry experience dates from 1990, and it includes, in addition to being the Chief Financial Officer of Northwest Airlines, serving on the boards of IAG (International Consolidated Airlines Group), Continental Airlines, TWA, Mesaba and British Airways. Since 1990, Mr. Lawrence has served on 16 public company boards, several private company boards and numerous non-profit boards. Mr. Lawrence earned a Bachelor of Arts in Economics from Yale University and an M.B.A. with distinction from Harvard Business School.  
Michael Walsh.   Mr. Walsh has been a Director of AerCap since May 5, 2017. He previously served as a Non-Executive Director, including Chairman, of a number of companies which finance and lease aircraft and trains throughout the world. Mr. Walsh has over 30 years’ experience as a Non-Executive Director, senior executive and commercial lawyer in the aircraft leasing and financing industry. In 1989, he joined GPA Group plc, the aircraft leasing and financing company, and held a number of senior management positions, including General Counsel. Following the acquisition of GPA by debis AirFinance in 2000, Mr. Walsh was appointed General Counsel of debis AirFinance and held that position until 2002. From 2003 to 2005, he served as Chief Legal Officer of Bord Gáis Éireann, the Irish gas utility. From 1986 to 1989, he was a diplomat in the Irish Diplomatic Service. Mr. Walsh is a barrister and a law graduate of University College, Cork, Ireland.
Robert (Bob) Warden.    Mr. Warden has been a Director of AerCap since July 26, 2006. He is also currently Global Head of Private Equity at Cerberus Capital Management, L.P., which he joined in October 2018 after previously working at Cerberus from 2003 to 2012. Mr. Warden has worked in the private equity industry for over 25 years. He was formerly a partner at Pamplona Capital Management from 2012 to 2018, and had previously worked in private equity at J.H. Whitney, Cornerstone Equity Investors and Donaldson, Lufkin & Jenrette. Mr. Warden received his A.B. from Brown University.
Officers
Philip Scruggs.    Mr. Scruggs assumed the position of President and Chief Commercial Officer of AerCap in May 2014, previously serving in the role of Executive Vice President and Chief Marketing Officer at ILFC, where he had a 20-year career. Mr. Scruggs oversees AerCap’s worldwide leasing business, including the marketing, pricing, credit, and commercial execution. Prior to joining ILFC, Mr. Scruggs was an attorney at the Los Angeles-based law firm Paul, Hastings, Janofsky and Walker, where he specialized in leasing and asset-based finance. Mr. Scruggs received his B.A. from the University of California, Berkeley, and his J.D. from The George Washington University. Mr. Scruggs is an instrument rated private pilot.
Peter Juhas.    Mr. Juhas was appointed Chief Financial Officer of AerCap in April 2017, following his appointment as Deputy Chief Financial Officer in September 2015. Prior to joining AerCap, Mr. Juhas was Global Head of Strategic Planning at American International Group, Inc. (“AIG”), where he led the development of the company’s strategic and capital plans, as well as mergers, acquisitions and other transactions, including the sale of ILFC to AerCap. Prior to joining AIG in 2011, Mr. Juhas was a Managing Director in the Investment Banking Division of Morgan Stanley from 2000 to 2011. While at Morgan Stanley, he led the IPO of AerCap in 2006 and was the lead advisor to the Federal Reserve Bank and the U.S. Treasury on the AIG restructuring and the placement of the U.S. government-sponsored enterprises Fannie Mae and Freddie Mac into conservatorship in 2008. Prior to joining Morgan Stanley, Mr. Juhas was an attorney in the Mergers and Acquisitions group at Sullivan & Cromwell LLP, the New York law firm. Mr. Juhas received his A.B. from Harvard College and his J.D. from Harvard Law School.

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Peter Anderson.    Mr. Anderson assumed the position of Head of EMEA in January 2019 having previously held the Head of Asia Pacific role since the acquisition of ILFC in 2014. In his role Mr. Anderson is responsible for AerCap’s leasing activities across Europe, Middle East and Africa. Prior to joining AerCap he worked in the leasing team at ILFC where he set up ILFC’s Asia Pacific office in 2012. Mr. Anderson worked in the leasing team at Hong Kong Aviation Capital and prior to that at Allco Finance Group in both Sydney and London, specializing in aircraft leasing and structured finance. Mr. Anderson earned his Master of Applied Finance and Investment from the Securities Institute of Australia, and his B.A. from the University of Technology Sydney.
Risteard Sheridan. Mr. Sheridan was appointed Company Secretary in May 2020 and Chief Compliance Officer in 2019. He joined AerCap in April 2017 as Head of Internal Audit. Prior to joining AerCap, he gained extensive experience advising companies on governance, financial reporting and control/process matters while working with the professional services firms KPMG and EY. Mr. Sheridan holds a Bachelor’s degree in Business & Legal Studies and a Masters degree in Accounting from University College Dublin and is a Fellow of Chartered Accountants Ireland.
Brian Canniffe.    Mr. Canniffe was appointed Group Treasurer of AerCap in January 2018, previously serving as Head of Investor Relations since joining the Company in October 2016. He has over 20 years’ experience in banking, lending and the capital markets. Prior to joining AerCap, Mr. Canniffe served as Managing Director and Head of Global Markets Financing for Bank of America Merrill Lynch in Hong Kong and Tokyo, where he led a division that was responsible for providing secured financing, trading, clearing, reporting and various treasury functions in the Asia Pacific region. In addition, he held roles within the financing divisions at Nomura Securities and Bankers Trust International.
Vincent Drouillard.    Mr. Drouillard was appointed General Counsel on June 1, 2018. He previously served in the role of Head of Legal Leasing at AerCap, a position he held from 2015 to 2018. He joined ILFC in 2004 and last served as Head of Legal EMEA, prior to the acquisition of ILFC by AerCap. Mr. Drouillard practiced law at the law firm Gibson, Dunn & Crutcher. He received law degrees from King’s College London, the University of Paris I Panthéon-Sorbonne and the University of Paris X Nanterre. Mr. Drouillard is a member of the New York State Bar and the State Bar of California.
Bashir Hajjar.    Mr. Hajjar assumed the position of Head of Americas in October 2018. In his role Mr. Hajjar is responsible for AerCap’s leasing activities across the Americas. He brings 30 years of wide-ranging experience in the aviation industry from aircraft manufacturing to aircraft leasing and airline management. Prior to joining AerCap he held various positions in the Fleet Planning group for Continental Airlines and the Aircraft Marketing group at McDonnell Douglas. Mr. Hajjar began his aviation career in engineering, at McDonnell Douglas, Eastern Airlines and Continental Airlines. Mr. Hajjar holds a Masters of Business Administration from California State University Long Beach, a Bachelor of Science Degree in Aerospace Engineering from Saint Louis University, and an FAA Airframe and Power Plant Certificate.
Emmanuel Herinckx.    Mr. Herinckx was appointed to the position of Head of Asia Pacific in July 2019. He oversees AerCap’s leasing activities across Asia Pacific and China from our office in Singapore. Mr. Herinckx joined AerCap in September 2006 as Vice President Marketing Asia Pacific. Prior to joining AerCap he worked in the Airline Marketing Departments of Airbus North America Sales, INC, Washington DC, USA and Airbus SAS, Toulouse, France for a period of seven years. Mr. Herinckx holds a Master of Science in Air Transport Management from Cranfield University, United Kingdom.
Anton Joiner.    Mr. Joiner was appointed Chief Risk Officer in 2011 with responsibility for portfolio risk management, workouts, repossessions and debtor management. He joined AerCap in 2001 and held a variety of positions. Prior to joining AerCap, Mr. Joiner held positions with Scotia Capital, Commercial Aviation Group and Hunting Cargo Airlines. He has a Master’s degree in Air Transport Management from Cranfield College of Aeronautics.
Tom Kelly.    Mr. Kelly was appointed Chief Executive Officer of AerCap Ireland in 2010. Mr. Kelly previously served as Chief Financial Officer of AerCap’s Irish operations and has a substantial aircraft leasing and financial services background. Previously, Mr. Kelly spent ten years with General Electric Capital Aviation Services Limited (“GECAS”) where his last roles were as Chief Financial Officer and director of GECAS’s Irish operation. Mr. Kelly also served as global controller for GECAS in his role as Senior Vice President & Controller. Prior to joining GECAS in 1997, Mr. Kelly spent over eight years with KPMG in their London office, as Senior Manager in their financial services practice. Mr. Kelly is a Chartered Accountant and holds a Bachelor of Commerce degree from University College, Dublin.
Jorg Koletzki.    Mr. Koletzki was appointed Chief Information Officer of AerCap in September 2015. He has significant experience in managing complex system implementations on a global scale, transforming IT functions and running high quality teams. His experience extends to working within large multinational companies including IBM, Volkswagen, National Grid and E.ON.
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Bart Ligthart.    Mr. Ligthart joined the AerCap Trading team in 2007. He was appointed to the position of Head of Trading and Portfolio Management in 2018. Mr. Ligthart has 12 years’ experience in aircraft trading and portfolio management in both wide and narrowbody aircraft. Prior to joining AerCap he worked at Deloitte and Touche in Amsterdam where he served as Manager Transactions Services. Mr. Ligthart received his B.A in Commercial Economics from Inholland University, and his MSc in Finance Management from Nyenrode Business University.
Theresa Murray.    Ms. Murray was appointed Head of Human Resources in October 2016. She has over 25 years’ experience across all HR disciplines. Prior to joining AerCap she held the position of International HR Director at Nuance Communications. Throughout her career she has held a variety of HR and management roles including senior positions at Telefonica and Lucent Technologies.
Martin Olson.    Mr. Olson assumed the position of Head of OEM Relations following the acquisition of ILFC by AerCap. He previously served in the role of Senior Vice President at ILFC. Mr. Olson heads AerCap’s OEM Relations Department, responsible for purchasing new aircraft and engines. He joined ILFC in 1995 after ten years with McDonnell Douglas Aircraft Corporation. Mr. Olson is a graduate of California State University, Fullerton. He holds a Master’s degree in Business Administration from the University of Southern California.
Joe Venuto.    Mr. Venuto was appointed Chief Technical Officer of AerCap in February 2012. He previously served in the role of Senior Vice President Operations for the Americas at AerCap for four years. From 2004 to 2008, he held the role of Senior Vice President Operations at AeroTurbine, Inc., responsible for all technical issues. Prior to joining AeroTurbine, Inc., Mr. Venuto held the role of Senior Director Maintenance at several airlines including Trump Shuttle, Laker Airways and Amerijet International. He has over 30 years’ experience in the aviation industry and he commenced his aviation career as an Airplane and Powerplant technician for Eastern Airlines. Mr. Venuto is a graduate of the College of Aeronautics and a licensed FAA Airframe and Powerplant Technician.
Compensation
Compensation of non-executive directors
We currently pay each non-executive director an annual fee of €95,000 (€200,000 for the Chairman of our Board of Directors) and pay each of these directors an additional €4,000 per meeting attended in person or €1,000 per meeting attended by phone. In addition, we pay the chair of the Audit Committee an annual fee of €25,000 and each Audit Committee member an annual fee of €15,000 and a fee of €4,000 per committee meeting attended in person or €1,000 per committee meeting attended by phone. We further pay the non-executive chair of each of the Nomination and Compensation Committee, the Group Treasury and Accounting Committee and the Group Portfolio and Investment Committee an annual fee of €15,000 and each such committee member an annual fee of €10,000 and a fee of €4,000 per committee meeting attended in person or €1,000 per committee meeting attended by phone.
In addition, our non-executive directors receive an annual equity award as provided for in AerCap’s remuneration policy for members of the Board of Directors and in accordance with the terms of the Equity Incentive Plan 2014. The size of the annual equity award to our non-executive directors increased, effective as of December 31, 2015, following a market compensation analysis conducted by an independent benefits advisory firm and in accordance with the terms of the Equity Incentive Plan 2014. The annual equity award may be supplemented by additional awards in line with AerCap’s remuneration policy in order to meet the compensation goals of the Company. As of December 31, 2020, our non-executive directors held 191,523 restricted stock units and options to acquire a total of 3,954 AerCap ordinary shares (our non-executive directors did not hold any shares of restricted stock as of December 31, 2020); these equity awards have been granted under the AerCap equity incentive plans, as further described below. All members of the Board of Directors are reimbursed for reasonable costs and expenses incurred in attending meetings of our Board of Directors.    
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Executive compensation
The aircraft leasing business is highly competitive. As the global leader in aircraft leasing, we seek to attract and retain the most talented and successful officers to manage our business and to motivate them with appropriate incentives to execute our strategy and to promote and encourage continued superior performance over a prolonged period of time, in support of achieving the objectives of long-term value creation and appropriate risk-taking. We have designed our compensation plans to meet these objectives.
Compensation goal
How goal is accomplished
Attract and retain leading executive talent
• Design compensation elements to enable us to compete effectively for executive talent
• Selectively retain executives acquired through business transactions considering industry and functional knowledge, leadership abilities and fit with Company culture
• Perform market analysis to stay informed of compensation trends and practices
Align executive pay with shareholder interests
• Concentrate executive pay heavily in equity compensation
• Require robust equity ownership and retention
• Motivate senior executives with meaningful incentives to generate long-term returns
Pay for performance
• Pay annual bonuses based on performance against one-year budgeted target set by the Nomination and Compensation Committee
• Reward long-term growth and value creation
• Tie long-term incentive program awards to the achievement of multi-year earnings per share (“EPS”) targets set by the Nomination and Compensation Committee
• Reward high performers with above-target pay when predetermined goals are exceeded
Manage risk
• Prohibit hedging of Company securities and pledging of AerCap equity prior to vesting
• Emphasize long-term performance by designing equity award opportunities to minimize short-term focus and influence on compensation payouts
• Subject the executive director’s incentive compensation to clawback provisions under Dutch law
As of December 31, 2020, our Group Executive Committee members were Aengus Kelly, Philip Scruggs, Peter Juhas and Peter Anderson. During the year ended December 31, 2020, we paid an aggregate of approximately $9.6 million in cash (base salary and bonuses) and benefits as compensation to our Group Executive Committee members, including approximately $0.6 million as part of their retirement and pension plans.
The compensation packages of our Group Executive Committee members (other than our Chief Executive Officer) and certain other officers, consisting of base salary, annual bonus and, for some officers, annual stock bonus, along with other benefits, are determined by the Nomination and Compensation Committee upon the recommendation of the Chief Executive Officer on an annual basis. In addition, upon the recommendation of the Chief Executive Officer, the Nomination and Compensation Committee may grant long-term equity incentive awards to our officers (other than our Chief Executive Officer) on a non-recurring basis under our equity incentive plans, as further outlined below. The compensation package of our Chief Executive Officer, consisting of base salary, annual bonus, annual stock bonus and a long-term equity incentive award, along with other benefits, is determined by the Board of Directors, upon the recommendation of the Nomination and Compensation Committee, in accordance with the remuneration policy approved by the General Meeting of Shareholders.
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The amount of the annual bonus and, if applicable, the amount of the annual stock bonus granted to our Group Executive Committee members and other participating officers are determined by the Nomination and Compensation Committee (or, in the case of our Chief Executive Officer, the Board of Directors, upon the recommendation of the Nomination and Compensation Committee) based on the Company’s performance relative to the U.S. GAAP EPS budget for the relevant year and the personal performance of the individual Group Executive Committee member or other officer involved. The Company’s U.S. GAAP EPS budget and target bonus levels are typically determined before the beginning of the relevant year. The annual bonus amounts and the annual stock bonuses are paid or granted, as the case may be, in arrears. As a matter of policy, actual bonus amounts will be below target level in years that the EPS target is not met, unless specific circumstances require otherwise which, if any, will be disclosed in this annual report. The annual stock bonuses vest after three years or, if earlier, at the end of the officer’s employment term.
Our long-term equity incentive program is designed to retain our most talented and successful officers and to incentivize continued superior performance, in accordance with the Company’s long-term objectives, for the benefit of our shareholders and other stakeholders. The majority of the long-term equity awards have vesting periods ranging between three years and five years, and the vesting of 66.67% of each award is conditional upon the achievement of the Company’s U.S. GAAP EPS budget over the multi-year vesting period, as determined by the Board of Directors at the beginning of the vesting period (33.33% of each award is subject to time-based vesting). The awards will cliff vest, subject to meeting the vesting conditions, at the end of the vesting period, i.e., there will be no vesting in the interim, and all shares will remain at risk until the end of the vesting period. If the EPS target is not met, then none or only a portion of the performance-based shares will vest, with the remaining performance-based shares being forfeited. None of the performance-based shares will vest if 84.5% or less of the EPS target is met, which indicates the stringency of the program. A portion of the performance-based shares will vest, as specified in the award agreements, if between 84.5% and 100% of the EPS target is met, and all performance-based shares will vest if the EPS target is met or exceeded. In the event of a change of control of the Company, the shares will immediately vest. We believe that the design of our long-term equity incentive program promotes and encourages continued superior performance over a prolonged period of time in support of achieving the objectives of long-term value creation and appropriate risk-taking.
The employment agreements with some of our Group Executive Committee members provide for severance payments on certain terminations. The amount of the pre-agreed severance is derived from calculations, based on the employee’s age and years of service.
The Company is subject to the Netherlands’ Clawback of Bonuses Act. Pursuant to this legislation, bonuses paid to the executive director (and other directors, as defined under the articles of association, provided they are in charge of day-to-day management) may be clawed back if awarded on the basis of incorrect information. In addition, any bonus that has been awarded to the executive director (and other directors, as defined under the articles of association, provided they are in charge of day-to-day management) may be reduced if, under the circumstances, payment of the bonus would be unacceptable. As of December 31, 2020, we did not have any directors other than the executive director who were in charge of day-to-day management.

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AerCap equity incentive plans
Under our equity incentive plans, we have granted restricted stock units, restricted stock and, previously, stock options to directors, officers and employees to attract and retain them on competitive terms, and to incentivize superior performance with a view to creating long-term value for the benefit of the Company, its shareholders and other stakeholders.
The table below indicates the equity awards the Company granted to our Group Executive Committee members and their equity awards that vested in 2020:
2020 Granted 2020 Vested
Aengus Kelly 233,580  (a) — 
Philip Scruggs 25,000  (b) 353,295  (c) (d)
Peter Juhas 41,881  (e) — 
Peter Anderson 333,953  (f) (g) — 

(a)Grant of 333,748 shares of restricted stock, of which 100,168 were withheld to pay taxes incurred by Mr. Kelly in connection with the grant.
(b)Grant of restricted stock units; included in vested shares in 2020.
(c)Vesting of 310,342 shares of restricted stock.
(d)Vesting of 42,953 restricted stock units, of which 15,894 were withheld to pay taxes incurred by Mr. Scruggs in connection with the vesting.
(e)Grant of 69,054 shares of restricted stock, of which 27,173 were withheld to pay taxes incurred by Mr. Juhas in connection with the grant.
(f)Grant of 450,000 shares of restricted stock, of which 136,047 were withheld to pay taxes incurred by Mr. Anderson in connection with the grant.
(g)Grant of 20,000 restricted stock units; payroll tax will be withheld and deducted from the ordinary shares to be delivered at vesting.

The table below indicates the years in which equity awards held by our Group Executive Committee members as of December 31, 2020 are due to vest, subject to meeting the applicable vesting criteria. The awards may comprise restricted stock and restricted stock units, as specified in the paragraph below regarding share ownership:
2021 2022 2023 2024 2025
Aengus Kelly 18,345  859,960  669,051  —  — 
Peter Juhas —  188,264  —  —  — 
Peter Anderson 140,400  20,000  —  —  313,953 
We require our Group Executive Committee members to own Company ordinary shares having a value equal to at least five times their annual base salary (ten times in the case of the Chief Executive Officer), in order to further align their interests with the long-term interests of our shareholders. This threshold amount includes ordinary shares owned outright, vested stock-based equity awards, time-based restricted stock and time-based restricted stock units, whether or not vested, and any stock-based equity that the executive has elected to defer. New Group Executive Committee members have a five-year grace period to meet this threshold. In addition, each Group Executive Committee member is required to hold, post vesting, 25% of the net ordinary shares (50% for our Chief Executive Officer) (after satisfaction of any exercise price or tax withholding obligations), delivered to him or her pursuant to Company equity awards since January 1, 2007, for so long as such member remains employed by the Company (or, if earlier, until such member reaches 65 years of age). Sales of Company ordinary shares are conducted with a view to avoiding undue impact on the Company’s ordinary share price and in compliance with laws and regulations. Each member must consult with the Chairman before executing any sale of the Company’s ordinary shares.
Our policies prohibit our directors, officers and employees from trading in Company securities on the basis of material non-public information, or engaging in hedging and other “short” transactions involving Company securities. In addition, our directors, officers and employees are prohibited from pledging equity incentive awards prior to vesting.
Please refer to Note 17—Share-based compensation to our Consolidated Financial Statements included in this annual report for more details on our equity incentive plans.
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Board Practices
General
Our Board of Directors currently consists of nine directors, eight of whom are non-executive directors.
As a foreign private issuer, as defined by the rules promulgated under the Exchange Act, we are not required to have a majority independent Board of Directors under applicable NYSE rules. Under the Dutch Corporate Governance Code (the “Dutch Code”), for a non-executive director to be considered “independent,” he or she (and his or her spouse and immediate relatives) may not, among other things, (i) in the five years prior to his or her appointment, have been an employee or executive director of us or any public company affiliated with us; (ii) in the year prior to his or her appointment, have had an important business relationship with us or any public company affiliated with us; (iii) receive any financial compensation from us other than for the performance of his or her duties as a director or other than in the ordinary course of business; (iv) hold 10% or more of our ordinary shares (including ordinary shares subject to any shareholder’s agreement); (v) be a member of the management or Supervisory Board of a company owning 10% or more of our ordinary shares; (vi) in the year prior to his or her appointment, have temporarily managed our day-to-day affairs while the executive director was unable to discharge his or her duties; or (vii) be a member of the management board of a company in which a member of the management board of the company which he supervises is a supervisory board member. The Dutch Code contains principles and best practices for Dutch companies with listed shares, and requires companies to either comply with the best practice provisions of the Dutch Code or to explain why they deviate from these best practice provisions. One of our non-executive directors (out of a total of eight) currently serve in excess of 12 years in deviation of the best practice provisions in the Dutch Code. However, we believe that the current composition of the Board enables it to operate effectively and independently, considering that the non-executive directors are carefully selected based upon their combined experience and expertise. The average tenure of our non-executive directors as of December 31, 2020, was 6.6 years.
The directors are appointed by the general meeting of the shareholders. Our directors may be appointed by the vote of a majority of votes cast at a general meeting of shareholders provided that our Board of Directors has proposed the appointment. Without a Board of Directors proposal, directors may also be appointed by the vote of a majority of the votes cast at a general meeting of shareholders if the majority represents at least one-third of our issued capital.
Shareholders may remove or suspend a director by the vote of a majority of the votes cast at a general meeting of shareholders, provided that our Board of Directors has proposed the removal. Our shareholders may also remove or suspend a director, without there being a proposal by the Board of Directors, by the vote of a majority of the votes cast at a general meeting of shareholders if the majority represents at least one-third of our issued capital.
Under our articles of association, the rules for the Board of Directors and the board committees, and Dutch corporate law, the members of the Board of Directors are collectively responsible for the management, general and financial affairs, policy, and strategy of our company.
The executive director is our Chief Executive Officer, who is primarily responsible for managing our day-to-day affairs as well as other responsibilities that have been delegated to the executive director in accordance with our articles of association and our internal rules for the Board of Directors. The non-executive directors supervise the Chief Executive Officer and our general affairs and provide general advice to our Chief Executive Officer. In performing their duties, the non-executive directors are guided by the interests of the Company and shall, within the boundaries set by relevant Dutch law, take into account the relevant interests of our shareholders and other stakeholders in AerCap. The internal affairs of the Board of Directors are governed by our rules for the Board of Directors.
The Chairman of the Board is responsible for ensuring, among other things, that (i) each director receives all information about matters that he or she may deem useful or necessary in connection with the proper performance of his or her duties; (ii) each director has sufficient time for consultation and decision making; and (iii) the Board of Directors and the board committees are properly constituted and functioning.
Each director has the right to cast one vote and may be represented at a meeting of the Board of Directors by a fellow director. The Board of Directors may pass resolutions only if a quorum of four directors, including our Chief Executive Officer and the Chairman or, in his absence, an alternative non-executive director who has been charged by the Board of Directors to act as chairman, are present at the meeting. Resolutions must be passed by a majority of the votes cast. If there is a tie, the matter will be decided by the Chairman of the meeting. Subject to Dutch law, resolutions of the Board of Directors may be passed in writing by a majority of the directors in office. Pursuant to Dutch laws and the Board Rules, a director may not participate in discussions or the decision making process on a transaction or subject in relation to which he or she has a conflict of interest with us. Resolutions to enter into such transactions must be approved by our Board of Directors, excluding such interested director or directors.
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In 2020, the Board of Directors met on 20 occasions. Throughout the year, the Chairman of the Board and individual non-executive directors were in close contact with our Chief Executive Officer and the other Group Executive Committee members. During its meetings and contacts with the Chief Executive Officer and the other Group Executive Committee members, the Board discussed such topics as AerCap’s annual reports and annual accounts for the financial year 2019, topics for the AGM 2020, the impacts of the Covid-19 pandemic, the situation involving the worldwide grounding of the Boeing 737 MAX aircraft, secured and unsecured financing transactions and AerCap’s liquidity position, AerCap’s hedging policies, the utilization and optimization of AerCap’s portfolio of aircraft, global and regional macroeconomic, monetary and political developments and impact on the industry, AerCap key customer developments, competitive landscape, aircraft valuations, AerCap’s backlog of new technology orders with aircraft and engine manufacturers, AerCap shareholder value, AerCap key shareholder developments, capital allocation strategies and share repurchases, AerCap’s corporate and tax structure, reports from the various Board committees, budgeting and financial planning, remuneration and compensation, directors’ and officers’ succession planning, cyber security, regulatory compliance, culture and values, the impact of remote working environments, sustainability and community, governance, risk management and control and an assessment of the Board’s own functioning.
Composition of the Board
The members of our Board of Directors are from diverse professional backgrounds and combine a broad spectrum of experience and expertise with a reputation for integrity. The Board as a whole possesses a wide range of core competencies, professional backgrounds and skill sets, as outlined in the Board profile, which is determined by the Board each year. The Board Profile, which is available on the website of the Company, sets out the Board’s policy in relation to Board composition and diversity, and associated targets. The highlights of this policy include that the Board shall aim for a diverse composition, in line with the global nature and identity of the Company and its business, in terms of such factors as nationality, background, gender and age. We are committed to advancing female representation on our Board of Directors, as we believe that greater diversity of the Board of Directors will have a positive impact. Candidate directors are primarily selected on the basis of core competencies, professional backgrounds and skill sets as outlined in the Board profile. The Board comprises at least one financial expert.
Committees of the Board of Directors
As described above, the Chief Executive Officer is primarily responsible for managing our day-to-day affairs as well as other duties that have been delegated to the executive director in accordance with our articles of association and our internal rules for the Board of Directors. The Board of Directors has established a Group Executive Committee, a Group Portfolio and Investment Committee, a Group Treasury and Accounting Committee, an Audit Committee and a Nomination and Compensation Committee.
Group Executive Committee
We maintain a Group Executive Committee, which is tasked with assisting the Chief Executive Officer with the operational management of the Company, subject to the Chief Executive Officer’s ultimate responsibility. It is chaired by our Chief Executive Officer and is comprised of officers appointed by the Nomination and Compensation Committee. As of December 31, 2020, the members of our Group Executive Committee were Aengus Kelly, Philip Scruggs, Peter Juhas and Peter Anderson. The members of the Group Executive Committee assist the Chief Executive Officer in performing his duties and as such have managerial and policy making functions within the Company in their respective areas of responsibility. Members of the Group Executive Committee regularly attend Board meetings.
Group Portfolio and Investment Committee
Our Group Portfolio and Investment Committee is entrusted with the authority to consent to transactions relating to the acquisition and disposal of aircraft, engines and financial assets that are in excess of $250 million but less than $600 million, among others. It is chaired by our Chief Financial Officer and is comprised of non-executive directors and officers appointed by the Nomination and Compensation Committee. As of December 31, 2020, the members of our Group Portfolio and Investment Committee were Peter Juhas, Aengus Kelly, Robert (Bob) Warden, Bart Ligthart and Rita Forst.
Group Treasury and Accounting Committee
Our Group Treasury and Accounting Committee is entrusted with the authority to consent to debt funding in excess of $250 million but less than $600 million per transaction, among others. It is chaired by our Chief Financial Officer and is comprised of non-executive directors and officers appointed by the Nomination and Compensation Committee. As of December 31, 2020, the members of our Group Treasury and Accounting Committee were Peter Juhas, Aengus Kelly, Paul Dacier, Tom Kelly, Brian Canniffe and Robert (Bob) Warden.
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Audit Committee
Our Audit Committee assists the Board of Directors in fulfilling its responsibilities relating to the integrity of our financial statements, our risk management and internal control arrangements, our compliance with legal and regulatory requirements, the performance, qualifications and independence of external auditors, and the performance of the internal audit function, among others. The Audit Committee is comprised of non-executive directors who are “independent” as defined by Rule 10A-3 under the Exchange Act. At least one of them shall have the necessary financial qualifications. As of December 31, 2020, the members of our Audit Committee were James (Jim) Lawrence (Chairman), Julian (Brad) Branch, Richard (Michael) Gradon and Michael Walsh.
In 2020, the Audit Committee met on seven occasions. Throughout the year, the members of the Audit Committee were in close contact with our Chief Executive Officer, our Chief Financial Officer, internal auditors as well as the external auditors. Principal items discussed and reviewed during these Audit Committee meetings and with our Chief Executive Officer and our Chief Financial Officer included the annual and quarterly financial statements and disclosures, external auditor’s reports, external auditor’s independence and rotation, activities and results in respect of our continued compliance with the Sarbanes-Oxley Act, the external auditor’s audit plan for 2020, approval of other services rendered by the external auditor, internal audit reports, the internal auditor’s audit plan for 2021, the impacts of the Covid-19 pandemic, the Company’s compliance, risk management policies and integrity and fraud, the expenses incurred by the Company’s most senior officers in carrying out their duties, the Company’s tax planning policies, key transformation projects including IT and cybersecurity projects, the functioning of the Audit Committee, the Audit Committee charter and the Audit Committee cycle. The Audit Committee had separate sessions with the external auditor and with the internal auditor without management being present.
Nomination and Compensation Committee
Our Nomination and Compensation Committee selects and recruits candidates for the positions of Chief Executive Officer, non-executive director and Chairman of the Board of Directors and recommends their remuneration, bonuses and other terms of employment or engagement to the Board of Directors. In addition, our Nomination and Compensation Committee approves the remuneration, bonuses and other terms of employment of the Group Executive Committee and certain other officers and appoints members of the Group Executive Committee, the Group Portfolio and Investment Committee, the Group Treasury and Accounting Committee and recommends candidates for the Audit Committee and plans the succession within the Board of Directors and committees. It is chaired by the Chairman of our Board of Directors and is further comprised of up to three non-executive directors appointed by the Board of Directors. As of December 31, 2020, the members of our Nomination and Compensation Committee were Paul Dacier (Chairman), who succeeded Pieter Korteweg with effect from the close of the AGM in 2020, Michael Walsh, Robert (Bob) Warden and Stacey Cartwright.
In 2020, the Nomination and Compensation Committee met on four occasions. At these meetings it discussed and approved succession planning and compensation related occurrences and developments within the framework of the Board and Committee Rules and our remuneration policy. In addition, various resolutions were adopted outside of these meetings.
None of our Nomination and Compensation Committee members or our officers has a relationship that would constitute an interlocking relationship with officers or directors of another entity or insider participation in compensation decisions.
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Share ownership
The following table presents beneficial ownership of our shares which are held by our directors and Group Executive Committee members as of December 31, 2020:
Ordinary shares (unrestricted) Restricted stock (a) Restricted stock units (a) (b) Ordinary shares underlying options (c) Fully diluted ownership percentage (d)
Directors:
Paul Dacier (Chairman) 9,429  —  20,000  3,954  *
Aengus Kelly (e) 1,757,233  1,547,356  —  —  2.5  %
Julian (Brad) Branch 4,000  —  27,029  —  *
Stacey Cartwright —  —  21,804  —  *
Rita Forst 425  —  21,804  —  *
Richard (Michael) Gradon 7,323  —  20,000  —  *
James (Jim) Lawrence 201,764  —  31,604  —  *
Michael Walsh 1,581  —  29,282  —  *
Robert (Bob) Warden 13,742  —  20,000  —  *
Total Directors 1,995,497  1,547,356  191,523  3,954 
Group Executive Committee (GEC) Members:
Philip Scruggs 399,865  —  —  —  *
Peter Juhas 48,750  178,343  9,921  —  *
Peter Anderson —  454,353  20,000  —  *
Total Directors and GEC Members 2,444,112  2,180,052  221,444  3,954   

*Less than 1.0%.
(a)All restricted stock and restricted stock units are subject to time-based or performance-based vesting conditions. Of these restricted stock and restricted stock units, subject to the vesting conditions, 5,647 vested on January 1, 2021, 18,345 will vest on March 12, 2021, 15,239 will vest on April 30, 2021 (or the date of the AGM in 2021, whichever is the earlier), 140,400 will vest on May 31, 2021, 4,311 will vest on January 1, 2022, 23,035 will vest on March 11, 2022, 2,718 will vest on April 30, 2022 (or the date of the AGM in 2022, whichever is the earlier), 842,105 will vest on May 1, 2022 (or the date of the AGM in 2022, whichever is the earlier), 20,000 will vest on June 30, 2022, 183,084 will vest on September 13, 2022, 3,608 will vest on January 1, 2023, 14,419 will vest on March 9, 2023, 654,632 will vest on May 1, 2023 (or the date of the AGM in 2023, whichever is the earlier), 160,000 will vest on December 17, 2023 and 313,953 will vest on March 31, 2025.
(b)Payroll tax will be withheld and deducted from the ordinary shares to be delivered at the vesting of restricted stock units, as applicable.
(c)2,151 of these options expire on December 31, 2021 and carry a strike price of $11.29 per option. The remaining 1,803 options expire on December 31, 2022 and carry a strike price of $13.72 per option.
(d)Percentage amount assumes the vesting and exercise of all time-based and performance-based equity awards at target in this table, and no vesting or exercise of any other equity awards.
(e)Mr. Kelly is our Chief Executive Officer and the Executive Director of the Board.
All of our ordinary shares have the same voting rights.
The address for all of our directors and officers is c/o AerCap Holdings N.V., AerCap House, 65 St. Stephen’s Green, Dublin, D02 YX20, Ireland.
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Employees
The following table presents the number of employees relating to our aircraft leasing business at each of our principal geographic locations as of December 31, 2020, 2019 and 2018:
As of December 31,
Location 2020 2019 2018
Dublin 200  206  207 
Shannon 79  79  78 
Los Angeles 41  48  46 
Singapore 44  44  41 
Other (a) 13  13  13 
Total (b) 377  390  385 

(a)Includes employees located in the Netherlands, China, France, the United Kingdom, the United Arab Emirates and the United States other than Los Angeles.
(b)Includes one part-time employee as of December 31, 2020, 2019 and 2018, respectively.
None of our employees are covered by a collective bargaining agreement, and we believe that we maintain excellent employee relations.
Item 7.    Major Shareholders and Related Party Transactions
Major shareholders
Beneficial holders of 5% or more of our ordinary outstanding shares as of December 31, 2020, based on available public filings, include: AllianceBernstein L.P. at 7.0% (9,092,216 shares), Eagle Capital Management, LLC at 5.9% (7,667,260 shares) and Wells Capital Management, Inc. at 5.1% (6,689,523 shares).
We do not register the jurisdiction of all record holders as this information is not always available. Specifically, the number of record holders in the United States, or in many regions outside the United States, is not known to the Company and cannot be ascertained from public filings. All of our ordinary shares have the same voting rights.
Related party transactions
Please refer to Note 9—Investments, Note 25—Variable interest entities and Note 26—Related party transactions to our Consolidated Financial Statements included in this annual report for further details of transactions and loans between the Company and its related parties.
Item 8.    Financial Information
Consolidated statements and other financial information
Please refer to pages F-1 through F-60 of this annual report.
Significant changes    
Please refer to Note 29—Subsequent events to our Consolidated Financial Statements included in this annual report for a discussion of significant changes.
Item 9.    The Offer and Listing
Offer and listing details
Not applicable.
Markets
AerCap’s ordinary shares are traded on the NYSE under the ticker symbol AER.
AerCap’s 5.875% Fixed-Rate Reset Junior Subordinated Notes due 2079 are traded on the NYSE under the ticker symbol AER79.
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Item 10.    Additional Information
Memorandum and articles of association
Set forth below is a summary description of our ordinary shares and related material provisions of our articles of association and of Book 2 of the Dutch Civil Code (“Boek 2 van het Burgerlijk Wetboek”), which governs the rights of holders of our ordinary shares. Please refer to “Item 6—Directors, Senior Management and Employees” for a discussion of Netherlands laws and our internal rules concerning directors’ power to vote on proposals in which they are materially interested.
Ordinary share capital
Pursuant to our articles of association, our ordinary shares may only be held in registered form. All of our ordinary shares are registered in a register kept by us or on our behalf by our transfer agent. Transfer of registered shares requires a written deed of transfer and the acknowledgment by AerCap, subject to provisions stemming from private international law. Our ordinary shares are, in general, freely transferable.
Regulatory obligations regarding certain share transactions
Cash Manager Limited, which is a subsidiary of AerCap, is subject to regulation by the Central Bank of Ireland. As a result, the acquisition or disposal directly or indirectly of interests in AerCap shares or similar interests may be subject to regulatory requirements involving the Central Bank of Ireland as set out below. The following disclosure is for information purposes only and AerCap cannot provide Irish legal advice to actual or potential investors. Actual or potential investors in AerCap must obtain their own legal advice in relation to their position.
Under the European Union (Markets in Financial Instruments) Regulations 2017 (as amended) (the “MiFID II Regulations”), a person or a group of persons acting in concert proposing to acquire a direct or indirect holding of ordinary shares or other similar interests in AerCap must give the Central Bank of Ireland prior written notice of such proposed acquisition if the acquisition would directly or indirectly (i) represent 10% or more of the capital or voting rights in AerCap; (ii) result in the proportion of capital or voting rights in AerCap held by such person or persons reaching or exceeding 10%, 20%, 33% or 50% of the capital or voting rights in AerCap; or (iii) in the opinion of the Central Bank of Ireland, make it possible for that person or those persons to control or exercise a significant influence over the management of Cash Manager Limited. Any such proposed acquisition shall not proceed until (a) the Central Bank of Ireland has informed such proposed acquirer or acquirers that it approves such acquisition or (b) the period prescribed in Regulation 21 of the MiFID II Regulations has elapsed without the Central Bank of Ireland having given notice in writing that it opposes such acquisition. It is important in this regard to note that the validity as a matter of Irish law of affected transactions, if completed without prior notification to, or assessment by, the Central Bank of Ireland will not be recognized in Ireland. Corresponding provisions apply to the disposal of direct and indirect shareholdings in AerCap except that, in such case, no approval is required, but prior notice of the disposal must be given to the Central Bank of Ireland. Cash Manager Limited is required under the MiFID II Regulations to notify the Central Bank of Ireland of relevant acquisitions and/or disposals of which it becomes aware.
Issuance of ordinary shares
The General Meeting of Shareholders can resolve upon the issuance of ordinary shares or the granting of rights to subscribe for ordinary shares, but only upon a proposal by the Board of Directors specifying the price and further terms and conditions. The General Meeting of Shareholders may designate our Board of Directors as the authorized corporate body for this purpose. Such designation may be for any period of up to five years and must specify the maximum number of ordinary shares that may be issued.
At the AGM held in 2020, our shareholders resolved to authorize the Board of Directors, for a period of 18 months, to issue ordinary shares or grant rights to subscribe for ordinary shares
(i)  up to ten percent of the Company’s issued share capital; and
(ii)  up to an additional ten percent of the Company’s issued share capital, provided that the shares that may be issued and rights that may be granted pursuant to this second authorization may only be used for mergers and/or the acquisition of a business or a company.
These resolutions together authorize the Board of Directors to issue ordinary shares, and grant rights to subscribe for such shares, up to a maximum of 20% of the Company’s issued share capital, subject to the conditions described in these resolutions.
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Preemptive rights
Unless limited or excluded by the General Meeting of Shareholders or Board of Directors as described below, holders of ordinary shares have a pro rata preemptive right to subscribe for ordinary shares that we issue, except for ordinary shares issued for non-cash consideration (contribution in kind) or ordinary shares issued to our employees.
The General Meeting of Shareholders may limit or exclude preemptive rights and also designate our Board of Directors as the authorized corporate body for this purpose. At the AGM held in 2020, our shareholders resolved to authorize the Board of Directors to limit or exclude preemptive rights in respect of any issuance of shares or granting of rights to subscribe for shares pursuant to the authorizations described above in the paragraph “Issuance of ordinary shares”, which authorization is valid for a period of 18 months.
Repurchase of our ordinary shares
We may acquire our ordinary shares, subject to certain provisions of the laws of the Netherlands and of our articles of association, if the following conditions are met:
•the General Meeting of Shareholders has authorized our Board of Directors to acquire the ordinary shares, which authorization may be valid for no more than 18 months;
•our equity, after deduction of the price of acquisition, is not less than the sum of the paid-in and called-up portion of the share capital and the reserves that the laws of the Netherlands or our articles of association require us to maintain; and
•we would not hold after such purchase, or hold as pledgee, ordinary shares with an aggregate par value exceeding such part of our issued share capital as set by law from time to time.
At the AGM held in 2020, our shareholders resolved to authorize the Board of Directors for a period of 18 months (i) to repurchase ordinary shares up to ten percent of the Company’s issued share capital; and (ii) to repurchase ordinary shares up to an additional ten percent of the Company’s issued share capital, subject to the condition that the number of ordinary shares which the Company may at any time hold in its own capital will not exceed ten percent of the Company’s issued share capital, and certain other conditions described in these resolutions.
Capital reduction and cancellation
The General Meeting of Shareholders may reduce our issued share capital either by cancelling ordinary shares held in treasury or by amending our articles of association to reduce the par value of the ordinary shares. A resolution to reduce our capital requires the approval of at least an absolute majority of the votes cast and, if less than one half of the share capital is represented at a meeting at which a vote is taken, the approval of at least two-thirds of the votes cast.
At the AGM held in 2020, our shareholders resolved to cancel the Company’s ordinary shares that may be acquired under the repurchase authorizations described above or otherwise, subject to determination by our Board of Directors or our Chief Executive Officer, of the exact number of ordinary shares to be cancelled. During 2020, we cancelled 3,000,000 ordinary shares which were acquired through the share repurchase programs in accordance with the authorizations obtained from the Company’s shareholders.
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General Meetings of Shareholders
Our articles of association determine how our AGM and any extraordinary General Meeting of Shareholders are convoked. At least one AGM must be held every year. Shareholders can exercise their voting rights by submitting their proxy forms or equivalent means prior to a set date in accordance with the procedures indicated in the notice and agenda of the applicable general meeting of shareholders. Shareholders may exercise their meeting rights in person after notifying us prior to a set date and providing us with appropriate evidence of ownership of the shares and authority to vote prior to a set date in accordance with the procedures indicated in the notice and agenda of the applicable general meeting of shareholders.
The rights of shareholders may only be changed by amending our articles of association. A resolution to amend our articles of association is valid if the Board of Directors makes a proposal amending the articles of association and such proposal is adopted by a simple majority of votes cast.
The following resolutions require a two-thirds majority vote if less than half of the issued share capital is present or represented at the General Meeting of Shareholders:
•capital reduction;
•exclusion or restriction of preemptive rights, or designation of the Board of Directors as the authorized corporate body for this purpose; and
•legal merger or legal demerger within the meaning of Title 7 of Book 2 of the Dutch Civil Code.
If a proposal to amend the articles of association will be considered at the meeting, we will make available a copy of that proposal, in which the proposed amendments will be stated verbatim.
An agreement of AerCap to enter into (i) a statutory merger whereby AerCap is the acquiring entity; or (ii) a legal demerger, with certain limited exceptions, must be approved by the shareholders.
The AGM was held on April 22, 2020. The AGM adopted the 2019 annual accounts and voted for all other items which required a vote.
Voting rights
Each ordinary share represents the right to cast one vote at a General Meeting of Shareholders. All resolutions must be passed with an absolute majority of the votes validly cast, unless otherwise stated in the Articles of Association or under Dutch law. We are not allowed to exercise voting rights for ordinary shares we hold directly or indirectly.
Any major change in the identity or character of AerCap or its business must be approved by our General Meeting of Shareholders, including:
•the sale or transfer of substantially all our business or assets;
•the commencement or termination of certain major joint ventures and our participation as a general partner with full liability in a limited partnership (“commanditaire vennootschap”) or general partnership (“vennootschap onder firma”); and
•the acquisition or disposal by us of a participating interest in a company’s share capital, the value of which amounts to at least one third of the value of our assets.
Liquidation rights
If we are dissolved or wound up, the assets remaining after payment of our liabilities will be first applied to pay back the amounts paid up on the ordinary shares. Any remaining assets will be distributed among our shareholders, in proportion to the par value of their shareholdings. All distributions referred to in this paragraph shall be made in accordance with the relevant provisions of the laws of the Netherlands.




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Dutch statutory squeeze-out proceedings
If a person or a company or two or more group companies within the meaning of Article 2:24b of the Dutch Civil Code acting in concert hold 95% or more of a Dutch public limited liability company’s issued share capital by par value for their own account, the laws of the Netherlands permit that person or company or those group companies acting in concert to acquire the remaining ordinary shares in the company by initiating statutory squeeze out proceedings against the holders of the remaining shares. The price to be paid for such shares will be determined by the Enterprise Chamber of the Amsterdam Court of Appeal.
Choice of law and exclusive jurisdiction
Our articles of association provide that the legal relationship among or between us, any of our current or former directors, and any of our current or former holders of our shares and derivatives thereof, including but not limited to (i) actions under statute; (ii) actions under the articles of association, including actions for breach thereof; and (iii) actions in tort, shall be governed in each case exclusively by the laws of the Netherlands, unless such legal relationship does not pertain to or arise out of the capacities above. Any dispute, suit, claim, pre-trial action or other legal proceeding, including summary or injunctive proceedings, by and between those persons pertaining to or arising out of their capacities listed above shall be exclusively submitted to the courts of the Netherlands.
Adoption of annual accounts and discharge of management liability
Each year, our Board of Directors must prepare annual accounts within five months after the end of our financial year (subject to extension of that term by our General Meeting of Shareholders). The annual accounts must be made available for inspection by shareholders at our offices from the moment that our annual General Meeting of Shareholders is convened. The annual accounts must be accompanied by an auditor’s certificate, a report of the Board of Directors and certain other mandatory information. The shareholders shall appoint an accountant, as referred to in Article 393 of Book 2 of the Dutch Civil Code, to audit the annual accounts. The annual accounts are adopted by our shareholders.
The adoption of the annual accounts by our shareholders does not include the release of the members of our Board of Directors from liability for acts reflected in those documents. Any such release from liability requires a separate shareholders’ resolution.
Registrar and transfer agent
A register of holders of the ordinary shares will be maintained by Broadridge in the United States who also serves as our transfer agent. The telephone number of Broadridge is 1-800-733-1121.
Risk management and control framework
Our management is responsible for designing, implementing and operating an adequate functioning internal risk management and control framework. The purpose of this framework is to identify and manage the strategic, operational, financial and compliance risks to which we are exposed, to promote effectiveness and efficiency of our operations, to promote reliable financial reporting and to promote compliance with laws and regulations. Supervision is exercised by our Audit Committee, as described in “Item 6. Directors, Senior Management and Employees—Board Practices—Committees of the Board of Directors—Audit Committee.” Our internal risk management and control framework is based on the COSO framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (2013). The COSO framework aims to provide reasonable assurance regarding effectiveness and efficiency of an entity’s operations, reliability of financial reporting, prevention of fraud and compliance with laws and regulations.
Our internal risk management and control framework has the following key components:
Planning and control cycle
The planning and control cycle consists of an annual budget and business plan prepared by management and approved by our Board of Directors, quarterly forecasts, operational reviews and financial reporting.




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Risk management and internal controls
We have developed policies and procedures for all areas of our operations, both financial and non-financial, that constitutes a broad system of internal control. This system of internal control has been developed through a risk-based approach and enhanced with a view to achieving and maintaining full compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. Our system of internal control is embedded in our standard business practices and is validated through audits performed by our internal auditors and through management testing of Sarbanes-Oxley Act controls, which is performed with the assistance of external advisors. In addition, senior management personnel and finance managers of our main operating subsidiaries annually sign a detailed letter of representation with regard to financial reporting, internal controls and ethical principles. Employees working in our finance or accounting functions are subject to a separate Finance Code of Ethics.
Code of Conduct and Whistleblower Policy
Our Code of Conduct is applicable to all our employees, including the Chief Executive Officer and Chief Financial Officer. It is designed to promote honest and ethical conduct and timely and accurate disclosure in our periodic financial results. Our Whistleblower Policy provides for the reporting, if so wished on an anonymous basis, of alleged violations of the Code of Conduct, alleged irregularities of a financial nature by our employees, directors or other stakeholders, alleged violations of our compliance procedures and other alleged irregularities without any fear of reprisal against the individual that reports the violation or irregularity.
Compliance procedures
We have various procedures and programs in place designed to ensure compliance with relevant laws and regulations, including anti-insider trading procedures, anti-bribery procedures, anti-fraud procedures, economic sanctions and export control compliance procedures, anti-money laundering procedures, anti-trust procedures and protection of personal data procedures. Our compliance programs are maintained and supervised by the Chief Compliance Officer, and they include annual training in key compliance areas and annual certifications. The procedures are subject to regular audits by, or on behalf of, the internal audit function.
Internal auditors
We have an internal audit function in place to provide assurance to the Audit Committee, on behalf of the Board of Directors, and to AerCap’s executive officers, with respect to AerCap’s key processes. The internal audit function independently and objectively carries out audit assignments in accordance with the annual internal audit plan, as approved by the Audit Committee. The head of the internal audit function reports, in line with professional standards of the Institute of Internal Auditors, to the Audit Committee (functional reporting line) and to our Chief Executive Officer (administrative reporting line). The work of the internal audit department is fully endorsed by the Audit Committee and AerCap’s executive officers and is considered a valuable part of AerCap’s system of control and risk management.
Disclosure controls and procedures
The Disclosure Committee assists our Chief Executive Officer and Chief Financial Officer in overseeing our financial and non-financial disclosure activities and to ensure compliance with applicable disclosure requirements arising under U.S. and Dutch law and regulatory requirements. The Disclosure Committee obtains information for its recommendations from the operational and financial reviews, letters of representation which include a risk and internal controls self-assessment, input from the documentation and assessment of our internal controls over financial reporting and input from risk management activities during the year along with various business reports. The Disclosure Committee comprises various members of senior management.
External auditors
Our external auditor is responsible for auditing the financial statements. Following the recommendation by the Audit Committee and upon proposal by the Board of Directors, the General Meeting of Shareholders appoints each year the auditor to audit the financial statements of the current financial year. The external auditor reports to our Board of Directors and the Audit Committee of our Board of Directors. The external auditor is present at the meetings of the Audit Committee when our quarterly and annual results are discussed.
At the request of the Board of Directors and the Audit Committee, the Chief Financial Officer and the Internal Audit department review, in advance, each service to be provided by the auditor to identify any possible breaches of the auditor’s independence. The Audit Committee pre-approves every engagement of our external auditor. In accordance with applicable regulations, the partner of the external audit firm and senior engagement team members in charge of the audit activities are subject to rotation requirements.
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Material contracts
We have entered into several credit facilities and other financing arrangements to fund our acquisition of our aircraft. See Note 13—Debt to our Consolidated Financial Statements included in this annual report for more information regarding our credit facilities and financing arrangements.
Exchange controls
There are no limits under the laws of the Netherlands or in our articles of association on non-residents of the Netherlands holding or voting our ordinary shares. Currently, there are no exchange controls under the laws of the Netherlands on the conduct of our operations or affecting the remittance of dividends.
Taxation
AerCap Holdings N.V. is a Dutch incorporated company which is centrally managed and controlled from Ireland. It is tax resident in Ireland under Irish domestic law and as a result of the application of the double taxation treaty between Ireland and the Netherlands.
Irish tax considerations
The following is a general summary of certain Irish tax consequences applicable to both Irish tax resident and non-Irish residents as a result of the holding and disposal of ordinary shares (or other securities where the payments made on the securities are within the scope of DWT (as defined below)) where and while we are considered a resident of Ireland for the purposes of Irish tax. This summary is based on existing Irish law and our understanding of the practices of the Irish Revenue Commissioners as of the date of this annual report. Legislative, administrative or judicial changes may modify the tax consequences described below. The discussion below is included for general information purposes only.
Please note that this summary does not constitute tax advice and is intended only as a general guide. Furthermore, this information applies only to our shares that are held as capital assets and does not apply to all categories of shareholders, such as dealers in securities, trustees, insurance companies, collective investment schemes or shareholders who have, or who are deemed to have, acquired their shares by virtue of an office or employment.
This summary is not exhaustive and shareholders should consult their own tax advisors as to the tax consequences of acquiring, holding and disposing our ordinary shares in their particular circumstances.
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Dividend withholding tax
Irish dividend withholding tax (“DWT”), which is currently at a rate of 25%, will arise in respect of dividends or other distributions (including deemed distributions) that we pay unless an exemption applies. A deemed distribution for these purposes could include, among other things, a payment made on the redemption, repayment or purchase by a company of its own shares, except for such payments made by a quoted company in certain circumstances. Where DWT does arise in respect of dividends, the Company is responsible for deducting DWT at source and forwarding the relevant payment to the Irish Revenue Commissioners.
An exemption from DWT is available on dividend payments made to certain non-Irish tax resident shareholders (“Exempt Non-Resident Shareholders”). Exempt Non-Resident Shareholders must be resident in a country with which Ireland has a double tax treaty (a “Relevant Territory”), which includes the United States and member states of the EU, other than Ireland. Exempt Non-Resident Shareholders include:
•individual shareholders (that are not corporate shareholders) who are not tax resident in Ireland and who are resident for the purposes of tax in a Relevant Territory;
•corporate shareholders resident for the purposes of tax in a Relevant Territory and which are not controlled (directly or indirectly) by Irish tax residents;
•corporate shareholders that are not resident in Ireland for the purposes of tax, which are under the direct or indirect control of persons who are resident for the purposes of tax in a Relevant Territory and are not under the ultimate control of persons not resident in a Relevant Territory; or
•corporate shareholders, that are not resident for tax purposes in Ireland, the principal class of shares of which (or of its 75% parent or where wholly owned by two or more companies, each such company) is substantially and regularly traded on a stock exchange in Ireland, a recognized stock exchange in a Relevant Territory or on such other stock exchange approved by the Irish Minister for Finance (which includes the New York Stock Exchange),
and provided that, in all cases noted above (but subject to the exception in the paragraph below regarding “U.S. resident shareholders”), the Exempt Non-Resident Shareholder has provided a relevant DWT declaration, as prescribed by the Irish Revenue Commissioners, to his or her broker before the record date for the dividend, and the relevant information is further transmitted to the Company (in the case of shares held through the Depository Trust Company (“DTC”)) or to our transfer agent (in the case of shares held outside of the DTC).
U.S. resident shareholders
A simplified DWT exemption procedure exists for U.S. resident shareholders who hold their shares in the Company through the DTC, pursuant to a confirmation obtained from the Irish Revenue Commissioners. The simplified procedures provide that such shareholders are not required to complete the Irish Revenue Commissioners’ DWT declaration form but can still avail of the exemption from DWT provided the address of the beneficial owner of the shares in the records of the broker is in the United States. We strongly recommend that such shareholders ensure that their information has been properly recorded by their brokers. In order for this simplified procedure to apply, the dividends must be paid via a “qualifying intermediary” as discussed further below. The confirmation from the Irish Revenue Commissioners is operative for a period of 5 years up to the end of 2020 and a request for renewal of the confirmation has been made.
Dividends paid in respect of shares (and payments on other securities subject to DWT) in an Irish resident company that are owned by residents of the United States and held outside of the DTC should not be subject to DWT provided that the shareholder has completed the relevant DWT declaration form and this declaration form remains valid. Such shareholders must provide the relevant DWT declaration form to our transfer agent at least seven business days before the record date for the first dividend payment to which they are entitled.
If a U.S. resident shareholder receives a dividend subject to DWT, that shareholder should generally be able to make an application for a refund of DWT from the Irish Revenue Commissioners, subject to certain time limits.



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Distributions to a qualifying intermediary
A distribution made by the Company to a “qualifying intermediary” (for example a bank or stockbroking firm) approved by the Irish Revenue Commissioners is exempt from DWT if the ultimate beneficial owner is an Exempt Non-Resident Shareholder. In such instances, the qualifying intermediary is required to identify the person who is beneficially entitled to the distribution and to ensure that the prescribed declarations are in place in advance of the dividend payment, or in the case of U.S. residents which hold our shares (or other relevant securities) through the DTC, that the address of the beneficial owner of the shares (or other securities) is in the United States. The Company must apply DWT to a distribution unless it has been notified by the qualifying intermediary that the distribution to be received by the qualifying intermediary is for the benefit of an Exempt Non-Resident Shareholder.
Prior to paying any dividend, the Company intends to put in place an agreement with an entity which is recognized by the Irish Revenue Commissioners as a “qualifying intermediary,” such that any dividends paid by the Company will be paid via a qualifying intermediary.
Other non-resident persons
Shareholders that do not fall within one of the categories mentioned above may fall within other exemptions from DWT. If a shareholder is exempt from DWT but receives a dividend subject to DWT, that shareholder may be able to claim a refund of DWT from the Irish Revenue Commissioners subject to certain time limits.
Irish resident shareholders
Irish tax resident or ordinarily resident individual shareholders will generally be subject to DWT in respect of dividends or distributions received from an Irish resident company (with some limited exemptions). Irish tax resident individual shareholders will be allowed a tax credit for the amount of DWT suffered on the dividend against their Irish income tax charge on the dividend income. Irish tax resident corporate shareholders will generally be entitled to claim an exemption from DWT.
Irish tax resident or ordinarily resident shareholders that are entitled to receive dividends without DWT must complete the relevant DWT declaration form, as prescribed by the Irish Revenue Commissioners, and provide the declaration form to their brokers before the record date for the first dividend to which they are entitled (in the case of shares held through the DTC), or to our transfer agent at least seven business days before such record date (in the case of shares held outside of the DTC).
Irish tax resident or ordinarily resident individual shareholders who are not entitled to an exemption from DWT and who are subject to Irish tax should consult their own tax adviser.
The Irish Revenue Commissioners held a public consultation in late 2019 regarding the administration of DWT. The aim of this consultation was to move DWT administration to real-time reporting and to introduce variable rates of DWT for Irish tax resident individuals by reference to their specific circumstances. However, on May 19, 2020, the Irish Revenue Commissioners announced the decision to postpone the DWT real-time reporting changes which had been originally planned for January 2021. The Irish Revenue Commissioners have not provided a specific date for the launch of the DWT real-time reporting system, and have announced that future plans will be the subject of further consultation with stakeholders.
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Irish income tax on dividends
Non-Irish resident shareholders
A shareholder who is not resident or ordinarily resident for tax purposes in Ireland and who is entitled to an exemption from DWT, generally has no liability to Irish income tax on a dividend from an Irish resident company unless that shareholder holds the shares through a branch or agency which carries on a trade in Ireland.
A shareholder who is not resident or ordinarily resident for tax purposes in Ireland and who is not entitled to an exemption from DWT, generally has no additional liability to Irish income tax unless that shareholder holds the shares through a branch or agency which carries on a trade in Ireland. The shareholder’s liability to Irish tax on the dividend is effectively limited to the amount of DWT already deducted by the Company.
Irish resident shareholders
Irish tax resident or ordinarily resident individual shareholders may be subject to Irish income tax and income charges such as pay related social insurance (“PRSI”) and the Universal Social Charge (“USC”) on the gross amount of any dividends received from the Company, with a credit allowed for any DWT suffered on the dividend. Such shareholders should consult their own tax adviser. Irish tax resident corporate shareholders should generally not be subject to Irish corporation tax on dividends from the Company.
Irish stamp duty
Irish stamp duty will generally not be payable on transactions for cash in the Company’s shares, unless the transfer of the shares is related to either immoveable property situated in Ireland or any interest in such property or to shares or marketable securities of an Irish incorporated company. In such cases a 1% stamp duty charge will arise for the acquirer based on the transfer consideration for the shares.
Irish tax on chargeable gains
Non-residents of Ireland
A disposal of our shares by a shareholder who is not resident or ordinarily resident for tax purposes in Ireland should not give rise to Irish tax on any chargeable gain realized on such disposal unless such shares are used, held or acquired for the purposes of a trade carried on by such shareholder through a branch or agency in Ireland.
Irish resident individuals/companies
A disposal of our shares by an Irish tax resident or ordinarily resident shareholder may, depending on the circumstances (including the availability of exemptions and reliefs), give rise to a chargeable gain or allowable loss for that shareholder. Any such gain or loss must be calculated in euro. The rate of capital gains tax in Ireland is currently 33%. Depending on the individual circumstances, unutilized capital losses from other sources may be available to reduce gains realized on the disposal of our shares.
A holder of our shares who is an Irish tax resident individual and becomes temporarily non-resident in Ireland may, under Irish anti-avoidance legislation, be liable to Irish tax on any chargeable gain realized on a disposal during the period in which such individual is non-resident.
Irish capital acquisitions tax
On a gift or inheritance of our shares, Irish capital acquisitions tax (“CAT”), will arise where either the disponer and/or the recipient is tax resident or ordinary resident in Ireland. Special rules with regard to residence apply where an individual is not domiciled in Ireland. Where both the disponer and the recipient are not Irish tax resident or ordinary resident, Irish CAT may still arise on a gift or inheritance of shares in the Company, if they are deemed to be situated in Ireland at the time. The current rate of Irish CAT for gifts and inheritances is 33% and there are various thresholds which apply before CAT becomes applicable.
The estate tax convention between Ireland and the United States generally provides for Irish CAT paid on inheritances in Ireland to be credited, in whole or in part, against tax payable in the United States, in the case where an inheritance of shares is subject to both Irish CAT and U.S. Federal Estate Tax. The estate tax convention does not apply to Irish CAT paid on gifts.
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U.S. tax considerations
Subject to the limitations and qualifications stated herein, this discussion sets forth the material U.S. federal income tax consequences of the purchase, ownership and disposition of the ordinary shares. The discussion of the holders’ tax consequences addresses only those persons that hold those ordinary shares as capital assets for U.S. federal income tax purposes and does not address the tax consequences to any special class of holder, including without limitation, holders of (directly, indirectly or constructively) 10% or more of our ordinary shares (as measured by vote or value), dealers in securities or currencies, banks, tax-exempt organizations, life insurance companies, financial institutions, broker dealers, regulated investment companies, real estate investment trusts, traders in securities that elect the mark-to-market method of accounting for their securities holdings, persons that hold securities that are a hedge or that are hedged against currency or interest rate risks or that are part of a straddle, conversion or “integrated” transaction, certain U.S. expatriates, partnerships or other entities classified as partnerships for U.S. federal income tax purposes, persons required to accelerate the recognition of any item of gross income with respect to the ordinary shares as a result of such income being recognized on an applicable financing statement and U.S. Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar. This discussion does not address the effect of the U.S. federal alternative minimum tax or any state, local or foreign tax laws on a holder of ordinary shares. The discussion is based on the Code, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as currently in effect and all subject to change at any time, possibly with retroactive effect.
For purposes of this discussion, a “U.S. Holder” means a beneficial owner of ordinary shares that is for U.S. federal income tax purposes an individual citizen or resident of the U.S.; a U.S. corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; a trust if the trust (i) is subject to the primary supervision of a U.S. court and one or more U.S. persons are able to control all substantial decisions of the trust; or (ii) has elected to be treated as a U.S. person; or an estate the income of which is subject to U.S. federal income tax regardless of its source. A “non-U.S. Holder” is a beneficial owner of our ordinary shares that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.
If an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds the shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and activities of the partnership. Partnerships holding shares and partners therein should consult their own tax advisors as to the particular U.S. federal income tax consequences of acquiring, owning and disposing of the shares.
Cash dividends and other distributions
A U.S. Holder of ordinary shares generally will be required to treat distributions received with respect to such ordinary shares (including any amounts withheld) as dividend income to the extent of AerCap’s current or accumulated earnings and profits (computed using U.S. federal income tax principles), with the excess treated as a non-taxable return of capital to the extent of the holder’s adjusted tax basis in the ordinary shares and, thereafter, as capital gain, subject to the PFIC rules discussed below. Dividends paid to a U.S. Holder that is a corporation are not eligible for the dividends received deduction generally available to corporations. Current tax law provides for a maximum 20% U.S. tax rate on the dividend income of a non-corporate U.S. Holder with respect to dividends paid by a domestic corporation or “qualified foreign corporation” if certain holding period requirements are met. A qualified foreign corporation generally includes a foreign corporation (other than a PFIC) if (i) its ordinary shares are readily tradable on an established securities market in the United States; or (ii) it is eligible for benefits under a comprehensive U.S. income tax treaty. The ordinary shares are expected to be readily traded on the NYSE. As a result, assuming we are not treated as a PFIC, we should be treated as a qualified foreign corporation with respect to dividends paid on our ordinary shares and, therefore, dividends paid to a non-corporate U.S. Holder with respect to ordinary shares for which the requisite holding period is satisfied should be taxed at a maximum federal tax rate of 20%.
Distributions to U.S. Holders of additional ordinary shares or preemptive rights with respect to ordinary shares that are made as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax, but in other circumstances may constitute a taxable dividend.
Distributions paid in a currency other than U.S. dollars will be included in a U.S. Holder’s gross income in a U.S. dollar amount based on the spot exchange rate in effect on the date of actual or constructive receipt whether or not the payment is converted into U.S. dollars at that time. The U.S. Holder will have a tax basis in such currency equal to such U.S. dollar amount, and any gain or loss recognized upon a subsequent sale or conversion of the foreign currency for a different U.S. dollar amount will be U.S. source ordinary income or loss. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.
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Subject to applicable limitations that may vary depending upon the circumstances, foreign taxes withheld from dividends on ordinary shares, to the extent the taxes do not exceed those taxes that would have been withheld had the holder been eligible for and actually claimed the benefits of any reduction in such taxes under applicable law or tax treaty, will be creditable against the U.S. Holder’s federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. The rules governing foreign tax credits are complex and, therefore, prospective purchasers of ordinary shares should consult their own tax advisors regarding the availability of foreign tax credits in their particular circumstances. Instead of claiming a credit, a U.S. Holder may, at his election, deduct such otherwise creditable foreign taxes in computing his taxable income, subject to generally applicable limitations under U.S. law.
A non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on dividends paid with respect to ordinary shares unless such income is effectively connected with the conduct by the non-U.S. Holder of a trade or business within the United States.
Sale or disposition of ordinary shares
A U.S. Holder generally will recognize gain or loss on the taxable sale or exchange of the ordinary shares in an amount equal to the difference between the U.S. dollar amount realized on such sale or exchange (determined in the case of shares sold or exchanged for currencies other than U.S. dollars by reference to the spot exchange rate in effect on the date of the sale or exchange or, if the ordinary shares sold or exchanged are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual basis taxpayer, the spot exchange rate in effect on the settlement date) and the U.S. Holder’s adjusted tax basis in the ordinary shares determined in U.S. dollars. The initial tax basis of the ordinary shares to a U.S. Holder will be the U.S. Holder’s U.S. dollar purchase price for the shares (determined by reference to the spot exchange rate in effect on the date of the purchase, or if the shares purchased are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual basis taxpayer, the spot exchange rate in effect on the settlement date). Assuming that AerCap is not a PFIC and has not been treated as a PFIC during your holding period for our ordinary shares, such gain or loss will be capital gain or loss and will be long-term gain or loss if the ordinary shares have been held for more than one year. Under current law, the maximum long-term capital gain rate for an individual U.S. Holder is 20%. The deductibility of capital losses is subject to limitations. Capital gain or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.
A non-U.S. Holder of ordinary shares will not be subject to United States income or withholding tax on gain from the sale or other disposition of ordinary shares unless (i) such gain is effectively connected with the conduct of a trade or business within the United States; or (ii) the non-U.S. Holder is an individual who is present in the United States for at least 183 days during the taxable year of the disposition and certain other conditions are met.
Potential application of PFIC provisions
We do not believe we will be classified as a PFIC for 2020. We cannot yet make a determination as to whether we will be classified as a PFIC for 2021 or subsequent years. In general, a non-U.S. corporation will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules, either (i) at least 75% of its gross income is “passive income;” or (ii) at least 50% of the average value of its gross assets is attributable to assets that produce “passive income” or are held for the production of “passive income.” Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities, foreign currency and securities transactions. Certain exceptions are provided, however, for rental income derived in the active conduct of a business.
The determination as to whether a foreign corporation is a PFIC is a complex determination that is based on all of the relevant facts and circumstances and that depends on the classification of various assets and income under applicable rules. It is unclear how some of these rules apply to us. Further, this determination must be tested annually at the end of the taxable year and, while we intend to conduct our affairs in a manner that will reduce the likelihood of our becoming a PFIC, our circumstances may change or our business plan may result in our engaging in activities that could cause us to become a PFIC. Accordingly, there can be no assurance that we will not be classified as a PFIC for the current taxable year or any future taxable year.
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If we are or become a PFIC in a taxable year in which we pay a dividend or the prior taxable year, the dividend rate discussed above with respect to dividends paid to non-corporate holders would not apply. If we are a PFIC, subject to the discussion of the mark-to-market election and the qualified electing fund election below, a U.S. Holder of ordinary shares will be subject to additional tax and an interest charge on “excess distributions” received with respect to the ordinary shares or gains realized on the disposition of such ordinary shares. Such a U.S. Holder will have an excess distribution if distributions during any tax year exceed 125% of the average amount received during the three preceding tax years (or, if shorter, the U.S. Holder’s holding period). A U.S. Holder may realize gain on an ordinary share not only through a sale or other disposition, but also by pledging the ordinary share as security for a loan or entering into certain constructive disposition transactions. To compute the tax on an excess distribution or any gain, (i) the excess distribution or gain is allocated ratably over the U.S. Holder’s holding period; (ii) the amount allocated to the current tax year and amounts allocated to any year before the first year in which we are a PFIC is taxed as ordinary income in the current tax year; and (iii) the amount allocated to each previous tax year (other than any year before the first year in which we are a PFIC) is taxed at the highest applicable marginal rate in effect for that year and an interest charge is imposed to recover the deemed benefit from the deferred payment of the tax. These rules effectively prevent a U.S. Holder from treating the gain realized on the disposition of an ordinary share as capital gain.
If we are a PFIC and our ordinary shares are “regularly traded” on a “qualified exchange,” a U.S. Holder may make a mark-to-market election, which may mitigate the adverse tax consequences resulting from AerCap’s PFIC status. The ordinary shares will be treated as “regularly traded” in any calendar year during which more than a de minimis quantity of ordinary shares are traded on a qualified exchange on at least 15 days during each calendar quarter. The NYSE, on which the ordinary shares are expected to be regularly traded, is a qualified exchange for U.S. federal income tax purposes.
If a U.S. Holder makes the mark-to-market election, for each year in which we are a PFIC the holder generally will include as ordinary income the excess, if any, of the fair market value of the ordinary shares at the end of the taxable year over their adjusted basis, and will be permitted an ordinary loss in respect of the excess, if any, of the adjusted basis of the ordinary shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). If a U.S. Holder makes the election, his basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. Any gain recognized on the sale or other disposition of ordinary shares, for which the mark-to-market election has been made, will generally be treated as ordinary income.
Alternatively, if we become a PFIC in any year, a U.S. Holder of ordinary shares may wish to avoid the adverse tax consequences resulting from our PFIC status by making a qualified electing fund (“QEF”) election with respect to our ordinary shares in such year. If a U.S. Holder makes a QEF election, the holder will be required to include in gross income each year (i) as ordinary income, its pro rata share of our earnings and profits in excess of net capital gains; and (ii) as long-term capital gains, its pro rata share of our net capital gains, in each case, whether or not cash distributions are actually made. The amounts recognized by a U.S. Holder making a QEF election generally are treated as income from sources outside the U.S. If, however, U.S. Holders hold at least half of the ordinary shares, a percentage of our income equal to the proportion of our income that we receive from U.S. sources will be U.S. source income for the U.S. Holders of ordinary shares. Because a U.S. Holder of shares in a PFIC that makes a QEF election is taxed currently on its pro rata share of our income, the amounts recognized will not be subject to tax when they are distributed to the U.S. Holder. An electing U.S. Holder’s basis in the ordinary shares will be increased by any amounts included in income currently as described above and decreased by any amounts not subjected to tax at the time of distribution. If we are or become a PFIC, a U.S. Holder would make a QEF election in respect of its ordinary shares by attaching a properly completed IRS Form 8621 in respect of such shares to the holder’s timely filed U.S. federal income tax return. For any taxable year that we determine that we are a PFIC, we will (i) provide notice of our status as a PFIC as soon as practicable following such taxable year; and (ii) comply with all reporting requirements necessary for U.S. Holders to make QEF elections, including providing to shareholders upon request the information necessary for such an election.
Although a U.S. Holder normally is not permitted to make a retroactive QEF election, a retroactive election (a “retroactive QEF election”) may be made for a taxable year of the U.S. Holder (the “retroactive election year”) if the U.S. Holder (i) reasonably believed that, as of the date the QEF election was due, the foreign corporation was not a PFIC for its taxable year that ended during the retroactive election year; and (ii) to the extent provided for in applicable Treasury Regulations, filed a protective statement with respect to the foreign corporation, applicable to the retroactive election year, in which the U.S. Holder described the basis for its reasonable belief and extended the period of limitation on the assessment of taxes for all taxable years of the shareholder to which the protective statement applies. If required to be filed to preserve the U.S. Holder’s ability to make a retroactive QEF election, the protective statement must be filed by the due date of the investor’s return (including extensions) for the first taxable year to which the statement is to apply. U.S. Holders should consult their own tax advisors regarding the advisability of filing a protective statement.
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As discussed above, if we are a PFIC, a U.S. Holder of ordinary shares that makes a QEF election (including a proper retroactive QEF election) will be required to include in income currently its pro rata share of our earnings and profits whether or not we actually distribute earnings. The use of earnings to fund reserves or pay down debt or to fund other investments could result in a U.S. Holder of ordinary shares recognizing income in excess of amounts it actually receives. In addition, our income from an investment for U.S. federal income tax purposes may exceed the amount we actually receive. If we are a PFIC and a U.S. Holder makes a valid QEF election in respect of its ordinary shares, such holder may be able to elect to defer payment, subject to an interest charge for the deferral period, of the tax on income recognized on account of the QEF election. Prospective purchasers of ordinary shares should consult their own tax advisors about the advisability of making a QEF election, protective QEF election and deferred payment election.
Special rules apply to determine the foreign tax credit with respect to withholding taxes imposed on distributions on shares in a PFIC. If a U.S. Holder owns ordinary shares during any year in which we are a PFIC, such holder must file IRS Form 8621.
We urge prospective purchasers of ordinary shares to consult their own tax advisors concerning the tax considerations relevant to an investment in a PFIC, including the availability and consequences of making the mark-to-market election and QEF election discussed above.
Additional tax on net investment income
Certain U.S. Holders that are individuals, trusts or estates may be subject to a 3.8% tax, in addition to otherwise applicable U.S. federal income tax, on the lesser of (i) the U.S. Holder’s “net investment income” (or undistributed “net investment income,” in the case of a trust or estate) for the relevant taxable year; and (ii) the excess of the U.S. Holder’s modified adjusted gross income (or adjusted gross income, in the case of a trust or estate) for the relevant taxable year above a certain threshold (which in the case of an individual ranges from $125,000 to $250,000, depending on the individual’s circumstances). A U.S. Holder’s “net investment income” generally includes, among other things, dividend income on and capital gain from the disposition of shares, subject to certain exceptions. If you are a U.S. Holder that is an individual, trust or estate, you should consult their own tax advisors regarding the applicability of this tax to the ordinary shares.
Information reporting and backup withholding
Information reporting to the Internal Revenue Service (“IRS”) generally will be required with respect to payments on the ordinary shares and proceeds of the sale of the ordinary shares paid to holders that are U.S. taxpayers, other than certain corporations and other exempt recipients. A 24% “backup” withholding tax may apply to those payments if such a holder fails to provide a taxpayer identification number to the paying agent and to certify that no loss of exemption from backup withholding has occurred. Holders that are not subject to U.S. taxation may be required to comply with applicable certification procedures to establish that they are not U.S. taxpayers in order to avoid the application of such information reporting requirements and backup withholding. The amounts withheld under the backup withholding rules are not an additional tax and may be refunded, or credited against the holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.
The above discussion is a general summary. It does not cover all tax matters that may be of importance to particular investors. All prospective investors are strongly urged to consult their own tax advisors about the tax consequences of an investment in our ordinary shares.
Dividends
Dividends may in principle only be paid out of profit as shown in the adopted annual accounts. In accordance with the articles of association and Book 2 of the Dutch Civil Code, we may only declare dividends insofar as our shareholders’ equity exceeds the amount of the paid up and called portion of the issued share capital plus the reserves that must be maintained in accordance with the provisions of the laws of the Netherlands or our articles of association. We may not make any distribution of profits on ordinary shares that we hold and have not done so in the past. Our Board of Directors determines whether and how much of the profits it will reserve. Any remaining profits shall be distributed to the shareholders pro rata to the number of shares held by each shareholder.

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All calculations to determine the amounts available for dividends will be based on our annual Dutch GAAP statutory accounts, which may be different from our Consolidated Financial Statements under U.S. GAAP, such as those included in this annual report. Our statutory accounts have to date been prepared, and will continue to be prepared, under Dutch GAAP and are deposited with the Commercial Register of the Dutch Trade Register. Our net income attributable to equity holders of AerCap Holdings N.V. for the year ended December 31, 2019 and our total AerCap Holdings N.V. shareholders’ equity as of December 31, 2019 as set forth in our annual statutory accounts were $1,134.5 million and $8,788.1 million, respectively. We are dependent on dividends or other advances from our operating subsidiaries to fund any dividends we may pay on our ordinary shares.
Documents on display
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. You can review our SEC filings, including this annual report, by accessing the SEC’s Internet website at www.sec.gov. Our website is located at www.aercap.com. Information contained on our website does not constitute a part of this annual report. In addition, you may inspect material we file at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
Item 11.    Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk exposure is interest rate risk associated with short- and long-term borrowings bearing variable interest rates and lease payments under leases tied to floating interest rates. To manage this interest rate exposure, from time to time, we enter into interest rate swap and cap agreements. We are also exposed to foreign currency risk, which can adversely affect our operating profits. To manage this risk, from time to time, we enter into forward exchange contracts.
The following discussion should be read in conjunction with Note 10—Derivative financial instruments and Note 13—Debt to our Consolidated Financial Statements included in this annual report, which provide further information on our debt and derivative financial instruments.
Interest rate risk
Interest rate risk is the exposure to changes in the level of interest rates and the spread between different interest rates. Interest rate risk is highly sensitive to many factors, including government monetary policies, global economic factors and other factors beyond our control.
We enter into leases with rents that are based on fixed and variable interest rates, and we fund our operations primarily with a mixture of fixed and floating rate debt. Interest rate exposure arises when there is a mismatch between terms of the associated debt and interest earning assets, primarily between floating rate debt and fixed rate leases. We manage this exposure primarily through the use of interest rate caps and interest rate swaps using a cash flow-based risk management model. This model takes the expected cash flows generated by our assets and liabilities and then calculates by how much the value of these cash flows will change for a given movement in interest rates.
The principal amount of our outstanding floating rate debt was approximately $8.4 billion, or approximately 29% of the total principal amount of our outstanding indebtedness as of December 31, 2020. If interest rates were to increase by 1%, we would expect a decrease in pre-tax income of approximately $15 million per year. This pre-tax income decrease would include an increase in interest expense, partially offset by benefits of interest rate derivatives currently in effect, leases that are based on variable interest rates and interest earning cash balances. A decrease in interest rates would result in an increase in pre-tax income. This pre-tax income increase would include a decrease in interest expense, partially offset by a decrease in the interest revenue and lease revenue. This sensitivity analysis is limited by several factors, and should not be viewed as a forecast.

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The following tables present the average notional amounts and weighted average interest rates which are contracted for the specified year for our derivative financial instruments that are sensitive to changes in interest rates, including our interest rate caps and swaps, as of December 31, 2020. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. Under our interest rate caps, we will receive the excess, if any, of LIBOR, reset monthly or quarterly on an actual/360 adjusted basis, over the strike rate of the relevant cap. For our interest rate swaps, pay rates are based on the fixed rate which we are contracted to pay to our swap counterparty.
2021 2022 2023 2024 2025 Thereafter Fair value
  (U.S. Dollars in millions)
Interest rate caps
Average notional amounts $ 3,305.7  $ 2,784.1  $ 1,900.4  $ 1,185.0  $ 247.0  $ 75.0  $ 3.3 
Weighted average strike rate 1.9  % 1.8  % 1.9  % 1.0  % 1.1  % 1.5  %

2021 2022 2023 2024 2025 Thereafter Fair value
  (U.S. Dollars in millions)
Interest rate swaps
Average notional amounts $ 3,406.0  $ 2,453.1  $ 694.3  $ —  $ —  $ —  $ (167.3)
Weighted average pay rate 2.6  % 2.8  % 3.0  % —  —  — 
The variable benchmark interest rates associated with these instruments ranged from one- to six-month U.S. dollar LIBOR.
Our Board of Directors is responsible for reviewing our overall interest rate management policies. Our counterparty risk is monitored on an ongoing basis, but is mitigated by the fact that the majority of our interest rate derivative counterparties are required to collateralize in the event of their downgrade by the rating agencies below a certain level.
Foreign currency risk and foreign operations
Our functional currency is U.S. dollars. Foreign exchange risk arises from our and our lessees’ operations in multiple jurisdictions. All of our aircraft purchase agreements are negotiated in U.S. dollars, we currently receive substantially all of our revenue in U.S. dollars and we pay our expenses primarily in U.S. dollars. We currently have a limited number of leases denominated in foreign currencies, maintain part of our cash in foreign currencies, pay taxes in foreign currencies, and incur some of our expenses in foreign currencies, primarily the euro. A decrease in the U.S. dollar in relation to foreign currencies increases our lease revenue received from foreign currency denominated leases and our expenses paid in foreign currencies. An increase in the U.S. dollar in relation to foreign currencies decreases our lease revenue received from foreign currency denominated leases and our expenses paid in foreign currencies. Because we currently receive most of our revenues in U.S. dollars and pay most of our expenses in U.S. dollars, a change in foreign exchange rates would not have a material impact on our results of operations or cash flows. We do not have any restrictions or repatriation issues associated with our foreign cash accounts.
Inflation
Inflation generally affects our lease revenue and costs, including selling, general and administrative expenses and other expenses. We do not believe that our financial results have been, or will be in the near future, materially and adversely affected by inflation.
Item 12.    Description of Securities Other than Equity Securities
Not applicable.
78

PART II
Item 13.    Defaults, Dividend Arrearages and Delinquencies
None.
Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds
Not applicable.
Item 15.    Controls and Procedures
Disclosure controls and procedures
Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in this report is recorded, processed, summarized and reported on a timely basis. Our management and the members of our Disclosure Committee, has evaluated, as of December 31, 2020, our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2020, our disclosure controls and procedures are effective. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to AerCap’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2020. The assessment was based on criteria established in the framework Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in 2013. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2020.
Attestation report of the registered public accounting firm
PricewaterhouseCoopers, the independent registered public accounting firm that audited our 2020 Consolidated Financial Statements included in this annual report, audited the effectiveness of our internal controls over financial reporting as of December 31, 2020 under the standards of the Public Company Accounting Oversight Board (United States). Their audit report may be found on page F-2.
Changes in internal control over financial reporting
There were no changes in AerCap’s internal controls over financial reporting during the year of 2020 that materially affected, or were reasonably likely to materially affect, the internal controls over financial reporting.
Item 16A.    Audit Committee Financial Expert
Our Board of Directors has determined that James (Jim) Lawrence and Julian (Brad) Branch are “audit committee financial experts,” as that term is defined by SEC rules. All members of the Audit Committee are “independent,” as that term is defined under applicable NYSE listing standards.
79

Item 16B.    Code of Ethics
Our Board of Directors has adopted our Code of Conduct, a code that applies to the members of our Board of Directors, including its Chairman, our officers and employees. This code is publicly available on our website at www.aercap.com.
Item 16C.    Principal Accountant Fees and Services
Our auditors charged the following fees for professional services rendered for the years ended December 31, 2020 and 2019:
Year Ended December 31,
2020 2019
(U.S. Dollars in thousands)
Audit fees $ 5,931  $ 5,530 
Tax fees 542  523 
All other fees 3  3 
Total $ 6,476  $ 6,056 
Audit Fees
Audit fees are defined as the standard audit work that needs to be performed each year in order to issue opinions on our consolidated financial statements and to issue reports on our local statutory financial statements. Also included are services that can only be provided by our auditor, such as auditing of non-recurring transactions and implementation of new accounting policies, reviews of quarterly financial results, consents and comfort letters and any other audit services required for SEC or other regulatory filings.
Tax Fees
Tax fees relate to the aggregated fees for services rendered on tax compliance.
All Other Fees
All other fees relate to licensing fees for accounting research software.
Policy on Pre-Approval of Audit and Non-Audit Services of Independent Auditors
The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by our auditor. These services may include audit services, audit related services, tax services and other services, as described above. Pre-approval is detailed as to the particular service or categories of services, and is subject to a specific budget. Our management and our auditor report to the Audit Committee regarding the extent of services provided in accordance with this pre-approval and the fees for the services performed to date on an annual basis. The Audit Committee may also pre-approve additional services on a case-by-case basis. All tax fees were approved by the Audit Committee.
Item 16D.    Exemptions from the Listing Standards for Audit Committees
Not applicable.
80

Item 16E.    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table presents repurchases of our ordinary shares made by us during the year ended December 31, 2020:
Number of ordinary shares purchased Average price paid per ordinary share Total number of ordinary shares purchased as part of our publicly announced programs Maximum dollar value of ordinary shares that may yet be purchased under the programs
(U.S. Dollars in millions) (a)
January 2020 305,012  $ 58.30  305,012  $ 357.5 
February 2020 1,162,557  58.11  1,162,557  290.0 
March 2020 662,940  48.22  662,940  258.0  (b)
Total 2,130,509  $ 55.06  2,130,509  $ — 

(a)For further details on our share repurchase programs, please refer to Note 16—Equity.
(b)Share repurchase programs expired on June 30, 2020.
Item 16F.    Change in Registrant’s Certifying Accountant
Not applicable.
81

Item 16G.    Corporate Governance
The NYSE requires U.S. domestic entities with shares listed on the exchange to comply with its corporate governance standards. As we are a foreign private issuer, however, the NYSE only requires us to comply with certain NYSE rules relating to audit committees and periodic certifications to the NYSE as long as we comply with home country corporate governance standards (in our case, Dutch corporate governance standards). The NYSE requires that we disclose to investors any significant ways in which our corporate governance practices differ from those followed by U.S. domestic companies under NYSE requirements.
Among these differences, shareholder approval is required by the NYSE prior to the issuance of ordinary shares:
•to a director, officer or substantial security holder of the Company (or their affiliates or entities in which they have a substantial interest) in excess of one percent of either the number of ordinary shares or the voting power outstanding before the issuance, with certain exceptions;
•that will have voting power or number equal to or in excess of 20% of either the voting power or the number of shares, respectively, outstanding before the issuance, with certain exceptions; or
•that will result in a change of control of the issuer.
Under Dutch rules, shareholders can delegate authority to issue ordinary shares to the Board of Directors at the AGM. In the past, our shareholders have delegated authority to issue ordinary shares to our Board at our AGM.
In some situations, NYSE rules are more stringent, and in others the Dutch rules are. Other significant differences include:
•NYSE rules require shareholder approval for changes to equity compensation plans, but under Dutch rules, shareholder approval is only required for changes to equity compensation plans for members of the Board of Directors;
•under Dutch corporate governance rules, the audit and remuneration committees may not be chaired by the Chairman of the Board;
•under Dutch rules, auditors must be appointed by the general meeting of shareholders, but NYSE rules require only that they be appointed by the audit committee;
•both NYSE and Dutch rules require that a majority of the Board of Directors be independent, but the definition of independence under each set of rules is not identical. For example, Dutch rules require a longer “look-back” period for former directors; and
•Dutch rules permit deviation from the rules if the deviations are explained in accordance with the rules, but NYSE rules do not allow such deviations.
Item 16H.    Mine Safety Disclosure
Not applicable.
82

PART III
Item 17.    Financial Statements
Not applicable.
Item 18.    Financial Statements
Please refer to pages F-1 through F-60 of this annual report.
Item 19.    Exhibits
We have filed the following documents as exhibits to this annual report:
Exhibit
Number 		Description of Exhibit
1.1 
2.1 
2.2 
2.3 
Deed of Amendment, dated as of April 9, 2014, relating to the Amended and Restated Facility Agreement, dated as of December 14, 2012, among the Banks and Financial Institutions named therein as ECA Lenders, Crédit Agricole Corporate and Investment Bank, as ECA Agent, National Agent, and Security Trustee, Citibank International PLC, as ECA Agent and National Agent, Jetstream Aircraft Leasing Limited, as Principal Borrower, ALS 3 Limited and Airstream Aircraft Leasing Limited, as Borrowers, AerCap Ireland Limited and AerCap A330 Holdings Limited, as Principal AerCap Obligors, the companies named there in as Lessees and Lessee Parents, Citibank, N.A., as Administrative Agent, and AerCap Holdings, N.V. (filed as an exhibit to our Form 20-F for the year ended December 31, 2014 and incorporated herein by reference)
2.4 
2.5 
2.6 
2.7 
2.8 
2.9 
2.10 
83

Exhibit
Number 		Description of Exhibit
2.11 
2.12 
2.13 
2.14 
2.15 
2.16 
2.17 
2.18 
2.19 
2.20 
2.21 
2.22 
2.23 
2.24 
84

Exhibit
Number 		Description of Exhibit
2.25 
2.26 
2.27 
2.28 
2.29 
2.30 
2.31 
2.32 
2.33 
2.34 
2.35 
2.36 
2.37 
2.38 
2.39 
2.40 
85

Exhibit
Number 		Description of Exhibit
2.41 
2.42 
2.43 
2.44 
2.45 
2.46 
2.47 
2.48 
2.49 
2.50 
2.51 
2.52  The Company agrees to furnish to the SEC upon request a copy of each instrument with respect to issues of long-term debt of the Company and its subsidiaries, the authorized principal amount of which does not exceed 10% of the consolidated assets of the Company and its subsidiaries
2.53 
4.1 
4.2 
4.3 
4.4 
86

Exhibit
Number 		Description of Exhibit
8.1 
12.1 
12.2 
13.1 
15.1 
101  The following financial information formatted in Inline eXtensible Business Reporting Language (iXBRL):
(1) Consolidated Balance Sheets as of December 31, 2020 and 2019
(2) Consolidated Income Statements for the Years Ended December 31, 2020, 2019 and 2018
(3) Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2020, 2019 and 2018
(4) Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018
(5) Consolidated Statements of Equity for the Years Ended December 31, 2020, 2019 and 2018
(6) Notes to the Consolidated Financial Statements, tagged as blocks of text and including detailed tags
104  The cover page from the Company’s annual report on Form 20-F for the year ended December 31, 2020, formatted in Inline XBRL (included in Exhibit 101)

87

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
AERCAP HOLDINGS N.V.
By: /s/ AENGUS KELLY
Aengus Kelly
 Chief Executive Officer
Date: March 2, 2021

88

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AerCap Holdings N.V. Consolidated Financial Statements  
F-2
F-5
F-6
F-7
F-8
F-12

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of AerCap Holdings N.V.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of AerCap Holdings N.V. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated income statements and consolidated statements of comprehensive income, cash flows and equity for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management’s annual report on internal control over financial reporting under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
F-2

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Identification of impairment events and resulting impairment calculations
As described in note 5 and note 22 to the consolidated financial statements, the Company’s consolidated flight equipment held for operating leases amounted to $35.2 billion as of December 31, 2020, and the impairment charge recorded on flight equipment held for operating leases amounts to $986.6 million for the year ended December 31, 2020. Management performs event-driven impairment assessments of its flight equipment held for operating leases each quarter. These quarterly impairment assessments are primarily triggered by potential sale transactions, early terminated leases, credit events impacting lessees or forecasted significant and permanent declines in the demand for aircraft types. On an annual basis, management also performs an impairment assessment on all aircraft to identify potential impairment events by reference to estimated future cash flows at asset group level. Management applies significant judgment in assessing whether an impairment is necessary, and in estimating significant assumptions, including the future lease rates, residual values and discount rates applied when performing quantitative impairment tests.
The principal considerations for our determination that performing procedures relating to the identification of impairment events and resulting impairment calculations is a critical audit matter are management’s exercise of significant judgment regarding the identification of potential impairment events and the establishment of significant assumptions of future lease rates, residual values and the discount rate applied. This in turn led to a high degree of auditor subjectivity, judgment and effort in evaluating management’s judgments in relation to the significant assumptions and the audit evidence obtained. The audit effort involved the use of professionals with specialized skill and knowledge. to assist in evaluating the significant assumption over the discount rate.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the identification of impairment events and resulting impairment calculations including controls over the identification of impairment events on a quarterly basis and the reasonableness of significant assumptions used to estimate future cash flows such as future lease rates, residual values and the discount rate. These procedures also included, among others, testing managements process for the identification of aircraft meeting the quarterly impairment triggers; evaluating the appropriateness of management’s impairment assessment model; testing the completeness and accuracy of the underlying data used in the model; evaluating the reasonableness of the significant assumptions used by management relating to future lease rates, residual values and the discount rate and evaluating the reasonableness of the resulting cash flow projections. Evaluating management’s assumptions relating to future lease rates involved evaluating whether the assumptions used by management were reasonable considering (i) comparing future lease rate assumptions to existing lease rates, and (ii) testing the assumptions were consistent with the evidence obtained in other areas of the audit. Evaluating management’s assumptions relating to residual values involved evaluating whether the assumptions used by management were reasonable considering (i) the expected sales price and (ii) comparing the residual values to residual values observed in the industry. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discount rate, by reference to the cost of capital of the Company and comparable businesses.
F-3

Measurement of operating lease revenue on a cash receipts basis
As described in note 3 to the consolidated financial statements, the Company concluded that collection of basic lease rent payments was not probable from a number of lessees, resulting in a reduction of basic lease rents of approximately $310.6 million. Management periodically evaluates the collectability of operating lease contracts to determine the appropriate revenue recognition and measurement model to apply to each lessee. Accrual-based revenue recognition ceases on an operating lease contract when the collection of the rental payments is no longer probable and thereafter rental revenues are recognized using a cash receipts basis (“Cash Accounting”). In the period the collection of lease payments is concluded as no longer probable, 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, is recognized as a current period adjustment to lease revenue. Subsequently, revenues are recognized 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. Management applies significant judgment in assessing at each reporting date whether operating rental payments are probable of collection by reference to the credit status of each lessee, including lessees in bankruptcy type arrangements, the extent of overdue balances, and other relevant factors.
The principal considerations for our determination that performing procedures relating to the measurement of operating lease revenue on a cash receipts basis is a critical audit matter is the significant judgment exercised by management in determining whether operating rentals from a lessee are probable of collection or if revenue should be recognized on a cash receipts basis. This in turn led to a high degree of auditor subjectivity, judgment and effort in evaluating management’s judgments and the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls over the measurement of operating lease revenue on a cash receipts basis. These procedures also included, among others, evaluating the reasonableness of management’s judgments relating to the collectability of operating lease contracts; testing the completeness and accuracy of the underlying data used by management in making their assessment and testing the completeness and accuracy of the cash accounting recorded by management. Evaluating the judgments relating to the collectability of operating lease contracts involved evaluating whether the assumptions used were reasonable considering (1) examining the quantum of overdue balances, (2) testing the level of security deposit amounts held, (3) agreeing lessees in bankruptcy or similar type restructuring arrangements, (4) reading third party information on lessees, and (5) consistency with evidence obtained in other areas of the audit.


/s/ PricewaterhouseCoopers
Dublin, Ireland
March 2, 2021

We have served as the Company’s auditor since 2018.

F-4

AerCap Holdings N.V. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2020 and 2019
As of December 31,
Note 2020 2019
(U.S. Dollars in thousands,
except share data)
Assets
Cash and cash equivalents 4 $ 1,248,772  $ 1,121,396 
Restricted cash 4 246,518  178,951 
Trade receivables 170,675  47,935 
Flight equipment held for operating leases, net 5 35,156,450  35,870,781 
Investment in finance and sales-type leases, net 6 878,451  1,011,549 
Flight equipment held for sale —  336,592 
Prepayments on flight equipment 27 2,111,659  2,954,478 
Maintenance rights and lease premium, net 7 649,914  809,615 
Other intangibles, net 7 224,634  307,394 
Deferred income tax assets 14 131,532  95,077 
Other assets 8, 9 1,229,434  1,015,476 
Total Assets $ 42,048,039  $ 43,749,244 
Liabilities and Equity
Accounts payable, accrued expenses and other liabilities 11 $ 1,109,325  $ 1,032,623 
Accrued maintenance liability 12 1,750,395  2,190,159 
Lessee deposit liability 600,321  747,790 
Debt 13 28,742,081  29,486,131 
Deferred income tax liabilities 14 913,431  910,336 
Commitments and contingencies 27
Total Liabilities 33,115,553  34,367,039 
Ordinary share capital, €0.01 par value, 350,000,000 ordinary shares authorized as of December 31, 2020 and 2019; 138,847,345 and 141,847,345 ordinary shares issued and 130,398,538 and 131,583,489 ordinary shares outstanding (including 2,552,346 and 2,354,318 shares of unvested restricted stock) as of December 31, 2020 and 2019, respectively
16, 24 1,721  1,754 
Additional paid-in capital 2,078,125  2,209,462 
Treasury shares, at cost (8,448,807 and 10,263,856 ordinary shares as of December 31,
2020 and 2019, respectively)
(459,994) (537,341)
Accumulated other comprehensive loss (155,085) (93,587)
Accumulated retained earnings 7,399,703  7,734,609 
Total AerCap Holdings N.V. shareholders’ equity 8,864,470  9,314,897 
Non-controlling interest 68,016  67,308 
Total Equity 8,932,486  9,382,205 
Total Liabilities and Equity $ 42,048,039  $ 43,749,244 
Supplemental balance sheet information—amounts related to assets and liabilities of
consolidated VIEs for which creditors do not have recourse to our general credit:
Restricted cash $ 163,596  $ 78,187 
Flight equipment held for operating leases and held for sale 4,339,176  2,091,022 
Other assets 97,417  64,908 
Accrued maintenance liability $ 115,079  $ 42,603 
Debt 2,454,187  1,395,022 
Other liabilities 109,606  81,335 

The accompanying notes are an integral part of these Consolidated Financial Statements.
F-5

AerCap Holdings N.V. and Subsidiaries
Consolidated Income Statements
For the Years Ended December 31, 2020, 2019 and 2018

Year Ended December 31,
Note 2020 2019 2018
(U.S. Dollars in thousands, except share and per share data)
Revenues and other income
Lease revenue:
Basic lease rents 18, 21 $ 3,761,611  $ 4,281,260  $ 4,145,552 
Maintenance rents and other receipts 559,395  401,006  391,541 
Total lease revenue 4,321,006  4,682,266  4,537,093 
Net gain on sale of assets 89,618  188,835  201,323 
Other income 20 83,005  66,239  61,564 
Total Revenues and other income 4,493,629  4,937,340  4,799,980 
Expenses
Depreciation and amortization 5, 7 1,645,373  1,676,121  1,679,074 
Asset impairment 22 1,086,983  70,149  44,186 
Interest expense 1,248,225  1,295,020  1,174,074 
Loss on debt extinguishment 13 118,460  —  — 
Leasing expenses 323,535  287,950  446,487 
Selling, general and administrative expenses 17, 19 242,161  267,458  305,226 
Total Expenses 4,664,737  3,596,698  3,649,047 
Loss on investment at fair value 9 (143,510) —  — 
(Loss) income before income taxes and income of
investments accounted for under the equity method
(314,618) 1,340,642  1,150,933 
Income tax benefit (expense) 14 17,231  (167,714) (144,079)
Equity in net earnings of investments accounted for under
the equity method
2,464  (6,151) 10,643 
Net (loss) income $ (294,923) $ 1,166,777  $ 1,017,497 
Net income attributable to non- controlling interest (3,643) (21,083) (1,865)
Net (loss) income attributable to AerCap Holdings N.V. $ (298,566) $ 1,145,694  $ 1,015,632 
Basic (loss) earnings per share 24 $ (2.34) $ 8.51  $ 7.00 
Diluted (loss) earnings per share 24 $ (2.34) $ 8.43  $ 6.83 
Weighted average shares outstanding—basic 127,743,828  134,570,169  145,162,220 
Weighted average shares outstanding—diluted 127,743,828  135,898,139  148,706,266 






The accompanying notes are an integral part of these Consolidated Financial Statements.
F-6

AerCap Holdings N.V. and Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2020, 2019 and 2018
Year Ended December 31,
2020 2019 2018
(U.S. Dollars in thousands)
Net (loss) income $ (294,923) $ 1,166,777  $ 1,017,497 
Other comprehensive loss:
Net loss on derivatives (Note 10), net of tax of $8,402, $12,845 and
 $2,080, respectively
(58,814) (89,918) (14,559)
Actuarial loss on pension obligations, net of tax of $348, $265 and
$215, respectively
(2,684) (1,845) (1,539)
Total other comprehensive loss (61,498) (91,763) (16,098)
Comprehensive (loss) income (356,421) 1,075,014  1,001,399 
Comprehensive income attributable to non-controlling interest (3,643) (21,083) (1,865)
Total comprehensive (loss) income attributable to AerCap Holdings N.V.  $ (360,064) $ 1,053,931  $ 999,534 
























The accompanying notes are an integral part of these Consolidated Financial Statements.
F-7

AerCap Holdings N.V. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2020, 2019 and 2018
Year Ended December 31,
2020 2019 2018
(U.S. Dollars in thousands)
Net (loss) income $ (294,923) $ 1,166,777  $ 1,017,497 
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
Depreciation and amortization 1,645,373  1,676,121  1,679,074 
Asset impairment 1,086,983  70,149  44,186 
Amortization of debt issuance costs, debt discount, debt premium and lease
premium
64,970  79,645  76,499 
Amortization of fair value adjustments on debt (47,279) (79,098) (142,596)
Maintenance rights write-off (a) 133,015  244,748  287,119 
Maintenance liability release to income (344,210) (207,849) (228,081)
Net gain on sale of assets (89,618) (188,835) (201,323)
Deferred income taxes (20,882) 162,498  147,588 
Share-based compensation 69,187  69,410  95,176 
Collections of finance and sales-type leases 68,128  98,365  — 
Loss on investment at fair value 143,510  —  — 
Loss on debt extinguishment 118,460  —  — 
Other 252,350  96,117  60,452 
Changes in operating assets and liabilities:
Trade receivables (128,188) (8,751) 19,839 
Other assets (400,316) (73,646) 9,800 
Accounts payable, accrued expenses and other liabilities (126,177) 31  (24,858)
Net cash provided by operating activities 2,130,383  3,105,682  2,840,372 
Purchase of flight equipment (778,547) (3,359,092) (4,036,194)
Proceeds from sale or disposal of assets 471,437  1,773,766  1,822,601 
Prepayments on flight equipment (405,178) (1,369,400) (1,912,215)
Collections of finance and sales-type leases —  —  94,703 
Other —  (17) (21,505)
Net cash used in investing activities (712,288) (2,954,743) (4,052,610)
Issuance of debt 10,946,333  6,539,310  5,589,825 
Repayment of debt (11,560,015) (6,504,830) (4,360,520)
Debt issuance and extinguishment costs paid, net of debt premium received (253,806) (36,592) (57,831)
Maintenance payments received 345,699  736,423  743,256 
Maintenance payments returned (412,492) (352,032) (459,326)
Security deposits received 137,130  232,219  208,259 
Security deposits returned (297,469) (233,222) (220,452)
Dividend paid to non-controlling interest holders and others (2,935) (6,341) (8,403)
Repurchase of shares and tax withholdings on share-based compensation (127,777) (639,941) (834,398)
Net cash (used in) provided by financing activities (1,225,332) (265,006) 600,410 
Net increase (decrease) in cash, cash equivalents and restricted cash 192,763  (114,067) (611,828)
Effect of exchange rate changes 2,180  (621) 2,738 
Cash, cash equivalents and restricted cash at beginning of period 1,300,347  1,415,035  2,024,125 
Cash, cash equivalents and restricted cash at end of period $ 1,495,290  $ 1,300,347  $ 1,415,035 


The accompanying notes are an integral part of these Consolidated Financial Statements.
F-8

AerCap Holdings N.V. and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
For the Years Ended December 31, 2020, 2019 and 2018
Year Ended December 31,
2020 2019 2018
(U.S. Dollars in thousands)
Supplemental cash flow information:
Interest paid, net of amounts capitalized $ 1,196,467  $ 1,270,532  $ 1,228,788 
Income taxes (refunded) paid, net (3,862) 2,352  679 

(a)Maintenance rights write-off consisted of the following:

End of lease ("EOL") and Maintenance Reserved ("MR") contract maintenance
rights expense
$ 45,655  $ 76,611  $ 157,792 
MR contract maintenance rights write-off due to maintenance liability release 35,897  19,848  29,656 
EOL contract maintenance rights write-off due to cash receipt 51,463  148,289  99,671 
Maintenance rights write-off $ 133,015  $ 244,748  $ 287,119 






















The accompanying notes are an integral part of these Consolidated Financial Statements.
F-9

AerCap Holdings N.V. and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
For the Years Ended December 31, 2020, 2019 and 2018
Non-Cash Investing and Financing Activities
Year ended December 31, 2020:
Flight equipment held for operating leases in the amount of $46.6 million, net, was reclassified to investment in finance and sales-type leases, net.
Flight equipment held for operating leases in the amount of $83.5 million was reclassified to flight equipment held for sale.
Accrued maintenance liability in the amount of $95.0 million was settled with buyers upon sale or disposal of assets.
In May 2020, other assets and accounts payable, accrued expenses and other liabilities each increased by $185.7 million due to the Norwegian Air Shuttle ASA (“NAS”) recapitalization. Please refer to Note 9—Investments for further details.
Year ended December 31, 2019:
Flight equipment held for operating leases in the amount of $143.4 million, net, was reclassified to investment in finance and sales-type leases, net.
Flight equipment held for operating leases in the amount of $1.6 billion was reclassified to flight equipment held for sale.
Accrued maintenance liability in the amount of $249.2 million was settled with buyers upon sale or disposal of assets.
Year ended December 31, 2018:
Flight equipment held for operating leases in the amount of $76.9 million was reclassified to investment in finance and sales-type leases, net.
Flight equipment held for operating leases in the amount of $979.2 million, net, was reclassified to flight equipment held for sale.
Flight equipment held for operating leases in the amount of $38.4 million was reclassified to inventory, which is included in other assets.
Accrued maintenance liability in the amount of $261.2 million was settled with buyers upon sale or disposal of assets.













The accompanying notes are an integral part of these Consolidated Financial Statements.
F-10

AerCap Holdings N.V. and Subsidiaries
Consolidated Statements of Equity
For the Years Ended December 31, 2020, 2019 and 2018
Number of
ordinary shares
issued 		Ordinary
share
capital 		Additional
paid-in
capital 		Treasury
shares 		Accumulated other comprehensive income (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, 2017 167,847,345  $ 2,058  $ 3,714,563  $ (731,442) $ 14,274  $ 5,580,257  $ 8,579,710  $ 59,104  $ 8,638,814 
Dividends paid —  —  —  —  —  —  —  (8,403) (8,403)
Repurchase of
shares
—  —  —  (726,640) —  —  (726,640) —  (726,640)
Share cancellation (16,000,000) (192) (800,544) 800,736  —  —  —  —  — 
Share-based
compensation
—  —  95,176  —  —  —  95,176  —  95,176 
Ordinary shares
issued, net of tax
withholdings
—  —  (296,778) 181,261  —  (5,456) (120,973) —  (120,973)
Cumulative effect
due to adoption of
new accounting
standard
—  —  —  —  —  1,241  1,241  —  1,241 
Total comprehensive
income (loss)
—  —  —  —  (16,098) 1,015,632  999,534  1,865  1,001,399 
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 —  —  —  —  —  —  —  (6,341) (6,341)
Repurchase of
shares
—  —  —  (607,343) —  —  (607,343) —  (607,343)
Share cancellation (10,000,000) (112) (503,005) 503,117  —  —  —  —  — 
Share-based
compensation
—  —  69,410  —  —  —  69,410  —  69,410 
Ordinary shares
issued, net of tax
withholdings
—  —  (69,360) 42,970  —  (2,759) (29,149) —  (29,149)
Total comprehensive
income (loss)
—  —  —  —  (91,763) 1,145,694  1,053,931  21,083  1,075,014 
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 —  —  —  —  —  —  —  (2,935) (2,935)
Repurchase of
shares
—  —  —  (117,302) —  —  (117,302) —  (117,302)
Share cancellation (3,000,000) (33) (149,203) 149,236  —  —  —  —  — 
Share-based
compensation
—  —  69,187  —  —  —  69,187  —  69,187 
Ordinary shares
issued, net of tax
withholdings
—  —  (51,321) 45,413  —  (10,562) (16,470) —  (16,470)
Cumulative effect
due to adoption of
new accounting
standard
—  —  —  —  —  (25,778) (25,778) —  (25,778)
Total comprehensive
income (loss)
—  —  —  —  (61,498) (298,566) (360,064) 3,643  (356,421)
Balance as of December 31, 2020 138,847,345  $ 1,721  $ 2,078,125  $ (459,994) $ (155,085) $ 7,399,703  $ 8,864,470  $ 68,016  $ 8,932,486 




The accompanying notes are an integral part of these Consolidated Financial Statements.
F-11

AerCap Holdings N.V. and Subsidiaries
Notes to the 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., together with its subsidiaries (“AerCap,” “we,” “us” or the “Company”), is the global leader in aircraft leasing with 1,330 aircraft owned, managed or on order, and total assets of $42 billion as of December 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 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 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.
Our Consolidated Financial Statements are stated in U.S. dollars, which is our functional currency.
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 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, intangible assets, investment in finance and sales-type leases, investments, trade receivables and notes receivable, deferred income tax assets and accruals and reserves. Actual results may differ from our estimates under different conditions, sometimes materially.
3. Summary of significant accounting policies
Cash and cash equivalents
Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less.
Restricted cash
Restricted cash includes cash held by banks that is subject to withdrawal restrictions. Such amounts are typically restricted under secured debt agreements and can be used only to maintain the aircraft securing the debt and to provide debt service payments of principal and interest.
F-12

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Trade receivables
Trade receivables represent unpaid, current lessee rental obligations under existing lease contracts.
Flight equipment held for operating leases, net
Flight equipment held for operating leases is stated at cost less accumulated depreciation and impairment. Flight equipment is depreciated to its estimated residual value on a straight-line basis over the useful life of the aircraft, which is generally 25 years from the date of manufacture, or a different period depending on the disposition strategy. The costs of improvements to flight equipment are normally recorded as leasing expenses unless the improvement increases the long-term value of the flight equipment. In that case, the capitalized improvement cost is depreciated over the estimated remaining useful life of the aircraft. The residual value of our flight equipment is generally 15% of estimated industry price, except where more relevant information indicates that a different residual value is more appropriate.
We periodically review the estimated useful lives and residual values of our flight equipment based on our industry knowledge, external factors, such as current market conditions, and changes in our disposition strategies, to determine if they are appropriate, and record adjustments to depreciation rates prospectively on an individual aircraft basis, as necessary.
We test long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The quantitative impairment test is performed at the lowest level for which identifiable cash flows are largely independent of other groups of assets, which is the individual aircraft, including the lease-related assets and liabilities of that aircraft, such as the maintenance rights assets, lease incentives, and maintenance liabilities (the “Asset Group”). If the sum of the expected undiscounted future cash flows is less than the Asset Group, an impairment loss is recognized. The loss is measured as the excess of the carrying value of the Asset Group over its estimated fair value.
Fair value reflects the present value of future cash flows expected to be generated from the aircraft, including its expected residual value, discounted at a rate commensurate with the associated risk. Future cash flows are assumed to occur under current market conditions and assume adequate time for a sale between a willing buyer and a willing seller. Expected future lease rates are based on all relevant information available, including current contracted rates for similar aircraft and industry trends.
We perform event-driven impairment assessments of our aircraft held for operating leases each quarter. These quarterly impairment assessments are primarily triggered by potential sale transactions, early terminated leases, credit events impacting lessees or forecasted significant and permanent declines in the demand for aircraft types. On an annual basis, we also perform an assessment of all aircraft held for operating leases to identify potential impairment by reference to estimated future cash flows at the Asset Group level, and perform a quantitative impairment test. We apply significant judgment in assessing whether an impairment is necessary and in estimating significant assumptions including the future lease rates, the residual value and the discount rate when performing quantitative impairment tests.
Capitalization of interest
We capitalize interest on prepayments of forward order flight equipment and add such amounts to prepayments on flight equipment. The amount of interest capitalized is the amount of interest costs which could have been avoided in the absence of such prepayments.
F-13

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Investment in finance and sales-type leases, net
If a lease meets specific criteria under U.S. GAAP, we recognize the lease in investment in finance and sales-type leases, net (“Finance Leases”) in our Consolidated Balance Sheets and de-recognize the aircraft from flight equipment held for operating leases. For sales-type leases, we recognize the difference between the aircraft carrying value and the amount recognized in investment in finance and sales-type leases, net in net gain on sale of assets in our Consolidated Income Statements. The amounts recognized for finance and sales-type leases consist of lease receivables and the estimated unguaranteed residual value of the flight equipment on the lease termination date, less the unearned income and net of the allowance for credit losses. Expected unguaranteed residual values are based on our assessment of the values of the flight equipment and, if applicable, the estimated end of lease payments expected at the expiration of the lease. The unearned income is recognized as lease revenue over the lease term, using the interest method to produce a constant yield over the life of the lease.
Definite-lived intangible assets
We recognize intangible assets acquired in a business combination at fair value on the date of acquisition. The rate of amortization of definite-lived intangible assets is calculated based on the period over which we expect to derive economic benefits from such assets.
Maintenance rights and lease premium, net
Maintenance rights assets are recognized when we acquire aircraft subject to existing leases. These assets represent the contractual right to receive the aircraft in a specified maintenance condition at the end of the lease under lease contracts with EOL payment provisions, or our right to receive the aircraft in better maintenance condition due to our obligation to contribute towards the cost of the maintenance events performed by the lessee either through reimbursement of maintenance deposit rents held under lease contracts with maintenance reserve provisions, or through a lessor contribution to the lessee.
For leases with EOL maintenance provisions, upon lease termination, we recognize receipt of EOL cash compensation as lease revenue to the extent those receipts exceed the EOL maintenance rights asset, and we recognize leasing expenses when the EOL maintenance rights asset exceeds the EOL cash received. For leases with maintenance reserve payment provisions, we recognize maintenance rights expense at the time the lessee submits a reimbursement claim and provides the required documentation related to the cost of a qualifying maintenance event that relates to pre-acquisition usage.
Lease premium assets represent the value of an acquired lease where the contractual rental payments are above the market rate. We amortize the lease premium assets on a straight-line basis over the term of the lease as a reduction of lease revenue.
Other definite-lived intangible assets, net
Other definite-lived intangible assets primarily consist of customer relationships recorded at fair value on the International Lease Finance Corporation (“ILFC”) Transaction closing date. These intangible assets are amortized over the period during which we expect to derive economic benefits from such assets. The amortization expense is recorded in depreciation and amortization. We evaluate definite-lived intangible assets for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

F-14

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Other assets
Other assets consist of debt issuance costs, lease incentives, investments, notes receivable, operating lease right-of-use (“ROU”) assets, derivative assets, other tangible fixed assets, straight-line rents, prepaid expenses and other receivables.
Lease incentives
We capitalize amounts paid or value provided to lessees as lease incentives. We amortize lease incentives on a straight-line basis over the term of the related lease as a reduction of lease revenue.
Investments
Unconsolidated investments where we do not have a controlling financial interest, but over which we have significant influence, are accounted for using the equity method of accounting. Under the equity method of accounting, we recognize our share of earnings and losses based on our ownership percentage of such investments in equity in net earnings (losses) of investments accounted for under the equity method in our Consolidated Income Statements. The carrying amount of the equity method investment is included in other assets on our Consolidated Balance Sheets. Please refer to Note 9—Investments for further details.
Investments for which the equity method would otherwise be required, we may elect to account for our investment at fair value with all changes in fair value recognized in our Consolidated Income Statements. We elected to account for our investment in NAS at fair value. Please refer to Note 9—Investments for further details. We initially measured our investment in NAS based on the quoted market price of the NAS shares on the date of acquisition, with an equal and offsetting amount recognized as deferred revenue included in other liabilities on our Consolidated Balance Sheets. Subsequent changes in the NAS investment fair value are recognized in our Consolidated Income Statements, while the deferred revenue amount is accounted for in accordance with our lease revenue recognition policies.
Notes receivable
Notes receivable arise from the restructuring and deferral of trade receivables from lessees experiencing financial difficulties and as well as amounts advanced in the normal course of operations.
Derivative financial instruments
We use derivative financial instruments to manage our exposure to interest rate risks. We recognize derivatives in our Consolidated Balance Sheets at fair value.
When cash flow hedge accounting treatment is applied, the changes in fair values related to the effective portion of the derivatives are recorded in accumulated other comprehensive income (loss) (“AOCI”), and the ineffective portion is recognized immediately in interest expense. Amounts reflected in AOCI related to the effective portion are reclassified into interest expense in the same period or periods during which the hedged transaction affects interest expense.
We discontinue hedge accounting prospectively when (i) we determine that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item; (ii) the derivative expires or is sold, terminated, or exercised; or (iii) management determines that designating the derivative as a hedging instrument is no longer appropriate. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, we recognize the changes in the fair value in current-period earnings. The remaining balance in AOCI at the time we discontinue hedge accounting is not recognized in our Consolidated Income Statements unless it is probable that the forecasted cash flows will not occur. Such amounts are recognized in interest expense when the hedged transaction affects interest expense.
When cash flow hedge accounting treatment is not applied, the changes in fair values related to interest rate-related derivatives between periods are recognized in interest expense in our Consolidated Income Statements.
Net cash received or paid under derivative contracts is classified as operating cash flows in our Consolidated Statements of Cash Flows.
F-15

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Other tangible fixed assets
Other tangible fixed assets consist primarily of leasehold improvements, computer equipment and office furniture, and are recorded at historical acquisition cost and depreciated at various rates over the asset’s estimated useful life on a straight-line basis. Depreciation expense on other tangible fixed assets is recorded in depreciation and amortization in our Consolidated Income Statements.
Fair value measurements
Fair value is defined as the amount 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. We measure the fair value of our derivatives and our NAS investment on a recurring basis and measure the fair value of flight equipment, goodwill and definite-lived intangible assets on a non-recurring basis. See Note 28—Fair value measurements.
Income taxes
We recognize an uncertain tax benefit only to the extent that it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
Deferred income tax assets and liabilities
We report deferred income taxes resulting from the temporary differences between the book values and the tax values of assets and liabilities using the liability method. The differences are calculated at nominal value using the enacted tax rate applicable at the time the temporary difference is expected to reverse. Deferred income tax assets attributable to unutilized losses carried forward or other timing differences are reduced by a valuation allowance if it is more likely than not that such losses will not be utilized to offset future taxable income.
Accrued maintenance liability
We use the expense as incurred model for planned major maintenance. Under this method, the estimated maintenance costs are expensed in the period incurred. In many instances, there is a short-term timing difference between when we incur the expense and the actual payment of this liability to the third-party maintenance provider. When these timing differences occur, we recognize an expense and accrue the corresponding liability in the Accrued maintenance liability line item on our Consolidated Balance Sheets.
When we lease a used aircraft, the maintenance condition of the aircraft generally will be less than 100% as a result of maintenance life usage by the prior lessee. For the next lessee of the used aircraft, we generally agree to reimburse the cost of the maintenance usage from the prior lessee, if and when the next lessee performs a qualifying maintenance event. These additional payments to our lessees related to prior lessee maintenance usage are generally referred to as “top-up” or lessor contribution payments and are expensed in the period incurred. These payments are in addition to our reimbursements of supplemental maintenance rents received from the current lessee during the lease period based on utilization.
In cases of a lessor contribution, where an aircraft is subject to lease, we consider the maintenance event to be incurred when the maintenance event is completed by the lessee and we confirm that the maintenance event qualifies for reimbursement under the lease provisions. In cases where the aircraft is not subject to lease and we are directing the maintenance activity, we consider the maintenance to be incurred over the period the maintenance activity is performed.
For all lease contracts acquired as part of the purchase by AerCap and AerCap Ireland Limited, a wholly-owned subsidiary of AerCap, of 100% of ILFC’s common stock from AIG on May 14, 2014 (“ILFC Transaction”), we determined the fair value of our maintenance liability, including lessor maintenance contributions, using the present value of the expected cash outflows. The discounted amounts are accreted in subsequent periods to their respective nominal values up until the expected maintenance event dates using the effective interest method. The accretion amounts are recorded as increases to interest expense in our Consolidated Income Statements.
F-16

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Debt and deferred debt issuance costs
Long-term debt is carried at the principal amount borrowed, including unamortized discounts and premiums, fair value adjustments and debt issuance costs, where applicable. The fair value adjustments reflect the application of the acquisition method of accounting to the debt assumed as part of the ILFC Transaction. We amortize the amount of discounts, premiums and fair value adjustments over the period the debt is outstanding using the effective interest method. The costs we incur for issuing debt are capitalized and amortized as an increase to interest expense over the life of the debt using the effective interest method.
Debt issuance costs related to our line-of-credit arrangements are presented within other assets.
Revenue recognition
We lease flight equipment principally under operating leases and recognize basic lease rents income on a straight-line basis over the life of the lease. At lease inception, we review all necessary criteria to determine proper lease classification. We account for lease agreements that include uneven rental payments on a straight-line basis. The amount of the difference between basic lease rents recognized and cash received is included in other assets, or in the event it is a liability, in accounts payable, accrued expenses and other liabilities.
Lease agreements where rent is based on floating interest rates are included in minimum lease payments based on the floating interest rate that existed at the commencement of the lease. Increases or decreases in lease payments that result from subsequent changes in the floating interest rate are considered contingent rentals and are recorded as increases or decreases in lease revenue in the period of the interest rate change.
Our lease contracts normally include default covenants, which generally obligate the lessee to pay us damages to put us in the position we would have been in had the lessee performed under the lease in full. There are no additional payments required which would increase the minimum lease payments.
We periodically evaluate the collectability of our operating lease contracts to determine the appropriate revenue recognition and measurement model to apply to each lessee. Accrual-based revenue recognition ceases on an operating lease contract when the collection of the rental payments is no longer probable and thereafter rental revenues are recognized using a cash receipts basis (“Cash Accounting”). In the period when collection of lease payments is no longer probable, 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, is recognized as a current period adjustment to lease revenue. Subsequently, revenues are recognized 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. We apply significant judgment in assessing at each reporting date whether operating rental payments are probable of collection by reference to the credit status of the each lessee, including lessees in bankruptcy-type arrangements, the extent of overdue balances and other relevant factors. During the year ended December 31, 2020, we recognized a decrease in basic lease rents of $310.6 million due to the application of Cash Accounting.
Revenue from investment in finance and sales-type leases is recognized using the interest method to produce a constant yield over the life of the lease and is included in basic lease rents.
Most of our lease contracts require rental payments in advance. Rental payments received but unearned are recorded as deferred revenue in our Consolidated Balance Sheets.
Under our aircraft leases, the lessee is responsible for maintenance, repairs and other operating expenses during the term of the lease. Under the provisions of many of our leases, the lessee is required to make payments of supplemental maintenance rents which are calculated with reference to the utilization of the airframe, engines and other major life-limited components during the lease. We record as lease revenue all supplemental maintenance rent receipts not expected to be reimbursed to the lessee. We estimate the total amount of maintenance reimbursements for the lease term and only record maintenance revenue after we have received sufficient maintenance rents to cover the total amount of estimated maintenance reimbursements during the remaining lease term.
F-17

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

In most lease contracts not requiring the payment of supplemental maintenance rents, and to the extent that the aircraft is redelivered in a different condition than at acceptance, we generally receive EOL cash compensation for the difference at redelivery. Upon lease termination, we recognize receipt of EOL cash compensation as lease revenue to the extent those receipts exceed the EOL maintenance rights asset, and we recognize leasing expenses when the EOL maintenance rights asset exceeds the EOL cash received.
The accrued maintenance liability existing at lease termination is recognized as lease revenue net of the MR contract maintenance rights asset. When flight equipment is sold, the portion of the accrued maintenance liability not specifically assigned to the buyer is released net of any maintenance rights asset balance and is included in net gain on sale of assets.
Other income consists of interest revenue, management fee revenue, lease termination fees, insurance proceeds, and income related to other miscellaneous activities. Interest revenue from secured loans, notes receivable and other interest-bearing instruments is recognized using the effective yield method as interest accrues under the associated contracts. Management fee revenue is recognized as income as it accrues over the life of the contract. Income from the receipt of lease termination penalties is recorded at the time cash is received or when the lease is terminated, if revenue recognition criteria are met.
Net gain on sales of aircraft
We sell aircraft in the normal course of our operations to manage our fleet and to realize the residual value of the aircraft at the end of their economic lives. These sales may include aircraft on lease to airlines as well as aircraft that are not on lease. In some cases, the terms and conditions of aircraft sale transactions may include continuing equity or debt investments in the aircraft, post-sale performance guarantees of aircraft cash flows or servicing arrangements. The presence of any of these terms and conditions requires us to determine whether control of the underlying aircraft has been transferred to the buyer, and whether we no longer have significant ownership risk in the aircraft, both of which are required for a sale and resulting gain or loss to be recognized.
Allowance for credit losses
We are exposed to credit losses on our investment in finance and sales-type leases, net and notes receivable related to the rescheduled operating lease payment amounts or the sale of aircraft, which are included as notes receivable in other assets. Our investment in finance and sales-type leases, net and notes receivable credit exposure reflects the risk that our customers fail to meet their payment obligations and the risk that the aircraft value in a finance and sales-type lease is less than the unguaranteed residual value.
We estimate the expected risk of loss over the remaining life 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 exposure, net of the estimated aircraft value in the instance of an investment in finance and sales-type leases, net, and other cash collateral, including security deposits and maintenance-related deposits, over the contractual term.
Current expected credit loss provisions are classified as leasing expenses in our Consolidated Income Statements, with a corresponding allowance for credit loss amount reported as a reduction in the carrying amount of the related investment in finance and sales-type leases, net and notes receivable balance sheet amount. A write-off is when all or part of the investment in finance and sales-type leases, net or notes receivable asset is deemed uncollectable. 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. Please refer to Note 23—Allowance for credit losses for further details.
Share-based compensation
Employees may receive AerCap share-based awards, consisting of restricted stock units or restricted stock. Share-based compensation expense is determined by reference to the fair value of the restricted stock units or restricted stock on the grant date and is recognized on a straight-line basis over the requisite service period. Share-based compensation expense is classified in selling, general and administrative expenses.

F-18

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Foreign currency
Foreign currency transactions are translated into U.S. dollars at the exchange rate prevailing at the time of the transaction. Receivables or payables denominated in foreign currencies are remeasured into U.S. dollars at the exchange rate prevailing at the balance sheet date. All resulting exchange gains and losses are recorded in selling, general and administrative expenses in our Consolidated Income Statements. Foreign currency exchange gains or losses on our investment at fair value are recorded in loss on investment at fair value in our Consolidated Income Statements.
Variable interest entities
We consolidate VIEs in which we have determined that we are the PB. We use judgment when determining (i) whether an entity is a variable interest entity (“VIE”); (ii) who are the variable interest holders; (iii) the elements and degree of control that each variable interest holder has; and (iv) ultimately which party is the PB. When determining which party is the PB, we perform an analysis which considers (i) the design of the VIE; (ii) the capital structure of the VIE; (iii) the contractual relationships between the variable interest holders; (iv) the nature of the VIE’s operations; and (v) the purposes and interests of all parties involved, including related parties. While we consider these factors, our conclusion about whether to consolidate ultimately depends on the breadth of our decision-making ability and our ability to influence activities that significantly affect the economic performance of the VIE. We continually re-evaluate whether we are the PB for VIEs in which we hold a variable interest.
Earnings per share
Basic Earnings (Loss) Per Share (“EPS”) is computed by dividing income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. For the purposes of calculating diluted EPS, the denominator includes both the weighted average number of ordinary shares outstanding during the period and the weighted average number of potentially dilutive ordinary shares, such as restricted stock units, restricted stock and stock options. In a period where a net loss is recognized, the denominator of the dilutive EPS calculation does not include potentially dilutive ordinary shares.
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.
Recent accounting standards adopted during the year ended December 31, 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 replaced 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 investment in finance and sales-type leases, net. Our investment in finance and sales-type leases, net 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. 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. 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 U.S. GAAP methodology.

F-19

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

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 the 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 consistently 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 simplified 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 clarified 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. During the year ended December 31, 2020, we recognized impairment charges related to goodwill. Please refer to Note 22—Asset Impairment for further details.

F-20

AerCap Holdings N.V. and Subsidiaries
Notes to the 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)

Future application of accounting standards:
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 provided 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 ASU 2020-04 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 annual period and are currently evaluating the impact that adopting the standard may have on our financial statements.
F-21

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
4. Cash, cash equivalents and restricted cash
Our restricted cash balance was $246.5 million and $179.0 million as of December 31, 2020 and 2019, respectively, and was primarily related to our Export Credit Agency (“ECA”) financings, Export-Import Bank of the United States (“Ex-Im”) financings, our AerFunding revolving credit facility, Brazilian Development Bank (“BNDES”) and other debt. See Note 13—Debt.
The following is a summary of our cash, cash equivalents and restricted cash as of December 31, 2020 and 2019:
As of December 31,
2020 2019
Cash and cash equivalents $ 1,248,772  $ 1,121,396 
Restricted cash 246,518  178,951 
Total cash, cash equivalents and restricted cash $ 1,495,290  $ 1,300,347 

5. Flight equipment held for operating leases, net
Movements in flight equipment held for operating leases during the years ended December 31, 2020 and 2019 were as follows:
Year Ended December 31,
2020 2019
Net book value at beginning of period $ 35,870,781  $ 35,052,335 
Additions 2,108,539  4,621,821 
Depreciation (1,620,185) (1,650,450)
Disposals and transfers to held for sale (169,503) (1,940,133)
Transfers to investment in finance and sales-type leases, net/other assets (46,623) (143,409)
Impairment (Note 22) (986,559) (69,383)
Net book value at end of period $ 35,156,450  $ 35,870,781 
Accumulated depreciation and impairment as of December 31, 2020 and 2019, respectively $ (9,825,647) $ (7,526,636)

F-22

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
6. Investment in finance and sales-type leases, net
Components of investment in finance and sales-type leases, net as of December 31, 2020 and 2019 were as follows:
As of December 31,
2020 2019
Future minimum lease payments to be received $ 608,950  $ 715,085 
Estimated residual values of leased flight equipment 589,872  577,353 
Less: Unearned income (260,708) (280,889)
Allowance for credit losses (Note 23) (59,663) — 
$ 878,451  $ 1,011,549 
As of December 31, 2020, the cash flows receivable, including the estimated residual value at lease termination, from finance and sales-type leases were as follows:
Cash flows receivable
2021 $ 145,512 
2022 207,102 
2023 140,188 
2024 113,698 
2025 141,267 
Thereafter 451,055 
Undiscounted cash flows receivable $ 1,198,822 
Less: Unearned income (260,708)
Allowance for credit losses (59,663)
$ 878,451 
During the year ended December 31, 2019, we recognized impairment charges of $22.0 million related to our finance and sales-type leases where we do not expect to recover the finance lease balances. Impairment charges on our finance and sales-type leases are included in leasing expenses in the Consolidated Income Statement.
During the year ended December 31, 2020 and 2019, we recognized interest income from investment in finance and sales-type leases, net of $54.1 million and $60.0 million, respectively, included in basic lease rents.
F-23

AerCap Holdings N.V. and Subsidiaries
Notes to the 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 December 31, 2020 and 2019:
As of December 31,
2020 2019
Maintenance rights $ 642,825  $ 794,798 
Lease premium, net 7,089  14,817 
$ 649,914  $ 809,615 
Movements in maintenance rights during the years ended December 31, 2020 and 2019 were as follows:
Year Ended December 31,
2020 2019
Maintenance rights at beginning of period $ 794,798  $ 1,088,246 
EOL and MR contract maintenance rights expense (45,655) (76,611)
MR contract maintenance rights write-off due to maintenance liability release (35,897) (19,848)
EOL contract maintenance rights write-off due to cash receipt (51,463) (148,289)
EOL and MR contract maintenance rights write-off due to sale of aircraft and impairment (18,958) (48,700)
Maintenance rights at end of period $ 642,825  $ 794,798 

Other intangibles
Other intangibles consisted of the following as of December 31, 2020 and 2019:
As of December 31,
2020 2019
Goodwill (Note 22) $ —  $ 58,094 
Customer relationships, net 219,589  240,765 
Contractual vendor intangible assets 5,045  8,535 
$ 224,634  $ 307,394 

The following tables present details of customer relationships and related accumulated amortization as of December 31, 2020 and 2019:
As of December 31, 2020
Gross carrying
amount 		Accumulated
amortization 		Net carrying
amount
Customer relationships $ 360,000  $ (140,411) $ 219,589 

As of December 31, 2019
Gross carrying
amount 		Accumulated
amortization 		Net carrying
amount
Customer relationships $ 360,000  $ (119,235) $ 240,765 
During the years ended December 31, 2020, 2019 and 2018, we recorded annual amortization expense for customer relationships of $21.2 million.
F-24

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
8. Other assets
Other assets consisted of the following as of December 31, 2020 and 2019:
As of December 31,
2020 2019
Notes receivable, net of allowance for credit losses (a) (b) $ 529,172  $ 87,745 
Lease incentives 177,028  239,607 
Investments (Note 9) 138,065  123,279 
Straight-line rents, prepaid expenses and other 125,541  98,443 
Operating lease ROU assets (Note 15) 40,603  43,668 
Other tangible fixed assets 22,512  26,018 
Debt issuance costs 20,722  26,393 
Derivative assets (Note 10) 3,303  11,664 
Other receivables 172,488  358,659 
$ 1,229,434  $ 1,015,476 

(a)Notes receivable as of December 31, 2020 and 2019 included $490 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. Notes receivable as of December 31, 2020 and 2019 also included $39 million related to aircraft sale transactions.
(b)As of December 31, 2020, we had a $7 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 23—Allowance for credit losses for further details.


F-25

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
9. Investments
Investment, at fair value
We participated in the NAS recapitalization completed on May 20, 2020, which included providing certain concessions related to our operating leases with NAS in exchange for NAS ordinary shares and perpetual bonds that are convertible into NAS ordinary shares on a one-for-one basis (the “NAS Investment”).
We have elected to account for our NAS Investment using the fair value option, whereby the changes in fair value are recognized as a gain or loss in our Consolidated Income Statement.
In November and December 2020, we converted all of our perpetual bonds into NAS ordinary shares and sold approximately 83% of our total NAS ordinary shares. As of December 31, 2020, we held NAS ordinary shares representing approximately 3% of the share capital of NAS with a fair value of $12.1 million based on the quoted market price. We recognized a loss on investment of $143.5 million in our Consolidated Income Statements for the year ended December 31, 2020. In January 2021, we sold all of our remaining NAS ordinary shares.
Other investments
Investments accounted for under the equity method of accounting consisted of the following as of December 31, 2020 and 2019:
% Ownership as of December 31, 2020 As of December 31,
2020 2019
AerDragon 16.7 72,861  68,673 
AerLift 39.3 31,681  35,188 
ACSAL 19.4 18,112  16,118 
$ 122,654  $ 119,979 
Our share of undistributed earnings of investments in which our ownership interest is less than 50% was $42.1 million and $39.4 million as of December 31, 2020 and 2019, respectively.
We also have an investment in Peregrine Aviation Company and its subsidiaries (“Peregrine”) of $3.3 million as of December 31, 2020 and 2019, which is accounted for in accordance with the cost method of accounting. Please refer to Note 25—Variable interest entities for further details.
F-26

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

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 December 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 December 31, 2020 and 2019, we had cash collateral of $0.1 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 December 31, 2020 or 2019.
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 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 Consolidated Balance Sheets.
The following tables present notional amounts and fair values of derivatives outstanding as of December 31, 2020 and 2019:
As of December 31,
2020 2019
Notional
amount (a) 		Fair value Notional
amount (a) 		Fair value
Derivative assets not designated as accounting hedges:
Interest rate caps $ 3,022,000  $ 2,790  $ 2,442,000  $ 3,727 
Derivative assets designated as accounting cash flow
hedges:
Interest rate swaps $ —  $ —  $ 488,616  $ 1,578 
Interest rate caps 475,000  513  400,000  6,359 
Total derivative assets $ 3,303  $ 11,664 

(a)The notional amount is excluded for caps and swaps which are not yet effective.
As of December 31,
2020 2019
Notional
amount (a) 		Fair value Notional
amount (a) 		Fair value
Derivative liabilities not designated as accounting cash
flow hedges:
Interest rate swaps $ 400,000  $ 14,933  $ —  $ — 
Derivative liabilities designated as accounting cash
flow hedges:
Interest rate swaps $ 3,331,000  $ 152,370  $ 3,776,000  $ 97,066 
Total derivative liabilities $ 167,303  $ 97,066 

(a)The notional amount is excluded for swaps which are not yet effective.

F-27

AerCap Holdings N.V. and Subsidiaries
Notes to the 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 recorded the following in other comprehensive loss related to derivative financial instruments for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Gain (Loss)
Effective portion of change in fair market value of derivatives designated as
accounting cash flow hedges:
Interest rate swaps $ (62,967) $ (102,725) $ (16,639)
Interest rate caps (5,846) (38) — 
Derivative premium and amortization 1,597  —  — 
Income tax effect 8,402  12,845  2,080 
Net loss on derivatives, net of tax $ (58,814) $ (89,918) $ (14,559)
We expect to reclassify approximately $66 million from AOCI as an increase in interest expense in our 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 Consolidated Income Statements for the years ended December 31, 2020, 2019 and 2018.
Year Ended December 31,
2020 2019 2018
Gain (Loss)
Derivatives not designated as accounting hedges:
Interest rate caps and swaps $ (14,369) $ (29,714) $ 5,158 
Reclassification to Consolidated Income Statements:
Reclassification of amounts previously recorded in AOCI (53,539) 3,381  6,874 
Gain (loss) recognized in interest expense $ (67,908) $ (26,333) $ 12,032 

F-28

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
11. Accounts payable, accrued expenses and other liabilities
Accounts payable, accrued expenses and other liabilities consisted of the following as of December 31, 2020 and 2019:
As of December 31,
2020 2019
Deferred revenue $ 399,820  $ 389,958 
Accrued interest 270,576  255,369 
Accounts payable and accrued expenses 222,203  239,086 
Derivative liabilities (Note 10) 167,303  97,066 
Operating lease liabilities (Note 15) 49,423  51,144 
$ 1,109,325  $ 1,032,623 

12. Accrued maintenance liability
Movements in accrued maintenance liability during the years ended December 31, 2020 and 2019 were as follows:
Year Ended December 31,
2020 2019
Accrued maintenance liability at beginning of period $ 2,190,159  $ 2,237,494 
Maintenance payments received 345,699  736,423 
Maintenance payments returned (412,492) (352,032)
Release to income upon sale (95,042) (249,187)
Release to income other than upon sale (344,210) (207,849)
Lessor contribution, top ups and other 66,281  25,310 
Accrued maintenance liability at end of period $ 1,750,395  $ 2,190,159 

F-29

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt
As of December 31, 2020, the principal amount of our outstanding indebtedness totaled $28.9 billion, which excluded fair value adjustments of $19.7 million and debt issuance costs, debt discounts and debt premium of $192.8 million, and our undrawn lines of credit and other available secured debt were $5.6 billion, availability of which is subject to certain conditions, including compliance with certain financial covenants. As of December 31, 2020, we remained in compliance with the financial covenants across our various debt agreements.
The following table provides a summary of our indebtedness as of December 31, 2020 and 2019:

As of December 31,
2020 2019
Debt obligation Collateral (number of aircraft) Commitment Undrawn
amounts 		Amount outstanding Weighted average interest rate (a) Maturity Amount outstanding
Unsecured
ILFC Legacy Notes $ 1,198,888  $ —  $ 1,198,888  6.36  % 2021-2022 $ 2,900,000 
AerCap Trust (c) & AICDC (d)
Notes 		12,797,126  —  12,797,126  4.27  % 2021-2028 12,500,000 
Asia Revolving Credit Facility 950,000  950,000  —  —  2022 — 
Citi Revolving Credit Facility 4,000,000  4,000,000  —  —  2024 — 
Other unsecured debt 1,759,000  —  1,759,000  1.92  % 2021-2023 2,024,000 
Fair value adjustment 21,716  99,093 
TOTAL UNSECURED $ 20,705,014  $ 4,950,000  $ 15,776,730  $ 17,523,093 
Secured
Export credit facilities 25  1,299,325  275,413  1,023,912  2.01  % 2023-2032 565,312 
Institutional secured term
loans & secured portfolio loans 		183  7,052,633  63,000  6,989,633  2.64  % 2022-2032 7,303,496 
AerFunding Revolving Credit
Facility 		53  2,075,000  119  2,074,881  2.90  % 2025 875,145 
Other secured debt (b) 24  1,106,045  327,772  778,273  3.17  % 2021-2038 1,062,756 
Fair value adjustment (1,827) (2,835)
TOTAL SECURED $ 11,533,003  $ 666,304  $ 10,864,872  $ 9,803,874 
Subordinated
Subordinated notes 2,250,000  —  2,250,000  4.88  % 2045-2079 2,250,000 
Subordinated debt issued by joint
ventures 		43,521  —  43,521  —  2021-2023 47,521 
Fair value adjustment (219) (222)
TOTAL SUBORDINATED $ 2,293,521  $ —  $ 2,293,302  $ 2,297,299 
Debt issuance costs, debt discounts
and debt premium 		(192,823) (138,135)
285  $ 34,531,538  $ 5,616,304  $ 28,742,081  $ 29,486,131 

(a)The weighted average interest rate for our floating rate debt is calculated based on the applicable U.S. dollar LIBOR rate as of the most recent 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 interest alternatives.
(b)In addition to the 24 aircraft, 60 engines are pledged as collateral.
(c)AerCap Global Aviation Trust, a Delaware Statutory Trust (“AerCap Trust”)
(d)AerCap Ireland Capital Designated Activity Company, a designated activity company with limited liability incorporated under the laws of Ireland (“AICDC”)
F-30

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
As of December 31, 2020, all debt was issued or guaranteed by AerCap with the exception of the AerFunding Revolving Credit Facility, and the Glide Funding term loan facility.
Maturities of our debt financings (excluding fair value adjustments, debt issuance costs, debt discounts and debt premium) as of December 31, 2020 were as follows:
Maturities of debt financing (a)
2021 $ 2,373,410 
2022 4,802,146 
2023 5,143,315 
2024 4,265,320 
2025 5,857,331 
Thereafter 6,473,712 
$ 28,915,234 

(a)For further detail on debt maturities, please refer to “Item 5. Operating and Financial Review and Prospects—Contractual obligations”.

During the years ended December 31, 2020, 2019 and 2018, we amortized as interest expense debt issuance costs, debt discounts and debt premium of $57.2 million, $69.5 million and $64.2 million, respectively.
ILFC Legacy Notes
The following table provides a summary of the outstanding senior unsecured notes issued by ILFC prior to the ILFC Transaction (the “ILFC Legacy Notes”) as of December 31, 2020:
Maturities of ILFC Legacy Notes
2021 $ 164,614 
2022 1,034,274 
$ 1,198,888 
All of the ILFC Legacy Notes bear interest at fixed rates ranging from 4.625% to 8.625% and are not subject to redemption prior to their stated maturity, and there are no sinking fund requirements.
Upon consummation of the ILFC Transaction, AerCap Trust became the successor issuer under the ILFC Legacy Notes indentures. ILFC also agreed to continue to be co-obligor. In addition, AerCap Holdings N.V. and certain of its subsidiaries became guarantors of the ILFC Legacy Notes.
The indentures governing the ILFC Legacy Notes contain customary covenants that, among other things, restrict our, and our restricted subsidiaries’, ability to incur liens on assets and to consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets. The indentures also provide for customary events of default, including, but not limited to, the failure to pay scheduled principal and interest payments on the ILFC Legacy Notes, the failure to comply with covenants and agreements specified in the indentures, the acceleration of certain other indebtedness resulting from non-payment of that indebtedness and certain events of insolvency. If any event of default occurs, any amount then outstanding under the indentures may immediately become due and payable.

F-31

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
In July 2020, AerCap Trust commenced offers to purchase for cash, for its own account as successor to ILFC, or for its own account and on behalf of AICDC, as applicable, any and all of certain series of outstanding ILFC Legacy Notes and AerCap Trust & AICDC Notes (the “July Tender Offer”). Pursuant to the July Tender Offer, AerCap Trust repurchased and retired (i) $742.1 million aggregate principal amount of 8.25% Senior Notes due 2020, (ii) $365.7 million aggregate principal amount of 8.625% Senior Notes due 2022 and (iii) $334.5 million aggregate principal amount of 4.625% Senior Notes due 2021 for aggregate total consideration of approximately $1.5 billion. In each case, such notes were originally issued by ILFC and assumed by AerCap Trust.
AerCap Trust & AICDC Notes

From time to time, AerCap Trust and AICDC have co-issued additional senior unsecured notes (the “AGAT/AICDC Notes”).
The following table provides a summary of the outstanding AGAT/AICDC Notes as of December 31, 2020:
Maturities of AGAT/AICDC Notes
2021 $ 1,131,426 
2022 1,365,700 
2023 2,450,000 
2024 2,550,000 
2025 2,650,000 
Thereafter 2,650,000 
$ 12,797,126 
All of the AGAT/AICDC Notes bear interest at fixed rates ranging from 2.875% to 6.5%.
The AGAT/AICDC Notes are jointly and severally and fully and unconditionally guaranteed by AerCap Holdings N.V. and by AerCap Ireland Limited (“AerCap Ireland”), AerCap Aviation Solutions B.V., ILFC and AerCap U.S. Global Aviation LLC. Except as described below, the AGAT/AICDC Notes are not subject to redemption prior to their stated maturity and there are no sinking fund requirements. We may redeem each series of the AGAT/AICDC Notes in whole or in part, at any time, at a price equal to 100% of the aggregate principal amount plus the applicable “make-whole” premium plus accrued and unpaid interest, if any, to the redemption date.
The indentures governing the AGAT/AICDC Notes contain customary covenants that, among other things, restrict our, and our restricted subsidiaries’, ability to incur liens on assets and to consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets. The indentures also provide for customary events of default, including, but not limited to, the failure to pay scheduled principal and interest payments on the AGAT/AICDC Notes, the failure to comply with covenants and agreements specified in the indentures, the acceleration of certain other indebtedness resulting from non-payment of that indebtedness and certain events of insolvency. If any event of default occurs, any amount then outstanding under the indentures may immediately become due and payable.
In June 2020, AerCap Trust and AICDC completed the redemption of all $500.0 million outstanding aggregate principal amount of their 4.250% Senior Notes due 2020.
In June 2020, AerCap Trust and AICDC co-issued $1.25 billion aggregate principal amount of 6.5% Senior Notes due 2025 (the “June Notes Offering”). In July 2020, AerCap Trust and AICDC co-issued $1.25 billion aggregate principal amount of 4.5% Senior Notes due 2023 (the “July Notes Offering”). The proceeds from the June Notes Offering and the July Notes Offering were used for general corporate purposes.
In August 2020, AerCap Trust and AICDC completed the redemption of all $999.0 million outstanding aggregate principal amount of their 4.625% Senior Notes due 2020.
F-32

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
In September 2020, AerCap Trust commenced offers to purchase for cash, for its own account and on behalf of AICDC, certain series of AerCap Trust & AICDC Notes (the “October Tender Offer”). Pursuant to the October Tender Offer, AerCap Trust repurchased and retired (i) $556.0 million aggregate principal amount of 4.5% Senior Notes due 2021, (ii) $513.7 million aggregate principal amount of 5.0% Senior Notes due 2021 and (iii) $398.9 million aggregate principal amount of 4.45% Senior Notes due 2021 for an aggregate total consideration of approximately $1.5 billion.
In September 2020, AerCap Trust and AICDC co-issued $900.0 million aggregate principal amount of 3.15% Senior Notes due 2024 and $600.0 million aggregate principal amount of 4.625% Senior Notes due 2027 (the “September Notes Offering”). The proceeds from the September Notes Offering were used to fund the October Tender Offer.
In November 2020, AerCap Trust commenced offers to purchase for cash, for its own account and on behalf of AICDC, certain series of AerCap Trust & AICDC Notes (the “December Tender Offer”). Pursuant to the December Tender Offer, AerCap Trust repurchased and retired (i) $484.4 million aggregate principal amount of 3.95% Senior Notes due 2022 and (ii) $232.8 million aggregate principal amount of 3.5% Senior Notes due 2022 for an aggregate total consideration of approximately $749.3 million.
In January 2021, AerCap Trust and AICDC co-issued $1.0 billion aggregate principal amount of 1.75% Senior Notes due 2026 (“January Notes Offering”). The proceeds from the January Notes Offering will be used for general corporate purposes.
During the year ended December 31, 2020, we recognized loss on debt extinguishment of $118.5 million, primarily related to the premium paid on the repurchase of debt pursuant to the July, October and December Tender Offers.
Revolving credit facilities
In March 2018, AerCap entered into a $950.0 million unsecured revolving and term loan agreement (the “Asia Revolver”) with a maturity of March 2022.
In March 2014, AICDC entered into a senior unsecured revolving credit facility (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 for AerCap to increase the size by an additional $0.5 billion) and extended the maturity to February 2024.
The obligations under the Asia Revolver and the Citi Revolver are guaranteed by AerCap Holdings N.V. and certain of its subsidiaries. Availability of borrowings under the Asia Revolver and the Citi Revolver is subject to the satisfaction of customary conditions precedent. We have the right to terminate or cancel, in whole or in part, the unused portions of the commitment amounts.
Both the Asia Revolver and the Citi Revolver contain 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.
Export credit facilities
The principal amounts under the export credit facilities amortize over ten- to 12-year terms. The export credit facilities require that SPEs controlled by the respective borrowers hold legal title to the financed aircraft. Obligations under the export credit facilities are secured by, among other things, a pledge of the shares of the SPEs.
The obligations under the export credit facilities are guaranteed by AerCap Holdings N.V. and certain of its subsidiaries, as well as various export credit agencies.

F-33

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
Institutional secured term loans and secured portfolio loans
The following table provides details regarding the terms of our outstanding institutional secured term loans and secured portfolio loans:
Collateral (Number of aircraft) (a) Amount outstanding Weighted average
interest rate 		Maturity
Institutional secured term loans
Hyperion 58 $ 1,050,000  2.00  % 2023
Secured portfolio loans
Celtago & Celtago II 25 984,076  2.78  % 2022 - 2025
Cesium 15 791,480  2.80  % 2025
Goldfish 13 671,060  1.65  % 2025
Scandium 10 627,555  3.16  % 2025
Rhodium 11 551,209  2.98  % 2026
Other secured facilities 51 2,314,253  2.88  % 2022 - 2032
183 $ 6,989,633 

(a)These loans are secured by a combination of aircraft and the equity interests in the borrower and certain special purpose entity (“SPE”) subsidiaries of the borrower that own the aircraft.

Institutional secured term loans
The Hyperion institutional term loan was originally entered into in 2014. The obligations of the borrowers of the loan are guaranteed by AerCap Holdings N.V. and certain of its subsidiaries.
The Hyperion loan contains customary covenants and events of default for financings of this type, including covenants that limit the ability of the subsidiary borrowers and their subsidiaries to incur additional indebtedness and create liens, and covenants that limit the ability of the guarantors, the subsidiary borrowers and their subsidiaries to consolidate, merge or dispose of all or substantially all of their assets and enter into transactions with affiliates.
Secured portfolio loans
The obligations of each of the respective borrowers under each secured portfolio loan are guaranteed by AerCap Holdings N.V. and certain of its subsidiaries.
These loans contain customary covenants and events of default for financings of this type, including covenants that limit the ability of the borrower and its subsidiaries to incur additional indebtedness and create liens, and covenants that limit the ability of the guarantors and the borrower and its subsidiaries to consolidate, merge or dispose of all or substantially all of their assets or enter into transactions with affiliates.

F-34

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
AerFunding Revolving Credit Facility
AerFunding 1 Limited (“AerFunding”) is an SPE whose share capital is owned 95% by a charitable trust and 5% by AerCap Ireland. AerFunding is a consolidated subsidiary formed for the purpose of acquiring aircraft assets. In April 2006, AerFunding entered into a non-recourse senior secured revolving credit facility that in December 2020 was amended to extend its revolving period, to June 2022, following which there is a 32-month term out period. The final maturity date of the AerFunding Revolving Credit Facility is February 2025.
Borrowings under the AerFunding Revolving Credit Facility are secured by, among other things, security interests in and pledges or assignments of equity ownership and beneficial interests in all of the subsidiaries of AerFunding, as well as by AerFunding’s interests in the leases of its assets.
Other secured debt
AerCap has entered into a number of financings, provided by a range of banks and non-bank financial institutions, to fund the purchase of aircraft and for general corporate purposes.
The majority of the financings are guaranteed by AerCap and are secured by, among other things, a pledge of the shares of the subsidiaries owning the related aircraft and, in certain cases, a mortgage on the applicable aircraft. All of our financings contain affirmative covenants customary for secured financings of this type.
Subordinated debt
The following table provides a summary of the outstanding subordinated debt as of December 31, 2020:
As of December 31, 2020
Amount
outstanding 		Weighted average interest rate Maturity
ECAPS Subordinated Notes (a) $ 1,000,000  3.33  % 2065
2045 Subordinated Notes 500,000  6.50  % 2045
2079 Subordinated Notes 750,000  5.88  % 2079
$ 2,250,000 

(a)Enhanced Capital Advantaged Preferred Securities (“ECAPS”)


F-35

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
ECAPS Subordinated Notes
In December 2005, ILFC issued two tranches of subordinated notes in an aggregate principal amount of $1.0 billion. Both the $400.0 million and $600.0 million tranches have a floating interest rate, with margins of 1.80% and 1.55% respectively, plus the highest of three-month LIBOR, ten-year constant maturity U.S. Treasury, and 30-year constant maturity U.S. Treasury.
Upon consummation of the ILFC Transaction, the subordinated notes were assumed by AerCap Trust, and AerCap Holdings N.V. and certain of its subsidiaries became guarantors. ILFC remains a co-obligor under the indentures governing the subordinated notes. The addition of these subsidiary guarantors did not affect the subordinated ranking of these notes.
The ECAPS contain customary financial tests, including a minimum ratio of equity to total managed assets and a minimum fixed charge coverage ratio. Failure to comply with these financial tests will result in a “mandatory trigger event.” If a mandatory trigger event occurs and we are unable to raise sufficient capital in a manner permitted by the terms of the subordinated debt to cover the next interest payment on the subordinated debt, a “mandatory deferral event” will occur, requiring us to defer all interest payments and prohibiting the payment of cash dividends on AerCap Trust’s or ILFC’s capital stock or its equivalent until both financial tests are met or we have raised sufficient capital to pay all accumulated and unpaid interest on the subordinated debt. Mandatory trigger events and mandatory deferral events are not events of default under the indenture governing the subordinated debt.
2045 Junior Subordinated Notes
In June 2015, AerCap Trust issued $500.0 million of junior subordinated notes due 2045 (the “2045 Junior Subordinated Notes”). The 2045 Junior Subordinated Notes currently bear interest at a fixed interest rate of 6.5% and, beginning in June 2025, will bear interest at a rate of three-month LIBOR plus 4.3%.
The 2045 Junior Subordinated Notes are guaranteed by AerCap Holdings N.V. and certain of its subsidiaries. We may defer any interest payments on the 2045 Junior Subordinated Notes for up to five consecutive deferral periods. At the end of five years following the commencement of any deferral period, we must pay all accrued and unpaid deferred interest, including compounded interest.
We may at our option redeem the 2045 Junior Subordinated Notes before their maturity in whole or in part, at any time and from time to time, on or after June 15, 2025 at 100% of their principal amount plus any accrued and unpaid interest thereon.
The 2045 Junior Subordinated Notes are junior subordinated unsecured obligations, rank equally with all of the issuer’s and the guarantors’ future equally ranking junior subordinated indebtedness, if any, and are subordinate and junior in right of payment to all of the issuer’s and the guarantors’ existing and future unsubordinated indebtedness.


F-36

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
13. Debt (Continued)
2079 Junior Subordinated Notes
In October 2019, AerCap Holdings N.V. issued $750.0 million of junior subordinated notes due 2079 (the “2079 Junior Subordinated Notes”). The 2079 Junior Subordinated Notes currently bear interest at a fixed interest rate of 5.875% and, from October 2024, will bear interest at a rate equal to the five-year U.S. Treasury Rate plus 4.535%, to be reset on each subsequent five-year anniversary.
We may forgo payment of interest on the 2079 Junior Subordinated Notes for any interest period. Upon a forgoing of interest, we will have no obligation to pay the forgone interest on the payment date or at any future date. The 2079 Junior Subordinated Notes are guaranteed by certain of AerCap Holdings N.V.’s subsidiaries.
We may at our option redeem the 2079 Junior Subordinated Notes before their maturity in whole or in part on October 10, 2024 (the “First Call Date”) and on each subsequent five-year anniversary of the First Call Date, at 100% of their principal amount plus any accrued and unpaid interest thereon for the then-current six-month interest period.
The 2079 Junior Subordinated Notes are junior subordinated unsecured obligations, rank equally with all of the issuer’s and the guarantors’ future equally ranking junior subordinated obligations, if any, and are subordinate and junior in right of payment to all of the issuer’s and the guarantors’ present and future creditors (i) who are unsubordinated creditors, (ii) who are subordinated only to the claims of unsubordinated creditors, or (iii) who are subordinated creditors except those whose claims rank equally with or junior to the 2079 Junior Subordinated Notes. As of December 31, 2020, the 2079 Junior Subordinated Notes rank senior only to the issuer’s and the guarantors’ common and preferred stock.
Subordinated debt issued by joint ventures
In 2008 and 2010, AerCap and our joint venture partner each purchased subordinated loan notes issued by the joint ventures. The subordinated debt held by AerCap is eliminated in consolidation of the joint ventures.
F-37

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
14. Income taxes
Our subsidiaries are subject to taxation in a number of tax jurisdictions, principally Ireland, the United States, and the Netherlands.
The following table presents our income tax (benefit) expense by tax jurisdiction for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Deferred tax expense (benefit)
Ireland $ (31,387) $ 154,134  $ 140,621 
United States 6,180  11,327  6,510 
The Netherlands 572  7,316  4,136 
Other (1,279) 7,658  8,881 
(25,914) 180,435  160,148 
Deferred tax (benefit) expense related to a (decrease) increase in
changes in valuation allowance of deferred tax assets
Ireland 1,882  2,358  368 
United States 12,085  (18,425) (2,838)
The Netherlands (11,746) 87  (2,302)
Other 2,811  (1,957) (7,788)
5,032  (17,937) (12,560)
Current tax (benefit) expense
Ireland —  —  (27)
United States 3,016  789  (3,691)
The Netherlands (314) 261  (307)
Other 949  4,166  516 
3,651  5,216  (3,509)
Income tax (benefit) expense $ (17,231) $ 167,714  $ 144,079 
The following table provides a reconciliation of the income tax (benefit) expense at statutory income tax rate to income tax (benefit) expense for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Income tax (benefit) expense at statutory income tax rate of 12.5% $ (39,327) $ 167,580  $ 143,866 
Permanent differences 22,486  (a) (949) (b) 1,016  (c)
Foreign rate differential (390) 1,083  (803)
22,096  134  213 
Income tax (benefit) expense $ (17,231) $ 167,714  $ 144,079 

(a)The 2020 permanent differences included non-deductible goodwill impairment, non-deductible interest, non-deductible share-based compensation in Ireland, and a valuation allowance change in respect of U.S., Dutch and Irish tax losses.
(b)The 2019 permanent differences included non-deductible interest, non-deductible share-based compensation in Ireland and in the Netherlands, and a valuation allowance change in respect of U.S., Dutch and Irish tax losses.
(c)The 2018 permanent differences included non-deductible share-based compensation in Ireland and in the Netherlands, and a valuation allowance change in respect of U.S., Dutch and Irish tax losses.
F-38

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
14. Income taxes (Continued)
The following tables present our foreign rate differential by tax jurisdiction for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31, 2020
Pre-tax income (loss) Local statutory tax rate (a) Variance to Irish statutory tax rate of 12.5% Tax variance as a result of global activities (b)
Tax jurisdiction
Ireland $ (160,739) 12.5  % —  $ — 
United States 101,339  21.0  % 8.5  % 8,614 
The Netherlands (45,954) 25.0  % 12.5  % (5,744)
Other (29,378) 23.6  % 11.1  % (3,260)
Taxable loss $ (134,732) $ (390)
Permanent differences (c) (179,886)
Loss from continuing operations before income tax $ (314,618)

Year Ended December 31, 2019
Pre-tax income (loss) Local statutory tax rate (a) Variance to Irish statutory tax rate of 12.5% Tax variance as a result of global activities (b)
Tax jurisdiction
Ireland $ 1,324,100  12.5  % —  $ — 
United States (30,041) 21.0  % 8.5  % (2,553)
The Netherlands 30,656  25.0  % 12.5  % 3,832 
Other 8,331  10.1  % (2.4  %) (196)
Taxable income $ 1,333,046  $ 1,083 
Permanent differences (d) 7,596   
Income from continuing operations before income tax $ 1,340,642 

F-39

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
14. Income taxes (Continued)
Year Ended December 31, 2018
Pre-tax income (loss) Local statutory tax rate (a) Variance to Irish statutory tax rate of 12.5% Tax variance as a result of global activities (b)
Tax jurisdiction
Ireland $ 1,163,574  12.5  % —  $ — 
United States (85) 22.0  % 9.5  % (8)
The Netherlands 6,108  25.0  % 12.5  % 764 
Other (10,977) 26.7  % 14.2  % (1,559)
Taxable income $ 1,158,620  $ (803)
Permanent differences (e) (7,687)
Income from continuing operations before income tax $ 1,150,933 

(a)The local statutory income tax expense for our significant tax jurisdictions (Ireland, the United States and the Netherlands) does not differ from the actual income tax expense.
(b)The tax variance as a result of global activities is primarily caused by our operations in countries with a higher or lower statutory tax rate than the statutory tax rate in Ireland.
(c)The 2020 permanent differences included non-deductible goodwill impairment, non-deductible interest, non-deductible share-based compensation in Ireland, and a valuation allowance change in respect of U.S., Dutch and Irish tax losses.
(d)The 2019 permanent differences included non-deductible interest, non-deductible share-based compensation in Ireland and in the Netherlands, and a valuation allowance change in respect of U.S., Dutch and Irish tax losses.
(e)The 2018 permanent differences included non-deductible share-based compensation in Ireland and in the Netherlands, and a valuation allowance change in respect of U.S., Dutch and Irish tax losses.
The calculation of income for tax purposes differs significantly from book income. Deferred income tax is provided to reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured under tax law in the various jurisdictions. Tax loss carry forwards and accelerated tax depreciation on flight equipment held for operating leases give rise to the most significant timing differences.
The following tables provide details regarding the principal components of our deferred income tax liabilities and assets by jurisdiction as of December 31, 2020 and 2019:
As of December 31, 2020
Ireland United States The
Netherlands 		Other Total
Depreciation/Impairment $ (2,154,075) $ (14,014) $ 12,510  $ (1,440) $ (2,157,019)
Intangibles (3,560) (3,986) —  —  (7,546)
Accrued maintenance liability (1,985) 410  —  —  (1,575)
Obligations under capital leases and debt obligations (3,343) —  —  —  (3,343)
Investments —  (7,836) —  —  (7,836)
Deferred losses on sale of assets —  20,534  —  —  20,534 
Valuation allowance (7,536) (50,805) (4,278) (16,774) (79,393)
Losses and credits forward 1,410,570  67,697  12,359  16,052  1,506,678 
Other (52,443) 1,002  356  (1,314) (52,399)
Net deferred income tax (liabilities) assets $ (812,372) $ 13,002  $ 20,947  $ (3,476) $ (781,899)

F-40

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
14. Income taxes (Continued)
As of December 31, 2019
Ireland United States The
Netherlands 		Other Total
Depreciation/Impairment $ (1,924,492) $ (606) $ 6,873  $ (1,253) $ (1,919,478)
Intangibles (4,594) (5,222) —  —  (9,816)
Accrued maintenance liability (3,456) 1,666  —  —  (1,790)
Obligations under capital leases and debt obligations (3,806) —  —  —  (3,806)
Investments —  (7,996) —  —  (7,996)
Deferred losses on sale of assets —  24,178  —  —  24,178 
Valuation allowance (5,654) (38,720) (16,025) (13,962) (74,361)
Losses and credits forward 1,146,434  58,099  20,568  19,090  1,244,191 
Other (58,691) (99) (1,773) (5,818) (66,381)
Net deferred income tax (liabilities) assets $ (854,259) $ 31,300  $ 9,643  $ (1,943) $ (815,259)
The net deferred income tax liabilities as of December 31, 2020 of $781.9 million were recognized in our Consolidated Balance Sheet as deferred income tax assets of $131.5 million and as deferred income tax liabilities of $913.4 million.
The net deferred income tax liabilities as of December 31, 2019 of $815.3 million were recognized in our Consolidated Balance Sheet as deferred income tax assets of $95.1 million and as deferred income tax liabilities of $910.3 million.
The following table presents the movements in the valuation allowance for deferred income tax assets during the years ended December 31, 2020 and 2019:
Year Ended December 31,
2020 2019
Valuation allowance at beginning of period $ 74,361  $ 92,298 
Decrease of allowance to income tax provision 5,032  (17,937)
Valuation allowance at end of period $ 79,393  $ 74,361 
As of December 31, 2020 and 2019, we had $30.7 million and $30.1 million, respectively, of unrecognized tax benefits. Substantially all of the unrecognized tax benefits as of December 31, 2020, if recognized, would affect our effective tax rate. Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next 12 months, based on the information currently available, we do not expect any change to be material to our consolidated financial condition.
Our primary tax jurisdictions are Ireland, the United States and the Netherlands. Our tax returns are open for examination in Ireland from 2016 forward, in the United States from 2014 forward and in the Netherlands from 2015 forward.

F-41

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
14. Income taxes (Continued)
Ireland
Since 2006, the enacted Irish corporate income tax rate has been 12.5%. Some of our Irish tax-resident operating subsidiaries have significant loss carry forwards as of December 31, 2020, which give rise to deferred income tax assets. The availability of these loss carry forwards does not expire with time. In addition, the vast majority of all of our Irish tax-resident subsidiaries are entitled to accelerated aircraft depreciation for tax purposes and shelter net taxable income with the surrender of losses on a current year basis within the Irish tax group. Based on projected taxable profits in our Irish subsidiaries, we expect to recover the majority of the value of our Irish tax assets and have not recognized a valuation allowance against such assets, with the exception of $7.5 million, as of December 31, 2020.
United States
Our U.S. subsidiaries are assessable to federal and state U.S. taxes. During 2020, we had one significant group of U.S. companies that file a consolidated return. The blended federal and state tax rate applicable to our combined U.S. group was 21.0% for the year ended December 31, 2020. Our U.S. federal net operating losses generated for tax years beginning before December 31, 2017 expire between 2026 and 2037. Any U.S. federal net operating losses generated in tax years beginning after December 31, 2017 will have an unlimited carry forward period.
The Netherlands
The majority of our Dutch subsidiaries form one fiscal unity and are included in one consolidated tax filing. Deferred income tax is calculated using the Dutch corporate income tax rate, which is 25%. In respect of the year ended December 31, 2020, tax losses in the Netherlands can generally be carried back one year and carried forward six years before expiry.

F-42

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
15. Leases
We lease office space in several locations globally under operating lease arrangements, and in limited instances may enter into finance leases for flight equipment. Our leases have remaining lease terms of up to 18 years, and in some cases we have options to extend the lease terms for up to ten years. Our finance lease arrangements may be terminated prior to their original expiration date at our discretion.
As of December 31, 2020 and 2019, operating lease ROU assets net of lease incentives included in other assets were $40.6 million and $43.7 million, respectively, and operating lease liabilities included in accounts payable, accrued expenses and other liabilities were $49.4 million and $51.1 million, respectively. As of December 31, 2020 and 2019, finance lease liabilities included in debt were $110.7 and $136.2 million, respectively.
As of December 31, 2020 and 2019, supplemental balance sheet information related to leases was as follows:
December 31, 2020 December 31, 2019
Operating leases Finance leases Operating leases Finance leases
Weighted average remaining lease term (years) 8.3 15.5 9.0 16.3
Weighted average discount rate 6.6  % 6.5  % 6.4  % 6.5  %
As of December 31, 2020, maturities of operating and finance lease liabilities were as follows:
Operating leases Finance leases
2021 $ 9,709  $ 9,659 
2022 9,055  9,659 
2023 9,125  9,659 
2024 6,792  9,659 
2025 5,715  9,659 
Thereafter 24,320  148,330 
Total lease payments $ 64,716  $ 196,625 
Less imputed interest (15,293) (85,924)
Present value of lease liabilities $ 49,423  $ 110,701 


F-43

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
16. Equity
The following table presents our share repurchase programs for the years ended December 31, 2020 and 2019:
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  Expired
January 2020 June 30, 2020 250,000  Expired
During the year ended December 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.
During the year ended December 31, 2020, our Board of Directors cancelled 3,000,000 ordinary shares which were acquired through the share repurchase programs in accordance with the authorizations obtained from the Company’s shareholders.
F-44

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
17. Share-based compensation
Under our equity incentive plans, we grant restricted stock units and restricted stock, and previously granted stock options, to directors, officers and employees to attract and retain them on competitive terms, and to incentivize superior performance with a view to creating long-term value for the benefit of the Company, its shareholders and other stakeholders.
AerCap equity grants
In March 2012, we implemented an equity incentive plan (the “Equity Incentive Plan 2012”) which provides for the grant of equity awards to participants of the plan selected by the Nomination and Compensation Committee of our Board of Directors. The maximum number of equity awards available under the plan is equivalent to 8,064,081 ordinary shares. The Equity Incentive Plan 2012 is not open for equity awards to our directors.
On May 14, 2014, we implemented an equity incentive plan (the “Equity Incentive Plan 2014”) which provides for the grant of equity awards to participants of the plan selected by the Nomination and Compensation Committee of our Board of Directors. The maximum number of equity awards available under the plan is equivalent to 4,500,000 ordinary shares. The Equity Incentive Plan 2014 is open for equity awards to our directors.
The Equity Incentive Plan 2014 and Equity Incentive Plan 2012 are collectively referred to herein as “AerCap Equity Plans.”
The terms and conditions, including the vesting conditions, of the equity awards granted under AerCap Equity Plans are determined by the Nomination and Compensation Committee and, for our directors, by the Board of Directors in line with the remuneration policies approved by the General Meeting of Shareholders. The vesting periods of the majority of equity awards range between three years and five years. Our long-term equity awards are subject to long-term performance vesting criteria, based on the Company’s U.S. GAAP EPS budget over the specified periods, in order to promote and encourage superior performance over a prolonged period of time. Some of our officers and employees receive annual equity awards as part of their compensation package. All outstanding awards of restricted stock units are convertible into ordinary shares of the Company at a ratio of one-to-one, prior to deduction for payroll withholding taxes, if applicable. Ordinary shares subject to outstanding equity awards, which are not issued or delivered by reason of, amongst others, the cancellation or forfeiture of such awards or the withholding of such ordinary shares to settle tax obligations, shall again be available under the AerCap Equity Plans.
F-45

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
17. Share-based compensation (Continued)
The following table presents movements in the outstanding restricted stock units and restricted stock under the AerCap Equity Plans during the year ended December 31, 2020:
Year Ended December 31, 2020
Number of time-based restricted stock units and restricted stock Number of performance-based restricted stock units and restricted stock Weighted average grant date fair value of time-based grants ($) Weighted average grant date fair value of performance-based grants ($)
Number at beginning of period 1,504,194  2,486,136  $ 51.78  $ 51.53 
Granted (a) 1,178,749  355,033  34.26  34.38 
Vested (b) (558,152) (576,255) 45.06  50.54 
Forfeited (16,388) (10,702) 46.74  37.88 
Number at end of period 2,108,403  2,254,212  $ 43.81  $ 49.11 

(a)Includes 990,802 shares of restricted stock granted under the AerCap Equity Plans, of which 669,362 shares of restricted stock were issued, with the remaining 321,440 ordinary shares being withheld and applied to pay the taxes involved. As part of the 321,440 ordinary shares withheld to pay for taxes, 155,015 ordinary shares were treated as granted and subsequently vested on the grant date under specific Irish tax legislation. As a result, we recognized an expense of $5.2 million on the grant dates associated with these ordinary shares.
(b)323,963 restricted stock units, which were previously granted under the AerCap Equity Plans, vested. In connection with the vesting of the restricted stock units, the Company issued, in full satisfaction of its obligations, 214,722 ordinary shares to the holders of these restricted stock units, with the remainder being withheld and applied to pay the taxes in respect of those awards. Restrictions on 655,429 shares of restricted stock (471,334 shares of restricted stock net of withholding for taxes) lapsed during the period. In addition, 155,015 ordinary shares were treated as granted and subsequently vested on the grant dates, as described in (a) above.
The amount of share-based compensation expense is determined by reference to the fair value of the restricted stock units or restricted stock on the grant date, based on the trading price of the Company’s shares on the grant date and reflective of the probability of vesting. All outstanding options have been fully expensed.
The following table presents our expected share-based compensation expense based on existing grants, assuming that the established performance criteria are met and that no forfeitures occur:
Expected share-based compensation expense
(U.S. Dollars in millions)
2021 $ 50.5 
2022 30.6 
2023 10.5 
2024 3.2 
2025 0.6 

F-46

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
18. Geographic information
The following table presents the percentage of lease revenue attributable to individual countries representing at least 10% of our total lease revenue in any year presented, based on each lessee’s principal place of business, for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Amount % Amount % Amount %
China (a) $ 835,317  19.3  % $ 874,145  18.7  % $ 639,316  14.1  %
United States 502,976  11.6  % 511,676  10.9  % 528,687  11.6  %
Other countries (b) 2,982,713  69.1  % 3,296,445  70.4  % 3,369,090  74.3  %
Total $ 4,321,006  100.0  % $ 4,682,266  100.0  % $ 4,537,093  100.0  %

(a)Includes mainland China, Hong Kong and Macau.
(b)No individual country within this category including Ireland, where our headquarters is located, accounts for more than 10% of our lease revenue.
The following table presents the percentage of long-lived assets, including flight equipment held for operating leases, flight equipment held for sale, investment in finance and sales-type leases, net and maintenance rights assets, attributable to individual countries representing at least 10% of our total long-lived assets in any year presented, based on each lessee’s principal place of business, as of December 31, 2020 and 2019:
As of December 31,
2020 2019
Amount % Amount %
China (a) $ 7,472,852  20.4  % $ 7,965,456  21.0  %
United States 4,257,232  11.6  % 4,395,161  11.6  %
Other countries (b) 24,911,580  68.0  % 25,609,668  67.4  %
Total $ 36,641,664  100.0  % $ 37,970,285  100.0  %

(a)Includes mainland China, Hong Kong and Macau.
(b)No individual country within this category including Ireland, where our headquarters is located, accounts for more than 10% of our long-lived assets.
During the years ended December 31, 2020, 2019 and 2018, we had no lessees that represented more than 10% of total lease revenue.
F-47

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
19. Selling, general and administrative expenses
Selling, general and administrative expenses consisted of the following for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Personnel expenses $ 104,765  $ 122,453  $ 132,694 
Share-based compensation 69,187  69,410  95,176 
Professional services 24,480  24,287  24,264 
Travel expenses 7,809  17,604  21,790 
Office expenses 12,974  14,095  14,784 
Other expenses 22,946  19,609  16,518 
$ 242,161  $ 267,458  $ 305,226 

20. Other income
Other income consisted of the following for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Management fees $ 9,701  $ 12,445  $ 14,539 
Interest and other income 73,304  53,794  47,025 
$ 83,005  $ 66,239  $ 61,564 

21. Lease revenue
Our current operating lease agreements expire up to and over the next 14 years. The contracted minimum future lease payments receivable from lessees for flight equipment on non-cancelable operating leases for our owned aircraft and engines as of December 31, 2020 were as follows:
Contracted minimum future lease payments receivable
2021 $ 3,773,352 
2022 3,551,721 
2023 3,363,258 
2024 3,070,849 
2025 2,743,947 
Thereafter 9,441,322 
$ 25,944,449 

F-48

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
22. Asset impairment
Asset impairment consisted of the following for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Flight equipment held for operating leases (Note 5) $ 986,559  $ 69,383  $ 39,318 
Goodwill (Note 7) 58,094  —  — 
Flight equipment held for sale 5,483  766  4,868 
Maintenance rights and other 36,847  —  — 
$ 1,086,983  $ 70,149  $ 44,186 
Our long-lived assets include flight equipment held for operating lease 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 flight equipment held for operating lease each quarter.
The Covid-19 pandemic and responsive government actions have had a significant impact on both domestic and international travel. While both domestic and international air travel have increased since the low points experienced earlier this year, in general domestic travel has been faster to recover, and the timeframe for the recovery of domestic travel is generally expected to be more rapid than for international travel. During the year ended December 31, 2020, the Covid-19 pandemic led governments in many countries to impose new restrictions on international travel or to delay the relaxation of existing restrictions. As a result, the expected recovery time for international air traffic has become longer. In addition, we have observed an increased number of airlines shifting away from current technology widebody aircraft in favor of new technology widebody aircraft such as the Boeing 787 and Airbus A350. We expect these factors to impact the future lease rates and long-term values of our Boeing 777 and Airbus A330 aircraft.
During the year ended December 31, 2020, we recognized impairment charges related to the impairment of our flight equipment held for operating lease, primarily Airbus A330 and Boeing 777 aircraft. In addition, we recognized impairment charges related to sales transactions and lease terminations, which were fully or partially offset by maintenance revenue recognized when we retained maintenance related balances or received EOL compensation. We also assessed goodwill for impairment and recognized impairment charges related to goodwill. Please refer to Note 28—Fair Value Measurements for the method of determining the fair value of our flight equipment held for operating leases.
During the years ended December 31, 2019 and 2018, we recognized impairment charges related to sales transactions and lease terminations, which were fully or partially offset by maintenance revenue recognized when we retained maintenance-related balances or received EOL compensation.

23. Allowance for credit losses
Movements in the allowance for credit losses during year ended December 31, 2020 were as follows:
Year Ended
December 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 50,215 
Write-offs charged against the allowance (13,326)
Allowance for credit losses at end of period $ 67,153 
During the year ended December 31, 2020, we increased our credit provision, classified in leasing expenses, by $50.2 million primarily to reflect the increased credit risk due to the Covid-19 pandemic.
F-49

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
24. Earnings per share
Basic EPS is calculated by dividing net (loss) income by the weighted average number of our ordinary shares outstanding, which excludes 2,552,346, 2,354,318 and 2,429,442 shares of unvested restricted stock as of December 31, 2020, 2019 and 2018, respectively. In general, 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. However, due to the reported loss for the year ended December 31, 2020, basic EPS is not adjusted by the effect of dilutive securities. The number of ordinary shares under our equity compensation plans which could dilute EPS in the future was 2,630,066 for the year ended December 31, 2020. The number of shares excluded from diluted shares outstanding was 163,067 and 90,929 for the years ended December 31, 2019 and 2018, respectively, because the effect of including those shares in the calculation would have been anti-dilutive.
The computations of basic and diluted EPS for the years ended December 31, 2020, 2019 and 2018 were as follows:
Year Ended December 31,
2020 2019 2018
Net (loss) income for the computation of basic EPS $ (298,566) $ 1,145,694  $ 1,015,632 
Weighted average ordinary shares outstanding—basic
127,743,828  134,570,169  145,162,220 
Basic EPS
$ (2.34) $ 8.51  $ 7.00 

Year Ended December 31,
2020 2019 2018
Net (loss) income for the computation of diluted EPS $ (298,566) $ 1,145,694  $ 1,015,632 
Weighted average ordinary shares outstanding—diluted
127,743,828  135,898,139  148,706,266 
Diluted EPS
$ (2.34) $ 8.43  $ 6.83 
The computations of ordinary shares outstanding, excluding shares of unvested restricted stock, as of December 31, 2020, 2019 and 2018 were as follows:
As of December 31,
2020 2019 2018
Number of ordinary shares
Ordinary shares issued 138,847,345  141,847,345  151,847,345 
Treasury shares (8,448,807) (10,263,856) (9,172,681)
Ordinary shares outstanding 130,398,538  131,583,489  142,674,664 
Shares of unvested restricted stock (2,552,346) (2,354,318) (2,429,442)
Ordinary shares outstanding, excluding shares of unvested restricted
stock
127,846,192  129,229,171  140,245,222 

F-50

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

25. 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 year ended December 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 December 31, 2020 and 2019, substantially all assets and liabilities presented in our Consolidated Balance Sheets were held in consolidated VIEs.
We have determined that we are the 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 Consolidated Balance Sheets under Supplemental balance sheet information. Further details of debt held by our consolidated VIEs are disclosed in Note 13—Debt.
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.
F-51

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

25. 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 December 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 December 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 December 31, 2020, AerFunding had $2,074.9 million outstanding under a secured revolving credit facility and $1,328.0 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 December 31, 2020 and 2019:
As of December 31,
2020 2019
Carrying value of debt and equity investments $ 125,955  $ 123,279 
Debt guarantees —  68,901 
Maximum exposure to loss $ 125,955  $ 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.
As of December 31, 2019 we guaranteed debt of $68.9 million for AerLift Leasing Limited (“AerLift”). In November 2020, this debt obligation was repaid in full.
AerDragon Aviation Partners Limited and its subsidiaries (“AerDragon”), AerLift, Acsal Holdco, LLC (“ACSAL”) and 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. Please refer to Note 9 —Investments for further details.
Other variable interest entities
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.
F-52

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
26. Related party transactions
The following table presents amounts received from related parties for management fees and dividends for the years ended December 31, 2020, 2019 and 2018:
Year Ended December 31,
2020 2019 2018
Management fees Dividends Management fees Dividends Management fees Dividends
AerDragon $ 543  $ —  $ 675  $ 1,667  $ 497  $ 1,667 
ACSAL 480  267  480  1,088  480  1,119 
AerLift 590  —  1,360  393  1,677  394 
$ 1,613  $ 267  $ 2,515  $ 3,148  $ 2,654  $ 3,180 
Norwegian Air Shuttle ASA
During the year ended December 31, 2020, we leased aircraft to, and had ordinary share and debt investments in NAS. Please refer to Note 9 —Investments for details of our ordinary share and debt investments. As of December 31, 2020, we no longer have a seat on the NAS board and have reduced our shareholding significantly through sales; therefore, NAS is no longer considered a related party. During the year ended December 31, 2020, we sold three of our forward order aircraft to Arctic Aviation Assets DAC, which is a wholly owned subsidiary of NAS. No gain or loss was recognized on these sales.

F-53

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



27. Commitments and contingencies
Aircraft on order
As of December 31, 2020, we had commitments to purchase 286 new aircraft for delivery through 2027. These commitments are based upon purchase agreements with Boeing, Airbus and 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. As of December 31, 2020, we had made non-refundable deposits on these purchase commitments (exclusive of capitalized interest and fair value adjustments) of approximately $1.8 billion.
A portion of the aggregate purchase price for the acquisition of aircraft will be funded by incurring additional debt. The amount of the indebtedness to be incurred will depend on the final purchase price of the aircraft, which can vary due to a number of factors, including inflation.
Prepayments on flight equipment include prepayments of our forward order flight equipment and other balances held by the aircraft manufacturers. Movements in prepayments on flight equipment during the years ended December 31, 2020 and 2019 were as follows:
Year Ended December 31,
2020 2019
Prepayments on flight equipment at beginning of period $ 2,954,478  $ 3,024,520 
Prepayments made during the period, net 270,032  1,329,110 
Interest paid and capitalized during the period 49,144  97,327 
Prepayments and capitalized interest applied to the purchase of flight equipment (1,161,995) (1,496,479)
Prepayments on flight equipment at end of period $ 2,111,659  $ 2,954,478 
The following table presents our contractual commitments for the purchase of flight equipment as of December 31, 2020:
2021 2022 2023 2024 2025 Thereafter Total
Purchase obligations (a) (b)
$ 1,511,360  $ 2,519,296  $ 3,099,701  $ 2,962,120  $ 2,525,185  $ 1,508,043  $ 14,125,705 

(a)As of December 31, 2020, we had commitments to purchase 284 aircraft and two purchase and leaseback transactions. The timing of our purchase obligations is based on current estimates. Due to the current Covid-19 pandemic, we expect that the delivery of many of our aircraft on order will be delayed to future periods. We have incorporated expected delivery delays into the table above. In addition, we have the right to reschedule the delivery dates of certain of our aircraft to future dates.
(b)The delivery positions of our Boeing 737 MAX aircraft are based on our best estimates and incorporate the information currently available to us. Our estimates may be different from the actual delivery dates, and will depend on the speed at which Boeing is able to deliver our aircraft on order to us.
F-54

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

27. 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 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 June 24, 2020, the STF reversed its earlier contrary rulings and granted our extraordinary appeal, ordering a new panel of the STJ to review the merits of our challenge against TJSP’s original order. VASP has appealed the STF’s latest order.
In 2006, VASP commenced a related proceeding to calculate the amount of alleged damages owed under the TJSP’s 1996 judgment. In 2017, the court decided that VASP had suffered no damages even if the TJSP’s 1996 judgment regarding liability were affirmed. On April 20, 2018, VASP appealed this decision. 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.
F-55

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

27. Commitments and contingencies (Continued)
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).
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 merits 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.

F-56

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


28. 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 December 31, 2020 and 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. As of December 31, 2020, we held an investment at fair value of $12.1 million, based on quoted market price. The valuation of this investment was classified as Level 1.
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 December 31, 2020 and 2019:
December 31, 2020
Total Level 1 Level 2 Level 3
Assets
Investment, at fair value $ 12,110  $ 12,110  $ —  $ — 
Derivative assets 3,303  —  3,303  — 
Liabilities
Derivative liabilities $ 167,303  $ —  $ 167,303  $ — 

December 31, 2019
Total Level 1 Level 2 Level 3
Assets
Derivative assets $ 11,664  $ —  $ 11,664  $ — 
Liabilities
Derivative liabilities $ 97,066  $ —  $ 97,066  $ — 
F-57

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

28. 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.
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.
Definite-lived intangible assets
We use the income approach to measure the fair value of definite-lived intangible assets, which is based on the present value of estimated future cash flows to be generated from the asset.
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.
For flight equipment that we measured at fair value on a non-recurring basis, as a result of aircraft that were impaired, during the year ended December 31, 2020, the following table presents the fair value of such flight equipment that were impaired as of the measurement date, the valuation technique and the related unobservable inputs:


Fair value
Valuation technique
Unobservable input
Weighted average
Flight equipment
$ 1,771,724 
Income approach
Discount rate
6  %
Non-contractual cash flows as a % of total cash flows
58  %

The significant unobservable inputs utilized in the fair value measurement of flight equipment are the discount rate 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 non-contractual cash flows represent management’s estimate of the 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 estimated non-contractual cash flows would increase the fair value measurement of the aircraft.
F-58

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

28. 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 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).
As of December 31, 2020, we held an investment at fair value of $12.1 million, based on quoted market price. The valuation of this investment was classified as Level 1.
All of our financial instruments are measured at amortized cost, other than our derivatives and investment which are measured at fair value on a recurring basis. The carrying amounts and fair values of our most significant financial instruments as of December 31, 2020 and 2019 were as follows:
December 31, 2020
Carrying value Fair value Level 1 Level 2 Level 3
Assets
Cash and cash equivalents $ 1,248,772  $ 1,248,772  $ 1,248,772  $ —  $ — 
Restricted cash 246,518  246,518  246,518  —  — 
Investment, at fair value 12,110  12,110  12,110  —  — 
Derivative assets 3,303  3,303  —  3,303  — 
$ 1,510,703  $ 1,510,703  $ 1,507,400  $ 3,303  $ — 
Liabilities          
Debt $ 28,934,904  (a) $ 29,798,305  $ —  $ 29,798,305  $ — 
Derivative liabilities 167,303  167,303  —  167,303  — 
$ 29,102,207  $ 29,965,608  $ —  $ 29,965,608  $ — 

(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  $ 11,664  $ — 
Liabilities          
Debt $ 29,624,266  (a) $ 30,219,588  $ —  $ 30,219,588  $ — 
Derivative liabilities 97,066  97,066  —  97,066  — 
$ 29,721,332  $ 30,316,654  $ —  $ 30,316,654  $ — 

(a)Excludes debt issuance costs, debt discounts and debt premium.
F-59

AerCap Holdings N.V. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
(U.S. Dollars in thousands or as otherwise stated, except share and per share data)
29. Subsequent events
In January 2021, AerCap Trust and AICDC co-issued $1.0 billion aggregate principal amount of 1.75% Senior Notes due 2026. The proceeds from the January Notes Offering will be used for general corporate purposes.
In January 2021, we sold all of our remaining NAS ordinary shares.

In February 2021, AerCap Trust and AICDC completed the redemption of all $544.0 million aggregate principal amount of their outstanding 4.5% Senior Notes due 2021.


F-60
Exhibit 2.6


Third Amended and Restated Revolving Credit Agreement
dated as of
October 22, 2019
among
AERCAP HOLDINGS N.V.,
AERCAP IRELAND CAPITAL DESIGNATED ACTIVITY COMPANY,
as Borrower,
the SUBSIDIARY GUARANTORS party hereto,
the LENDERS party hereto
and
CITIBANK, N.A.,
as Administrative Agent
___________________________

MIZUHO BANK, LTD.,
CITIBANK, N.A.,
BANCO SANTANDER, S.A., LONDON BRANCH, BANK OF AMERICA SECURITIES, INC., BARCLAYS BANK PLC, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, DEUTSCHE BANK SECURITIES INC., JP MORGAN CHASE BANK, N.A., MORGAN STANLEY SENIOR FUNDING, INC.
AND RBC CAPITAL MARKETS,
as Joint Lead Arrangers and Joint Bookrunners,

MIZUHO BANK, LTD.,
as Syndication Agent,

and
BANCO SANTANDER, S.A., LONDON BRANCH, BANK OF AMERICA SECURITIES, INC., BARCLAYS BANK PLC, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, DEUTSCHE BANK SECURITIES INC., JP MORGAN CHASE BANK, N.A., MORGAN STANLEY SENIOR FUNDING, INC. AND ROYAL BANK OF CANADA,
as Documentation Agents




TABLE OF CONTENTS
Page
SECTION 1.    CERTAIN DEFINITIONS    1
Section 1.1.    Terms Generally    1
Section 1.2.    Specific Terms    1
Section 1.3.    Divisions    24
SECTION 2.    COMMITTED LOANS AND COMMITTED NOTES    24
Section 2.1.    Agreement to Make Committed Loans    24
Section 2.2.    Procedure for Committed Loans    24
Section 2.3.    Maturity of Committed Loans    25
Section 2.4.    Optional Conversion or Continuation of Committed Loans    26
SECTION 3.    INTEREST AND FEES    26
Section 3.1.    Interest Rates    26
Section 3.2.    Interest Payment Dates    27
Section 3.3.    Setting and Notice of Committed Loan Rates    27
Section 3.4.    Commitment Fee    27
Section 3.5.    Agent’s Fees    28
Section 3.6.    Computation of Interest and Fees    28
SECTION 4.    REDUCTION OR TERMINATION OF THE COMMITMENTS; PREPAYMENTS; DEFAULTING LENDERS; INCREASE OF COMMITMENTS    28
Section 4.1.    Voluntary Termination or Reduction of the Commitments    28
Section 4.2.    Voluntary Prepayments    29
Section 4.3.    Defaulting Lenders    29
Section 4.4.    Increase of Commitments    30
SECTION 5.    MAKING AND PRORATION OF PAYMENTS; SET‑OFF; TAXES    32
Section 5.1.    Making of Payments    32
Section 5.2.    Pro Rata Treatment; Sharing    32
Section 5.3.    Set-off    32
Section 5.4.    Taxes    33
SECTION 6.    INCREASED COSTS AND SPECIAL PROVISIONS FOR LIBOR RATE LOANS    35
Section 6.1.    Increased Costs    35
Section 6.2.    Basis for Determining Interest Rate Inadequate or Unfair    37
Section 6.3.    Changes in Law Rendering Certain Loans Unlawful    38
Section 6.4.    Funding Losses    39
Section 6.5.    Discretion of Lenders as to Manner of Funding    39
Section 6.6.    Conclusiveness of Statements; Survival of Provisions    39
SECTION 7.    REPRESENTATIONS AND WARRANTIES    39
Section 7.1.    Organization, etc.    39
Section 7.2.    Authorization; Consents; No Conflict    40
Section 7.3.    Validity and Binding Nature    40
Section 7.4.    Financial Statements    41
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Section 7.5.    Litigation    41
Section 7.6.    Employee Benefit Plans    41
Section 7.7.    Investment Company Act    42
Section 7.8.    Regulation U    42
Section 7.9.    Disclosure    42
Section 7.10.    Compliance with Applicable Laws, etc.    42
Section 7.11.    Insurance    42
Section 7.12.    Taxes    43
Section 7.13.    Use of Proceeds    43
Section 7.14.    Pari Passu    43
Section 7.15.    OFAC, Etc.    43
SECTION 8.    COVENANTS    43
Section 8.1.    Reports, Certificates and Other Information    43
Section 8.2.    Existence    45
Section 8.3.    Nature of Business    46
Section 8.4.    Books, Records and Access    46
Section 8.5.    Insurance    46
Section 8.6.    Repair    46
Section 8.7.    Taxes    47
Section 8.8.    Compliance    47
Section 8.9.    Sale of Assets    47
Section 8.10.    Consolidated Indebtedness to Shareholder’s Equity    47
Section 8.11.    Interest Coverage Ratio    47
Section 8.12.    Unencumbered Assets    47
Section 8.13.    Restricted Payments    48
Section 8.14.    Liens    48
Section 8.15.    Use of Proceeds    50
Section 8.16.    Transactions with Affiliates    50
Section 8.17.    Limitation on Issuances of Guarantees of Indebtedness    52
Section 8.18.    [Reserved]    52
Section 8.19.    Subsidiary Guarantors    52
SECTION 9.    CONDITIONS TO LENDING    52
Section 9.1.    Conditions Precedent to All Committed Loans    52
Section 9.2.    Conditions to Effectiveness    53
SECTION 10.    EVENTS OF DEFAULT AND THEIR EFFECT    55
Section 10.1.    Events of Default    55
Section 10.2.    Effect of Event of Default    57
SECTION 11.    THE AGENT    57
Section 11.1.    Authorization and Authority    57
Section 11.2.    Agent Individually    57
Section 11.3.    Indemnification    58
Section 11.4.    Action on Instructions of the Required Lenders    59
Section 11.5.    Payments    59
Section 11.6.    Duties of Agent; Exculpatory Provisions    60
Section 11.7.    Reliance by Agent    61
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Section 11.8.    Delegation of Duties    61
Section 11.9.    Resignation of Agent    62
Section 11.10.    Non-Reliance on Agent and Other Lenders    62
Section 11.11.    The Register; the Committed Notes    63
Section 11.12.    No Other Duties, etc.    64
Section 11.13.    Certain ERISA Matters.    64
SECTION 12.    GENERAL    65
Section 12.1.    Waiver; Amendments    65
Section 12.2.    Notices    66
Section 12.3.    Computations    68
Section 12.4.    Assignments; Participations    68
Section 12.5.    Costs, Expenses and Taxes    72
Section 12.6.    Confidentiality    73
Section 12.7.    Indemnification    74
Section 12.8.    Acknowledgement and Consent to Bail-In of EEA Financial Institutions    74
Section 12.9.    Extension of Termination Dates; Removal of Lenders; Substitution of Lenders    75
Section 12.10.    Captions    77
Section 12.11.    Governing Law; Jurisdiction; Severability    77
Section 12.12.    Counterparts; Effectiveness    78
Section 12.13.    Further Assurances    78
Section 12.14.    Successors and Assigns    78
Section 12.15.    Judgment    78
Section 12.16.    Waiver of Jury Trial    79
Section 12.17.    No Fiduciary Relationship    79
Section 12.18.    USA Patriot Act    80
Section 12.19.    Existing Credit Agreement; Effect of Amendment and Restatement;    80
SECTION 13.    GUARANTEE    81
Section 13.1.    The Guarantee    81
Section 13.2.    Obligations Unconditional    82
Section 13.3.    Reinstatement    82
Section 13.4.    Subrogation    83
Section 13.5.    Remedies    83
Section 13.6.    Continuing Guarantee    83
Section 13.7.    Indemnity and Rights of Contribution    83
Section 13.8.    General Limitation on Guarantee Obligations    84
Section 13.9.    Releases    84

-iii-

SCHEDULES AND EXHIBITS
Schedule I    Schedule of Lenders
Schedule II     Fees and Margins
Schedule III     Address for Notices
Exhibit A    Form of Committed Loan Request
Exhibit B    Form of Committed Note
Exhibit C    Form of Compliance Certificate
Exhibit D    Form of Assignment and Assumption Agreement
Exhibit E    Form of Request for Extension of Termination Date
Exhibit F    Form of Guarantee Assumption Agreement
Exhibit G    Form of Secretary’s Certificate
Exhibit H-1    Form of Opinion of Special New York Counsel
Exhibit H-2    Form of Opinion of Special Irish Counsel
Exhibit H-3    Form of Opinion of Special Dutch Counsel
Exhibit H-4    Form of Opinion of Special California Counsel
Exhibit H-5    Form of Opinion of Special Delaware Counsel    


-iv-

THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “Agreement”), dated as of October 22, 2019, among AERCAP HOLDINGS N.V., an entity organized under the laws of the Netherlands (herein called the “Company”), AERCAP IRELAND CAPITAL DESIGNATED ACTIVITY COMPANY, a designated activity company incorporated under the laws of Ireland with limited liability (herein called the “Borrower”), the SUBSIDIARY GUARANTORS party hereto from time to time, the LENDERS (as defined herein) party hereto from time to time and CITIBANK, N.A. (herein, in its individual corporate capacity, together with its successors and permitted assigns, called “Citibank”), as administrative agent for the Lenders (herein, in such capacity, together with its successors and permitted assigns in such capacity, called the “Agent” or “Administrative Agent”).
W I T N E S S E T H:
WHEREAS, the Company, the Borrower, the Subsidiary Guarantors party thereto, certain of the Lenders and the Administrative Agent are party to the Existing Credit Agreement (as defined below).
WHEREAS, the Borrower has requested that the “Lenders” under the Existing Credit Agreement agree to amend and restate the Existing Credit Agreement in the form hereof. The Lenders party hereto are willing to amend and restate the Existing Credit Agreement in the form hereof and to lend up to $4,000,000,000 to the Borrower on a revolving basis for general corporate purposes, in each case on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:
SECTION 1.CERTAIN DEFINITIONS
Section 1.1.    Terms Generally. The definitions ascribed to terms in this Section 1 and elsewhere in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless expressly provided for herein or the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, in each case in accordance with its terms and (b) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns. The words “hereby”, “herein”, “hereof”, “hereunder” and words of similar import refer to this Agreement as a whole (including any exhibits and schedules hereto) and not merely to the specific Section, paragraph or clause in which such word appears. All references herein to Sections, Exhibits and Schedules shall be deemed references to Sections of and Exhibits and Schedules to this Agreement unless the context shall otherwise require.
-1-

Section 1.2.    Specific Terms. When used herein, the following terms shall have the following meanings:
“Act” has the meaning set forth in Section 12.18.
“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any of its Subsidiaries (a) acquires all or substantially all of the assets of any firm, corporation, limited liability company or other Person, or business unit or division thereof, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes for the members of the board of directors) of the capital stock of a Person.
“Activities” has the meaning set forth in Section 11.2(b).
“Additional Lender” has the meaning set forth in Section 4.4(a)(ii).
“Administrative Agent” has the meaning set forth in the Preamble.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through ownership of stock, by contract or otherwise.
“Affiliate Transaction” has the meaning set forth in Section 8.16.
“Agent” has the meaning set forth in the Preamble.
“Agent’s Group” has the meaning set forth in Section 11.2(b).
“Agent Parties” has the meaning set forth in Section 12.2(f).
“Aggregate Commitment” means $4,000,000,000, as reduced by any reduction in the Commitments made from time to time pursuant to Section 4.1 or Section 12.9 or increased by any increase in the Commitments made from time to time pursuant to Section 4.4.
“Agreement” has the meaning set forth in the Preamble.
“Aircraft Assets” means “Flight Equipment held for Operating Lease [net],” plus “Net Investment in Direct Finance Leases,” plus “Inventory” plus “Lease Premium” plus “End of Lease Assets” (or such substantially similar terms for such substantially similar assets as may be used from time to time).
“Anti-Corruption Laws” means (a) the United States Foreign Corrupt Practices Act of 1977 and all other United States laws, rules and regulations applicable to the Company
-2-

and its Subsidiaries concerning or relating to bribery or corruption and (b) the UK Bribery Act of 2010.
“Arranger” means each of Mizuho Bank, Ltd., Citibank, N.A., Banco Santander, S.A., London Branch, Bank of America Securities, Inc., Barclays Bank PLC, Credit Agricole Corporate And Investment Bank, Deutsche Bank Securities Inc., JPMorgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc. and RBC Capital Markets in their respective capacities as joint lead arrangers and joint bookrunners.
“Assignee” has the meaning set forth in Section 12.4.1.
“Authorized Officer” of the Company means any of the following: any director, any attorney-in-fact, the Chairman of the Board, the Chief Executive Officer, the Vice Chairman, the President, any Executive Vice President, any Senior Vice President, any Vice President, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Chief Accounting Officer and the Secretary of the Company; provided that, for purposes of any certification of financial statements of the Company required to be delivered hereunder, the term “Authorized Officer” shall mean any of the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller and the Chief Accounting Officer of the Company.
“Bail-In Action” means, as to any EEA Financial Institution, the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of such EEA Financial Institution.
“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Base LIBOR” means, with respect to any Loan Period for a LIBOR Rate Loan, an interest rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1.00% per annum) equal to (i) the rate determined by the Administrative Agent (and notified to the Borrower) to be the offered rate which appears on the page of the Bloomberg Screen which displays an average ICE Benchmark Administration Interest Settlement Rate (or successor thereto if such rate is no longer displayed) (such page currently being the LIBOR01 page) for deposits (for delivery on the first day of such Loan Period) with a term equivalent to such Loan Period in Dollars, determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to the first day of such Loan Period, or (ii) in the event the rate referenced in the preceding sub-clause (i) does not appear on such page or service or if such page or service shall cease to be available, the rate determined by the Administrative Agent (and notified to the Borrower) to be the offered rate on such other page or other service which displays an average ICE Benchmark Administration Interest Settlement Rate (or successor thereto if such rate is no longer displayed) for deposits (for delivery on the first day of such Loan Period) with a term equivalent to such Loan Period in Dollars, determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to the first day of such Loan Period or a rate determined through the use of straight-line
-3-

interpolation by reference to two such rates, one of which shall be determined as if the period of time for which the rate for such deposits is available is the period next shorter than the length of such Loan Period and the other of which shall be determined as if the period of time for which the rate for such deposits are available is the period next longer than the length of such Loan Period as determined by the Administrative Agent (and notified to the Borrower) (such rate referred to in clauses (i) and (ii), the “Screen Rate”) by (b) a percentage equal to 100% minus the Eurodollar Reserve Percentage for such Loan Period; provided that at no time shall “Base LIBOR” in respect of Committed Loans for any purposes hereunder be deemed to be less than 0.00% per annum.
“Base Rate” means for any day a fluctuating interest rate per annum equal to the applicable rate margin set forth for Base Rate Loans in the row entitled “Margins” on Schedule II plus the highest of (a) the Federal Funds Rate for such day plus 1/2 of 1.00%, (b) the Prime Rate and (c) the LIBOR Rate that would be payable on such day for a LIBOR Rate Loan with a one-month Loan Period plus 1.00% less the applicable rate margin set forth for LIBOR Rate Loans in the row entitled “Margins” on Schedule II, provided that at no time shall “Base Rate” for any purposes hereunder (including in respect of Committed Loans) be deemed to be less than 0.00% per annum.
“Base Rate Loan” means any Committed Loan which bears interest at the Base Rate.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Board of Directors” means (a) with respect to a corporation or company, as applicable, the board of directors of the corporation or company, as applicable, or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a partnership, the board of directors of the general partner of the partnership, (c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof, and (d) with respect to any other Person, the board or committee of such Person serving a similar function.
“Business Day” means any day of the year on which banks are not required or authorized by law to close in New York City, Dublin or Amsterdam and, if the applicable Business Day relates to notices, determinations, fundings and payments in connection with any LIBOR Rate Loan, a day on which dealings are carried on in the London interbank market.
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“Capital Markets Debt” means any debt securities (other than (a) a Qualified Securitization Financing or (b) a debt issuance guaranteed by an export credit agency (including the Eximbank)) issued in the capital markets by the Company or any of its Subsidiaries, whether issued in a public offering or private placement, including pursuant to Section 4(2) of the Securities Act or Rule 144A, Regulation S or Regulation D under the Securities Act.
“Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership, membership interests (whether general or limited) or shares in the capital of the company, and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Capitalized Lease” means any lease under which any obligations of the lessee are, or are required to be, capitalized on a balance sheet of the lessee in accordance with GAAP; provided, however, that notwithstanding the foregoing, the treatment of Capitalized Leases shall be evaluated , and the amount of Capitalized Rentals shall be determined, in accordance with Sections 12.3(b) and (c) and without giving effect to any change to GAAP occurring after December 31, 2015 as a result of the adoption of any proposals set forth in the Proposed Accounting Standards Update, Leases (Topic 840), issued by the Financial Accounting Standards Board on August 17, 2010, or any other proposals issued by the Financial Accounting Standards Board in connection therewith, in each case if such change would require treating any lease (or similar arrangement conveying the right to use) as a capital lease where such lease (or similar arrangement) was not required to be so treated under GAAP as in effect on December 31, 2015.
“Capitalized Rentals” means, as of the date of any determination, the amount at which the obligations of the lessee, due and to become due under all Capitalized Leases under which the Company or any Subsidiary is a lessee, are reflected as a liability on a consolidated balance sheet of the Company and its Subsidiaries.
“Change of Control” means (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of shares representing more than 50% of the voting power of the Company’s Voting Stock, (b) (i) all or substantially all of the assets of the Company and the Subsidiaries, taken as a whole, are sold or otherwise transferred to any Person other than a Wholly-owned Subsidiary of the Company or one or more Permitted Holders or (ii) the Company amalgamates, consolidates or merges with or into another Person or any Person consolidates, amalgamates or merges with or into the Company, in either case under this clause (b), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Company, immediately prior to such consummation do not
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beneficially own (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) Voting Stock representing a majority of the total voting power of the Voting Stock of the Company, or the applicable surviving or transferee Person; provided that this clause shall not apply (A) in the case where immediately after the consummation of the transactions Permitted Holders beneficially own Voting Stock representing in the aggregate a majority of the total voting power of the Company, or the applicable surviving or transferee Person or (B) to an amalgamation or a merger of the Company with or into (x) a corporation, limited liability company or partnership or (y) a wholly-owned subsidiary of a corporation, limited liability company or partnership that, in either case, immediately following the transaction or series of transactions, has no Person or group (other than Permitted Holders), which beneficially owns Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of such entity and, in the case of clause (y), the parent of such Wholly-owned Subsidiary guarantees the Borrower’s Obligations under this Agreement, (c) the Company shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the shareholders of the Company or (d) the Borrower ceases to be a direct or indirect Wholly-owned Subsidiary of the Company.
“Citibank” has the meaning set forth in the Preamble.
“Closing Date” has the meaning set forth in Section 9.2.
“Code” means the Internal Revenue Code of 1986, as amended.
“Commitments” means the Lenders’ commitments to make Committed Loans hereunder; and “Commitment” as to any Lender means the amount set forth opposite such Lender’s name on Schedule I (as reduced or increased, as applicable, in accordance with Section 4.1 or Section 4.4, or as periodically revised in accordance with Section 12.4 or Section 12.9).
“Committed Loan” means a loan in Dollars that is a Base Rate Loan or LIBOR Rate Loan made pursuant to Section 2 (each of which shall be a “Type” of Committed Loan).
“Committed Loan Request” has the meaning set forth in Section 2.2(a).
“Committed Note” means a promissory note of the Borrower, substantially in the form of Exhibit B, duly completed, evidencing Committed Loans to the Borrower, as such note may be amended, modified or supplemented or supplanted pursuant to Section 12.4.1 from time to time.
“Communications” has the meaning set forth in Section 12.2(b).
“Company” has the meaning set forth in the Preamble.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
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“Consolidated Indebtedness” means, as of the date of any determination, (a) the total amount of Indebtedness less the amount of current and deferred income taxes and rentals received in advance of the Company and its Subsidiaries (to the extent constituting Indebtedness) determined on a consolidated basis in accordance with GAAP (but without giving effect to any election to value any Indebtedness at “fair value”, or any other accounting principle, including purchase accounting, that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on a consolidated balance sheet of the Company to be reflected thereon in any amount other than the stated principal amount of such Indebtedness), and excluding (i) the amount that is (A) the aggregate amount outstanding of Hybrid Capital Securities multiplied by (B) the Hybrid Capital Securities Percentage, (ii) adjustments in relation to Indebtedness denominated in any currency other than Dollars and any related derivative liability, in each case to the extent arising from currency fluctuations (such exclusions to apply only to the extent the resulting liability is hedged by the Company or such Subsidiary), (iii) net obligations of any Person under any swap contracts that are not yet due and payable, and (iv) trade payables outstanding in the ordinary course of business, but not overdue by more than 90 days less (b) the lesser of (x) $2,000,000,000 and (y) the aggregate amount of “cash and cash equivalents” or any line item of similar import (but in any event, excluding “restricted cash” or any line item of similar import and excluding “cash and cash equivalents” or any line item of similar import subject to any Lien (other than (A) Liens arising by operation of law and (B) bankers’ Liens arising in the ordinary course of business)) reflected on a consolidated balance sheet of the Company prepared as of such date of determination in accordance with GAAP.
“Consolidated Interest Expense” means for any measurement period, and without duplication, interest expense in respect of all Indebtedness for borrowed money accrued during such measurement period by the Company and its Subsidiaries on a consolidated basis, as determined under GAAP (but without giving effect to any adjustment to such interest expense resulting from any election to value any Indebtedness at “fair value”, or any other accounting principle, including purchase accounting, that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on a consolidated balance sheet of the Company to be reflected thereon in any amount other than the stated principal amount of such Indebtedness).
“Continue”, “Continuation” and “Continued” each refers to a continuation of LIBOR Rate Loans as LIBOR Rate Loans for a new Loan Period pursuant to Section 2.4.
“Convert”, “Conversion” and “Converted” each refers to a conversion of Committed Loans of one Type into Committed Loans of the other Type pursuant to Section 2.4.
“Credit Facilities” means one or more debt facilities, or commercial paper facilities with banks or other institutional lenders or investors or indentures providing for revolving credit loans, term loans, receivables financing, including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against receivables, letters of credit or other long-term indebtedness, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings
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thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof.
“Debtor Relief Law” means title 11 of the United States Code, as in effect from time to time, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Defaulted Commitments” has the meaning set forth in Section 4.1(b).
“Defaulting Lender” means, at any time, any Lender that at such time (a) has failed to perform any of its funding obligations hereunder, including in respect of its Committed Loans within two Business Days of the date required to be funded by it hereunder unless such Lender notifies the Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified the Borrower or the Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or generally under other agreements in which it commits to extend credit (unless such notice or public statement relates to such Lender’s obligation to fund a Committed Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such notice or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Agent or the Borrower (based on its reasonable belief that such Lender may not fulfill its funding obligations hereunder), to confirm in writing or a manner satisfactory to the Agent and the Borrower that it will comply with its funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, intervenor, sequestrator, assignee for the benefit of creditors or similar Person under any applicable Debtor Relief Law charged with reorganization or liquidation of its business or a custodian appointed for it, (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment, or (iv) become the subject of a Bail-in Action; provided, that, a Lender shall not be a Defaulting Lender solely by virtue of the control, ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority, so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination
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that a Lender is a Defaulting Lender under clauses (a) through (d) above will be made by the Agent in its reasonable discretion acting in good faith. If the Borrower believes in good faith that a Lender should be determined by the Agent to be a Defaulting Lender and so notifies Agent, citing the reasons therefor, the Agent shall determine in its reasonable discretion acting in good faith whether or not such Lender is a Defaulting Lender. The Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition.
“Disqualified Lender” means any Person that (a) is an operating lessor of aircraft assets or an Affiliate of an operating lessor of aircraft assets if the business of leasing aircraft assets is a principal line of business of such Person or the Affiliates of such Person taken as a whole, (b) has a business unit or an Affiliate that is an operating lessor of aircraft assets (regardless of whether the business of leasing aircraft assets is a principal line of business of such Person or the Affiliates of such Person taken as a whole) if such Person has not affirmed to the Borrower that such Person has in place procedures not to transmit or permit the transmission to such operating lessor of any information concerning the Company or any of its Subsidiaries obtained in connection with this Agreement or the transactions contemplated hereby, (c) is a Defaulting Lender or, upon becoming a Lender under this Agreement, would be a Defaulting Lender or (d) based on the law and circumstances existing at the time of any proposed transfer, would be entitled to claim additional amounts from the Borrower under Section 5.4 or 6.1 (as compared to any amounts able to be claimed by the proposed assignor) or whose acquisition of any Committed Loan or Commitments would conflict with applicable law or would impose on the Borrower any withholding obligation not applicable to the assignor at the time of the assignment.
“Disqualified Stock” means with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable, other than as a result of a change of control or asset sale, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other than as a result of a change of control or asset sale, in whole or in part, in each case prior to the date 91 days after the earlier of (a) the latest scheduled Termination Date in effect on the date of issuance of such Capital Stock and (b) the date which no Committed Loans or Commitments are then outstanding hereunder; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
“Dollar” and “$” refer to the lawful money of the United States of America.
“EBITDA” means for any period, (a) the sum, without duplication, of (i) net income (or net loss), (ii) Consolidated Interest Expense, (iii) income tax expense, (iv) depreciation and depletion expense, (v) amortization expense, (vi) extraordinary, unusual or nonrecurring losses to the extent the foregoing have been deducted in determining such net income, (vii) any non-cash items (including write-downs and impairment of property, plant,
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equipment and intangibles and other long-lived assets, including aircraft, and the impact of purchase accounting, including stock based compensation expense, derivative expense and fair value adjustments) to the extent deducted in determining net income, and (viii) the amount of any extraordinary, unusual or nonrecurring non-cash restructuring charges, less (b) the sum, without duplication, of (i) extraordinary, unusual or nonrecurring gains to the extent added in determining net income, and (ii) all non-cash items to the extent included in determining net income). For the purposes of calculating EBITDA for any four quarter period, such calculation shall be made (i) after giving effect to any Acquisition consummated during such period and (ii) assuming that such Acquisition occurred at the beginning of such period; provided, that any pro forma calculation made by the Company either (i) based on Regulation S-X or (ii) as calculated in good faith and set forth in an officer’s certificate of the Company, in reasonable detail, (and in the case of this clause (ii), based on audited financials of the target company) shall be acceptable.
“ECA Financing” means any financing provided or supported by one or more government export credit agencies.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) above or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in clause (a) or (b) above and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” means any financial institution; provided, however, that (a) neither the Borrower nor any Affiliate of the Borrower shall qualify as an Eligible Assignee, and (b) no natural person or Disqualified Lender shall qualify as an Eligible Assignee, whether or not an Event of Default has occurred and is continuing (unless otherwise agreed by the Borrower in its sole discretion).
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means any corporation, trade or business that is, along with the Company or any Subsidiary, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Sections 414(b) and 414(c), respectively, of the
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Code or Section 4001 of ERISA (and Sections 414(m) and 414(o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30‑day notice period is waived); (b) any failure by any Plan to satisfy the minimum funding standard (as defined in Section 412 of the Code or Section 302 of ERISA), applicable to such Plan; (c) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (d) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice having the effect of terminating any Plan or Plans or appointing a trustee to administer any Plan; (e) the incurrence by the Company or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (f) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA or in “endangered” or “critical” status, within the meaning of Section 305 of ERISA or Section 432 of the Code.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Eurodollar Reserve Percentage” means for any day in any Loan Period for any LIBOR Rate Loan that percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor thereto) or other U.S. government agency for determining the reserve requirement (including any marginal, basic, supplemental or emergency reserves) for a member bank of the Federal Reserve System in New York City with deposits exceeding one billion dollars in respect of eurocurrency funding liabilities.
“Event of Default” means any of the events described in Section 10.1.
“Exchange Act” means the United States Securities Exchange Act of 1934.
“Excluded Subsidiary” means (a) any dormant Subsidiary (it being understood and agreed that the provision by such Subsidiary of any Guarantees under any indenture, credit agreement or other agreement or instrument existing on the date hereof (or under any amendments, supplements (including in respect of supplemental issuances), modifications, upsizings, extensions, renewals, restatements, refundings or refinancings of any such indenture, credit agreement or other agreement or instrument from time to time) shall not cause such Subsidiary to be deemed not to be dormant) or (b) any other Subsidiary that (i) is not engaged in any material business activities (it being understood and agreed that the provision by such Subsidiary of any Guarantees under any indenture, credit agreement or other agreement or instrument existing on the date hereof (or under any amendments, supplements (including in respect of supplemental issuances), modifications, upsizings, extensions, renewals, restatements, refundings or refinancings of any such indenture, credit agreement or other agreement or
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instrument from time to time), shall be deemed not to be a material business activity) and (ii) does not hold any material assets. For the avoidance of doubt, no Significant Subsidiary shall be an “Excluded Subsidiary” for purposes of Section 8.17 of this Agreement.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal, Netherlands or Irish withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Committed Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Committed Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 12.9(c)) or (ii) such Lender changes its lending office (other than pursuant to Section 6.1(c)), its place of incorporation or its place of tax residence, except in each case to the extent that, (x) pursuant to Section 5.4, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in such Committed Loan or Commitment or to such Lender immediately before it changed its lending office, its place of incorporation or its place of tax residence or (y) in the case of Irish withholding Taxes, such Taxes are imposed on Lenders that are Qualifying Lenders, (c) Taxes attributable to such Recipient’s failure to comply with Section 5.4(f), and (d) any withholding Taxes imposed under FATCA.
“Eximbank” means the Export-Import Bank of the United States.
“Existing Credit Agreement” means that certain Second Amended and Restated Revolving Credit Agreement dated as of February 15, 2017, among the Company, the Borrower, the Subsidiary Guarantors party thereto, certain financial institutions party thereto and Citibank, as administrative agent, as amended, supplemented or otherwise modified through the Closing Date (but shall not, for any purposes hereunder, include this Agreement).
“Extension Request” has the meaning set forth in Section 12.9(a).
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together in each case with any current or future regulations or official IRS interpretations thereof, any official agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty, or convention among Governmental Authorities and implementing such Sections of the Code.
“Federal Funds Rate” means, for any period, the greater of (a) a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as
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published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it and (b) 0%.
“Financial Indebtedness” of any Person means Indebtedness of the type that appears as “debt” upon a consolidated balance sheet (excluding the footnotes thereto) of such Person and its Subsidiaries prepared in accordance with GAAP (but without giving effect to any election to value any such Indebtedness at “fair value”, or any other accounting principle, including purchase accounting, that results in the amount of any such Indebtedness (other than zero coupon Indebtedness) as reflected on a consolidated balance sheet of such Person to be reflected thereon in any amount other than the stated principal amount of such Indebtedness), excluding, however, any such “debt” that is issued to any holder (or Affiliate of any such holder) of Equity Interests in such Person and is fully subordinated (including as to payment and liquidity preference) to the Committed Loans.
“Financing Trust” means AerCap Global Aviation Trust, a Delaware statutory trust.
“Foreign Benefit Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any applicable law, (b) the failure to make the required contributions or payments, under any applicable law, on or before the due date for such contributions or payments, (c) the receipt of a notice by a Governmental Authority relating to the termination of any such Foreign Plan or the appointment of a trustee or similar official to administer any such Foreign Plan, (d) the incurrence of any liability by the Company or any Subsidiary under any applicable law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein or (e) the occurrence of any transaction that is prohibited under any applicable law and that could reasonably be expected to result in the incurrence of any material liability by the Company or any Subsidiary.
“Foreign Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA) maintained or contributed to by the Company or any of its Subsidiaries outside the United States with respect to which the Company or any of its Subsidiaries could have any actual or contingent liability, other than a Plan.
“Funding Date” means the date on which any Committed Loan is scheduled to be disbursed.
“Funding Office” means, with respect to any Lender, any office or offices of such Lender or Affiliate or Affiliates of such Lender through which such Lender shall fund or shall have funded any Committed Loan. A Funding Office may be, at such Lender’s option, either a domestic or foreign office of such Lender or a domestic or foreign office of an Affiliate of such Lender.
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“GAAP” means generally accepted accounting principles in the United States which are in effect from time to time. At any time after the Closing Date, the Company may elect to apply IFRS accounting principles in lieu of GAAP for reporting purposes and for purposes of calculations hereunder. The Company shall give notice of any such election made in accordance with this definition to the Agent. Upon receipt of such notice, the Agent and the Company shall negotiate in good faith to amend the financial covenants, requirements and other relevant provisions of this Agreement impacted by such change to preserve the original intent thereof in light of such change. The change from GAAP to IFRS accounting principles shall become effective once this Agreement has been so amended, and thereafter references herein to GAAP shall be construed to mean IFRS (except as otherwise provided herein); provided that any calculation or determination herein that requires the application of GAAP for periods that include fiscal quarters ended prior to the Company’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.
“Governmental Authority” means, as and to the extent applicable, the government of the United States of America, the Netherlands or any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity (including any federal or other association of or with which any such nation may be a member or associated) exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies, such as the European Union or the European Central Bank).
“Granting Lender” has the meaning set forth in Section 12.4.2.
“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit F (or in such other form as may be agreed between the Company and the Administrative Agent) in favor of the Administrative Agent for the benefit of the Lenders and the Administrative Agent.
“Guaranteed Obligations” has the meaning set forth in Section 13.1.
“Guarantees” by any Person means, without duplication, all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, including all obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any property or assets constituting security therefor, (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation or (ii) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (c) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the Primary Obligor to make payment of the Indebtedness or obligation or (d) otherwise to assure the owner of the Indebtedness or obligation of the Primary Obligor against loss in respect thereof; provided, however, that the obligation described in clause (c) shall not include (i) obligations of a buyer under an agreement with a seller to purchase goods or
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services entered into in the ordinary course of such buyer’s and seller’s businesses unless such agreement requires that such buyer make payment whether or not delivery is ever made of such goods or services and (ii) remarketing agreements where the remaining debt on an aircraft does not exceed the aircraft’s net book value, determined in accordance with industry standards, except that clause (c) shall apply to the amount of remaining debt under a remarketing agreement that exceeds the net book value of the aircraft. For the purposes of all computations made under this Agreement, a Guarantee in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the principal amount of such Indebtedness for borrowed money which has been guaranteed, and a Guarantee in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend.
“Guarantor” means the Company and each Subsidiary Guarantor.
“Hybrid Capital Securities” means any hybrid capital securities issued by the Company or any of its Subsidiaries from time to time whose proceeds are accorded a percentage of equity treatment by one or more Rating Organizations.
“Hybrid Capital Securities Percentage” means the greater of (a) 50% and (b) the lowest percentage accorded equity treatment for the Company’s or any of its Subsidiaries’ Hybrid Capital Securities among the Rating Organizations, as determined by such Rating Organizations from time to time.
“ILFC” means International Lease Finance Corporation, a California corporation.
“Increasing Lender” has the meaning set forth in Section 4.4(a)(i).
“Indebtedness” of any Person means and includes, without duplication, all obligations of such Person which in accordance with GAAP shall be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all:
(a)    obligations of such Person for borrowed money or which have been incurred in connection with the acquisition of property or assets (other than security and other deposits on flight equipment),
(b)    Indebtedness of any other Person secured by any Lien or other charge upon property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness,
(c)    obligations created or arising under any conditional sale, or other title retention agreement with respect to property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under such agreement in the event of default are limited to repossession or sale of property,
(d)    Capitalized Rentals of such Person under any Capitalized Lease,
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(e)    obligations evidenced by bonds, debentures, notes or other similar instruments, and
(f)    Guarantees by such Person of Indebtedness of any other Person;
provided, however, that Indebtedness shall in no event include any security deposits, deferred overhaul rental or other customer deposits held by such Person.
“Indemnified Liabilities” has the meaning set forth in Section 12.7.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Obligor under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in similar businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.
“Information” has the meaning set forth in Section 12.6.
“Information Memorandum” means the September 2019 Confidential Information Memorandum relating to the credit facility provided for herein.
“Interest Coverage Ratio” means the ratio of (a) EBITDA of the Company and its Subsidiaries, determined on a consolidated basis, to (b) the sum of Consolidated Interest Expense and cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock, for each of the items in clauses (a) and (b) above, of or by the Company and its Subsidiaries during the four consecutive fiscal quarters most recently ended for which financial statements have been delivered pursuant to Section 8.1.
“IRS” means the United States Internal Revenue Service.
“Lender Appointment Period” has the meaning set forth in Section 11.9.
“Lender Parties” has the meaning set forth in Section 12.7.
“Lenders” means the financial institutions identified as Lenders on the signature pages hereto and their respective successors and permitted assignees.
“LIBOR Rate” means with respect to Committed Loans that are LIBOR Rate Loans, Base LIBOR plus the applicable rate margin set forth for LIBOR Rate Loans in the row entitled “Margins” on Schedule II.
“LIBOR Rate Loan” means any Committed Loan which bears interest at a LIBOR Rate.
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“Lien” means any mortgage, pledge, lien, security interest or other charge, encumbrance or preferential arrangement, including the retained security title of a conditional vendor or lessor. For avoidance of doubt, the parties hereto acknowledge that the filing of a financing statement under the Uniform Commercial Code does not, in and of itself, give rise to a Lien.
“Litigation Actions” means all litigation, claims and arbitration proceedings, proceedings before any Governmental Authority or investigations which are pending or, to the knowledge of the Company, threatened in writing against or affecting, the Company or any Subsidiary.
“Loan Documents” means this Agreement, the Committed Notes, and any Guarantee Assumption Agreement.
“Loan Period” means with respect to any LIBOR Rate Loan, the period commencing on such LIBOR Rate Loan’s Funding Date, the date of the Conversion of any Base Rate Loan into such LIBOR Rate Loan or the date of the Continuation of such LIBOR Rate Loan for a new Loan Period and ending one week or one, two, three or six months thereafter as selected by the Borrower pursuant to Section 2.2(a); provided, however, that:
(a)    if a Loan Period would otherwise end on a day which is not a Business Day, such Loan Period shall end on the next succeeding Business Day (unless, in the case of a LIBOR Rate Loan with a Loan Period of one month or longer, such next succeeding Business Day would fall in the next succeeding calendar month, in which case such Loan Period shall end on the next preceding Business Day),
(b)    in the case of a Loan Period of one month or longer for any LIBOR Rate Loan, if there exists no day numerically corresponding to the day such Committed Loan was made in the month in which the last day of such Loan Period would otherwise fall, such Loan Period shall end on the last Business Day of such month, and
(c)    on the date of the making, Conversion or Continuation of any Committed Loan by a Lender, the Loan Period for such Committed Loan shall not extend beyond the then-scheduled Termination Date for such Lender; provided, that a Loan Period may be shortened by the Borrower to end on the then-scheduled Termination Date, regardless of the duration of such Loan Period.
“Management Group” means at any time, the Chairman of the Board of Directors, the Chief Executive Officer, any President, any Executive Vice President or Vice President, any Managing Director, any Treasurer and any Secretary or other executive officer of the Company or any subsidiary of the Company at such time.
“Material Adverse Effect” means (a) any material adverse effect on the business, properties, condition (financial or otherwise) or operations of the Company and its Subsidiaries, taken as a whole since any stated reference date or from and after the date of determination, as the case may be, (b) any material adverse effect on the ability of the Borrower or any Guarantor
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to perform its material obligations hereunder and under the Committed Notes or (c) any material adverse effect on the legality, validity, binding effect or enforceability of any material provision of this Agreement or any Committed Note.
“Multiemployer Plan” has the meaning assigned to such term in Section 3(37) of ERISA.
“Non-Defaulting Lender” means, at any time, a Lender that is not a Defaulting Lender.
“Notice of Increase” has the meaning set forth in Section 4.4(a)(i).
“Notice Office” means the office of Citibank which, as of the date hereof, is located at Building #3, 1615 Brett Road, New Castle, Delaware 19720; attention of Bank Loan Syndications; telecopy number 302-894-6005; e-mail address GLAgentOfficeOps@citi.com.
“Obligors” means the Borrower and each Guarantor, and “Obligor” means any one of them.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Committed Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment other than an assignment made pursuant to Section 12.9(c).
“Participant” has the meaning set forth in Section 12.4.2.
“Participant Register” has the meaning set forth in Section 12.4.2.
“Payment Office” means the office of the Agent which, as of the date hereof, is at Building #3, 1615 Brett Road, New Castle, DE 19720, account number 36852248.
“PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.
“Percentage” means as to any Lender the ratio, expressed as a percentage, that such Lender’s Commitment as set forth opposite such Lender’s name on Schedule I, as periodically revised in accordance with Section 12.4 or 12.9 and, as applicable, from time to time in accordance with Section 4.3(a), bears to the Aggregate Commitment or, if the Commitments
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have been terminated, the ratio, expressed as a percentage, that the aggregate principal amount of such Lender’s outstanding Committed Loans bears to the aggregate principal amount of all outstanding Committed Loans.
“Permitted Holders” means the collective reference to Waha Capital, its Affiliates and the Management Group.
“Person” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, limited liability company, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.
“Plan” means, at any date, any employee pension benefit plan (as defined in Section 3(2) of ERISA) which is subject to Title IV of ERISA (other than a Multiemployer Plan) and to which the Company or any ERISA Affiliate may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Platform” has the meaning set forth in Section 12.2(c).
“Primary Currency” has the meaning set forth in Section 12.15(c).
“Primary Obligor” has the meaning set forth in the definition of “Guarantees”.
“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.
“Projections” has the meaning set forth in Section 7.9.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” has the meaning set forth in Section 12.2(d).
“Qualified Securitization Financing” means any Securitization Financing of a Securitization Subsidiary, the financing terms, covenants, termination events and other provisions of which, including any Standard Securitization Undertakings, shall be market terms.
“Qualifying Lender” means a Lender that is beneficially entitled to the receipt of interest payable hereunder and that is
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(a)    (i) a body corporate that is, by virtue of the law of a Relevant Territory, resident for the purposes of tax in that Relevant Territory and the Relevant Territory concerned imposes a tax that generally applies to interest receivable in that territory by companies from sources outside the Relevant Territory, or (ii) a body corporate where such interest payable is exempted from the charge to Irish income tax under arrangements for relief from double taxation which have the force of law by virtue of Section 826(1) of the Taxes Consolidation Act 1997 of Ireland, or would be exempted from the charge to Irish income tax if arrangements made, on or before the date of payment of the interest, for relief from double taxation that do not have the force of law by virtue of Section 826(1) of the Taxes Consolidation Act 1997 of Ireland, had the force of law (by virtue of Section 826(1) of the Taxes Consolidation Act 1997 of Ireland) when such interest is paid; provided that, in each case, such interest is not paid to that body corporate in connection with a trade or business carried on in Ireland by that body corporate through a branch or agency;
(b)    a corporation organized under the laws of the U.S. or any state thereof and subject to tax in the U.S. on its worldwide income; provided that such interest is not paid in connection with a trade or business carried on in Ireland by that corporation through a branch or agency;
(c)    a U.S. limited liability company; provided that the ultimate recipients of such interest would be Qualifying Lenders within paragraph (a) and/or (b) of this definition if they were Lenders and the business conducted through such U.S. limited liability company is so structured for market reasons and not for tax avoidance reasons; provided further that such interest is not paid in connection with a trade or business carried on in Ireland by that limited liability company through a branch or agency;
(d)    a bank within the meaning of Section 246(i) of the Taxes Consolidation Act 1997 of Ireland whose lending office is located in Ireland and which is carrying on a bona fide banking business in Ireland for the purposes of section 246(3) of the Taxes Consolidation Act 1997 of Ireland, provided that such interest is paid in Ireland;
(e)    a body corporate which advances money in the ordinary course of a trade which includes the lending of money; provided that such interest (i) is paid in Ireland, (ii) is taken into account in computing the trading income of such Lender, and (iii) such Lender has complied with (and continues to comply with) the notification requirements under section 246(5) of the Taxes Consolidation Act 1997 of Ireland;
(f)    a qualifying company within the meaning of Section 110 of the Taxes Consolidation Act 1997 of Ireland; provided that such interest is paid in Ireland; or
(g)    an investment undertaking within the meaning of section 739B of the Taxes Consolidation Act 1997 of Ireland; provided that such interest is paid in Ireland.
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“Rating Organizations” means the following nationally recognized rating organizations: Moody’s Investors Service, Inc., S&P Global Ratings, a division of S&P Global Inc., and Fitch Ratings, Inc.
“Recipient” means the Administrative Agent or any Lender.
“Register” has the meaning set forth in Section 11.11(a).
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Relevant Territory” means a member state of the European Union (other than Ireland), or a territory with the government of which Ireland has made arrangements for relief from double taxation which have the force of law by virtue of Section 826(1) of the Taxes Consolidation Act 1997 of Ireland, or a territory with the government of which Ireland has made arrangements for relief from double taxation which, upon completion of procedures set out in Section 826(1) of the Taxes Consolidation Act 1997 of Ireland will have the force of law.
“Replaced Lender” has the meaning set forth in Section 12.19(b)(iii).
“Reportable Event” means an event described in Section 4043(c) of ERISA with respect to a Plan other than those events as to which the 30‑day notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
“Requested Increase Amount” has the meaning set forth in Section 4.4(a)(i).
“Requested Increase Date” has the meaning set forth in Section 4.4(a)(i).
“Required Lenders” means Non-Defaulting Lenders having an aggregate Percentage of more than 50%; provided, that the Committed Loans and Commitments of any Defaulting Lender shall be excluded from the determination of Required Lenders.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of specially designated nationals or designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of Treasury, the U.S. State Department, the U.S. Department of Commerce, the U.S. Department of the Treasury, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, or (b) any Person controlled by such a Person.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the United States government, including those administered by the Office of Foreign Assets Control of the U.S. Department of Treasury, the U.S. State Department, the U.S. Department of Commerce or the U.S. Department of the Treasury, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
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“Screen Rate” has the meaning set forth in the definition of “Base LIBOR”.
“Securities Act” means the United States Securities Act of 1933.
“Securitization Assets” means the accounts receivable, lease, royalty or other revenue streams and other rights to payment and all related assets (including contract rights, books and records, all collateral securing any and all of the foregoing, all contracts and all guarantees or other obligations in respect of any and all of the foregoing and other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving any and all of the foregoing) and the proceeds thereof in each case pursuant to a Securitization Financing.
“Securitization Financing” means one or more transactions or series of transactions that may be entered into by the Company and/or any Subsidiary pursuant to which the Company or any Subsidiary may sell, convey or otherwise transfer Securitization Assets to (a) a Securitization Subsidiary (in the case of a transfer by the Company or any of the Subsidiaries that is not a Securitization Subsidiary) or (b) any other Person (in the case of a transfer by a Securitization Subsidiary), or may grant a security interest in, any Securitization Assets of the Company or any Subsidiary.
“Securitization Subsidiary” means a Subsidiary (or another Person formed for the purposes of engaging in a Qualified Securitization Financing in which the Company or any Subsidiary makes an investment and to which the Company or any Subsidiary transfers Securitization Assets and related assets) that engages in no activities other than in connection with the financing of Securitization Assets of the Company or a Subsidiary, all proceeds thereof and all rights (contingent and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Company or such other Person (as provided below) as a Securitization Subsidiary and (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any Subsidiary, other than another Securitization Subsidiary (excluding guarantees of obligations pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Company or any Subsidiary, other than another Securitization Subsidiary, in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the Company or any Subsidiary, other than another Securitization Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and (b) to which none of the Company or any other Subsidiary, other than another Securitization Subsidiary, has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of the Company or such other Person shall be evidenced by a resolution of the Board of Directors of the Company or such other Person giving effect to such designation.
“Shareholder’s Equity” means, as of any date of determination for the Company and its Subsidiaries on a consolidated basis, (a) shareholders’ equity (including (i) capital stock, (ii) additional paid-in capital, (iii) the amount that is (x) the aggregate amount outstanding of Hybrid Capital Securities multiplied by (y) the Hybrid Capital Securities Percentage, and
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(iv) retained earnings after deducting treasury stock) as of such date determined in accordance with GAAP, plus (b) to the extent not otherwise included in shareholders’ equity of the Company, any outstanding market auction preferred stock of ILFC.
“Significant Subsidiary” means (a) any Obligor that is a Subsidiary of the Company and (b) any other Subsidiary which is so defined pursuant to Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange Commission.
“SPV” has the meaning set forth in Section 12.4.2.
“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Company or any of its Subsidiaries that are customary for a seller or servicer of assets in a Securitization Financing.
“Subsidiary” means any Person of which or in which the Company and its other Subsidiaries own directly or indirectly 50% or more of:
(a)    the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such Person, if it is a corporation,
(b)    the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or
(c)    the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.
“Subsidiary Guarantor” means each of the Subsidiaries of the Company identified under the caption “GUARANTORS” on the signature pages hereto and each Subsidiary of the Company that becomes a “Subsidiary Guarantor” after the date hereof pursuant to Section 8.19.
“Successor Lender” has the meaning set forth in Section 12.9(c).
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Terminating Lender” has the meaning set forth in Section 12.9(c).
“Termination Date” means, with respect to any Lender, the earliest to occur of (i) February 15, 2024, or such later date as may be agreed to by such Lender pursuant to Section 12.9(a), or if such day is not a Business Day, the next preceding Business Day, (ii) the date on which the Commitments shall terminate pursuant to Section 10.2 or the Commitments shall be reduced to zero pursuant to Section 4.1 and (iii) the date specified as such Lender’s Termination Date pursuant to Section 12.9(b), or, if such day is not a Business Day, the next preceding Business Day; in all cases, subject to the provisions of Section 12.9(d).
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“Type” has the meaning set forth in the definition of “Committed Loan”.
“Unencumbered Assets” means, as of the date of any determination, the sum, without duplication, of (a) the difference between (i) the book value (determined in accordance with GAAP) on such date of determination of the Aircraft Assets owned by the Company and its Subsidiaries and (ii) the aggregate outstanding principal amount on such date of determination of Financial Indebtedness of the Company and its Subsidiaries secured by Liens over such Aircraft Assets or the Equity Interests of the Subsidiary owning such Aircraft Assets, and (b) the lesser of (i) $2,000,000,000 and (ii) the aggregate amount of “cash and cash equivalents” or any line item of similar import (but in any event, excluding “restricted cash” or any line item of similar import and excluding “cash and cash equivalents” or any line item of similar import subject to any Lien (other than (x) Liens arising by operation of law and (y) bankers’ Liens arising in the ordinary course of business)) reflected on a consolidated balance sheet of the Company prepared as of such date of determination in accordance with GAAP.
“Unmatured Event of Default” means any event which if it continues uncured will, with lapse of time or notice or lapse of time and notice, constitute an Event of Default.
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
“Wholly-owned Subsidiary” means any Person of which or in which the Company and its other Wholly-owned Subsidiaries own directly or indirectly 100% of:
(a)    the issued and outstanding shares of stock (except shares required as directors’ qualifying shares),
(b)    the capital interest or profits interest of such Person, if it is a partnership, limited liability company, joint venture or similar entity, or
(c)    the beneficial interest of such Person, if it is a trust, association or other unincorporated organization.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
Section 1.3.    Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Section 18-217 of the Delaware Limited Liability Company Act: (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b)
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if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.
SECTION 2.    COMMITTED LOANS AND COMMITTED NOTES
Section 2.1.    Agreement to Make Committed Loans. On the terms and subject to the conditions of this Agreement, each Lender, severally and for itself alone, agrees to make loans (herein collectively called “Committed Loans” and individually each called a “Committed Loan”) on a revolving basis from time to time from the Closing Date until such Lender’s Termination Date in such Lender’s Percentage of such aggregate amounts as the Borrower may from time to time request as provided in Section 2.2; provided, that, (a) the aggregate principal amount of all outstanding Committed Loans of any Lender shall not at any time exceed the amount set forth opposite such Lender’s name on Schedule I (as reduced in accordance with Section 4.1, Section 12.4 or Section 12.9), (b) the aggregate principal amount of all outstanding Committed Loans of all Lenders shall not at any time exceed the then Aggregate Commitment, and (c) at no time shall there be more than 15 Committed Loans outstanding. Within the limits of this Section 2.1, the Borrower may from time to time borrow, prepay and reborrow Committed Loans on the terms and conditions set forth in this Agreement.
Section 2.2.    Procedure for Committed Loans.
(a)    Committed Loan Requests. The Borrower shall give the Agent irrevocable telephonic notice at the Notice Office (promptly confirmed in writing on the same day), not later than (i) 1:00 p.m., New York City time, at least three Business Days prior to the applicable Funding Date in the case of LIBOR Rate Loans or (ii) 10:00 a.m., New York City time, on the applicable Funding Date in the case of Base Rate Loans, of each requested Committed Loan, and the Agent shall promptly advise each Lender thereof. Each such notice to the Agent (a “Committed Loan Request”) shall be substantially in the form of Exhibit A and shall specify (i) the Funding Date (which shall be a Business Day), (ii) the aggregate amount of the Committed Loans requested (in an amount permitted under clause (b) below), (iii) whether each Committed Loan shall be a LIBOR Rate Loan or a Base Rate Loan and (iv) if a LIBOR Rate Loan, the Loan Period therefor (subject to the limitations set forth in the definition of Loan Period). After giving effect to all Committed Loans, all Conversions of Committed Loans from one Type to the other and all Continuations of LIBOR Rate Loans, there shall not be more than ten Loan Periods in effect with respect to Committed Loans.
(b)    Amount and Increments of Committed Loans. Each Committed Loan Request shall contemplate Committed Loans in a minimum aggregate amount of $10,000,000 or a higher integral multiple of $1,000,000, not to exceed in the aggregate (for all requested Committed Loans) the excess of the then Aggregate Commitment over the aggregate principal amount of all outstanding Committed Loans, calculated as of the relevant Funding Date.

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(c)    Funding of Committed Loans.
(i)    Not later than 12:30 p.m., New York City time, on the applicable Funding Date of a Committed Loan, each Lender shall, subject to this Section 2.2(c), provide the Agent at its Notice Office with immediately available funds covering such Lender’s Committed Loan and the Agent shall pay over such funds to the Borrower not later than 2:00 p.m., New York City time, on such day if the Agent shall have received the documents required under Section 9 with respect to such Committed Loan and the other conditions precedent to the making of such Committed Loan shall have been satisfied not later than 11:00 a.m., New York City time, on such day. If the Agent does not receive such documents or such other conditions precedent have not been satisfied prior to such time, then (A) the Agent shall not pay over such funds to the Borrower, (B) the Borrower’s Committed Loan Request related to such Committed Loan shall be deemed cancelled in its entirety, (C) in the case of Committed Loan Requests relative to LIBOR Rate Loans, the Borrower shall be liable to each Lender in accordance with Section 6.4 and (D) the Agent shall return the amount previously provided to the Agent by each Lender on the next following Business Day.
(ii)    The Borrower agrees, notwithstanding its previous delivery of any documents required under Section 9 with respect to a particular Committed Loan, immediately to notify the Agent of any failure by it to satisfy the conditions precedent to the making of such Committed Loan. The Agent shall be entitled to assume, after it has received each of the documents required under Section 9 with respect to a particular Committed Loan, that each of the conditions precedent to the making of such Committed Loan has been satisfied absent actual knowledge to the contrary received by the Agent prior to the time of the receipt of such documents. Unless the Agent shall have notified the Lenders prior to 11:30 a.m., New York City time, on the applicable Funding Date of any Committed Loan that the Agent has actual knowledge that the conditions precedent to the making of such Committed Loan have not been satisfied, the Lenders shall be entitled to assume that such conditions precedent have been satisfied.
(d)    Repayment of Committed Loans. If any Lender is to make a Committed Loan hereunder on a day on which the Borrower is to repay (or has elected to prepay, pursuant to Section 4.2) all or any part of any outstanding Committed Loan held by such Lender, the proceeds of such new Committed Loan shall be applied to make such repayment and only an amount equal to the positive difference, if any, between the amount being borrowed and the amount being repaid shall be requested by the Agent to be made available by such Lender to the Agent as provided in Section 2.2(c).
Section 2.3.    Maturity of Committed Loans. Except for a Base Rate Loan, which shall mature on the Termination Date, a Committed Loan made by a Lender shall mature on the last day of the Loan Period applicable to such Committed Loan, but in no event later than the Termination Date for such Lender; provided, that, a LIBOR Rate Loan that would otherwise mature at the end of a Loan Period may instead be Converted to a Base Rate Loan or Continued as a LIBOR Rate Loan for a new Loan Period pursuant to
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Section 2.4 or become a Base Rate Loan at the end of such Loan Period pursuant to Section 3.1(b).
Section 2.4.    Optional Conversion or Continuation of Committed Loans. The Borrower may on any Business Day, upon notice given to the Agent not later than 1:00 p.m. (New York City time) on the third Business Day prior to the date of the proposed Conversion or Continuation and subject to the provisions of Sections 3.1, Convert all Committed Loans of one Type comprising the same borrowing hereunder into Committed Loans of the other Type or Continue all LIBOR Rate Loans comprising the same borrowing hereunder for a new Loan Period; provided, however, that any Conversion of LIBOR Rate Loans into Base Rate Loans and any Continuation of LIBOR Rate Loans for a new Loan Period shall be made only (a) on the last day of a Loan Period for such LIBOR Rate Loans or (b) on any day other than the last day of a Loan Period for such LIBOR Rate Loans so long as the Borrower pays the amounts payable pursuant to Section 6.4(a), any Conversion of Base Rate Loans into LIBOR Rate Loans or Continuation of LIBOR Rate Loans shall be in an amount not less than the minimum amount specified in Section 2.2(b) and no Conversion or Continuation of any Committed Loans shall result in more separate Committed Loans than permitted under Section 2.2(a); provided, further, that upon the occurrence and during the continuance of any Event of Default no Conversion of Base Rate Loans into LIBOR Rate Loans or Continuation of LIBOR Rate Loans for a new Loan Period shall be permitted. Each such notice of a Conversion or Continuation shall, within the restrictions specified above, specify (i) the date of such Conversion or Continuation, (ii) the Committed Loans to be Converted or Continued, and (iii) if such Conversion is into LIBOR Rate Loans or if such notice is of a Continuation of LIBOR Rate Loans, the duration of the initial (or Continued) Loan Period for each such Committed Loan. Each notice of Conversion or Continuation shall be irrevocable and binding on the Borrower.
SECTION 3.    INTEREST AND FEES
Section 3.1.    Interest Rates. The Borrower hereby promises to pay interest on the unpaid principal amount of each Committed Loan for the period commencing on the applicable Funding Date for such Committed Loan until such Committed Loan is paid in full, as follows:
(a)    if such Committed Loan is a Base Rate Loan, at a rate per annum equal to the Base Rate from time to time in effect; provided, however, that upon the occurrence and during the continuance of any Event of Default, such Committed Loan that is a Base Rate Loan shall bear interest on the unpaid principal amount thereof at a rate per annum (calculated on the basis of a 365-day year for the actual number of days elapsed) equal to the Base Rate from time to time in effect plus 2.00% per annum; and
(b)    if such Committed Loan is a LIBOR Rate Loan, at a rate per annum equal to the LIBOR Rate applicable to the Loan Period for such Loan; provided, however, that upon the occurrence and during the continuance of any Event of Default, such Committed Loan that is a LIBOR Rate Loan shall, at the end of the applicable Loan Period then in effect, bear interest on the unpaid principal amount thereof at a rate per annum (calculated on the basis of a 360-day
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year for the actual number of days involved) equal to the Base Rate from time to time in effect (but not less than the interest rate in effect for such Committed Loan immediately prior to maturity of such Committed Loan) plus 2.00% per annum.
Section 3.2.    Interest Payment Dates. Except for Base Rate Loans, as to which accrued interest shall be payable on the last day of each calendar quarter and on the Termination Date, accrued interest on each Committed Loan shall be payable in arrears on the last day of the one week or one, two or three month, as applicable, Loan Period therefor and with respect to each LIBOR Rate Loan with a Loan Period of six months, on the day that is three months after the first day of such Loan Period (or, if there is no day in such third month numerically corresponding to such first day of the Loan Period, on the last Business Day of such month). Upon the occurrence and during the continuance of any Event of Default, accrued interest on any Committed Loan shall be payable on demand. If any interest payment date falls on a day that is not a Business Day, such interest payment date shall be postponed to the next succeeding Business Day and the interest paid shall cover the period of postponement (except that if the Committed Loan is a LIBOR Rate Loan with a Loan Period of one month or longer and the next succeeding Business Day falls in the next succeeding calendar month, such interest payment date shall be the immediately preceding Business Day).
Section 3.3.    Setting and Notice of Committed Loan Rates.
(a)    The applicable interest rate for each Committed Loan hereunder shall be determined by the Agent in accordance with this Agreement and notice thereof shall be given by the Agent promptly to the Borrower and to each Lender. Each determination of the applicable interest rate by the Agent shall be conclusive and binding upon the parties hereto in the absence of demonstrable error.
(b)    In the case of LIBOR Rate Loans, if as to any Loan Period the Screen Rate is not available and the substitute or successor pages or screens are also unavailable, then (i) the Agent shall promptly notify the other parties thereof and (ii) at the option of the Borrower the Committed Loan Request delivered by the Borrower pursuant to Section 2.2(a) with respect to such Funding Date shall be cancelled or shall be deemed to have specified a Base Rate Loan. For the avoidance of doubt, in the circumstances described in the immediately preceding sentence, the obligation of the Lenders to make or Continue LIBOR Rate Loans or to Convert Base Rate Loans into LIBOR Rate Loans shall be suspended until the Agent shall notify the Company and the Lenders that the circumstances causing such suspension no longer exist (which notice shall be provided by the Agent promptly upon such circumstances ceasing to exist).
(c)    The Agent shall, upon written request of the Borrower or any Lender, deliver to the Borrower or such Lender a statement showing the computations used by the Agent in determining the interest rate applicable to any LIBOR Rate Loan.
Section 3.4.    Commitment Fee. The Borrower agrees to pay to the Agent for the accounts of the Lenders pro rata in accordance with their respective Percentages an annual commitment fee computed by multiplying the average daily amount of the unused
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Aggregate Commitment by the applicable percentage determined with respect to such commitment fee in accordance with Schedule II hereto. Such fee shall commence accruing on the Closing Date and shall be payable quarterly in arrears on the last Business Day of March, June, September and December of each year (beginning with the last Business Day of the first full calendar quarter ending after the Closing Date) until the Commitments have expired or have been terminated and on the date of such expiration or termination (and, in the case of any Terminating Lender, such Lender’s Termination Date), in each case for the period then ending for which such commitment fee has not previously been paid; provided, that, no Defaulting Lender shall be entitled to receive any commitment fee in respect of its Commitment for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay such fee that otherwise would have been required to have been paid to that Defaulting Lender).
Section 3.5.    Agent’s Fees. The Borrower agrees promptly to pay to the Agent such fees as may be agreed from time to time by the Borrower, the Company and the Agent.
Section 3.6.    Computation of Interest and Fees. All interest and commitment fees hereunder shall be computed for the actual number of days elapsed on the basis of a 360-day year; provided that, for any period when the Base Rate is determined based on clause (b) of the definition of Base Rate, all interest accruing at the Base Rate for such period shall be computed for the actual number of days elapsed on the basis of a 365/366 day year. The interest rate applicable to each LIBOR Rate Loan and Base Rate Loan shall change simultaneously with each change in the LIBOR Rate or the Base Rate, as applicable.
SECTION 4.    REDUCTION OR TERMINATION OF THE COMMITMENTS; PREPAYMENTS; DEFAULTING LENDERS; INCREASE OF COMMITMENTS
Section 4.1.    Voluntary Termination or Reduction of the Commitments.
(a)    The Borrower may at any time on at least 3 Business Days’ prior notice received by the Agent (which shall promptly on the same day or on the next Business Day advise each Lender thereof) permanently reduce the amount of the Commitments (such reduction to be pro rata among the Lenders according to their respective Percentages) to an amount not less than the aggregate principal amount of all outstanding Committed Loans. Any such reduction shall be in the amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Concurrently with any such reduction, the Borrower shall prepay the principal of any Committed Loans outstanding to the extent that the aggregate amount of such Committed Loans outstanding shall then exceed the Aggregate Commitment, as so reduced. The Borrower may from time to time on like notice terminate the Commitments upon payment in full of all Committed Loans, all interest accrued thereon, all fees and all other obligations of the Borrower hereunder. Any notice of reduction or termination in full of the Commitments hereunder may state that such notice is conditioned upon the effectiveness of other credit facilities or capital raising, in which case such
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notice may be revoked by the Borrower (by notice to the Agent on or prior to the specified effective date) if such condition is not satisfied.
(b)    Termination of Defaulting Lender. The Borrower shall be entitled at any time to (i) terminate the unused Commitment of any Lender that is a Defaulting Lender (the “Defaulted Commitments”) upon prior notice of not less than one Business Day to the Agent (which shall promptly notify the Lenders thereof), and/or (ii) replace all of the Commitments or the Defaulted Commitments of any Lender that is a Defaulting Lender with Commitments of a Successor Lender, provided, that, (x) each such assignment shall be either an assignment of all of the rights and obligations of the Defaulting Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the Defaulting Lender under this Agreement with respect to all of the Commitments or the Defaulted Commitments, as the case may be, and (y) concurrently with such assignment, either the Borrower or one or more Successor Lenders shall pay for the account of such Defaulting Lender an aggregate amount at least equal to the aggregate outstanding principal amount of the Committed Loans owing to such Defaulting Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Defaulting Lender under this Agreement. In either such event, the provisions of Section 4.3 shall apply to all amounts thereafter paid by the Borrower or such Successor Lender for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, commitment fees or other amounts), provided, that, such termination or assignment shall not be deemed to be a waiver or release of any claim the Borrower, the Agent, or any Lender may have against such Defaulting Lender.
Section 4.2.    Voluntary Prepayments. The Borrower may voluntarily prepay Committed Loans without premium or penalty, except as may be required pursuant to subsection (d) below, in whole or in part; provided, that, (a) each prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (b) the Borrower shall give the Agent at its Notice Office (which shall promptly advise each Lender), not later than (i) 1:00 p.m., New York City time, at least two Business Days’ prior notice thereof for prepayments of LIBOR Rate Loans or (ii) 11:00 a.m., New York City time, same day notice thereof for prepayments of Base Rate Loans, specifying the Committed Loans to be prepaid and the date and amount of prepayment, (c) any prepayment of principal of any Committed Loan shall include accrued interest to the date of prepayment on the principal amount being prepaid and (d) any prepayment of a LIBOR Rate Loan shall be subject to the provisions of Section 6.4. Any notice of prepayment in full of all Committed Loans hereunder or reduction of Commitments in full may state that such notice is conditioned upon the effectiveness of other credit facilities or capital raising, in which case such notice may be revoked by the Borrower (by notice to the Agent on or prior to the specified effective date) if such condition is not satisfied.
Section 4.3.    Defaulting Lenders.
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(a)    No Commitment of any Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in this Section 4.3 or otherwise specifically provided herein, performance by the Borrower of its obligations shall not be excused or otherwise modified as a result of the operation of this Section 4.3. The rights and remedies against a Defaulting Lender under this Section 4.3 are in addition to any other rights and remedies which the Borrower, the Agent or any Lender may have against such Defaulting Lender.
(b)    If the Borrower and the Agent agree in writing in their reasonable determination that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Committed Loans of the other Lenders, assume Commitments on a pro rata basis or take such other actions as the Agent may determine to be necessary to cause the outstanding borrowings of Committed Loans or Commitments to be held on a pro rata basis by the Lenders in accordance with their respective Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided, that, no adjustments will be made retroactively or with duplication with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.
(c)    Notwithstanding anything to the contrary contained in this Agreement, any payment of principal, interest, commitment fees or other amounts received by the Agent for the account of any Defaulting Lender under this Agreement (whether voluntary or mandatory, at maturity or otherwise) shall be applied at such time or times as may be determined by the Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second, as the Borrower may request (so long as no Event of Default shall have occurred and be continuing), to the funding of any Committed Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; third, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fourth, so long as no Event of Default shall have occurred and be continuing, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided, that, if (x) such payment is a payment of the principal amount of any Committed Loan in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Committed Loans were made at a time when the applicable conditions set forth in Section 9 were satisfied or waived, such payment shall be applied solely to pay the Committed Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Committed Loans of such Defaulting Lender and provided, further, that any amounts held as cash collateral for funding obligations of a Defaulting Lender shall be returned to such Defaulting Lender upon the
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termination of this Agreement and the satisfaction of such Defaulting Lender’s obligations hereunder. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 4.3 shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
Section 4.4.    Increase of Commitments.
(a)    The Borrower shall have the right at any time after the Closing Date to increase the aggregate Commitments hereunder in accordance with the following provisions and subject to the following conditions:
(i)    The Borrower shall give the Administrative Agent, which shall promptly deliver a copy thereof to each of the Lenders, at least three Business Days’ (or such lesser period as the Administrative Agent may reasonably agree) prior written notice (a “Notice of Increase”) of any such requested increase specifying the aggregate amount by which the Commitments are to be increased (the “Requested Increase Amount”), which shall be at least $5,000,000 and in increments of $1,000,000 thereafter, and the requested date of increase (the “Requested Increase Date”). The Borrower may, but shall not be obligated to, offer to any Lender the right to provide all or any portion of the Requested Increase Amount. No Lender shall have any obligation whatsoever to offer to increase its Commitment by an amount specified by the Borrower or otherwise nor shall the Borrower be obligated to accept any offer by an existing Lender to provide all or any portion of the Requested Increase Amount. Any Lender that so offers to increase its Commitment, which increase is accepted by the Borrower, is herein called an “Increasing Lender”.
(ii)    If the aggregate amount of the increases offered and accepted pursuant to clause (i) above, if any, is less than the Requested Increase Amount, the Borrower may, through the Administrative Agent, offer the balance of the Requested Increase Amount to one or more Eligible Assignees; provided that the Commitment to be acquired hereunder by any such Eligible Assignee shall not be less than $1,000,000. Any such Eligible Assignee that agrees to acquire a Commitment pursuant hereto is herein called an “Additional Lender”.
(iii)    Effective on the Requested Increase Date, subject to the terms and conditions hereof, (x) Schedule I shall be deemed amended to reflect the increases contemplated hereby, (y) the Commitment of each Increasing Lender shall be increased by the amount agreed by such Increasing Lender and the Borrower, and (z) each Additional Lender shall enter into an agreement in form and substance reasonably satisfactory to the Borrower and the Administrative Agent pursuant to which it shall undertake, as of such Requested Increase Date, a new Commitment in the amount determined pursuant to clause (ii) above, and such Additional Lender shall thereupon be deemed to be a Lender for all purposes of this Agreement.
(iv)    If on the Requested Increase Date there are borrowings of Committed Loans outstanding hereunder, appropriate adjustments shall be made (by the making of borrowings of Committed Loans by the Increasing Lenders and the Additional Lenders and/or
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the prepayment of outstanding borrowings of Committed Loans) as necessary to cause the outstanding borrowings of Committed Loans to be held ratably by all Lenders.
(b)    Anything in this Section 4.4 to the contrary notwithstanding, no increase in the aggregate Commitments hereunder pursuant to this Section shall be effective unless:
(i)    on the relevant Requested Increase Date and after giving effect to such increase, (x) no Unmatured Event of Default under Section 10.1.1 or 10.1.3 or Event of Default shall have occurred and be continuing and (y) the representations and warranties contained in Section 7 (other than those contained in Section 7.5) shall be true and correct in all material respects as of the Requested Increase Date and after giving effect thereto, with the same effect as though made on the Requested Increase Date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date; and
(ii)    after giving effect to any such increase the aggregate amount of the Commitments shall not exceed $4,500,000,000.
SECTION 5.    MAKING AND PRORATION OF PAYMENTS; SET‑OFF; TAXES
Section 5.1.    Making of Payments. Except as provided in Section 2.2(d), payments (including those made pursuant to Section 4.1) of principal of, or interest on, the Committed Loans and all payments of fees and any other payments required to be made by the Borrower to the Agent hereunder shall be made by the Borrower to the Agent in immediately available funds at its Payment Office not later than 12:00 Noon, New York City time, on the date due; and funds received after that hour shall be deemed to have been received by the Agent on the next following Business Day. Subject to Sections 3.4 and 4.3, the Agent shall promptly remit to each Lender its share (if any) of each such payment. All payments under Section 6 and all payments required to be made hereunder to any Person other than the Agent shall be made by the Borrower when due directly to the Persons entitled thereto in immediately available funds.
Section 5.2.    Pro Rata Treatment; Sharing.
(a)    Except as required pursuant to Section 3.4, Section 4.3, Section 6 or Section 12.9, each payment or prepayment of principal of any Committed Loans, each payment of interest on the Committed Loans and each payment of the commitment fee shall be allocated pro rata among the Lenders in accordance with their respective Percentages.
(b)    If any Lender or other holder of a Committed Loan shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise) on account of principal of, interest on or fees or other amounts with respect to any Committed Loan in excess of the share of payments and other recoveries (exclusive of payments or recoveries under Section 6 or pursuant to Section 12.9) such Lender or other holder would have received if such payment had been distributed pursuant to the provisions of Section 5.2(a), such
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Lender or other holder shall purchase from the other Lenders or holders, in a manner to be specified by the Agent, such participations in the Committed Loans held by them as shall be necessary so that all such payments of principal and interest with respect to the Committed Loans shall be shared by the Lenders and other holders pro rata in accordance with their respective Percentages; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender or holder, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.
Section 5.3.    Set-off. Each Obligor agrees that the Agent, each Lender and any of their respective branches or agencies, to the extent permitted by applicable law, has all rights of set-off and banker’s lien provided by applicable law, and each Obligor further agrees that at any time, (i) any amount owing by any Obligor under this Agreement is due to any such Person or (ii) any Event of Default exists, each such Person, to the extent permitted by applicable law, may apply to the payment of any amount payable hereunder any and all balances, credits, deposits, accounts or moneys of such Obligor then or thereafter with such Person.
Section 5.4.    Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of any Obligor under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Obligor shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(a)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(b)    Evidence of Payment. As soon as practicable after any payment of Taxes by any Obligor to a Governmental Authority pursuant to this Section, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(c)    Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section, but without duplication of increased amounts the Borrower has paid in respect of Taxes pursuant to Section 5.4(a)) payable or paid by such Recipient or required to be withheld or
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deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d)    Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so) and (ii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph.
(e)    Status of Lenders. (i)(A) Each Lender shall certify in writing to the Borrower and the Administrative Agent on or before the date it becomes a Lender that it is a Qualifying Lender (specifying which category of Qualifying Lender it is) and (B) any Lender that is entitled to benefit from an exemption from or reduction of withholding Tax with respect to payments made under this Agreement shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation to the Borrower as will enable the Borrower to comply with the provisions of Sections 891A, 891E, 891F and 891G of the Taxes Consolidation Act 1997 of Ireland. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.4(f)(ii) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(i)    Without limiting the generality of the foregoing, if a payment made to a Lender under this Agreement would be subject to U.S. Federal withholding Tax imposed by FATCA if such
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Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (ii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(ii)    Each Lender agrees (A) that if any form, certification or representation it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form, certification or representation or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so; and (B) if it no longer qualifies as a Qualifying Lender after the date it becomes a Lender, it will promptly notify the Borrower and the Administrative Agent in writing.
(f)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(g)    Indemnification of Borrower. Each Lender shall severally indemnify the Borrower within 10 Business Days after written demand with adequate supporting documentation for any Excluded Tax actually paid by the Borrower to a governmental entity solely and directly attributable to such Lender’s failure to comply with Section 5.4(f)(i)(A) or Section 5.4(f)(iii)(B) as it relates to the certification provided in Section 5.4(f)(i)(A).
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(h)    Survival. Each party’s obligations under this Section 5.4 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
SECTION 6.    INCREASED COSTS AND SPECIAL PROVISIONS FOR LIBOR RATE LOANS
Section 6.1.    Increased Costs. (a) If after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or the making or issuance of any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency and compliance by any Lender (or any Funding Office of such Lender) therewith, then, subject to the provisions of Section 5.4, which shall provide the sole source of additional amounts payable to any Lender with respect to the matters covered therein,
(A)    shall subject any Lender (or any Funding Office of such Lender) to any Taxes with respect to its LIBOR Rate Loans (except for (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (iii) Connection Income Taxes);
(B)    shall impose, modify or deem applicable any reserve (including any reserve imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve included in the determination of interest pursuant to Section 3.1), special deposit, assessment (including any assessment for insurance of deposits) or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (or any Funding Office of such Lender); or
(C)    shall impose on any Lender (or any Funding Office of such Lender) any other condition affecting its LIBOR Rate Loans, its Committed Notes or its obligation to make or maintain LIBOR Rate Loans;
and the result of any of the foregoing is to increase the cost to (or to impose an additional cost on) such Lender (or any Funding Office of such Lender) of making, converting to, continuing or maintaining any LIBOR Rate Loan, or to reduce the amount of any sum received or receivable by such Lender (or such Lender’s Funding Office) under this Agreement or under its Committed Notes with respect thereto, then within 10 days after demand by such Lender (which demand shall be accompanied by a statement setting forth the basis of such demand), the Borrower shall pay directly to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or such reduction (without duplication of any amounts which have been paid or reimbursed).
(b)    If, after the date hereof, any Lender shall determine that the adoption, effectiveness or phase-in of any applicable law, rule, guideline or regulation regarding capital
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adequacy or liquidity requirements, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or the making or issuance of any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) of any such authority, central bank or comparable agency and compliance by any Lender (or any Funding Office of such Lender or such Lender’s holding company) therewith, has or would have the effect of reducing the rate of return on the capital of such Lender or such Lender’s holding company as a consequence of its obligations hereunder to a level below that which such Lender or such Lender’s holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such Lender’s holding company’s policies with respect to capital adequacy or liquidity requirements), then, from time to time, within 10 days after demand by such Lender (which demand shall be accompanied by a statement setting forth the basis of such demand), the Borrower shall pay directly to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for such reduction.
(c)    Each Lender shall promptly notify the Borrower and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 6.1 and will designate a different Funding Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in such Lender’s sole judgment, be otherwise disadvantageous to such Lender. The Borrower shall not be required to compensate a Lender pursuant to this Section 6.1 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the change in law or other event occurring after the date hereof giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the change in law or other such event is retroactive, then the nine month period referred to above shall be extended to include the period of retroactive effect thereof).
(d)    Notwithstanding anything to the contrary herein, it is understood and agreed that any changes resulting from requests, rules, guidelines or directives (x) issued in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III) shall, for the purposes of this Agreement, be deemed to be adopted subsequent to the date hereof; provided, however, that no Lender shall be entitled to receive any compensation or reimbursement hereunder with respect to any such changes unless such requirements are generally applicable to (and for which reimbursement is generally being sought by the applicable Lender in respect of) credit transactions similar to this transaction from borrowers similarly situated to the Borrower; provided, further, that no Lender shall be required to disclose any confidential or proprietary information in connection therewith.
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Section 6.2.    Basis for Determining Interest Rate Inadequate or Unfair. (a) If with respect to the Loan Period for any LIBOR Rate Loan:
(i)    the Screen Rate is not available and the substitute or successor pages or screens are also unavailable for such Loan Period, or the Agent otherwise determines (which determination shall be binding and conclusive on all parties) that, by reason of circumstances affecting the Base LIBOR market, adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or
(ii)    the Required Lenders advise the Agent that the LIBOR Rate as determined by the Agent will not adequately and fairly reflect the cost to such Required Lenders of maintaining or funding LIBOR Rate Loans for such Loan Period, or that the making or funding of LIBOR Rate Loans has become impracticable as a result of an event occurring after the date of this Agreement which in such Required Lenders’ opinion materially affects LIBOR Rate Loans,
then (A) the Agent shall promptly notify the other parties thereof and (B) so long as such circumstances shall continue, no Lender shall be under any obligation to make or Continue any LIBOR Rate Loan or Convert any Base Rate Loan into a LIBOR Rate Loan.
(b)    If at any time the Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i) of this Section have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) of this Section have not arisen but either (A) the supervisor for the administrator of the Screen Rate has made a public statement that the administrator of the Screen Rate is insolvent (and there is no successor administrator that will continue publication of the Screen Rate), (B) the administrator of the Screen Rate has made a public statement identifying a specific date after which the Screen Rate will permanently or indefinitely cease to be published by it (and there is no successor administrator that will continue publication of the Screen Rate), (C) the supervisor of the administrator of the Screen Rate has made a public statement identifying a specific date after which the Screen Rate will permanently or indefinitely cease to be published or (D) the supervisor of the administrator of the Screen Rate or a Governmental Authority having jurisdiction over the Agent has made a public statement identifying a specific date after which the Screen Rate may no longer be used for determining interest rates for loans, then the Agent and the Borrower shall endeavor to establish an alternate rate of interest to the LIBOR Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but for the avoidance of doubt, such related changes shall not include a reduction of the applicable rate margins set forth on Schedule II unless agreed to by all Lenders in accordance with Section 12.1), a copy of which amendment shall be promptly provided by the Agent to the Lenders; provided that, if such alternate rate of interest as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. Notwithstanding anything to the contrary in Section 12.1, such amendment shall become effective without any further action or consent of any other
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party to this Agreement so long as the Agent shall not have received, within five Business Days of the date a copy of such amendment is provided to the Lenders by the Agent, a written notice from the Required Lenders stating that such Required Lenders object to such amendment. Until an alternate rate of interest shall be determined in accordance with this clause (b) (but, in the case of the circumstances described in clause (ii) of the first sentence of this clause (b), only to the extent the Screen Rate for such Loan Period is not available or published at such time on a current basis or is no longer used for determining interest rates for loans), (w) no Lender shall be under any obligation to make or Continue any LIBOR Rate Loan or Convert any Base Rate Loan into a LIBOR Rate Loan, (x) if any Committed Loan Request requests a LIBOR Rate Loan, such Committed Loan shall be made as a Base Rate Loan and (y) if the Borrower shall request the Conversion of a Base Rate Loan into a LIBOR Rate Loan or the Continuation of a LIBOR Rate Loan for a new Loan Period, such Conversion request shall be ineffective and the LIBOR Rate Loan subject to such Continuation request shall be Converted into a Base Rate Loan and (z) the rate of interest set forth in clause (c) of the definition of “Base Rate” contained in Section 1.2 will no longer be utilized in determining the Base Rate.
Section 6.3.    Changes in Law Rendering Certain Loans Unlawful. In the event that any change in (including the adoption of any new) applicable laws or regulations, or in the interpretation of applicable laws or regulations by any Governmental Authority or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of such Lender raise a substantial question as to whether it is) unlawful for a Lender to make, maintain or fund any LIBOR Rate Loan, then (a) such Lender shall promptly notify each of the other parties hereto, (b) upon the effectiveness of such event and so long as such unlawfulness shall continue, the obligation of such Lender to make or Continue LIBOR Rate Loans shall be suspended and any request by the Borrower for LIBOR Rate Loans shall, as to such Lender, be deemed to be a request for a Base Rate Loan, and (c) on the last day of the current Loan Period for such Lender’s LIBOR Rate Loans (or, in any event, if such Lender so requests on such earlier date as may be required by the relevant law, regulation or interpretation) such Lender’s Committed Loans which are LIBOR Rate Loans shall cease to be maintained as LIBOR Rate Loans and shall thereafter bear interest at a floating rate per annum equal to the Base Rate. If at any time the event giving rise to such unlawfulness shall no longer exist, then such Lender shall promptly notify the Borrower and the Agent.
Section 6.4.    Funding Losses. The Borrower hereby agrees that upon demand by any Lender (which demand shall be accompanied by a statement setting forth the basis for the calculations of the amount being claimed) the Borrower will indemnify such Lender against any net loss or expense which such Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain any LIBOR Rate Loan), as reasonably determined by such Lender, as a result of (a) any payment or mandatory or voluntary prepayment (including any payment pursuant to Section 6.3 or 12.9(b) or any payment resulting from acceleration) or Conversion or Continuation of any LIBOR Rate Loan of such Lender on a date other than the last day of the Loan Period for such Loan or (b) any failure of the Borrower to borrow any Committed Loans on the
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originally scheduled Funding Date specified therefor pursuant to this Agreement (including any failure to borrow resulting from any failure to satisfy the conditions precedent to such borrowing) or to Continue any LIBOR Rate Loans on the date specified therefor pursuant to this Agreement. For this purpose, all notices to the Agent pursuant to this Agreement shall be deemed to be irrevocable.
Section 6.5.    Discretion of Lenders as to Manner of Funding. Notwithstanding any provision of this Agreement to the contrary (but subject to Section 6.1(c)), each Lender shall be entitled to fund and maintain its funding of all or any part of its Committed Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Lender had actually funded and maintained each LIBOR Rate Loan during the Loan Period for such LIBOR Rate Loan through the purchase of deposits having a maturity corresponding to such Loan Period and bearing an interest rate equal to the rate borne by such LIBOR Rate Loan for such Loan Period.
Section 6.6.    Conclusiveness of Statements; Survival of Provisions. Determinations and statements of any Lender pursuant to this Section 6 shall be conclusive absent demonstrable error, and each Lender may use reasonable averaging and attribution methods in determining compensation pursuant to Section 6.1 or 6.4. The provisions of this Section 6 shall survive termination of this Agreement and payment of the Committed Loans.
SECTION 7.    REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make Committed Loans hereunder, each Obligor hereby makes the following representations and warranties to the Agent and the Lenders (a) as of the Closing Date, and (b) other than the representations and warranties in Section 7.5, as of each applicable Funding Date, which representations and warranties shall survive the execution and delivery of this Agreement and the Committed Notes and the disbursement of the initial Committed Loans hereunder:
Section 7.1.    Organization, etc. (a) The Company is duly organized or incorporated, as applicable, validly existing and in good standing, to the extent applicable, under the laws of the jurisdiction of its organization; (b) each corporate Significant Subsidiary is a company or corporation, as applicable, duly organized or incorporated, as applicable, validly existing and in good standing, to the extent applicable, under the laws of the jurisdiction of its incorporation; (c) each other Significant Subsidiary (if any) is an entity duly organized and validly existing under the laws of the jurisdiction of its organization; and (d) each of the Company and each Significant Subsidiary has the power to own its property and to carry on its business as now being conducted and is duly qualified and in good standing, to the extent applicable, as a foreign corporation or other entity authorized to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except, in each of cases (a), (b), (c) and (d) above, where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect.
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Section 7.2.    Authorization; Consents; No Conflict. The execution and delivery by (x) each Obligor party hereto of this Agreement and by the Borrower of the Committed Notes, the payment of any fees hereunder, the borrowings hereunder and the performance by each such Obligor of its obligations under this Agreement and by the Borrower of its obligations under the Committed Notes and (y) each Obligor of any Guarantee Assumption Agreement to which it is a party and the performance by each such Obligor of its obligations hereunder and thereunder (a) are within the corporate or similar powers of each such Obligor, (b) have been duly authorized by all necessary corporate or similar action on the part of each such Obligor, (c) have received all necessary approvals, authorizations, consents, registrations, notices, exemptions and licenses (if any shall be required) from Governmental Authorities and other Persons, except for any such approvals, authorizations, consents, registrations, notices, exemptions or licenses non-receipt of which could not reasonably be expected to have a Material Adverse Effect, (d) are, where it concerns an Obligor incorporated under the laws of the Netherlands, in such Obligor’s corporate interest, (e) do not and will not contravene or conflict with any provision of (i) law, (ii) any judgment, decree or order to which such Obligor or any Significant Subsidiary is a party or by which such Obligor or any Significant Subsidiary is bound, (iii) the charter, by-laws, memorandum and articles of association or other organizational documents of such Obligor or any Significant Subsidiary or (iv) any provision of any agreement or instrument binding on such Obligor or any Significant Subsidiary, or any agreement or instrument of which such Obligor is aware affecting the properties of such Obligor or any Significant Subsidiary, except with respect to (i), (ii) and (iv) above, for any such contravention or conflict which could not reasonably be expected to have a Material Adverse Effect, and (f) do not and will not result in or require the creation or imposition of any Lien on any of such Obligor’s or its Significant Subsidiaries’ properties.
Section 7.3.    Validity and Binding Nature. (a) This Agreement is, each Guarantee Assumption Agreement when duly executed and delivered will be, and the Committed Notes (if any) when duly executed and delivered will be, legal, valid and binding obligations of each Obligor party thereto, enforceable against each such Obligor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
(a)    This Agreement is in proper legal form under the law of Ireland and each other jurisdiction under which any Obligor is incorporated or organized for the enforcement thereof against each Obligor under such law. All formalities required in Ireland and each other jurisdiction under which any Obligor is organized or incorporated for the validity and enforceability of this Agreement (including any necessary registration, recording or filing with any court or other authority in Ireland and each other jurisdiction under which any Obligor is organized or incorporated) have been accomplished, and no notarization is required, for the validity and enforceability thereof.
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Section 7.4.    Financial Statements. The Company’s audited consolidated financial statements as at December 31, 2018, and unaudited consolidated financial statements as at June 30, 2019, a copy of each of which has been furnished to each Lender, have been prepared in conformity with GAAP applied on a basis consistent with that of the preceding fiscal year (other than as required or permitted by GAAP, subject, in the case of unaudited financial statements, to changes resulting from audit and year-end adjustments) and fairly present the financial condition of the Company and its Subsidiaries as at such dates and the results of their operations for the applicable time periods then ended.
Section 7.5.    Litigation. (a) As of the Closing Date, all Litigation Actions, taken as a whole, could not reasonably be expected to have a Material Adverse Effect.

(a)    As of the Closing Date, there is no Litigation Action pending or, to the knowledge of the Company, threatened that could reasonably be expected to adversely affect the enforceability of the Loan Documents against the Obligors or the rights and remedies of the Agent or the Lenders thereunder.
Section 7.6.    Employee Benefit Plans. Except as could not reasonably be expected to have a Material Adverse Effect, each employee benefit plan (as defined in Section 3(3) of ERISA) maintained or sponsored by the Company or any Subsidiary complies in all material respects with all applicable requirements of law and regulations. Except as could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, during the term of this Agreement, (i) no steps have been taken to terminate any Plan and no contribution failure has occurred with respect to any Plan sufficient to give rise to a lien under Section 303(k) of ERISA, (ii) no Reportable Event has occurred with respect to any Plan, (iii) no determination has been made that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA) and (iv) neither the Company nor any ERISA Affiliate has either withdrawn or instituted steps to withdraw from any Multiemployer Plan. Except as could not reasonably be expected to have a Material Adverse Effect, no condition exists or event or transaction has occurred in connection with any Plan which could reasonably be expected to result in the incurrence by the Company or any Subsidiary of any material liability, fine or penalty (imposed by Section 4975 of the Code or Section 502(i) of ERISA or otherwise). Neither the Company nor any ERISA Affiliate is a member of, or contributes to, any Multiemployer Plan as to which the potential withdrawal liability based upon the most recent actuarial report could reasonably be expected to have a Material Adverse Effect. Except as could not reasonably be expected to have a Material Adverse Effect, neither the Company nor any Subsidiary has any contingent liability with respect to any post retirement benefit under an employee welfare benefit plan (as defined in Section 3(1) of ERISA), other than liability for continuation coverage described in Part 6 of Title I of ERISA.
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Section 7.7.    Investment Company Act. Neither the Company nor the Borrower is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.
Section 7.8.    Regulation U. Neither the Company nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System as amended from time to time). No part of the proceeds of any Committed Loan will be used to buy or carry any margin stock. Following the application of the proceeds of each Committed Loan, not more than 25% of the value of the assets of any of the Company and its Subsidiaries shall consist of margin stock.
Section 7.9.    Disclosure. As of the Closing Date, (a) all written information (including the Information Memorandum), other than Projections (as defined below), forward looking information and information of a general economic or industry specific nature that has been made available to the Administrative Agent, any Arranger or any Lender by the Company or any of its officers, directors, employees, accountants or attorneys or, at the direction of the Company, its other advisors, agents or representatives in connection with the transactions contemplated hereby, other than independent third-party appraisals of aircraft and independent third party generated industry information and when taken together with all reports, statements, schedules and other information included in filings made by the Company with the Securities and Exchange Commission, taken as a whole, is complete and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were made (giving effect to any supplements thereto from time to time), (b) all financial projections, if any, that have been prepared by the Company in connection with the transactions contemplated hereby and made available to the Administrative Agent, any Lender or any potential Lender (the “Projections”) have been prepared in good faith based upon assumptions believed by the Company to be reasonable as of the date of the preparation of such Projections (it being understood that projections by their nature are inherently uncertain and no assurances are being given that the results reflected in the Projections will be achieved) and (c) the information included in the Beneficial Ownership Certification (if any) is true and correct in all material respects.
Section 7.10.    Compliance with Applicable Laws, etc. Each Obligor and each of its Subsidiaries is in compliance with the requirements of all applicable laws, rules, regulations and orders of all Governmental Authorities (including ERISA or any laws applicable to a Foreign Plan and all applicable environmental laws), except for noncompliance that could not reasonably be expected to have a Material Adverse Effect. None of the Obligors nor any of the Subsidiaries is in default under any agreement or instrument to which such Obligor or such Subsidiary is a party or by which it or any of its properties or assets is bound, which default could reasonably be expected to have a Material Adverse Effect on the business, credit, operations or financial condition of the
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Obligors and their Subsidiaries taken as a whole. No Event of Default or Unmatured Event of Default has occurred and is continuing.
Section 7.11.    Insurance. Each of the Obligors and each Subsidiary maintains, or, in the case of any property owned by any Obligor or any Subsidiary and leased to lessees, has contractually required such lessees to maintain, insurance with financially sound and reputable insurers to such extent and against such hazards and liabilities as is commonly maintained, or caused to be maintained, as the case may be, by companies similarly situated.
Section 7.12.    Taxes. Each of the Obligors and each Subsidiary has filed all tax returns which are required to have been filed and has paid, or made adequate provisions for the payment of, all of its Taxes which are due and payable, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP have been established, except where failure to pay such Taxes or file a tax return, individually or in the aggregate, cannot reasonably be expected to have a Material Adverse Effect.
Section 7.13.    Use of Proceeds. The proceeds of the Committed Loans will be used for general corporate purposes of the Company and its Subsidiaries.
Section 7.14.    Pari Passu. All obligations and liabilities of any Obligor hereunder or under any Guarantee Assumption Agreement to which it is a party shall rank at least equally and ratably (pari passu) in priority with all other unsubordinated, unsecured obligations of such Obligor to any other creditor.
Section 7.15.    OFAC, Etc. The Company has implemented and maintains in effect policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their directors, officers, employees and agents with applicable Anti-Corruption Laws and Sanctions, the USA PATRIOT Act and other applicable anti-terrorism and money laundering laws. None of the Company or any Subsidiary, director, officer, employee or, to the knowledge of the Company after due inquiry, any agent of the Company or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No borrowing hereunder will be made for any purpose that would constitute or result in a violation by any party hereto, including the Lenders, of any applicable Anti-Corruption Laws, Sanctions, the USA PATRIOT Act or other anti-terrorism and money laundering laws.
SECTION 8.    COVENANTS
Until the expiration or termination of the Commitments, and thereafter until all obligations of the Obligors hereunder and under the Committed Notes are paid in full (other than unasserted contingent indemnification obligations), each Obligor agrees that, commencing on the Closing Date, unless at any time the Required Lenders shall otherwise expressly consent in writing, it will:
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Section 8.1.    Reports, Certificates and Other Information. Furnish to the Agent with sufficient copies for each Lender which the Agent shall promptly make available to each Lender:
8.1.1    Audited Financial Statements. As soon as available, and in any event within 95 days after each fiscal year of the Company, a copy of the audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows and annual audit report of the Company and its subsidiaries for such fiscal year (setting forth in each case in comparative form the figures for the previous fiscal year) prepared on a consolidated basis and in conformity with GAAP and certified by PricewaterhouseCoopers or by another independent certified public accountant of recognized national standing selected by the Company.
8.1.2    Interim Reports. As soon as available, and in any event within 50 days after each quarter (except the last quarter) of each fiscal year of the Company, a copy of the unaudited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows of the Company and its subsidiaries as of the end of and for such quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the corresponding period or periods of the previous fiscal year, all certified by an Authorized Officer of the Company as presenting fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year end audit adjustments, the auditors’ year-end report and the absence of footnotes.
8.1.3    Certificates. Contemporaneously with the furnishing of a copy of each annual audit report and of each set of quarterly statements provided for in this Section 8.1, deliver a certificate of the Company, in substantially the form of Exhibit C hereto, dated the date of delivery of such annual report or such quarterly statements and signed by an Authorized Officer, to the effect that no Event of Default or Unmatured Event of Default has occurred and is continuing, or, if there is any such event, describing it and the steps, if any, being taken to cure it and containing a computation of, and showing compliance with, each of the financial ratios and restrictions contained in this Section 8.
8.1.4    Certain Notices. Forthwith upon learning of the occurrence of any of the following, provide written notice thereof, describing the same and the steps being taken by the Company or the Subsidiary affected with respect thereto:
(i)    the occurrence of an Event of Default or an Unmatured Event of Default;
(ii)    the institution of any Litigation Action; provided, that, the Company need not give notice of any new Litigation Action unless such Litigation Action, together with all other pending Litigation Actions, could reasonably be expected to have a Material Adverse Effect;
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(iii)    the entry of any judgment or decree against the Company or any Subsidiary if the aggregate amount of all judgments and decrees then outstanding against the Company and all Subsidiaries exceeds $200,000,000 after deducting (i) the amount with respect to which the Company or any Subsidiary is insured and with respect to which the insurer has not denied coverage in writing and (ii) the amount for which the Company or any Subsidiary is otherwise indemnified if the terms of such indemnification are satisfactory to the Agent and the Required Lenders;
(iv)    the occurrence of a Reportable Event with respect to any Plan; the institution of any steps by the Company, any ERISA Affiliate, the PBGC or any other Person to terminate any Plan; the institution of any steps by the Company or any ERISA Affiliate to withdraw from any Plan; the incurrence of any material increase in the contingent liability of the Company or any Subsidiary with respect to any post-retirement welfare benefits; the failure of the Company or any other Person to make a required contribution to a Plan if such failure is sufficient to give rise to a lien under Section 303(k) of ERISA or a determination is made that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA); provided, however, that no notice shall be required of any of the foregoing unless the circumstance could reasonably be expected to have a Material Adverse Effect; or
(v)    the occurrence of a material adverse change in the business, credit, operations or financial condition of the Company and its Subsidiaries taken as a whole.
8.1.5    Reports. Promptly from time to time after the occurrence of an event required to be therein reported by the Company, such other reports of the Company on Form 6-K, or any successor or comparable form, as the Company shall have filed with the SEC.
8.1.6    Other Information. From time to time provide such other information regarding the operations and financial condition of the Company and its Subsidiaries (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts) as any Lender or the Agent may reasonably request (not including reports and other materials to the extent filed with the Securities and Exchange Commission).
8.1.7    Beneficial Ownership Certification. To the extent reasonably requested by any Lender or Agent following any change in the information provided in the Beneficial Ownership Certification (if any) that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification, an updated Beneficial Ownership Certification.
Financial and other information required to be delivered pursuant to Sections 8.1.1, 8.1.2 and 8.1.5 above shall be deemed to have been delivered if such information, or one or more annual or quarterly reports containing such information, shall have been posted by the Agent on any Platform (as defined herein) or similar site to which the Lenders have been granted access or such reports shall be available on the website of the Securities and Exchange
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Commission at http://www.sec.gov or the Company’s website at http://www.aercap.com; provided, that the Company shall provide paper copies of such financial information if requested by the Agent or any Lender. Information, reports or certificates required to be delivered pursuant to this Section 8.1 may be delivered by electronic communications pursuant to procedures approved by the Administrative Agent.
Section 8.2.    Existence. (a) Maintain and preserve, and, subject to the first proviso in Section 8.9, cause each Subsidiary to maintain and preserve, its respective existence as a corporation or other form of business organization, as the case may be (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts), and (b) take all reasonable action to maintain all rights, privileges, licenses, patents, patent rights, copyrights, trademarks, trade names, franchises and other authority, except in each case (other than with respect to the Company or the Borrower in connection with clause (a) above) to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Effect; provided, however, that notwithstanding anything to the contrary herein, (a) any Subsidiary may be merged or consolidated with or into (i) any other Subsidiary or (ii) into the Company (with the Company as the surviving corporation), provided that, in the case of clauses (a)(i) and (ii), if the Borrower shall be party to any such merger or consolidation the Borrower shall be the surviving entity of such merger or consolidation and (b) any Subsidiary may be converted from one form of business organization into any other form of business organization.
Section 8.3.    Nature of Business. Subject to Section 8.2, engage on a consolidated basis with its Subsidiaries in substantially the same fields of business as it and its Subsidiaries on a consolidated basis are engaged in on the date hereof (or fields of business related or ancillary thereto).
Section 8.4.    Books, Records and Access.
(a)    Maintain, and cause each Subsidiary to (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts) maintain in all material respects complete and accurate books and records in which full and correct entries in all material respects and in conformity with GAAP shall be made of all dealings and transactions in relation to its respective business and activities.
(b)    Permit, and cause each Subsidiary to permit (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts), access by the Agent and each Lender to the books and records of the Company and such Subsidiary during normal business hours, and permit, and cause each Subsidiary to permit, the Agent and each Lender to make copies of such books and records upon reasonable notice and as often as may be reasonably requested.
Section 8.5.    Insurance. Maintain, and cause each Subsidiary to maintain, such insurance as is described in Section 7.11 (but in the case of each Securitization
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Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts).
Section 8.6.    Repair. Maintain, preserve and keep, and cause each Subsidiary to maintain, preserve and keep, its properties in good repair, working order and condition, ordinary wear and tear excepted, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts). In the case of properties leased by any Obligor or any Subsidiary to lessees, such Obligor may satisfy its obligations related to such properties under the previous sentence by contractually requiring, or by causing each Subsidiary to contractually require, such lessees to perform such obligations (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts).

Section 8.7.    Taxes. Pay or cause to be paid, and cause each Subsidiary to pay, or cause to be paid, prior to the imposition of any penalty or fine, all of its Taxes, unless and only to the extent that such Obligor or such Subsidiary, as the case may be, is contesting any such Taxes in good faith and by appropriate proceedings and the Company or such Subsidiary has set aside on its books such reserves or other appropriate provisions therefor as may be required by GAAP, except where failure to pay such Taxes, individually or in the aggregate, cannot reasonably be expected to have a Material Adverse Effect (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts).
Section 8.8.    Compliance. (a) Comply, and cause each Subsidiary to comply with all statutes (including ERISA) and governmental rules and regulations applicable to it except to the extent noncompliance could not reasonably be expected to have a Material Adverse Effect (but in the case of each Securitization Subsidiary, only to the extent it is able to do so after use of commercially reasonable efforts).
(a)    Maintain in effect and enforce policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
(b)    Use the proceeds of any borrowing hereunder in compliance with any Anti-Corruption Laws, applicable anti-money laundering laws and any Sanctions applicable to any party hereto.
Section 8.9.    Sale of Assets. Not, and not permit any Subsidiary to, transfer, convey, lease (except for in the ordinary course of business) or otherwise dispose of all or substantially all of the assets of the Obligors and their Subsidiaries taken as a whole; provided, however, that any Wholly-owned Subsidiary may sell, transfer, convey, lease or assign all or a substantial part of its assets to another Obligor or another Wholly-
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owned Subsidiary if immediately thereafter and after giving effect thereto no Event of Default or Unmatured Event of Default shall have occurred and be continuing; provided, further that this Section 8.9 shall not prohibit any transaction otherwise permitted by Section 8.2.
Section 8.10.    Consolidated Indebtedness to Shareholder’s Equity. Not permit the ratio of Consolidated Indebtedness to Shareholder’s Equity to exceed at any time 3.75:1.00 (such ratio to be calculated in a manner consistent with the calculations set forth on Schedule 1 to Exhibit C).
Section 8.11.    Interest Coverage Ratio. Not permit the Interest Coverage Ratio on the last day of any quarter of any fiscal year of the Company to be less than 150%.
Section 8.12.    Unencumbered Assets. Not permit the ratio of (A) Unencumbered Assets to (B) the aggregate outstanding principal amount of the Company’s consolidated unsecured Financial Indebtedness minus, to the extent included in Financial Indebtedness, the aggregate amount outstanding of Hybrid Capital Securities, in each case on the last day of any quarter of any fiscal year of the Company to be less than 135%.
Section 8.13.    Restricted Payments. Not declare or pay any dividends whatsoever or make any distribution on any capital stock of the Company (except in shares of, or warrants or rights to subscribe for or purchase shares of, capital stock of the Company), and not permit any Subsidiary to, make any payment to acquire or retire shares of capital stock of the Company, in each case at any time when (i) an Event of Default as described in Section 10.1 has occurred and is continuing and there are Committed Loans outstanding hereunder or (ii) an Event of Default as described in Section 10.1.1 has occurred and is continuing and there are no Committed Loans outstanding hereunder; provided, however, that notwithstanding the foregoing, this Section 8.13 shall not prohibit (x) the payment of dividends on any of ILFC’s market auction preferred stock that was sold to the public pursuant to an effective registration statement under the Securities Act of 1933 or (y) the payment of dividends within 30 days of the declaration thereof if such declaration was not prohibited by this Section 8.13.
Section 8.14.    Liens. Not, and not permit any Subsidiary to, create or permit to exist any Lien upon or with respect to any of its properties or assets of any kind, now owned or hereafter acquired, or on any income or profits therefrom, except for:
(a)    Liens existing on the Closing Date that are reflected in the consolidated financial statements of the Company dated prior to the Closing Date;
(b)    Liens to secure the payment of all or any part of the purchase price of any property or assets or to secure any Indebtedness incurred by the Company or a Subsidiary to finance the acquisition of any property or asset. For the avoidance of doubt, Liens securing Indebtedness relating to ECA Financings or Eximbank financings shall be permitted hereunder;
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(c)    Liens securing the Indebtedness of a Subsidiary owing to the Company or to a Wholly-owned Subsidiary;
(d)    Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or a Subsidiary or at the time of a purchase, lease or other acquisition of the properties of a Person as an entirety or substantially as an entirety by the Company or a Subsidiary; provided, that, any such Lien shall not extend to or cover any assets or properties of the Company or such Subsidiary owned by the Company or such Subsidiary prior to such merger, consolidation, purchase, lease or acquisition, unless otherwise permitted under this Section 8.14;
(e)    leases, subleases or licenses granted to others in the ordinary and usual course of the Company’s business;
(f)    easements, rights of way, restrictions and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of the Company or any Subsidiary;
(g)    bankers’ Liens arising by law or by contract in the ordinary and usual course of the Company’s business;
(h)    Liens incurred or deposits made in the ordinary course of business in connection with surety and appeal bonds, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); provided, however, that the obligation so secured is not overdue or is being contested in good faith and by appropriate proceedings diligently pursued;
(i)    any replacement or successive replacement in whole or in part of any Lien referred to in the foregoing clauses (a) to (h), inclusive; provided, however, that the principal amount of any Indebtedness secured by the Lien shall not be increased and the principal repayment schedule and maturity of such Indebtedness shall not be extended and (i) such replacement shall be limited to all or a part of the property which secured the Lien so replaced (plus improvements and construction on such property) or (ii) if the property which secured the Lien so replaced has been destroyed, condemned or damaged and pursuant to the terms of the Lien other property has been substituted therefor, then such replacement shall be limited to all or part of such substituted property;
(j)    Liens created by or resulting from any litigation or other proceeding which is being contested in good faith by appropriate proceedings, including Liens arising out of judgments or awards against the Company or any Subsidiary with respect to which the Company or such Subsidiary is in good faith prosecuting an appeal or proceedings for review; Liens incurred by the Company or any Subsidiary for the purpose of obtaining a stay or discharge in the course of any litigation or other proceeding to which the Company or such Subsidiary is a party; or Liens created by or resulting from any litigation or other proceeding that would not result in an Event of Default hereunder;
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(k)    carrier’s, warehouseman’s, hangar keeper’s, mechanic’s, repairer’s, landlord’s and materialmen’s Liens, Liens for Taxes, assessments and other governmental charges and other Liens arising in the ordinary course of business, by operation of law or under customary terms of repair or modification agreements or any engine or parts-pooling arrangements, in each case securing obligations that are not incurred in connection with the obtaining of any advance or credit and which are either not overdue or are being contested in good faith and by appropriate proceedings diligently pursued; and
(l)    other Liens securing Indebtedness of the Company or any Subsidiary; provided that at the time such Indebtedness is incurred (or, in the case of unsecured Indebtedness that is subsequently secured by Liens, at the time such Indebtedness becomes secured) the ratio of (A) Unencumbered Assets as of the end of the most recently ended fiscal period for which financial statements have been delivered pursuant to Section 8.1 (except that (i) “cash and cash equivalents” and Financial Indebtedness shall be measured on the applicable date of determination on a pro forma basis, (ii) any Aircraft Assets acquired subsequent to such date may, at the option of the Company, be included in the determination of Unencumbered Assets valued as of the date of acquisition and as determined by the Company in good faith and (iii) if the outstanding amount of Financial Indebtedness on the applicable date of determination has been reduced since the end of the most recently ended fiscal period for which financial statements have been delivered pursuant to Section 8.1 with the proceeds of any sale or other disposition of Aircraft Assets, the book value of such Aircraft Assets sold or otherwise disposed of shall be excluded) to (B) the aggregate outstanding principal amount of the Company’s consolidated unsecured Financial Indebtedness on the date of determination on a pro forma basis minus, to the extent included in Financial Indebtedness as of such date, the aggregate amount outstanding of Hybrid Capital Securities, is not less than 135%.
Section 8.15.    Use of Proceeds. Not permit any proceeds of the Committed Loans to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time; or for the purpose, whether immediate, incidental or ultimate, of acquiring directly or indirectly any of the outstanding shares of voting stock of any corporation which (i) has announced that it will oppose such acquisition or (ii) has commenced any litigation which alleges that any such acquisition violates, or will violate, applicable law.
Section 8.16.    Transactions with Affiliates.
(a)    Not, and not permit any Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate payments or consideration in excess of $5,000,000, unless:
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(i)    such Affiliate Transaction is on terms that are not materially less favorable to the Company or the relevant Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person; and
(ii)    the Company delivers to the Administrative Agent with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $50,000,000, a resolution adopted by the disinterested members of the Board of Directors of the Company, if any, approving such Affiliate Transaction and set forth in a certificate of an Authorized Officer of the Company certifying that such Affiliate Transaction complies with Section 8.16(a)(i).
(b)    The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 8.16(a):
(i)    transactions between or among the Company and/or any of its Subsidiaries;
(ii)    declaration or payment of dividends, the making of distributions on any Capital Stock of the Company and the making of payments to acquire or retire shares of Capital Stock of the Company, in each case at any time not prohibited by Section 8.13;
(iii)    the payment of reasonable and customary fees paid to, and indemnities provided on behalf of, officers, directors, employees or consultants of the Company or any Subsidiary;
(iv)    transactions in which the Company or any of its Subsidiaries, as the case may be, delivers to the Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Subsidiary from a financial point of view or meets the requirements of 8.16(a)(i);
(v)    payments or loans (or cancellation of loans) to employees or consultants of the Company or any of its Subsidiaries which are approved by a majority of the Board of Directors of the Company in good faith;
(vi)    any agreement as in effect as of the Closing Date, or any amendment thereto (so long as any such amendment, taken as a whole, is no less favorable to the Company and its Subsidiaries than the agreement in effect on the date hereof (as determined by the Board of Directors of the Company in good faith));
(vii)    the existence of, or the performance by the Company or any of its Subsidiaries of its obligations under the terms of, any limited liability company, limited partnership or other organizational document or joint venture, investors or shareholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any Subsidiary of obligations under any future amendment to any such
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existing agreement or under any similar agreement entered into after the Closing Date shall only be permitted by this clause (vii) to the extent that the terms of any such amendment or new agreement, taken as a whole, is no less favorable to the Company and its Subsidiaries than the agreement in effect on the Closing Date (as determined by the Board of Directors of the Company in good faith);
(viii)    transactions with customers, clients, suppliers, trade creditors, joint venture partners or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement;
(ix)    the issuance of Capital Stock (other than Disqualified Stock) of the Company to any Affiliate of the Company and other customary rights in connection therewith;
(x)    transactions or payments pursuant to any employee, officer or director compensation (including bonuses) or benefit plans, employment agreements, severance agreement, indemnification agreements or any similar arrangements entered into in the ordinary course of business or approved by the Board of Directors of the Company;
(xi)    transactions in the ordinary course with joint ventures in which the Company or a subsidiary of the Company holds or acquires an ownership interest (whether by way of Capital Stock or otherwise) so long as the terms of any such transactions are no less favorable to the Company or subsidiary participating in such joint ventures than they are to other joint venture partners;
(xii)    transactions with a Person that is an Affiliate of the Company solely because the Company owns, directly or through one or more of its Subsidiaries, Capital Stock in, or controls, such Person;
(xiii)    transactions involving Securitization Assets, or participations therein, in connection with any Qualified Securitization Financing;
(xiv)    services provided by the Company or any of its Subsidiaries to its Subsidiaries or Affiliates under an agreement in respect of (A) aircraft, airframe and engines, (B) all parts, including replacement parts, of whatever nature, which are from time to time included within the airframes or engines or owned separately by the Company or any of its subsidiaries, (C) aircraft documents, (D) leases to which the Company or any of its subsidiaries is or may from time to time be party with respect to an aircraft engine or part and (E) all asset backed securities or other instruments secured directly or indirectly by aircraft, airframe, engines or parts all in the ordinary course of business and consistent with past practice; and
(xv)    any transaction with an Affiliate of the Company where the only consideration paid by the Company or any of its Subsidiaries is the issuance of Capital Stock (other than Disqualified Stock).
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Section 8.17.    Limitation on Issuances of Guarantees of Indebtedness. Not cause or permit any of its Subsidiaries (other than a Securitization Subsidiary, an Excluded Subsidiary or an Obligor), directly or indirectly, to guarantee any Capital Markets Debt or unsecured Credit Facility (other than Standard Securitization Undertakings in connection with a Qualified Securitization Financing) of the Company or any other Obligor (other than the Financing Trust or any of its subsidiaries) unless such Subsidiary, within five Business Days of the date on which it guarantees Capital Markets Debt or an unsecured Credit Facility of the Company or any other Obligor (other than the Financing Trust or any of its subsidiaries), executes and delivers to the Administrative Agent a Guarantee Assumption Agreement.
Section 8.18.    [Reserved].
Section 8.19.    Subsidiary Guarantors. In each case to the extent such Person is not a party to this Agreement on the date hereof, cause any Subsidiary that is required under Section 8.17 to become a Subsidiary Guarantor to (a) become a “Subsidiary Guarantor” hereunder pursuant to a Guarantee Assumption Agreement and (b) deliver such proof of corporate or similar action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by each Obligor pursuant to Section 9 on the Closing Date.
SECTION 9.    CONDITIONS TO LENDING
Section 9.1.    Conditions Precedent to All Committed Loans. Each Lender’s obligation to make each Committed Loan on the date of original borrowing thereof is subject to the following conditions precedent:
9.1.1    No Default. (a) No Event of Default or Unmatured Event of Default has occurred and is continuing or will result from the making of such Committed Loan and (b) the representations and warranties contained in Section 7 (other than those contained in Section 7.5) are true and correct in all material respects as of the date of such requested Committed Loan, with the same effect as though made on the date of such Committed Loan, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date (it being understood that each request for a Committed Loan shall automatically constitute a representation and warranty by the Company that, as at the requested date of such Committed Loan, (x) all conditions under this Section 9.1.1 shall be satisfied and (y) after the making of such Committed Loan the aggregate principal amount of all outstanding Committed Loans will not exceed the Aggregate Commitment).
9.1.2    Documents. The Agent shall have received (a) a certificate signed by an Authorized Officer of the Company as to compliance with Section 9.1.1, which requirement shall be deemed satisfied by the submission of a properly completed Committed Loan Request, and (b) a Committed Loan Request substantially in the form of Exhibit A hereto.
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Section 9.2.    Conditions to Effectiveness. This Agreement, and the obligations of each Lender hereunder to make Committed Loans pursuant to its Commitment, shall not become effective until the date on which each of the following conditions precedent shall have been satisfied or, to the extent not so satisfied, waived in writing by the Required Lenders (the “Closing Date”):
9.2.1    Revolving Credit Agreement. The Agent shall have received this Agreement duly executed and delivered by each of the Lenders, the Company, the Borrower and each of the Subsidiary Guarantors identified under the caption “GUARANTORS” on the signature pages hereto and each of the Lenders shall have received a fully executed Committed Note, if such Committed Note is requested by any Lender pursuant to Section 11.11.
9.2.2    KYC Documents. (a) The Agent shall have received at least three Business Days prior to the Closing Date all documentation and other information reasonably requested by the Lenders through the Agent in writing at least ten Business Days in advance of the Closing Date, which documentation or other information is required by regulatory authorities under applicable “know your customer” requirements under applicable law, and (b) at least three Business Days prior to the Closing Date, if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, the Borrower shall deliver a Beneficial Ownership Certification in relation to it.
9.2.3    Closing Certificate. The Agent shall have received a certificate of an Authorized Officer (a) confirming that since the date of the audited financial statements identified in Section 7.4 hereof, there shall not have occurred any material adverse change in the business, condition (financial or otherwise) or operations of the Company and its Subsidiaries taken as a whole, (b) as to the absence of any Unmatured Event of Default or Event of Default and (c) confirming that the representations and warranties contained in Section 7 are true and correct in all material respects as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date.
9.2.4    Fees. The Agent shall have received (a) for the account of the Agent the Agent’s fees payable on the Closing Date pursuant to Section 3.5 hereof and (b) all accrued fees and expenses payable on the Closing Date owing to the Agent, the Arrangers and the Lenders from the Company, in each case, pursuant to written agreements as in effect on the Closing Date.
9.2.5    Existing Credit Facility. Prior to or substantially contemporaneously with the Closing Date, all outstanding “Committed Loans” of any Replaced Lenders and all accrued but unpaid interest and fees owing to any “Lender”, in each case, under the Existing Credit Agreement shall have been paid in full.
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9.2.6    Evidence of Corporate Action, Incumbency and Signatures. The Agent shall have received a certificate of the Secretary or an Assistant Secretary or a director of each Obligor, in substantially the form of Exhibit G, certifying (a) copies of all corporate or similar actions taken by each Obligor to authorize this Agreement and, as applicable, the Committed Notes and (b) the names of the officer or officers or director or directors or other authorized signatories of such Obligor authorized to sign the Loan Documents to which it is a party and the other documents provided for in this Agreement to be executed by such Obligor, together with a sample of the true signature of each such officer or director or other authorized signatory (it being understood that the Agent and each Lender may conclusively rely on such certificate until formally advised by a like certificate of any changes therein).
9.2.7    Good Standing Certificates. To the extent made available in the relevant jurisdiction, the Agent shall have received such good standing certificates of state officials (or analogous documents or certificates relating to valid existence and good standing) with respect to the incorporation or organization of each Obligor.
9.2.8    Opinions of Company Counsel. The Agent shall have received favorable written opinions of (i) Cravath, Swaine & Moore LLP, special New York counsel for the Obligors, in substantially the form of Exhibit H-1, (ii) McCann FitzGerald, special Irish counsel to the Company, in substantially the form of Exhibit H-2, (iii) NautaDutilh N.V., special Dutch counsel to the Company, in substantially the form of Exhibit H-3, (iv) Smith, Gambrell & Russell, LLP, special California counsel to ILFC, in substantially the form of Exhibit H-4, and (v) Morris, Nichols, Arsht & Tunnell LLP, special Delaware counsel to the Company, in substantially the form of Exhibit H-5.
The Agent shall promptly notify the Company and the Lenders of the occurrence of the Closing Date, and such notice shall be conclusive and binding.
SECTION 10.    EVENTS OF DEFAULT AND THEIR EFFECT
Section 10.1.    Events of Default. Each of the following shall constitute an Event of Default under this Agreement:
10.1.1    Non-Payment of the Committed Loans, etc. Default in the payment when due of any principal of any Committed Loan or default and continuance thereof for three Business Days in the payment when due of any interest on any Committed Loan, any fees or any other amounts payable by any Obligor hereunder.
10.1.2    Non-Payment of Other Indebtedness for Borrowed Money. (a) Default in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal of, interest on or fees incurred in connection with any other Indebtedness of, or Guaranteed by, the Company or any Significant Subsidiary beyond the period of grace, if any, provided in the instrument or agreement pursuant to which such Indebtedness was created (except (i) any such Indebtedness of any Subsidiary to the Company or to any other Subsidiary and (ii) any Indebtedness hereunder) or (b) default in
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the performance or observance of any obligation or condition with respect to any such other Indebtedness or (other than in respect of any Indebtedness secured by Liens over Aircraft Assets or the Equity Interests of a Subsidiary owning Aircraft Assets) any other event shall occur, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, (with or without the giving of notice, the lapse of time or both but in each case after any applicable period of grace, if any, shall have lapsed) such Indebtedness to become due prior to its stated maturity or the obligations under such Guarantee to become payable, provided, however, that the aggregate principal amount of all Indebtedness as to which there has occurred any default as described in clause (a) or (b) above shall equal or exceed $200,000,000; provided further however, that clause (b) above shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness.
10.1.3    Bankruptcy, Insolvency, etc. The Company or any Significant Subsidiary becomes insolvent (which term shall include any form of creditor protection and moratorium, including bankruptcy (faillissement) and suspension of payments (surseance van betaling) under Dutch law and the serving of a notice pursuant to section 36 of the Dutch Tax Collection Act (Invorderingswet)) or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or the Company or any Significant Subsidiary applies for, consents to, or acquiesces in the appointment of a trustee, liquidator, examiner, receiver or other custodian (including a “curator” in a bankruptcy under Dutch law and a “bewindvoerder” in a suspension of payment (surseance van betaling) under Dutch law) for the Company or such Significant Subsidiary or a material portion of the property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, liquidator, examiner, receiver or other custodian is appointed for the Company or any Significant Subsidiary or for a substantial part of the property of any thereof and is not discharged within 60 days; or any warrant of attachment or similar legal process is issued against any substantial part of the property of the Company or any of its Significant Subsidiaries which is not released within 60 days of service; or any bankruptcy, examinership, receivership, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding (except the voluntary dissolution, not under any bankruptcy or insolvency law, of a Significant Subsidiary), is commenced in respect of the Company or any Significant Subsidiary, and, if such case or proceeding is not commenced by the Company or such Significant Subsidiary it is consented to or acquiesced in by the Company or such Significant Subsidiary or remains for 60 days undismissed; or the Company or any Significant Subsidiary takes any corporate action to authorize, or in furtherance of, any of the foregoing.
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10.1.4    Non-Compliance with this Agreement.
(a)    Failure by any Obligor to comply with or to perform any of the covenants in Sections 8.1.4(i), Sections 8.9 through Section 8.15 and Section 8.17.
(b)    Failure by any Obligor to comply with or to perform any of the covenants herein or any other provision of this Agreement (and not constituting an Event of Default under any of the other provisions of this Section 10.1) and continuance of such failure for 30 days after notice thereof to the Company from the Agent.
10.1.5    Representations and Warranties. Any representation or warranty made by the Company herein or by any Guarantor in any Guarantee Assumption Agreement is untrue or misleading in any material respect when made or deemed made; or any schedule, statement, report, notice, or other writing furnished by the Company to the Agent or any Lender is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified; or any certification made or deemed made by the Company to the Agent or any Lender is untrue or misleading in any material respect on or as of the date made or deemed made.
10.1.6    Employee Benefit Plans. Any ERISA Event shall have occurred with respect to any Plan or any Foreign Benefit Event shall have occurred with respect to a Foreign Plan that, in each case, would reasonably be expected to result in a Material Adverse Effect.
10.1.7    Judgments. There shall be entered against the Company or any Subsidiary one or more final, non-appealable judgments or decrees for the payment of money in excess of $200,000,000 in the aggregate at any one time outstanding for the Company or any Subsidiary (excluding any portion thereof that is paid or covered by insurance so long as coverage has not been denied in writing or is otherwise indemnified if the terms of such indemnification are satisfactory to the Required Lenders) and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgments or orders in excess of such aggregate amount on or after the date any payment is due and payable under the terms of such judgments or orders and shall not have been stayed within 60 days after such enforcement proceedings are commenced or (ii) there is a period of 60 consecutive days during which such judgments or orders in excess of such aggregate amount shall not have been paid, vacated, discharged, stayed or bonded.
10.1.8    Invalidity of Loan Documents. Any Loan Document shall cease to be, or shall be asserted by any Obligor not to be, in full force and effect, except in accordance with the terms of this Agreement, including, in the case of any guarantee by any Subsidiary Guarantor of the Guaranteed Obligations, as a result of the release of such guarantee as provided in Section 13.9.
10.1.9    Change of Control. A Change of Control shall have occurred.
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Section 10.2.    Effect of Event of Default. If any Event of Default described in Section 10.1.3 shall occur, the Commitments (if they have not theretofore terminated) shall immediately terminate and all Committed Loans and all interest and other amounts due hereunder shall become immediately due and payable, all without presentment, demand or notice of any kind; and, in the case of any other Event of Default, the Agent may, and upon written request of the Required Lenders shall, declare the Commitments (if they have not theretofore terminated) to be terminated and all Committed Loans and all interest and other amounts due hereunder to be due and payable, whereupon the Commitments (if they have not theretofore terminated) shall immediately terminate and all Committed Loans and all interest and other amounts due hereunder shall become immediately due and payable, all without presentment, demand or notice of any kind. The Agent shall promptly advise the Company and each Lender of any such declaration, but failure to do so shall not impair the effect of such declaration.
SECTION 11.    THE AGENT
Section 11.1.    Authorization and Authority. Each Lender hereby irrevocably appoints Citibank, N.A. to act on its behalf as the Agent hereunder and under the Committed Notes and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. Subject to the provisions of Section 11.4, the Agent will take such action permitted by any agreement delivered in connection with this Agreement as may be requested in writing by the Required Lenders or if required under Section 12.1, all of the Lenders. Other than as expressly set forth herein, the Agent shall promptly remit in immediately available funds to each Lender its share of all payments received by the Agent for the account of such Lender, and shall promptly transmit to each Lender (or share with each Lender the contents of) each notice it receives from the Company pursuant to this Agreement. Other than Section 11.9, the provisions of this Section 11 are solely for the benefit of the Agent and the Lenders, and the Company shall have no rights as a third party beneficiary of any of such provisions.
Section 11.2.    Agent Individually. (a) The Person serving as the Agent, if a Lender hereunder, shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Company or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Lenders.
(a)    Each Lender understands that the Person serving as Agent, acting in its individual capacity, and its Affiliates (collectively, the “Agent’s Group”) are engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research) (such services and businesses
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are collectively referred to in this Section 11.2 as “Activities”) and may engage in the Activities with or on behalf of the Company or its Affiliates. Furthermore, the Agent’s Group may, in undertaking the Activities, engage in trading in financial products or undertake other investment businesses for its own account or on behalf of others (including the Company and its Affiliates and including holding, for its own account or on behalf of others, equity, debt and similar positions in the Company or its Affiliates), including trading in or holding long, short or derivative positions in securities, loans or other financial products of one or more of the Company and its Affiliates. Each Lender understands and agrees that in engaging in the Activities, the Agent’s Group may receive or otherwise obtain information concerning the Company and its Affiliates (including information concerning the ability of the Company to perform its obligations hereunder) which information may not be available to any of the Lenders that are not members of the Agent’s Group. None of the Agent nor any member of the Agent’s Group shall have any duty to disclose to any Lender or use on behalf of the Lenders, and shall not be liable for the failure to so disclose or use, any information whatsoever about or derived from the Activities or otherwise (including any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Company) or to account for any revenue or profits obtained in connection with the Activities except that the Agent shall deliver or otherwise make available to each Lender such documents as are expressly required by this Agreement to be transmitted by the Agent to the Lenders.
(b)    Each Lender further understands that there may be situations where members of the Agent’s Group or their respective customers (including the Company and its Affiliates) either now have or may in the future have interests or take actions that may conflict with the interests of any one or more of the Lenders (including the interests of the Lenders hereunder). Each Lender agrees that no member of the Agent’s Group is or shall be required to restrict its activities as a result of the Person serving as Agent being a member of the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities without further consultation with or notification to any Lender. None of (i) this Agreement, (ii) the receipt by the Agent’s Group of information (including “Information” as defined in Section 12.6) concerning the Company or its Affiliates (including information concerning the ability of the Company to perform its obligations hereunder) nor (iii) any other matter shall give rise to any fiduciary, equitable or contractual (other than the administrative duties of the Agent expressly provided hereunder) duties (including any duty of trust or confidence) owing by the Agent or any member of the Agent’s Group to any Lender including any such duty that would prevent or restrict the Agent’s Group from acting on behalf of customers (including the Company or its Affiliates) or for its own account.
Section 11.3.    Indemnification. The Lenders agree to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Company and without releasing the Company from its obligation to do so, to the extent applicable), ratably according to their respective Percentages (determined at the time such indemnity is sought), from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses which may at any time (including at any time following the repayment of the Committed Loans) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, or any documents contemplated by or referred to herein or
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the transactions contemplated hereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided, that, no Lender shall be liable for the payment to the Agent of any portion of such actions, causes of action, suits, losses, liabilities, damages and expenses resulting from the Agent’s or its employees’ or agents’ gross negligence or willful misconduct. Without limiting the foregoing, subject to Section 12.5 each Lender agrees to reimburse the Agent promptly upon demand for its ratable share (determined at the time such reimbursement is sought) of any out-of-pocket expenses (including reasonable counsel fees) incurred by the Agent in such capacity in connection with the preparation, execution or enforcement of, or legal advice in respect of rights or responsibilities under, this Agreement or any amendments or supplements hereto or thereto to the extent that the Agent is not reimbursed for such expenses by the Company. All obligations provided for in this Section 11.3 shall survive repayment of the Committed Loans, cancellation of the Committed Notes or any termination of this Agreement. For the purpose of this Section 11.3, Agent shall mean the Administrative Agent and its Affiliates, directors, officers and employees.
Section 11.4.    Action on Instructions of the Required Lenders. As to any matters not expressly provided for by this Agreement (including enforcement or collection of the Committed Loans), the Agent shall not be required to exercise any discretion or take any action, but the Agent shall in all cases be fully protected in acting or refraining from acting upon the written instructions from (i) the Required Lenders, except for instructions which under the express provisions hereof must be received by the Agent from all Lenders and (ii) in the case of such instructions, from all Lenders. In no event will the Agent be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. The relationship between the Agent and the Lenders is and shall be that of agent and principal only and nothing herein contained shall be construed to constitute the Agent a trustee for any holder of a Committed Loan or of a participation therein nor to impose on the Agent duties and obligations other than those expressly provided for herein.
Section 11.5.    Payments. (a) The Agent shall be entitled to assume that each Lender has made its Committed Loan available in accordance with Section 2.2(c) unless such Lender notifies the Agent at its Notice Office prior to 11:30 a.m., New York City time, on the Funding Date for such Committed Loan that it does not intend to make such Committed Loan available, it being understood that no such notice shall relieve such Lender of any of its obligations under this Agreement. If the Agent makes any payment to the Borrower on the assumption that a Lender has made the proceeds of such Committed Loan available to the Agent but such Lender has not in fact made the proceeds of such Committed Loan available to the Agent, such Lender shall pay to the Agent on demand an amount equal to the amount of such Lender’s Committed Loan, together with interest thereon for each day that elapses from and including such Funding Date to but excluding the Business Day on which the proceeds of such Lender’s Committed Loan become immediately available to the Agent at its Payment Office prior to 12:00 Noon, New York City time, at the Federal Funds Rate for each such day, based upon a year of 360 days. A certificate of the Agent submitted to any Lender with respect to any amounts owing under
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this Section 11.5(a) shall be conclusive absent demonstrable error. If the proceeds of such Lender’s Committed Loan are not made available to the Agent at its Payment Office by such Lender within three Business Days of such Funding Date, the Agent shall be entitled to recover such amount upon two Business Days’ demand from the Borrower, together with interest thereon for each day that elapses from and including such Funding Date to but excluding the Business Day on which such proceeds become immediately available to the Agent prior to 12:00 Noon, New York City time, at the rate per annum applicable to Base Rate Loans hereunder, based upon a year of 360 days. Nothing in this paragraph (a) shall relieve any Lender of any obligation it may have hereunder to make any Committed Loan or prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.
(a)    The Agent shall be entitled to assume that the Borrower has made all payments due hereunder from the Borrower on the due date thereof unless it receives notification prior to any such due date from the Borrower that the Borrower does not intend to make any such payment, it being understood that no such notice shall relieve the Borrower of any of its obligations under this Agreement. If the Agent distributes any payment to a Lender hereunder in the belief that the Borrower has paid to the Agent the amount thereof but the Borrower has not in fact paid to the Agent such amount, such Lender shall pay to the Agent on demand (which shall be made by facsimile or personal delivery) an amount equal to the amount of the payment made by the Agent to such Lender, together with interest thereon for each day that elapses from and including the date on which the Agent made such payment to but excluding the Business Day on which the amount of such payment is returned to the Agent at its Payment Office in immediately available funds prior to 12:00 Noon, New York City time, at the Federal Funds Rate for each such day, based upon a year of 360 days. If the amount of such payment is not returned to the Agent in immediately available funds within three Business Days after demand by the Agent, such Lender shall pay to the Agent on demand an amount calculated in the manner specified in the preceding sentence after substituting the term “Base Rate” for the term “Federal Funds Rate”. A certificate of the Agent submitted to any Lender with respect to amounts owing under this Section 11.5(b) shall be conclusive absent demonstrable error.
Section 11.6.    Duties of Agent; Exculpatory Provisions. (a) The Agent’s duties hereunder are solely ministerial and administrative in nature and the Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, the Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, but shall be required to act or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written direction of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein), provided, that, the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent or any of its Affiliates to liability or that is contrary to this Agreement or applicable law.
(a)    The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be necessary,
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under the circumstances as provided in Sections 12.1, 11.1 or 10.1) or (ii) in the absence of its own gross negligence, bad faith or willful misconduct. The Agent shall be deemed not to have knowledge of any Unmatured Event of Default or Event of Default or the event or events that give or may give rise to any Unmatured Event of Default or Event of Default unless and until the Company or any Lender shall have given notice to the Agent describing such Event of Default and such event or events.
(b)    Neither the Agent nor any member of the Agent’s Group shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty, representation or other information made or supplied by or on behalf of the Company or any of its Subsidiaries in or in connection with this Agreement or the Information Memorandum, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith or the adequacy, accuracy and/or completeness of the information contained therein, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Unmatured Event of Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or the perfection or priority of any Lien or security interest created or purported to be created hereby or (v) the satisfaction of any condition set forth in Section 9 or elsewhere herein, other than (but subject to the foregoing clause (ii)) to confirm receipt of items expressly required to be delivered to the Agent.
(c)    Nothing in this Agreement shall require the Agent or any of its Related Parties to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or any of its Related Parties.
Section 11.7.    Reliance by Agent. The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and correct and to have been signed, sent or otherwise authenticated by the proper Person or Persons. The Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Committed Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the Agent may presume that such condition is satisfactory to such Lender unless an officer of the Agent responsible for the transactions contemplated hereby shall have received notice to the contrary from such Lender prior to the making of such Committed Loan, and such Lender shall not have made available to the Agent such Lender’s ratable portion of the applicable Committed Loan. The Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
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Section 11.8.    Delegation of Duties. The Agent may perform any and all of its duties and exercise its rights and powers hereunder by or through any one or more sub agents appointed by the Agent. The Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. Each such sub agent and the Related Parties of the Agent and each such sub agent shall be entitled to the benefits of all provisions of this Section 11 and Section 12.5 and subject to the duties and obligations of the Agent under the Agreement (as though such sub-agents were the “Agent” hereunder) as if set forth in full herein with respect thereto. The Agent shall not be responsible for the negligence or misconduct of any sub-agent that it selects in the absence of gross negligence, bad faith or willful misconduct.
Section 11.9.    Resignation of Agent. The Agent may resign as Agent upon 30 days’ notice to the Lenders and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor reasonably acceptable to the Company (such consent of the Company not to be unreasonably withheld or delayed and not required if an Event of Default under Section 10.1.1 or 10.1.3 has occurred and is continuing) from among the Lenders, which shall be a commercial bank organized under the laws of the United States of America or any State thereof or the District of Columbia or under the laws of another country which is doing business in the United States of America and having a combined capital, surplus and undivided profits of at least $1,000,000,000. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation (such 30-day period, the “Lender Appointment Period”), then the retiring Agent may on behalf of the Lenders, appoint a successor Agent meeting the qualifications set forth above. In addition and without any obligation on the part of the retiring Agent to appoint, on behalf of the Lenders, a successor Agent, the retiring Agent may at any time upon or after the end of the Lender Appointment Period notify the Company and the Lenders that no qualifying Person has accepted appointment as successor Agent and the effective date of such retiring Agent’s resignation. Upon the resignation effective date established in such notice and regardless of whether a successor Agent has been appointed and accepted such appointment, the retiring Agent’s resignation shall nonetheless become effective and (i) the retiring Agent shall be discharged from its duties and obligations as Agent hereunder (other than with respect to its own gross negligence, bad faith or willful misconduct concerning any actions taken or omitted to be taken by it while it was Agent under this Agreement) and (ii) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties as Agent of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations as Agent hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Company to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After any retiring Agent’s resignation
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hereunder as Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
Section 11.10.    Non-Reliance on Agent and Other Lenders. (a) Each Lender confirms to the Agent, each other Lender and each of their respective Related Parties that it (i) possesses (individually or through its Related Parties) such knowledge and experience in financial and business matters that it is capable, without reliance on the Agent, any other Lender or any of their respective Related Parties, of evaluating the merits and risks (including tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering into this Agreement, (y) making Committed Loans and other extensions of credit hereunder and (z) in taking or not taking actions hereunder and thereunder, (ii) is financially able to bear such risks and (iii) has determined that entering into this Agreement and making Committed Loans and other extensions of credit hereunder is suitable and appropriate for it.
(a)    Each Lender acknowledges that (i) it is solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with this Agreement, (ii) that it has, independently and without reliance upon the Agent, any other Lender or any of their respective Related Parties, made its own appraisal and investigation of all risks associated with, and its own credit analysis and decision to enter into, this Agreement based on such documents and information, as it has deemed appropriate and (iii) it will, independently and without reliance upon the Agent, any other Lender or any of their respective Related Parties, continue to be solely responsible for making its own appraisal and investigation of all risks arising under or in connection with, and its own credit analysis and decision to take or not take action under, this Agreement based on such documents and information as it shall from time to time deem appropriate, which may include, in each case:
(i)    the financial condition, status and capitalization of the Company;
(ii)    the legality, validity, effectiveness, adequacy or enforceability of this Agreement and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement;
(iii)    determining compliance or non-compliance with any condition hereunder to the making of a Committed Loan and the form and substance of all evidence delivered in connection with establishing the satisfaction of each such condition;
(iv)    the adequacy, accuracy and/or completeness of the Information Memorandum and any other information delivered by the Agent, any other Lender or by any of their respective Related Parties under or in connection with this Agreement, the transactions contemplated hereby and thereby or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with this Agreement.
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Section 11.11.    The Register; the Committed Notes.
(a)    The Agent, acting as a non-fiduciary agent on behalf of the Borrower, shall maintain at the Payment Office a register for the inscription of the names and addresses of Lenders and the Commitments and Committed Loans of, and principal amounts and interest owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Lenders, and the Agent may treat each Person whose name is inscribed in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Company, the Borrower, the Agent, or any Lender at any reasonable time and from time to time upon reasonable prior notice.
(b)    The Agent shall inscribe in the Register the Commitments and the Committed Loans from time to time of each Lender, the amount of each Lender’s participation in outstanding Committed Loans and each repayment or prepayment in respect of the principal amount of the Committed Loans of each Lender, the principal and other amounts owing from time to time by the Borrower in respect of each Committed Loan to each Lender of such Committed Loans and the dates on which the Loan Period for each such Committed Loan shall begin and end. Any such inscription shall be conclusive and binding on the Borrower and each Lender, absent manifest or demonstrable error; provided, that, failure to make any such inscription, or any error in such inscription, shall not affect any of the Borrower’s obligations in respect of the applicable Committed Loans; and provided further, that, in such case, the Borrower and the Agent shall be entitled to continue to deal solely and directly with the Lender inscribed in the Register with respect to such Committed Loans.
(c)    Each Lender shall record on its internal records the amount of each Committed Loan made by it and each payment in respect thereof; provided, that, in the event of any inconsistency between the Register and any Lender’s records, the inscriptions in the Register shall govern, absent manifest or demonstrable error.
(d)    If so requested by any Lender by written notice to the Company (with a copy to Agent) at least two Business Days prior to the Closing Date or at any time thereafter, the Borrower shall execute and deliver to such Lender (and/or, if so specified in such notice, any Person who is an assignee of such Lender pursuant to Section 12.4.1 hereof) promptly after receipt of such notice, a Committed Note substantially in the form of Exhibit B hereto.
Section 11.12.    No Other Duties, etc. Anything herein to the contrary notwithstanding, no Person acting as “Joint Bookrunner”, “Joint Lead Arranger”, “Documentation Agent” or “Syndication Agent” listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement, except in its capacity, as applicable, as the Administrative Agent or as a Lender hereunder.
Section 11.13.    Certain ERISA Matters.
(a)    Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the
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Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:
(i)    such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Committed Loans, the Commitments or this Agreement,
(ii)    the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Committed Loans, the Commitments and this Agreement,
(iii)    (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Committed Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Committed Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Committed Loans, the Commitments and this Agreement, or
(iv)    such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
(b)    In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Committed Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).
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SECTION 12.    GENERAL
Section 12.1.    Waiver; Amendments. No delay on the part of the Agent, any Lender, or the holder of any Committed Loan in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy. Except as provided in Section 6.2(b), no amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the Committed Notes shall in any event be effective unless the same shall be in writing and signed and delivered by the Obligors (or, in the case of the Committed Notes, the Borrower), the Agent and by the Non-Defaulting Lenders having an aggregate Percentage of not less than the aggregate Percentage expressly designated herein with respect thereto or, in the absence of such designation as to any provision of this Agreement or the Committed Notes, by the Required Lenders, and then any amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment, modification, waiver or consent (i) shall change the definition of “Required Lenders” or “Percentage” in Section 1, amend, waive, change or otherwise modify the terms of Section 3.6, Section 5.2(a), Section 10.1.1, or this Section 12.1, release all or substantially all of the Guarantors (except the release of any Guarantor pursuant to a transaction otherwise permitted hereunder), or otherwise change the aggregate Percentage required to effect an amendment, modification, waiver or consent without the written consent of the Obligors and all Non-Defaulting Lenders, (ii) shall modify or waive any of the conditions precedent specified in Section 9.1 for the making of any Committed Loan without the written consent of the Obligors and the Lender which is to make such Committed Loan or (iii) shall (other than in accordance with Section 12.9(a)) extend the scheduled maturity, increase the amount of, or reduce the principal amount of, or rate of interest on, reduce or waive any fee hereunder or extend the due date for or waive any amount payable under, any Commitment or Committed Loan without the written consent of the Obligors and the applicable Lender holding the Commitment or Committed Loan adversely affected thereby. No provisions of Section 12 or any provision herein affecting the rights and duties of the Agent in its capacity as such shall be amended, modified or waived without the Agent’s written consent.
Section 12.2.    Notices.
(a)    Subject to paragraphs (b) through (f) of this Section 12.2, all notices, requests and demands to or upon the respective parties hereto to be effective shall be either (x) in writing (including by telecopy, encrypted or unencrypted) or (y) as and to the extent set forth in Section 12.2(b) and in the proviso to this Section 12.2(a) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered or, in the case of telecopy or e-mail notice, when received, addressed to the Borrower, the Agent or such Lender (or other holder) at its address shown across from its name on Schedule III hereto or at such other address as it may, by written notice received by the other parties to this Agreement, have designated as its address for such purpose; provided, that any notice, request or demand to
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or upon the Agent or the Lenders pursuant to Sections 2.2(a) or 4.2 shall not be effective until received.
(b)    Each Obligor hereby agrees that, unless otherwise requested by the Agent, it will provide to the Agent all information, documents and other materials that it is obligated to furnish to the Agent pursuant to this Agreement, including all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing, borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Unmatured Event of Default or Event of Default under this Agreement, (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit hereunder or (v) initiates or responds to legal process (all such non-excluded information being referred to herein collectively as the “Communications”) by transmitting the Communications in an electronic/soft medium (with such Communications to contain any required signatures) in a format acceptable to the Agent to global.loans.support@citi.com (or such other e-mail address designated by the Agent from time to time); provided, that, if requested in writing by any Lender, the Company will provide to such Lender a hard copy of its financial statements required to be provided hereunder.
(c)    Each party hereto agrees that the Agent may make the Communications available to the Lenders by posting the Communications on DebtDomain or another relevant website, if any, to which each Lender and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent) (the “Platform”). Nothing in this Section 12.2 shall prejudice the right of the Agent to make the Communications available to the Lenders in any other manner specified in this Agreement.
(d)    The Company hereby acknowledges that certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Company or its securities) (each, a “Public Lender”). The Company hereby agrees that (i) Communications that are to be made available on the Platform to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof, (ii) by marking Communications “PUBLIC,” the Company shall be deemed to have authorized the Agent and the Lenders to treat such Communications as either publicly available information or not material information (although it may be sensitive and proprietary) with respect to the Company or its securities for purposes of United States Federal and state securities laws, (iii) all Communications marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Lender,” and (iv) the Agent shall be entitled to treat any Communications that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Lender.”
(e)    Each Lender agrees that e-mail notice to it (at the address provided pursuant to the next sentence and deemed delivered as provided in the next paragraph) specifying
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that Communications have been posted to the Platform shall constitute effective delivery of such Communications to such Lender for purposes of this Agreement. Each Lender agrees (i) to notify the Agent in writing (including by electronic communication) from time to time to ensure that the Agent has on record an effective e-mail address for such Lender to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such e‑mail address.
(f)    Each party hereto acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available,” (iii) none of the Agent, its affiliates nor any of their respective officers, directors, employees, agents, advisors or representatives (collectively, the “Agent Parties”) warrants the adequacy, accuracy or completeness of the Communications or the Platform, and each Agent Party expressly disclaims liability for errors or omissions in any Communications or the Platform, and (iv) no warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with any Communications or the Platform.
Section 12.3.    Computations.
(a)    Subject to Section 12.3(b), where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, at any time and to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP. If (i) at any time any material change in GAAP or (ii) on the Closing Date any “End of Lease Assets” are reclassified as goodwill on such date, and in each case the application thereof or such reclassification would affect the computation or interpretation of any financial ratio, requirement or other provision set forth in this Agreement, and either the Company or the Agent shall so request, the Agent and the Company shall negotiate in good faith to amend such ratio, requirement or other provision to preserve the original intent thereof in light of such change in GAAP or the application thereof or such reclassification (it being understood, however, that such ratio, requirement or other provision shall remain in full force and effect in accordance with their existing terms pending the execution by the Company and the Required Lenders of any such amendment); provided that, until so amended, (A) such ratio, requirement or other provision shall continue to be computed or interpreted in accordance with GAAP or the application thereof prior to such change therein or such reclassification and (B) in the case of any relevant calculation, the Company shall provide to the Agent and the Lenders a written unaudited reconciliation in form and substance reasonably satisfactory to the Agent, between calculations of such ratio, requirement or other provision made before and after giving effect to such change in GAAP or the application thereof or such reclassification.
(b)    Notwithstanding the foregoing or any other provision of this Agreement, the adoption or issuance of any accounting standards after December 31, 2015 will not cause any
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rental obligation that was not or would not have been Capitalized Rentals prior to such adoption or issuance to be deemed Capitalized Rentals.
(c)    In the event that (i) any accounting standard that is adopted or issued after December 31, 2015 would, but for the provisions of Section 12.3(b), cause any rental obligation that was not or would not have been Capitalized Rentals prior to such adoption or issuance to be deemed Capitalized Rentals and (ii) the effect of Section 12.3(b) shall materially impact the calculation of the financial covenants in this Agreement, then the Company thereafter shall provide, at the time of delivery of financial statements pursuant to Sections 8.1.1 and 8.1.2, to the Administrative Agent and the Lenders financial statements and other documents required or as reasonably requested under this Agreement to, as applicable, provide an unaudited estimated reconciliation of such financial covenant at the close of each quarterly period with respect to the treatment of Capitalized Leases and Capitalized Rentals, calculated using GAAP as in effect before such adoption or issuance and GAAP as in effect after such adoption or issuance.
Section 12.4.    Assignments; Participations. Each Lender may assign, or sell participations in, its Committed Loans and its Commitment to one or more other Persons in accordance with this Section 12.4 (and, subject to compliance by the applicable Lender with Section 12.6, the Company consents to the disclosure of any information obtained by any Lender in connection herewith to any actual or prospective Assignee or Participant).
12.4.1    Assignments. Any Lender may with the written consents of the Company and the Agent (which consents will not be unreasonably withheld or delayed) at any time assign and delegate to one or more Eligible Assignees (any Person to whom an assignment and delegation is made being herein called an “Assignee”) all or any fraction of such Lender’s Committed Loans and Commitment; each such assignment of a Lender’s Commitment shall be in the minimum amount of $10,000,000 or in integral multiples of $1,000,000 in excess thereof (or such lower minimum amount or lower integral multiple as the Company and the Agent may consent to); provided that, in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Committed Loans at the time owing to it, no minimum amount need be assigned; provided, further, that no such consent from the Company shall be required if, at such time, an Event of Default under Section 10.1.1 or 10.1.3 has occurred and is continuing; provided, further, that, any such Assignee will comply, if applicable, with the provisions contained in Section 5.4; provided, further, the Company may withhold consent to the assignment of any Lender’s Committed Loans and Commitment to an Assignee for whom it is illegal to make a LIBOR Rate Loan described in Section 12.9(b)(iii) or that the Borrower would be required to compensate for any withholding or deductions described in clauses (i) or (ii) of Section 12.9(b) that are in excess of any such withholding or deductions the Borrower would be required to compensate to such assigning Lender, and any such withholding of consent by the Company is and hereby will be deemed to be reasonable; and provided, further, that the Borrower and the Agent shall be entitled to continue to deal solely and directly with such assigning Lender in connection with the interests so assigned and delegated to an Assignee until such assigning Lender and/or such Assignee shall have consummated such assignment:
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(i)    given written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee, substantially in the form of Exhibit D, to the Company and the Agent;
(ii)    provided evidence satisfactory to the Company and the Agent that, as of the date of such assignment and delegation the Obligors will not be required to pay any costs, fees, taxes or other amounts of any kind or nature (including under Section 12.5) with respect to the interest assigned in excess of those payable by the Obligors with respect to such interest prior to such assignment;
(iii)    paid to the Agent for the account of the Agent a processing fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment; and
(iv)    provided to the Agent evidence reasonably satisfactory to the Agent that the assigning Lender has complied with the provisions of Section 11.10.
Upon receipt of the foregoing items and the consents of the Company and the Agent, and subject to the acceptance and recordation of the assignment by the Agent pursuant to Section 11.11, (x) the Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee, such Assignee shall have the rights and obligations of a Lender hereunder and under the other instruments and documents executed in connection herewith and (y) the assigning Lender, to the extent that rights and obligations hereunder have been assigned and delegated by it, shall be released from its obligations hereunder, except as specified in the last sentence of Section 12.6. The Agent may from time to time (and upon the request of the Company or any Lender after any change therein shall) distribute a revised Schedule I indicating any changes in the Lenders party hereto or the respective Percentages of such Lenders and update the Register. Within five Business Days after the Company’s receipt of notice from the Agent of the effectiveness of any such assignment and delegation, if requested by the Assignee in accordance with Section 11.11, the Borrower shall execute and deliver to the Agent (for delivery to the relevant Assignee) new Committed Notes in favor of such Assignee and, if the assigning Lender has retained Committed Loans and a Commitment hereunder and if so requested by such Lender in accordance with Section 11.11, replacement Committed Notes in favor of the assigning Lender (such Committed Notes to be in exchange for, but not in payment of, the Committed Notes previously held by such assigning Lender). Each such Committed Note shall be dated the date of the predecessor Committed Notes. The assigning Lender shall promptly mark the predecessor Committed Notes, if any, “exchanged” and deliver them to the Borrower. Any attempted assignment and delegation not made in accordance with this Section 12.4.1 shall be null and void.
The foregoing consent requirement shall not be applicable in the case of, and this Section 12.4.1 shall not restrict, any assignment or other transfer by any Lender of all or any portion of such Lender’s Committed Loans or Commitment to any Federal Reserve Bank or the European Central Bank (provided, that, such Federal Reserve Bank or European Central Bank shall not be considered a “Lender” for purposes of this Agreement).
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Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender to a Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System or other similar central bank; provided, that, no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender party hereto.
The Company, each Lender, and each Assignee acknowledge and agree that after receipt by the Agent of the items and consents required by this Section 12.4.1 each Assignee shall be considered a Lender for all purposes of this Agreement (including Sections 5.4, 6.1, 6.4, 12.5 and 12.6) and by its acceptance of an assignment herein, each Assignee agrees to be bound by the provisions of this Agreement (including Section 5.4).
12.4.2    Participations. Any Lender may at any time without the consent of the Company or the Agent sell to one or more Eligible Assignees or any Affiliate thereof which is not a Disqualified Lender and is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business (any such Eligible Assignee or Affiliate being herein called a “Participant”) participating interests in any of its Committed Loans, its Commitment or any other interest of such Lender hereunder; provided, however, that
(a)    no participation contemplated in this Section 12.4.2 shall relieve such Lender from its Commitment or its other obligations hereunder;
(b)    such Lender shall remain solely responsible for the performance of its Commitment and such other obligations hereunder and such Lender shall retain the sole right and responsibility to enforce the obligations of the Obligors hereunder, including the right to approve any amendment, modification or waiver of any provision of this Agreement (subject to Section 12.4.2(d) below);
(c)    the Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement;
(d)    no Participant, unless such Participant is an Affiliate of such Lender, or is itself a Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in the third sentence of Section 12.1;
(e)    no Obligor shall be required to pay any amount under Sections 3.1, 5.4 or 6.1 that is greater than the amount which such Obligor would have been required to pay had no participating interest been sold;
(f)    no Participant may further participate any interest in any Committed Loan (and each participation agreement shall contain a restriction to such effect);
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(g)    to the extent permitted by applicable law, each Participant shall be considered a Lender for purposes of Section 5.4, Section 6.1, Section 6.4, Section 12.5 and Section 12.6 and by its acceptance of a participating interest in any Committed Loan, Commitment or any other interest of a Lender hereunder, each Participant agrees that it is bound by, and agrees to deliver all documentation required under, the provisions of Section 5.2(b) and Section 5.4 as if such Participant were a Lender (it being understood that the documentation required under Section 5.4 shall be delivered to the participating Lender);
(h)    such Lender shall have provided to the Agent evidence reasonably satisfactory to the Agent that such Lender has complied with the provisions of the last sentence of Section 11.6; and
(i)    each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Committed Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans or other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.
Any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle organized under the laws of the United States of America or any State thereof (a “SPV”) of such Granting Lender, identified as such in writing from time to time by the Granting Lender to the Agent, the Company and the Borrower, the option to provide to the Borrower all or any part of its Committed Loans that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided, that, (i) such SPV shall be deemed to be a Participant for purposes of this Section 12.4.2, (ii) nothing herein shall constitute a commitment by any SPV to make any Committed Loan, (iii) if a SPV elects not to exercise such option or otherwise fails to provide all or any part of such Committed Loan, the Granting Lender shall be obligated to make such Committed Loan pursuant to the terms hereof and (iv) the Company shall not be required to pay any amount under Sections 12.5 or 12.7 that is greater than the amount which the Company would have been required to pay had such SPV not provided the Borrower with any part of any Committed Loan of such Granting Lender. The making of a Committed Loan by a SPV hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Committed Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPV shall be liable for any indemnity or similar payment obligation under this Agreement (any indemnity, liability or other payment obligation, including but not limited to any tax liabilities that occur by reason of such funding by the SPV, shall remain the obligation of
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the Granting Lender). In furtherance of the foregoing, each party hereto agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against, or join any other Person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything contrary contained in this Section 12.4.2, any SPV may (i) with notice to, but without the prior written consent of, the Company and the Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Committed Loans to the Granting Lender providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Committed Loans and (ii) disclose on a confidential basis any non-public information relating to its Committed Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPV. This paragraph may not be amended without the written consent of any SPV at the time holding all or any part of any Committed Loans under this Agreement (which consent shall not be unreasonably withheld or delayed).
Section 12.5.    Costs, Expenses and Taxes. The Company agrees to pay on demand (a) all reasonable out-of-pocket costs and expenses of the Agent (including the reasonable fees and out-of-pocket expenses of a single counsel for the Agent (and of local counsel, if any, who may be retained by said counsel)), in connection with the preparation, execution, delivery and administration of, and any amendment to, this Agreement, the Committed Notes and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith and (b) all out-of-pocket costs and expenses (including reasonable attorneys’ fees and legal expenses and allocated costs of staff counsel) incurred by the Agent and each Lender in connection with the enforcement of this Agreement, the Committed Notes or any such other instruments or documents. Each Lender agrees to reimburse the Agent for such Lender’s pro rata share (based upon its respective Percentage determined at the time such reimbursement is sought) of any such costs or expenses incurred by the Agent on behalf of all the Lenders and not paid by the Obligors other than any fees and out-of-pocket expenses of counsel for the Agent which exceed the amount which the Company or the Borrower has agreed with the Agent to reimburse. In addition, without duplication of the provisions of Section 5.4, each Obligor agrees to pay, and to hold the Agent and the Lenders harmless from all liability for, any stamp, court or documentary, intangible, recording, filing or similar Taxes which may be payable in connection with the execution, delivery and enforcement of this Agreement, the borrowings hereunder, the issuance of the Committed Notes (if any) or the execution, delivery and enforcement of any other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith, except, in each case, any such Taxes that are Other Connection Taxes imposed with respect to an assignment or participation. All obligations provided for in this Section 12.5 shall survive repayment of the Committed Loans, cancellation of the Committed Notes or any termination of this Agreement.
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Section 12.6.    Confidentiality. Each of the Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives (it being understood that (i) no disclosure of Information shall be made by the Agent or any Lender to an Affiliate and such Affiliate’s respective managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives if such Affiliate is a Disqualified Lender and (ii) the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any Committed Note or any action or proceeding relating to this Agreement or any Committed Note or the enforcement of rights hereunder or thereunder, (f) subject to a confidentiality agreement with or other contractual, legal, or fiduciary obligation of confidentiality to the Company containing provisions substantially the same as those of this Section 12.6, to (i) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective party (or its managers, administrators, trustees, partners, directors, officers, employees, agents, advisors and other representatives) to any swap or derivative or similar transaction under which payments are to be made by reference to the Company and its obligations, this Agreement or payments hereunder, (iii) any rating agency, or (iv) the CUSIP Service Bureau or any similar organization, (g) with the prior written consent of the Company or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 12.6 or (y) becomes available to the Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Company. With respect to any disclosure under Section 12.6(c), each of the Agent and the Lenders, as applicable, shall use commercially reasonable efforts to promptly notify the Company, to the extent legally permissible and practicable under the circumstances, so as to permit the Company to obtain a protective order as to such disclosure, and each of the Agent and the Lenders will reasonably cooperate (to the extent practicable and permitted by their respective then existing policies) with the Company for such purpose.
For purposes of this Section, “Information” means all information received from the Company or any of its Subsidiaries relating to the Company or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Agent or any Lender on a nonconfidential basis prior to disclosure by the Company or any of its Subsidiaries, provided, that, in the case of information received from the Company or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such
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Person would accord to its own confidential information. With respect to any Lender or Agent, the obligations of such Lender or Agent pursuant to this Section 12.6 shall terminate on the first anniversary of the earlier of the Termination Date and the date on which such Lender or Agent ceases to be a party hereto.
Section 12.7.    Indemnification. In consideration of the execution and delivery of this Agreement by the Agent and the Lenders, but without duplication of the provisions of Section 5.4, each Obligor hereby agrees to indemnify, exonerate and hold each of the Lenders, the Agent, the Arrangers, the Affiliates of each of the Lenders, the Arrangers and the Agent, and each of the officers, directors, employees, agents and advisors of the Lenders, the Arrangers, the Agent and the Affiliates of each of the Lenders, the Arrangers and the Agent (collectively herein called the “Lender Parties” and individually called a “Lender Party”) free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including reasonable attorneys’ fees and disbursements (collectively herein called the “Indemnified Liabilities”), incurred by the Lender Parties or any of them as a result of, or arising out of, or relating to (i) this Agreement, the Committed Notes (if any) or the Committed Loans or (ii) the direct or indirect use of proceeds of any of the Committed Loans or any credit extended hereunder, except (x) for any such Indemnified Liabilities arising on account of such Lender Party’s gross negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable judgment and (y) to the extent such Indemnified Liabilities result from any dispute solely among Indemnified Parties other than any claims against Agent in its capacity or in fulfilling its role as Agent under this Agreement and other than any claims arising out of any act or omission on the part of the Company or any Obligor, and if and to the extent that the foregoing undertaking may be unenforceable for any reason, the Obligors hereby agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Each Obligor agrees not to assert any claim against the Lender Parties on any theory of liability, for consequential, indirect, special or punitive damages arising out of or otherwise relating to this Agreement and the Committed Notes (if any) or any of the transactions contemplated hereby or thereby or the actual or proposed use of the proceeds of the Committed Loans. All obligations provided for in this Section 12.7 shall survive repayment of the Committed Loans, cancellation of the Committed Notes (if any) or any termination of this Agreement. This Section 12.7 shall not apply with respect to Taxes other than Taxes that represent losses, claims, damages or similar items arising from any non-Tax claim.
Section 12.8.    Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among the parties hereto, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
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(a)    The application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)    The effects of any Bail-in Action on any such liability, including, if applicable:
(i)    a reduction in full or in part or cancellation of any such liability;
(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.
Section 12.9.    Extension of Termination Dates; Removal of Lenders; Substitution of Lenders. (a) At any time and from time to time after the Closing Date, the Borrower may, at its option, request all the Lenders then party to this Agreement to extend their scheduled Termination Dates by an additional one year period, or such shorter period as agreed upon by the Borrower and the Agent, by means of a letter substantially in the form of Exhibit E hereto (each, an “Extension Request”), addressed to the Agent (who shall promptly deliver such Extension Request to each Lender). Each Lender electing (in its sole discretion) to extend its scheduled Termination Date shall execute and deliver not later than the 10th Business Day after delivery of the Extension Request to Lenders, counterparts of such Extension Request to the Borrower and the Agent, who shall notify the Borrower, in writing, of the Lenders’ decisions no later than the 15th Business Day after delivery of the Extension Request to the Lenders, whereupon (unless Lenders with an aggregate Percentage of 50% or more decline to extend their respective scheduled Termination Dates, in which event the Agent shall notify all the Lenders and the Borrower thereof and no such extension shall occur) such Lender’s scheduled Termination Date shall be extended, effective only as of the date that is such Lender’s then-current scheduled Termination Date, to the date that is one year, or such shorter period as agreed as provided above, after such Lender’s then-current scheduled Termination Date. Any Lender that declines or fails to respond to the Borrower’s request for such extension shall be deemed to have not extended its scheduled Termination Date. Notwithstanding anything to the contrary in this Agreement, the Borrower shall not effectuate any such extension of the Termination Date (i) more than two times during the term of this Agreement, (ii) more than once in any consecutive 12-month period and (iii) that would result in a scheduled Termination Date, after giving effect to such extension, that is greater than five years.
(a)    In addition to its rights to remove any Defaulting Lender under Section 4.1(b), with respect to any Lender (i) on account of which the Borrower is required to make any deductions or withholdings or pay any additional amounts, as contemplated by
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Section 5.4, (ii) on account of which the Borrower is required to pay any additional amounts, as contemplated by Section 6.1, (iii) for which it is illegal to make a LIBOR Rate Loan, as contemplated by Section 6.3, (iv) which has declined to (A) extend such Lender’s scheduled Termination Date pursuant to subsection (a) above, or (B) consent to an amendment, modification or waiver and, in each case, Lenders with an aggregate Percentage in excess of 50% have elected to extend their respective Termination Dates or consent to such amendment, modification or waiver or (v) from which the Agent has received a written notice of objection pursuant to Section 6.2(b), the Borrower may, in its discretion, upon not less than 30 days’ prior written notice to the Agent and each Lender, remove such Lender as a party hereto. Each such notice shall specify the date of such removal (which shall be a Business Day), which shall thereupon become the scheduled Termination Date for such Lender.
(b)    In the event that any Lender does not extend its scheduled Termination Date pursuant to subsection (a) above or is the subject of a notice of removal pursuant to subsection (b) above, then, at any time prior to the Termination Date for such Lender (a “Terminating Lender”), the Borrower may, at its option, arrange to have one or more other Eligible Assignees (which may be a Lender or Lenders, or if not a Lender, shall be reasonably acceptable to the Agent (such acceptance not to be unreasonably withheld or delayed), and each of which shall herein be called a “Successor Lender”) with the approval of the Agent (such approval not to be unreasonably withheld or delayed) succeed to all or a percentage of the Terminating Lender’s outstanding Committed Loans, if any, and rights under this Agreement and assume all or a like percentage (as the case may be) of such Terminating Lender’s undertaking to make Committed Loans pursuant hereto and other obligations hereunder (as if (i) in the case of any Lender electing not to extend its scheduled Termination Date pursuant to subsection (a) above, such Successor Lender had extended its scheduled Termination Date pursuant to such subsection (a) and (ii) in the case of any Lender that is the subject of a notice of removal pursuant to subsection (b) above, no such notice of removal had been given by the Borrower). Such succession and assumption shall be effected by means of one or more agreements supplemental to this Agreement among the Terminating Lender, the Successor Lender, the Borrower and the Agent. On and as of the effective date of each such supplemental agreement (i) each Successor Lender party thereto shall be and become a Lender for all purposes of this Agreement and to the same extent as any other Lender hereunder and shall be bound by and entitled to the benefits of this Agreement in the same manner as any other Lender and (ii) the Borrower agrees to pay to the Agent for the account of the Agent a processing fee of $3,500 for each such Successor Lender which is not a Lender.
(c)    On the Termination Date for any Terminating Lender, such Terminating Lender’s Commitment shall terminate and the Borrower shall pay in full all of such Terminating Lender’s Committed Loans (except to the extent assigned pursuant to subsection (c) above) and all other amounts payable to such Lender hereunder (including any amounts payable pursuant to Section 5.4 on account of such payment); provided, that, if an Event of Default or Unmatured Event of Default exists on the date scheduled as any Terminating Lender’s Termination Date, payment of such Terminating Lender’s Committed Loans shall be postponed to (and, for purposes of calculating commitment fees under Section 3.4 and determining the Required Lenders (except as provided below), but for no other purpose, such Terminating Lender’s
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Commitment shall continue until) the first Business Day thereafter on which (i) no Event of Default or Unmatured Event of Default exists (without regard to any waiver or amendment that makes this Agreement less restrictive for the Borrower, other than as described in clause (ii) below) or (ii) the Required Lenders (which for purposes of this subsection (d) shall be determined based upon the respective Percentages and aggregate Commitments of all Lenders other than any Terminating Lender whose scheduled Termination Date has been extended pursuant to this proviso) waive or amend the provisions of this Agreement to cure all existing Events of Default or Unmatured Events of Default or agree to permit any borrowing hereunder notwithstanding the existence of any such event. In the event that Citibank or its Affiliates shall become a Terminating Lender, the provisions of Section 11.9 shall apply with respect to Citibank in its capacity as Agent.
(d)    To the extent that all or a portion of any Terminating Lender’s obligations are not assumed pursuant to subsection (c) above, the Aggregate Commitment shall be reduced on the applicable Termination Date and each Lender’s percentage of the reduced Aggregate Commitment shall be revised pro rata to reflect such Terminating Lender’s absence. The Agent shall distribute a revised Schedule I indicating such revisions promptly after the applicable Termination Date and update the Register accordingly. Such revised Schedule I shall be deemed conclusive in the absence of demonstrable error.

Section 12.10.    Captions. Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.
Section 12.11.    Governing Law; Jurisdiction; Severability. THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF SITTING IN NEW YORK COUNTY, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY
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OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY OBLIGOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. All obligations of the Obligors and the rights of the Agent, the Lenders and any other holders of the Committed Loans expressed herein or in the Committed Notes (if any) shall be in addition to and not in limitation of those provided by applicable law. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Each Obligor agrees that service of all writs, process and summonses in any such action or proceeding brought in the courts of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof sitting in New York County, may be made upon AerCap, Inc., presently located in the United States located at 10250 Constellation Blvd. Suite 1500, Los Angeles, CA 90067 (the “Process Agent”), and each Obligor confirms and agrees that the Process Agent has been duly and irrevocably appointed as its agent and true and lawful attorney in fact in its name, place and stead to accept such service of any and all such writs, process and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to any Obligor shall not impair or affect the validity of such service or of any judgment based thereon.
Section 12.12.    Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Delivery of a counterpart via facsimile or electronic mail, including by email with a “.pdf” copy hereof attached, shall constitute delivery of an original counterpart. When counterparts of this Agreement executed by each party shall have been lodged with the Agent (or, in the case of any Lender as to which an executed counterpart shall not have been so lodged, the Agent shall have received facsimile, electronic mail or other written confirmation of execution of a counterpart hereof by such Lender), this Agreement shall become effective as of the date hereof and the Agent shall so inform all of the parties hereto.
Section 12.13.    Further Assurances. Each Obligor agrees to do such other acts and things, and to deliver to the Agent and each Lender such additional agreements, powers and instruments, as the Agent or any Lender may reasonably require or deem advisable to carry into effect the purposes of this Agreement or to better assure and confirm unto the Agent and each Lender their respective rights, powers and remedies hereunder.
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Section 12.14.    Successors and Assigns. This Agreement shall be binding upon the Obligors, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Obligors, the Lenders and the Agent and the respective successors and assigns of the Lenders and the Agent. Except as expressly provided herein, the Borrower may not assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of all of the Lenders.
Section 12.15.    Judgment. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase Dollars with such other currency at the Agent’s principal office in New York at 11:00 a.m. (New York City time) on the Business Day preceding that on which final judgment is given.
(a)    If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in another currency into Dollars, the parties agree to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase such currency with Dollars at the Agent’s principal office in New York at 11:00 a.m. (New York City time) on the Business Day preceding that on which final judgment is given.
(b)    The obligation of each Obligor in respect of any sum due from it in any currency (the “Primary Currency”) to any Lender or the Agent hereunder shall, notwithstanding any judgment in any other currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Agent (as the case may be), of any sum adjudged to be so due in such other currency, such Lender or the Agent (as the case may be) may in accordance with normal banking procedures purchase the applicable Primary Currency with such other currency; if the amount of the applicable Primary Currency so purchased is less than such sum due to such Lender or the Agent (as the case may be) in the applicable Primary Currency, each Obligor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Agent (as the case may be) against such loss, and if the amount of the applicable Primary Currency so purchased exceeds such sum due to any Lender or the Agent (as the case may be) in the applicable Primary Currency, such Lender or the Agent (as the case may be) agrees to remit to such Obligor such excess.
Section 12.16.    Waiver of Jury Trial. EACH OBLIGOR, THE AGENT AND EACH LENDER HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY COMMITTED NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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Section 12.17.    No Fiduciary Relationship. Each Obligor acknowledges that neither the Agent nor any Lender has any fiduciary relationship with, or fiduciary duty to, such Obligor arising out of or in connection with this Agreement, the Committed Notes (if any) or the transactions contemplated hereby, and the relationship between the Agent and the Lenders, on the one hand, and such Obligor, on the other, in connection herewith or therewith is solely that of creditor and debtor. This Agreement does not create a joint venture among the parties. Each Obligor understands that each Lender and its Affiliates (collectively referred to in this Section 12.17 as a “group”) is engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research) and that members of each group generally act independently of each other, both for their own account and for the account of clients. Accordingly, there may be situations where parts of a group and/or their clients either now have or may in the future have interests, or take actions, that may conflict with the interests of the Obligors. For example, a group may, in the ordinary course of business, engage in trading in financial products or undertake other investment businesses for their own account or on behalf of other clients, including without limitation, trading in or holding long, short or derivative positions in securities, loans or other financial products of the Obligors or their Affiliates or other entities connected with the credit facility provided for herein or the transactions contemplated hereby. In recognition of the foregoing, each Obligor agrees that no group is required to restrict its activities as a result of this Agreement and that each group may undertake any business activity, including acts in relation to any matter for any other Person whose interests may be adverse to an Obligor or any of its Affiliates, without further consultation with or notification to any Obligor.
Section 12.18.    USA Patriot Act. Each Lender and the Agent (for itself in such capacity and not on behalf of any Lender) hereby notifies each Obligor that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Obligor, which information includes the name and address of such Obligor and other information that will allow such Lender or the Agent, as applicable, to identify each Obligor in accordance with the Act. Each Obligor shall provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Agent or any Lenders in order to assist the Agent and the Lenders in maintaining compliance with the Act.
Section 12.19.    Existing Credit Agreement; Effect of Amendment and Restatement;.
(a)    Prior to the Closing Date, the Existing Credit Agreement shall remain in full force and effect and nothing in this Agreement or the other Loan Documents shall be deemed to amend, modify or otherwise affect the Existing Credit Agreement and the other “Loan Documents” under in the Existing Credit Agreement. On and after the Closing Date, (i) the Existing Credit Agreement and the other “Loan Documents” under the Existing Credit Agreement shall terminate and have no further force and effect, (ii) without limiting the generality of clause (i) above, the guarantee by AerCap Aviation Solutions B.V. of the
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Guaranteed Obligations (as defined in the Existing Credit Agreement) under the Existing Credit Agreement, and all obligations of AerCap Aviation Solutions B.V. thereunder, shall be terminated, released and discharged and shall have no further force and effect and (iii) the Existing Credit Agreement shall be amended and restated in the form of this Agreement and the Existing Credit Agreement and the other “Loan Documents” thereunder shall be replaced in full by this Agreement and the other Loan Documents.
(b)    Each of (v) Citibank, in its capacity as the “Agent” under the Existing Credit Agreement, (w) the Lenders party hereto, in their capacities as “Lenders” under the Existing Credit Agreement, (x) the Company, in its capacity as the “Company” under the Existing Credit Agreement, (y) the Borrower, in its capacity as the “Borrower” under the Existing Credit Agreement, and (z) each Subsidiary Guarantor, in its capacity as a “Subsidiary Guarantor” under the Existing Credit Agreement, hereby:
(i)    consents, on the Closing Date, to (A) the termination of the Existing Credit Agreement and the other “Loan Documents” thereunder, (B) without limiting the generality of clause (A) above, the termination, release and discharge of the guarantee by AerCap Aviation Solutions B.V. of the Guaranteed Obligations (as defined in the Existing Credit Agreement) under the Existing Credit Agreement and of all obligations of AerCap Aviation Solutions B.V. thereunder and (C) the replacement in full of the Existing Credit Agreement and the other “Loan Documents” thereunder with this Agreement and the other Loan Documents on the Closing Date;
(ii)     waives any requirement of prior notice in respect of the termination of commitments under the Existing Credit Agreement on the Closing Date; and
(iii)    agrees that, with respect to each “Lender” under the Existing Credit Agreement that declines or fails to enter into this Agreement as a Lender hereunder on the Closing Date (other than any such “Lender” under the Existing Credit Agreement that becomes a Lender hereunder on or prior to the Closing Date pursuant to Section 4.4) (each, a “Replaced Lender”), effective as of the Closing Date, each such Replaced Lender’s “Commitment” under the Existing Credit Agreement shall terminate, each such Replaced Lender shall be released from all obligations under the Existing Credit Agreement and the Borrower shall be required to prepay all of such Replaced Lender’s “Committed Loans” outstanding under the Existing Credit Agreement and pay all interest, fees and other amounts owing, as of the Closing Date, to such Replaced Lender under the Existing Credit Agreement.
SECTION 13.    GUARANTEE
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Section 13.1.    The Guarantee. The Guarantors hereby jointly and severally guarantee to each Lender and the Administrative Agent and their respective successors and assigns the prompt payment in full when due upon the expiration of any applicable remedial period (whether at stated maturity, by acceleration or otherwise) of the obligations, whether direct or indirect, absolute or contingent, now or hereafter from time to time owing to the Lenders or the Administrative Agent by the Borrower or any other Obligor under this Agreement or any of the other Loan Documents, in each case strictly in accordance with the terms hereof and thereof and including all monetary obligations incurred during the pendency of any bankruptcy, insolvency, examinership, receivership or other similar proceeding of the Borrower, regardless of whether allowed or allowable in such proceeding (such obligations being herein collectively called the “Guaranteed Obligations”). The Guarantors hereby further jointly and severally agree that if the Borrower shall fail to pay in full when due upon the expiration of any applicable remedial period (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
Section 13.2.    Obligations Unconditional. The obligations of the Guarantors under Section 13.1 are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Borrower under this Agreement or any other agreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 13 that the obligations of the Guarantors hereunder shall be primary obligations of payment and not of collection, absolute and unconditional, joint and several, under any and all circumstances (and any defenses thereto are hereby waived by the Guarantors). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder (and any such defense are hereby waived), which shall remain absolute and unconditional as described above:
at any time or from time to time, without notice to the Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall be done or omitted;
the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any
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right under this Agreement or any other agreement or instrument referred to herein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;
any law or regulation of any jurisdiction or any other event affecting any term of a Guaranteed Obligation; or
any lien or security interest granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to be perfected.
The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under this Agreement or any other agreement or instrument referred to herein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors expressly confirm that they shall obtain substantial direct and indirect benefit from the giving of the Guarantee pursuant to this Agreement.
Section 13.3.    Reinstatement. The obligations of the Guarantors under this Section shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy, liquidation, examinership or reorganization or otherwise, and the Guarantors jointly and severally agree that they will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including fees of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, liquidation, examinership, insolvency or similar law.
Section 13.4.    Subrogation. The Guarantors hereby jointly and severally agree that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement they shall not exercise any right or remedy arising by reason of any performance by them of their guarantee in Section 13.1, whether by subrogation or otherwise, against the Borrower or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.
Section 13.5.    Remedies. The Guarantors jointly and severally agree that, as between the Guarantors and the Lenders, the obligations of the Borrower under this Agreement may be declared to be forthwith due and payable as provided in Section 10 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 10) for purposes of Section 13.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming
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automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section 13.1.
Section 13.6.    Continuing Guarantee. The guarantee in this Section 13 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising. Each Guarantor agrees that the guarantee in this Section 13 is a guarantee of payment and not of collection.
Section 13.7.    Indemnity and Rights of Contribution. The Borrower and the Guarantors hereby agree, as between themselves, that (a) if a payment of any Guaranteed Obligations shall be made by any Subsidiary Guarantor under this Agreement, the Borrower and the Company shall indemnify such Subsidiary Guarantor for the full amount of such payment and (b) if any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations that shall not have been fully indemnified by the Borrower or the Company, then the other Subsidiary Guarantors shall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Subsidiary Guarantor’s Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, debts and liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations. The payment obligation of the Borrower or the Company to any Subsidiary Guarantor or of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Obligor under the other provisions of this Agreements, including this Section 13, and such Subsidiary Guarantor or Excess Funding Guarantor, as the case may be, shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations.
For purposes of this Section, (i) “Excess Funding Guarantor” means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess Payment” means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (iii) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all properties of such Subsidiary Guarantor (excluding any shares of stock or other equity interest of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of the other Subsidiary Guarantors that have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable value of all properties of all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of the Subsidiary Guarantors hereunder) of all of the Subsidiary Guarantors,
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determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the Closing Date, as of the Closing Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
Section 13.8.    General Limitation on Guarantee Obligations. In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 13.1 would otherwise, taking into account the provisions of Section 13.7, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 13.1, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.
Section 13.9.    Releases.
(a)    In the event of (i) a sale or other transfer or disposition of all of the Capital Stock in any Subsidiary Guarantor to any Person that is not an Affiliate of the Company in compliance with Section 8.9 or (ii) the sale or other transfer or disposition, by way of merger, consolidation or otherwise, of assets or Capital Stock of a Subsidiary Guarantor substantially as an entirety to a Person that is not an Affiliate of the Company in compliance with the terms of Section 8.9, then, without any further action on the part of the Administrative Agent or any Lender, such Subsidiary Guarantor (or the Person concurrently acquiring such assets of such Subsidiary Guarantor) shall be deemed automatically and unconditionally released and discharged of any obligations under the guarantee of such Subsidiary Guarantor of the Guaranteed Obligations, as evidenced by a written instrument or confirmation executed by the Administrative Agent, upon the request and at the expense of the Company. Upon delivery by the Company to the Administrative Agent of an officers’ certificate stating that such sale or other disposition was made by the Company in accordance with the provisions of this Agreement, including Section 8.9, the Administrative Agent will execute any documents required in order to evidence the release of any Subsidiary Guarantor from its obligations under its guarantee of the Guaranteed Obligations.
(b)    In addition, the guarantee of a Subsidiary Guarantor of the Guaranteed Obligations will be released:
(i)    if the Subsidiary Guarantor (other than ILFC or any Subsidiary that is or becomes a Subsidiary Guarantor on the Closing Date) ceases to be a guarantor under any Capital Markets Debt or unsecured Credit Facilities, including the guarantee that resulted in the obligation of such Subsidiary Guarantor to guarantee the Guaranteed Obligations, and is released or discharged from all obligations thereunder; or
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(ii)    upon the expiration or termination of the Commitments and the payment in full of all obligations of the Obligors under this Agreement and under the Committed Notes (other than unasserted contingent indemnification and expense reimbursement obligations).
(c)    Any Subsidiary Guarantor not released from its obligations under its guarantee of the Guaranteed Obligations as provided in this Section 13.9 will remain liable for the full amount of the Guaranteed Obligations as provided in this Section 13.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

AERCAP IRELAND CAPITAL DESIGNATED ACTIVITY COMPANY
By:        /s/ Kenneth Ng    
Name:    Kenneth Ng
Title:    Attorney-in-Fact

    [Signature Page to AerCap 2019 Revolving Credit Agreement]



GUARANTORS


AERCAP HOLDINGS N.V.
By:        /s/ Kenneth Ng    
Name:    Kenneth Ng
Title:    Attorney-in-Fact

AERCAP GLOBAL AVIATION TRUST
By:        /s/ Kenneth Ng    
Name:    Kenneth Ng
Title:    Attorney-in-Fact

AERCAP U.S. GLOBAL AVIATION LLC
By:        /s/ Kenneth Ng    
Name:    Kenneth Ng
Title:    Attorney-in-Fact

INTERNATIONAL LEASE FINANCE CORPORATION
By:        /s/ Margaret Epstein    
Name:    Margaret Epstein
Title:    Vice President
    [Signature Page to AerCap 2019 Revolving Credit Agreement]




GUARANTORS
AERCAP IRELAND LIMITED
SIGNED AND DELIVERED AS A DEED

By:        /s/ Kenneth Ng    
As attorney of AERCAP IRELAND LIMITED
In the presence of:
Signature of witness: /s/ Leah Brophy    
Name of witness: Leah Brophy    
Address of witness: 65 St. Stephen’s Green, Dublin 2
Occupation of witness: Solicitor    
    [Signature Page to AerCap 2019 Revolving Credit Agreement]



AGENT
CITIBANK, N.A.
By:        /s/ Maureen Maroney    
Name:    Maureen Maroney
Title:    Vice President
    [Signature Page to AerCap 2019 Revolving Credit Agreement]



LENDERS

MIZUHO BANK, LTD.
By:        /s/ Donna DeMagistris    
Name:    Donna DeMagistris
Title:    Authorized Signatory


CITIBANK, N.A.
By:        /s/ Maureen Maroney    
Name:    Maureen Maroney
Title:    Vice President


BANK OF AMERICA, N.A.
By:        /s/ Chris Choi    
Name:    Chris Choi
Title:    Director


BANCO SANTANDER, S.A., LONDON BRANCH
By:        /s/ M. Thomas    
Name:    M. Thomas
Title:    Director
By:        /s/ D. Edwards    
Name:    D. Edwardes
Title:    Director


    [Signature Page to AerCap 2019 Revolving Credit Agreement]



BARCLAYS BANK PLC
By:        /s/ Craig Malloy    
Name:    Craig Malloy
Title:    Director


BNP PARIBAS
By:        /s/ Antoine Treguer    
Name:    Antoine Treguer
Title:    Director, Aviation Finance Group
By:        /s/ E. Dulcire    
Name:    E. Dulcire
Title:    


CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK
By:        /s/ François Martin    
Name:    François Martin
Title:    Senior Banker
By:        /s/ Julien Clamou    
Name:    Julien Clamou
Title:    Senior Banker







    [Signature Page to AerCap 2019 Revolving Credit Agreement]



CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
By:        /s/ Doreen Barr    
Name:    Doreen Barr
Title:    Authorized Signatory
By:        /s/ Komal Shah    
Name:    Komal Shah
Title:    Authorized Signatory


DEUTSCHE BANK AG NEW YORK BRANCH
By:        /s/ Ming K. Chu    
Name:    Ming K. Chu
Title:    Director
By:        /s/ Virginia Cosenza    
Name:    Virginia Cosenza
Title:    Vice President


GOLDMAN SACHS BANK USA,
By:        /s/ Ryan Durkin    
Name:    Ryan Durkin
Title:    Authorized Signatory










    [Signature Page to AerCap 2019 Revolving Credit Agreement]



HSBC FRANCE
By:        /s/ Christine Debu    
Name:    Christine Debu
Title:    Managing Director
By:        /s/ Diana Banciu    
Name:    Diana Banciu
Title:    Associate Director


JPMORGAN CHASE BANK, N.A.
By:        /s/ Cristina Caviness    
Name:    Cristina Caviness
Title:    Vice President


MORGAN STANLEY BANK, N.A.
By:        /s/ Michael King    
Name:    Michael King
Title:    Authorized Signatory


MORGAN STANLEY SENIOR FUNDING, INC.
By:        /s/ Michael King    
Name:    Michael King
Title:    Vice President




    [Signature Page to AerCap 2019 Revolving Credit Agreement]



MFUG BANK (EUROPE) N.V.
By:        /s/ H. Takase    
Name:    H. Takase
Title:    President
By:        /s/ K. Kuzuhara    
Name:    K. Kuzuhara
Title:    Managing Director


ROYAL BANK OF CANADA
By:        /s/ Scott Umbs    
Name:    Scott Umbs
Title:    Authorized Signatory


SOCIETE GENERALE, LONDON BRANCH
By:        /s/ Francois Pannetier    
Name:    Francois Pannetier
Title:    Managing Director, Diversified Industries


SUNTRUST BANK
By:        /s/ David Bennett    
Name:    David Bennett
Title:    Director



    [Signature Page to AerCap 2019 Revolving Credit Agreement]



THE TORONTO-DOMINION BANK
By:        /s/ Philip Bates    
Name:    Philip Bates
Title:    MD, European Credit Organization
By:        /s/ Pei-Lyn Hui    
Name:    Pei-Lyn Hui
Title:    Vice President


WELLS FARGO BANK, N.A.
By:        /s/ William R. Eustis    
Name:    William R. Eustis
Title:    Managing Director

    [Signature Page to AerCap 2019 Revolving Credit Agreement]





Exhibit 2.53
Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”)
AerCap Holdings N.V. (“AerCap”, the “Company”, “we”, “us” and “our”) has two securities registered under Section 12 of the Exchange Act: our ordinary shares and our 5.875% Fixed-Rate Reset Junior Subordinated Notes due 2079 (the “Junior Subordinated Notes”).
A.    Ordinary Shares
Set forth below is a summary description of our ordinary shares and related material provisions of our articles of association (the “Articles of Association”) and of Book 2 of the Dutch Civil Code (“Boek 2 van het Burgerlijk Wetboek”), which governs the rights of holders of our ordinary shares. This summary does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the provisions of our Articles of Association and of Book 2 of the Dutch Civil Code and other applicable legislation. We encourage you to read our Articles of Association for additional information. An English translation of our Articles of Association is filed as an exhibit to the Annual Report on Form 20-F of which this Exhibit 2.53 is a part.
General
AerCap’s share capital is divided into ordinary shares, each having a nominal value of €0.01. The authorized share capital is €3,500,000, therefore we are authorized to issue up to 350,000,000 ordinary shares, unless we first increase our authorized capital by amending our Articles of Association. Pursuant to our Articles of Association, our ordinary shares may only be held in registered form. All of our ordinary shares are registered in a register kept by us or on our behalf by our transfer agent.
Transfer of registered shares requires a written deed of transfer and the acknowledgment by AerCap, subject to provisions stemming from private international law. Our ordinary shares are, in general, freely transferable.
Preemptive Rights
Unless limited or excluded by the General Meeting of Shareholders or Board of Directors as described below, holders of ordinary shares have a pro rata preemptive right to subscribe for ordinary shares that we issue, except for ordinary shares issued for non-cash consideration (contribution in kind) or ordinary shares issued to our employees.
The General Meeting of Shareholders may limit or exclude preemptive rights and also designate our Board of Directors as the authorized corporate body for this purpose. Such action requires a two-thirds majority vote if less than half of the issued share capital is present or represented at the general meeting.




Rights of the Ordinary Shares
Dividends
Dividends may in principle only be paid out of profit as shown in the adopted annual accounts. In accordance with the Articles of Association and Book 2 of the Dutch Civil Code, we may only declare dividends insofar as our shareholders' equity exceeds the amount of the paid up and called portion of the issued share capital plus the reserves that must be maintained in accordance with the provisions of the laws of the Netherlands or our Articles of Association. We may not make any distribution of profits on ordinary shares that we hold and have not done so in the past. Our Board of Directors determines whether and how much of the profits it will reserve. Any remaining profits shall be distributed to the shareholders pro rata to the number of shares held by each shareholder.
All calculations to determine the amounts available for dividends will be based on our annual Dutch GAAP statutory accounts, which may be different from our Consolidated Financial Statements under U.S. GAAP, such as those included in this annual report. Our statutory accounts have to date been prepared under Dutch GAAP and are deposited with the Commercial Register of the Dutch Trade Register.
Voting rights
Each ordinary share represents the right to cast one vote at a General Meeting of Shareholders. All resolutions must be passed with an absolute majority of the votes validly cast, unless otherwise stated in the Articles of Association or under Dutch law. We are not allowed to exercise voting rights for ordinary shares we hold directly or indirectly.
Any major change in the identity or character of AerCap or its business must be approved by our General Meeting of Shareholders, including:
•the sale or transfer of substantially all our business or assets;
•the commencement or termination of certain major joint ventures and our participation as a general partner with full liability in a limited partnership (“commanditaire vennootschap”) or general partnership (“vennootschap onder firma”); and
•the acquisition or disposal by us of a participating interest in a company’s share capital, the value of which amounts to at least one third of the value of our assets.
Shareholders can exercise their voting rights by submitting their proxy forms or equivalent means prior to a set date in accordance with the procedures indicated in the notice and agenda of the applicable General Meeting of Shareholders. Shareholders may exercise their meeting rights in person after notifying us prior to a set date and providing us with appropriate evidence of ownership of the shares and authority to vote prior to a set date in accordance with the procedures indicated in the notice and agenda of the applicable General Meeting of Shareholders.
Liquidation rights
If we are dissolved or wound up, the assets remaining after payment of our liabilities will be first applied to pay back the amounts paid up on the ordinary shares. Any remaining assets will be distributed among our shareholders, in proportion to the par value of their shareholdings. All distributions referred to in this paragraph shall be made in accordance with the relevant provisions of the laws of the Netherlands.
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Adoption of annual accounts and discharge of management liability
Each year, our Board of Directors must prepare annual accounts within five months after the end of our financial year (subject to extension of that term by our General Meeting of Shareholders). The annual accounts must be made available for inspection by shareholders at our offices from the moment that our annual General Meeting of Shareholders is convened. The annual accounts must be accompanied by an auditor’s certificate, a report of the Board of Directors and certain other mandatory information. The shareholders shall appoint an accountant, as referred to in Article 393 of Book 2 of the Dutch Civil Code, to audit the annual accounts. The annual accounts are adopted by our shareholders.
The adoption of the annual accounts by our shareholders does not include the release of the members of our Board of Directors from liability for acts reflected in those documents. Any such release from liability requires a separate shareholders’ resolution.
Requirements for Amendments
The rights of shareholders can only be changed by amending our Articles of Association. A resolution to amend our Articles of Association is valid if the Board of Directors makes a proposal amending the Articles of Association and such proposal is adopted by a simple majority of votes cast.
The following resolutions require a two-thirds majority vote if less than half of the issued share capital is present or represented at the General Meeting of Shareholders:
•capital reduction;
•exclusion or restriction of preemptive rights, or designation of the Board of Directors as the authorized corporate body for this purpose; and
•legal merger or legal demerger within the meaning of Title 7 of Book 2 of the Dutch Civil Code.
If a proposal to amend the Articles of Association will be considered at the meeting, we will make available a copy of that proposal, in which the proposed amendments will be stated verbatim.
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Differences Between the Law of Different Jurisdictions
Regulatory obligations regarding certain share transactions
Cash Manager Limited, which is a member of AerCap, is subject to regulation by the Central Bank of Ireland. As a result, the acquisition or disposal directly or indirectly of interests in AerCap shares or similar interests may be subject to regulatory requirements involving the Central Bank of Ireland as set out below. The following disclosure is for information purposes only and AerCap cannot provide Irish legal advice to actual or potential investors. Actual or potential investors in AerCap must obtain their own legal advice in relation to their position.
Under the European Union (Markets in Financial Instruments) Regulations 2017 (as amended) (the “MiFID II Regulations”), a person or a group of persons acting in concert proposing to acquire a direct or indirect holding of ordinary shares or other similar interests in AerCap must give the Central Bank of Ireland prior written notice of such proposed acquisition if the acquisition would directly or indirectly (i) represent 10% or more of the capital or voting rights in AerCap; (ii) result in the proportion of capital or voting rights in AerCap held by such person or persons reaching or exceeding 10%, 20%, 33% or 50% of the capital or voting rights in AerCap; or (iii) in the opinion of the Central Bank of Ireland, make it possible for that person or those persons to control or exercise a significant influence over the management of Cash Manager Limited. Any such proposed acquisition shall not proceed until (a) the Central Bank of Ireland has informed such proposed acquirer or acquirers that it approves such acquisition or (b) the period prescribed in Regulation 21 of the MiFID II Regulations has elapsed without the Central Bank of Ireland having given notice in writing that it opposes such acquisition. It is important in this regard to note that the validity as a matter of Irish law of affected transactions, if completed without prior notification to, or assessment by, the Central Bank of Ireland will not be recognized in Ireland. Corresponding provisions apply to the disposal of direct and indirect shareholdings in AerCap except that, in such case, no approval is required, but prior notice of the disposal must be given to the Central Bank of Ireland. Cash Manager Limited is required under the MiFID II Regulations to notify the Central Bank of Ireland of relevant acquisitions and/or disposals of which it becomes aware.
Dutch statutory squeeze-out proceedings
If a person or a company or two or more group companies within the meaning of Article 2:24b of the Dutch Civil Code acting in concert holds in total 95% of a Dutch public limited liability company’s issued share capital by par value for their own account, the laws of the Netherlands permit that person or company or those group companies acting in concert to acquire the remaining ordinary shares in the company by initiating statutory squeeze out proceedings against the holders of the remaining shares. The price to be paid for such shares will be determined by the Enterprise Chamber of the Amsterdam Court of Appeal.
Choice of law and exclusive jurisdiction
Our Articles of Association provide that the legal relationship among or between us, any of our current or former directors, and any of our current or former holders of our shares and derivatives thereof, including but not limited to (i) actions under statute; (ii) actions under the Articles of Association, including actions for breach thereof; and (iii) actions in tort, shall be governed in each case exclusively by the laws of the Netherlands, unless such legal relationship does not pertain to or arise out of the capacities above. Any dispute, suit, claim, pre-trial action or other legal proceeding, including summary or injunctive proceedings, by and between those persons pertaining to or arising out of their capacities listed above shall be exclusively submitted to the courts of the Netherlands.
4




Changes in Capital
Issuance of ordinary shares
The General Meeting of Shareholders can resolve upon the issuance of ordinary shares or the granting of rights to subscribe for ordinary shares, but only upon a proposal by the Board of Directors specifying the price and further terms and conditions. The General Meeting of Shareholders may designate our Board of Directors as the authorized corporate body for this purpose. Such designation may be for any period of up to five years and must specify the maximum number of ordinary shares that may be issued.
Repurchase of our ordinary shares
We may acquire our ordinary shares, subject to certain provisions of the laws of the Netherlands and of our Articles of Association, if the following conditions are met:
•the General Meeting of Shareholders has authorized our Board of Directors to acquire the ordinary shares, which authorization may be valid for no more than 18 months;
•our equity, after deduction of the price of acquisition, is not less than the sum of the paid-in and called-up portion of the share capital and the reserves that the laws of the Netherlands or our Articles of Association require us to maintain; and
•we would not hold after such purchase, or hold as pledgee, ordinary shares with an aggregate par value exceeding such part of our issued share capital as set by law from time to time.
Capital reduction and cancellation
The General Meeting of Shareholders may reduce our issued share capital either by cancelling ordinary shares held in treasury or by amending our Articles of Association to reduce the par value of the ordinary shares. A resolution to reduce our capital requires the approval of at least an absolute majority of the votes cast and, if less than one half of the share capital is represented at a meeting at which a vote is taken, the approval of at least two-thirds of the votes cast.
B.    Debt Securities

The Junior Subordinated Notes were issued under an indenture, dated as of October 1, 2019 (the “Base Indenture”), among AerCap, the guarantors party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”), as supplemented by the first supplemental indenture, relating to the Junior Subordinated Notes, dated as of October 10, 2019 (the “First Supplemental Indenture”, and together with the Base Indenture, the “Indenture”), among AerCap, the guarantors party thereto and the Trustee.
The following summary of certain provisions of the Junior Subordinated Notes and the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Junior Subordinated Notes and the Indenture, including the definitions of certain terms contained therein. For a complete description of the terms and provisions of the Junior Subordinated Notes, refer to (i) the Base Indenture filed as an exhibit to the registration statement on Form F-3 (No. 333-234028) on October 1, 2019 and (ii) the First Supplemental Indenture filed as an exhibit to our Form 6-K on October 10, 2019. Certain terms used in the “Description of Junior Subordinated Notes” are defined under the subheading “Certain Definitions.”

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DESCRIPTION OF JUNIOR SUBORDINATED NOTES
General
On October 10, 2019, AerCap issued $750 million aggregate principal amount of the Junior Subordinated Notes. The Junior Subordinated Notes are listed on the New York Stock Exchange under the symbol “AER79.”
The Junior Subordinated Notes were issued only in fully registered book-entry form without coupons only in minimum denominations of $150,000 and integral multiples of $1,000 above that amount. The Junior Subordinated Notes were issued in the form of global notes. Global notes are registered in the name of a nominee of DTC, New York, New York.
Paying Agent and Registrar for the Junior Subordinated Notes
AerCap will maintain one or more paying agents and registrars for the Junior Subordinated Notes.
Principal Amount; Maturity and Interest
The Junior Subordinated Notes were issued in an aggregate principal amount of $750,000,000 and will mature on October 10, 2079.
Subject to AerCap’s right to elect to forgo payment of interest on the Junior Subordinated Notes as described under “Optional of Interest,” the Junior Subordinated Notes bear interest (1) from and including the Issue Date to, but excluding, October 10, 2024 (the “First Call Date”) at a rate of 5.875% per annum and (2) from and including the First Call Date, during each Reset Period (as defined below), at a rate per annum equal to the Five-year U.S. Treasury Rate (as defined below) as of the most recent Reset Interest Determination Date (as defined below) plus 4.535%, payable semiannually in arrears on April 10 and October 10 of each year (each, an “Interest Payment Date”), commencing on April 10, 2020, until full repayment of the outstanding principal amount of the Junior Subordinated Notes. Each period from and including an Interest Payment Date (or the Issue Date, in the case of the first Interest Payment Date) to, but excluding, the next following Interest Payment Date is referred to herein as an “Interest Period.” Interest on the Junior Subordinated Notes will be payable to the holders of record on April 1 and October 1, as the case may be, immediately preceding such Interest Payment Date, whether or not such day is a Business Day. If any Interest Payment Date is not a Business Day, then such date will nevertheless be an Interest Payment Date, but interest on the Junior Subordinated Note will be paid on the next succeeding Business Day (without adjustment to the amount of the interest on the Junior Subordinated Notes), if applicable.
 
The Junior Subordinated Notes are denominated in U.S. dollars and all payments of principal and interest thereon are to be paid in U.S. dollars. Interest on the Junior Subordinated Notes accrues from the most recent date on which interest has been paid or, in the case of the first Interest Payment Date, from and including the Issue Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
“Five-year U.S. Treasury Rate” means, as of any Reset Interest Determination Date, as applicable, (i) an interest rate (expressed as a decimal) determined to be the per annum rate equal to the arithmetic mean of the five most recent daily yields to maturity for U.S. Treasury securities with a maturity of five years from the next Reset Date and trading in the public securities markets or (ii) if there is no such published U.S. Treasury security with a maturity of five years from the next Reset Date and trading in the public securities markets, then the rate will be determined by interpolation between the arithmetic mean of the five most recent daily yields to maturity for each of the two series of U.S. Treasury securities trading in the public securities market, (A) one maturing as close as possible to, but earlier than, the Reset Date following the next succeeding Reset Interest Determination Date, and (B) the other maturing as close as possible to, but later than, the Reset Date following the next succeeding Reset Interest Determination Date, in each case as published in the most recent H.15. If the Five-year U.S. Treasury Rate cannot be determined pursuant to the methods described in clause (i) or (ii) above, then the Five-year U.S. Treasury Rate will be the same interest rate determined for the prior Reset Interest Determination Date or the same interest rate as the initial Interest Period, 5.875%, if prior to the First Call Date.
6



“H.15” means the weekly statistical release designated as such, or any successor publication, published by the Board of Governors of the United States Federal Reserve System, and “most recent H.15” means the H.15 published closest in time but prior to the close of business on the second Business Day prior to the applicable Reset Date.
“Reset Date” means the First Call Date and each date falling on the fifth anniversary of the immediately preceding Reset Date.
“Reset Interest Determination Date” means, in respect of any Reset Period, the day falling two Business Days prior to the Reset Date that commences such Reset Period.
“Reset Period” means the period from and including the First Call Date to, but excluding, the next following Reset Date, and thereafter, each period from and including each Reset Date to, but excluding, the next following Reset Date, ending on the Maturity Date.
Unless AerCap has delivered notice of redemption of all outstanding Junior Subordinated Notes, with such redemption to occur on the First Call Date, AerCap will appoint a calculation agent with respect to the Junior Subordinated Notes prior to the Reset Interest Determination Date preceding the First Call Date. The applicable interest rate for each Reset Period will be determined by the calculation agent, as of the applicable Reset Interest Determination Date. Promptly upon such determination, the calculation agent will notify AerCap of the interest rate for the Reset Period. The calculation agent’s determination of any interest rate, and its calculation of the amount of interest for any Interest Period beginning on or after the First Call Date, will be on file at AerCap’s principal offices, will be made available to any holder of the Junior Subordinated Notes upon request and will be final and binding in the absence of manifest error.
Optional Interest
If AerCap elects to forgo payment of interest (a “Forgoing of Interest”) on the Junior Subordinated Notes for any Interest Period, it will provide written notice thereof to the Trustee and paying agent not less than 10 Business Days prior to the relevant Interest Payment Date and the Trustee will promptly forward any such notice to each holder of the Junior Subordinated Notes, and such interest will not be cumulative and any accrued interest for that Interest Period shall cease to accrue and be payable. Upon a Forgoing of Interest, AerCap will have no obligation to pay the forgone interest on the relevant Interest Payment Date or at any future time, whether or not interest on the Junior Subordinated Notes is paid for any future Interest Period, and no sum of money in lieu of interest will be payable in respect of any forgone interest. References to the “accrual” of interest in this Description of Junior Subordinated Notes refer only to the determination of the amount of such interest.
7




Restrictions Following a Forgoing of Interest
So long as any Junior Subordinated Notes remain outstanding for any Interest Period, in the event that any interest is not paid in full for any Interest Period, AerCap will not:
(1)    declare or pay any distribution, dividend or comparable payment in respect of any Parity Claims or Junior Claims until an interest payment on the Junior Subordinated Notes for a subsequent Interest Period is paid in full, other than:
(a)    any distribution, dividend or comparable payment in respect of any Parity Claims or Junior Claims in the form of securities, warrants, options or other rights where such securities, or the securities issuable upon exercise of such warrants, options or other rights, are the same securities as that on which the distribution, dividend or comparable payment is being paid or are other Parity Claims or Junior Claims; and
(b)    any dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of rights, shares or other property under such plan, or the redemption or repurchase of any rights under such plan; and
(c)    any distribution, dividend or comparable payment in respect of any Parity Claims or Junior Claims in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors, consultants or independent contractors; or
(2)    repurchase or redeem any of its Parity Claims or Junior Claims until an interest payment on the Junior Subordinated Notes for a subsequent Interest Period is paid in full, other than:
(a)    as a result of a reclassification of Parity Claims or Junior Claims for or into other Parity Claims or Junior Claims, as the case may be;
(b)    the exchange, redemption or conversion of any Parity Claims or Junior Claims for or into other Parity Claims or Junior Claims, as the case may be;
(c)    purchases, redemptions or other acquisitions of any Parity Claims or Junior Claims in connection with (i) any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors, consultants or independent contractors, (ii) a dividend reinvestment or shareholder share purchase plan or (iii) the satisfaction of AerCap’s obligations pursuant to any contract outstanding at the beginning of the applicable Interest Period requiring such purchase, redemption or other acquisition;
(d)    the purchase of fractional interests in any Parity Claims or Junior Claims pursuant to the conversion or exchange provisions of such securities or the security being converted or exchanged; and
(e)    with the proceeds of a substantially contemporaneous sale of any Parity Claims or Junior Claims.
8




Additional Junior Subordinated Notes
AerCap may, from time to time, without notice to or the consent of the holders, create and issue, pursuant to the Indenture and in accordance with applicable laws and regulations, additional Junior Subordinated Notes (the “Additional Junior Subordinated Notes”) maturing on the same maturity date as the Junior Subordinated Notes and having the same terms and conditions under the Indenture (including with respect to the Guarantors and the Guarantees) as the Junior Subordinated Notes at the time Outstanding in all respects (or in all respects except for the issue date and the date of the first interest payment thereon, if applicable) so that such Additional Junior Subordinated Notes shall be consolidated and form a single class with the Junior Subordinated Notes at the time Outstanding for all purposes under the Indenture, including with respect to waivers, amendments, redemptions and offers to purchase; provided that, if the Additional Junior Subordinated Notes are not fungible with such Junior Subordinated Notes for U.S. federal income tax purposes, the Additional Junior Subordinated Notes will have a separate CUSIP, ISIN or other identifying number. Additional Junior Subordinated Notes, if any, will be the subject of a separate prospectus supplement. Interest on such Additional Junior Subordinated Notes will accrue from the Issue Date if such Junior Subordinated Notes are issued prior to the first Interest Payment Date and otherwise will accrue from the date on which such Junior Subordinated Notes are issued (if it is an Interest Payment Date) or the Interest Payment Date immediately preceding the date such Junior Subordinated Notes are issued.
Ranking
The Junior Subordinated Notes and the Guarantees constitute AerCap’s and the relevant Guarantor’s direct, unsecured, junior subordinated obligations, respectively, and rank equally (without any preference) among themselves and with any Parity Claims and prior to any Junior Claims. The rights and claims of the holders of the Junior Subordinated Notes, including under the Guarantees, are subordinated to all claims of Senior Creditors (“Senior Claims”).
“Senior Creditors” means all of AerCap’s or the relevant Guarantor’s, as the case may be, present and future creditors:
(1)    who are unsubordinated creditors;
(2)    whose claims are, or are expressed to be, subordinated (whether only in the event of a winding up in any applicable jurisdiction or otherwise) only to the claims of unsubordinated creditors; and
(3)    who are subordinated creditors, other than those whose claims are, or are expressed to rank, equally with, or junior to, the claims of holders of the Junior Subordinated Notes or the Guarantees, as the case may be.
Each of AGAT and AerCap Ireland Capital Designated Activity Company (“AICDC”), wholly-owned subsidiaries of AerCap and co-Issuers of various series of outstanding senior unsecured notes guaranteed by AerCap, guarantees the Junior Subordinated Notes. In addition, AerCap U.S. Global Aviation LLC, AerCap Aviation Solutions B.V., AerCap Ireland Ltd. and ILFC guaranteed the Junior Subordinated Notes.
Senior Claims continue to be Senior Claims and entitled to the benefits of the subordination provisions of the Indenture irrespective of any amendment, modification or waiver of any term of the Senior Claims or any extension or renewal of the Senior Claims.
If either of the following circumstances exist, AerCap will first pay all of its Senior Claims in full before it makes any payment or distribution, whether in cash, securities or other property, on account of the principal of or interest on the Junior Subordinated Notes:
(I)    in the event of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization, assignment for creditors or other similar proceedings or events involving AerCap or AerCap’s assets; or
9



(II)    (a) in the event and during the continuation of any default in the payment of principal of or premium or interest on any Senior Claims of AerCap constituting indebtedness for borrowed money or any guarantee thereof (“AerCap Senior Debt”) beyond any applicable grace period, (b) in the event that any event of default not referred to in sub-clause (a) of this clause (II) with respect to any AerCap Senior Debt has occurred and is continuing, permitting the direct holders of that AerCap Senior Debt (or a trustee) to accelerate the maturity of that AerCap Senior Debt, whether or not the maturity is in fact accelerated (unless, in the case of either sub-clause (a) or (b), the payment default or event of default has been cured or waived or ceased to exist and any related acceleration has been rescinded) or (c) in the event that any judicial proceeding is pending with respect to a payment default or event of default described in sub-clause (a) or (b).
In any such event, AerCap will pay or deliver directly to its Senior Creditors any payment or distribution otherwise payable or deliverable to holders of the Junior Subordinated Notes. AerCap will make the payments to its Senior Creditors according to priorities existing among those creditors until AerCap has paid all senior indebtedness, including accrued interest, in full.
If such events of insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization, assignment for creditors or other similar proceedings or events involving AerCap or AerCap’s assets as described in clause (I) above occur, after AerCap has paid in full all amounts owed in respect of its Senior Claims, the holders of the Junior Subordinated Notes together with the holders of any of AerCap’s other Parity Claims will be entitled to receive from AerCap’s remaining assets any principal of or premium or interest, if any, on the Junior Subordinated Notes and such other Parity Claims due at that time before AerCap makes any payment or other distribution on account of any of its Junior Claims.
The subordination provisions described in the immediately preceding three paragraphs also apply to each Guarantor in respect of its Guarantee of the Junior Subordinated Notes.
If AerCap breaches the Indenture by making a payment or distribution to holders of the Junior Subordinated Notes before it has paid all of its Senior Claims in full, then the holders of the Junior Subordinated Notes will have to pay or transfer the payments or distributions to the trustee in bankruptcy, receiver, liquidating trustee or other person distributing AerCap’s assets for payment of its Senior Claims.  
Guarantees
The Junior Subordinated Notes and all obligations under the Indenture are initially irrevocably and unconditionally guaranteed, jointly and severally, on a junior subordinated unsecured basis as described under “Ranking,” by the Guarantors. The Guarantors agree to pay in full on a junior subordinated basis (without duplication of amounts theretofore paid by or on behalf of AerCap) to the holders of the Junior Subordinated Notes, as and when due, regardless of any defense, right of setoff or counterclaim (other than the defense of payment), among other obligations, the following:
(1)    any interest payments with respect to which AerCap has not exercised its right to forgo payment;
(2)    the applicable redemption price, plus accrued and unpaid interest for the then-current Interest Period to, but excluding the redemption date, with respect to any Junior Subordinated Notes called for redemption by AerCap; and
(3)    the principal amount of the Outstanding Junior Subordinated Notes at maturity.
If AerCap elects to forgo payment of interest for any Interest Period, there is no obligation for any Guarantor to pay the forgone interest on the relevant Interest Payment Date for that Interest Period, whether or not interest on the Junior Subordinated Notes is paid for any future Interest Period, and there are no other obligations created with respect to the Guarantors in such event.
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In addition, the obligations of each Guarantor under its Guarantee are limited to the extent necessary to prevent such Guarantee from constituting a fraudulent conveyance or transfer under applicable law (or to ensure compliance with legal restrictions with respect to distributions or the provision of other benefits to direct or indirect shareholders) or as necessary to recognize certain defenses generally available to guarantors, including voidable preference, financial assistance, corporate purpose, capital maintenance or similar laws, regulations or defenses affecting the rights of creditors generally or other considerations under applicable law.
 
A Guarantee by a Guarantor shall provide by its terms that it shall be automatically and unconditionally released and discharged upon:
 
        (1)
(a)
any sale, exchange, disposition or transfer (including through consolidation, amalgamation, merger or otherwise) of all or substantially all the assets of such Guarantor;
(b)    other than with respect to each Guarantor that is a party to the Indenture on the date of the Indenture, the release, discharge or termination of the Guarantee by such Guarantor that resulted in the obligation of such Guarantor to guarantee the Junior Subordinated Notes, except a release, discharge or termination by or as a result of payment under such Guarantee;
(c)    the consolidation, amalgamation or merger of any Guarantor with and into AerCap or another Guarantor that is the surviving Person in such consolidation, amalgamation or merger, or upon the liquidation of such Guarantor following the transfer of all of its assets to AerCap or another Guarantor; or
(d)    AerCap exercising its legal defeasance option or covenant defeasance option as described under “Legal Defeasance and Covenant Defeasance” or AerCap’s obligations under the Indenture being discharged as described under “Satisfaction and Discharge”; and
(2)    if evidence of such release and discharge is requested to be executed by the Trustee, AerCap delivering, or causing to be delivered, to the Trustee an Officers’ Certificate and an opinion of counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction and to the execution of such evidence by the Trustee have been complied with.
Additional Amounts
AerCap and the Guarantors are required to make all payments under or with respect to the Junior Subordinated Notes and each Guarantee, as the case may be, free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and other liabilities related thereto) (hereinafter “Taxes”) imposed or levied by or on behalf of (i) Ireland or any political subdivision or any authority or agency therein or thereof having power to tax, (ii) any other jurisdiction in which AerCap or, as applicable, the relevant Guarantor is organized or otherwise resident for tax purposes or any political subdivision or any authority or agency therein or thereof having the power to tax or (iii) any jurisdiction from or through which payment on the Junior Subordinated Notes or the relevant Guarantee is made or any political subdivision or any authority or agency therein or thereof having the power to tax (each a “Relevant Taxing Jurisdiction”), unless AerCap or, as applicable, the relevant Guarantor is required to withhold or deduct Taxes by law or by the interpretation or administration thereof.
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If AerCap or a Guarantor is so required to withhold or deduct any amount for or on account of Taxes imposed by a Relevant Taxing Jurisdiction from any payment made under or with respect to the Junior Subordinated Notes or any Guarantee, AerCap or, as applicable, the relevant Guarantors will be required to pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by holders (including Additional Amounts) after such withholding or deduction will not be less than the amount holders would have received if such Taxes had not been withheld or deducted; provided, however, that the foregoing obligation to pay Additional Amounts does not apply to
(1)    any Taxes that would not have been so imposed but for the existence of any present or former connection between the relevant holder (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over, the relevant holder, if the relevant holder is an estate, nominee, trust or corporation) and the Relevant Taxing Jurisdiction (including being a citizen or resident or national of, or carrying on a business or maintaining a permanent establishment in, or being physically present in, the Relevant Taxing Jurisdiction, but other than a connection arising from the acquisition, ownership or holding of such Junior Subordinated Note or the receipt of any payment in respect thereof, including, where applicable, under the relevant Guarantee);
 
(2)    any estate, inheritance, gift, sales, value added, excise, transfer, personal property tax or similar tax, assessment or governmental charge;
(3)    any Taxes imposed as a result of the failure of the relevant holder or beneficial owner of the Junior Subordinated Notes to comply with a timely request in writing of AerCap or the qualifying intermediary (as defined in Section 172E(2) of the Taxes Consolidation Act, 1997) addressed to the holder or beneficial owner, as the case may be (such request being made at a time that would enable such holder or beneficial owner acting reasonably to comply with that request), to provide information, a declaration or tax form concerning such holder’s or beneficial owner’s nationality, residence, identity or connection with any Relevant Taxing Jurisdiction, if and to the extent that due and timely compliance with such request under applicable law, regulation or administrative practice would have reduced or eliminated such Taxes with respect to such holder or beneficial owner, as applicable;
(4)    any Taxes imposed as a result of the failure of the relevant holder or beneficial owner of the Junior Subordinated Notes
(a)    to complete and deliver to a qualifying intermediary (as defined in Section 172E(2) of the Taxes Consolidation Act, 1997) a validly completed Non-Resident Form V2A, Non-Resident Form V2B, or Non-Resident Form V2C, as relevant for such holder or beneficial owner, or any successor form prescribed by the Irish Revenue Commissioners, or
(b)    to comply with such alternative procedures as may be prescribed by applicable law (including any Revenue concession or confirmation issued by the Irish Revenue Commissioners) in effect at the time of the applicable payment,
if and to the extent that due and timely completion and delivery of such form or compliance with such procedures would have reduced or eliminated such Taxes with respect to such holder or beneficial owner, as applicable;
(5)    any Taxes that are payable other than by deduction or withholding from a payment of the principal of, premium, if any, or interest, if any, on the Junior Subordinated Notes;
(6)    any Taxes that are required to be deducted or withheld on a payment that are required to be made pursuant to Council Directive 2014/107/EU (“DAC2”) or any law implementing or complying with, or introduced in order to conform to, such Directive;
(7)    as of January 1, 2021, any Taxes withheld or deducted pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021) (a tax which applies to interest payments made to affiliated entities in a low-taxed country); or
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(8)    any Taxes withheld or deducted pursuant to Sections 1471 through 1474 of the Internal Revenue Code (or any amended or successor version of such Sections), any U.S. Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements or treaties (including any law implementing any such agreement or treaty) entered into in connection with the implementation thereof;
nor will AerCap or any Guarantor pay Additional Amounts
(a)    if the payment could have been made without such deduction or withholding if the beneficiary of the payment had presented the Junior Subordinated Note for payment (where presentation is permitted or required for payment) within 30 days after the date on which such payment or such Junior Subordinated Note became due and payable or the date on which payment thereof is duly provided for, whichever is later,
(b)    with respect to any payment of principal of (or premium, if any, on) or interest on such Junior Subordinated Note to any holder who is a fiduciary or partnership or any Person other than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or the beneficial owner of such payment would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual holder of such Note,
 
(c)    with respect to any Taxes imposed by Ireland or the Netherlands (or, in each case, any political subdivision or any authority or agency therein or thereof having power to tax) on any payment on the Junior Subordinated Notes made to a holder who is not a Qualified Holder (as defined below) or
(d)    in respect of any Junior Subordinated Note where such withholding or deduction is imposed as a result of any combination of clauses (1), (2), (3), (4), (5), (6), (7), (8), (a), (b) and (c) of this paragraph.
A “Qualified Holder” means
(I)    with respect to any Taxes imposed by Ireland or any political subdivision or any authority or agency therein or thereof having power to tax, any person who is
(i)    an individual who is not tax resident in Ireland and who is resident for the purposes of tax in a country (other than Ireland) which is a member of the European Union or a country with which Ireland has a double tax treaty in effect, in each case as of the date on which the Junior Subordinated Notes are issued (a “Qualified Jurisdiction” );
(ii)    a body corporate resident for the purposes of tax in a Qualified Jurisdiction and which is not controlled (directly or indirectly) by Irish tax residents;
(iii)    a body corporate that is not resident in Ireland for the purposes of tax, which is under the direct or indirect control of persons who are resident for the purposes of tax in a Qualified Jurisdiction and are not under the ultimate control of persons not resident in a Qualified Jurisdiction; or
(iv)    a body corporate that is not resident for tax purposes in Ireland, the principal class of shares of which (or of its 75% parent or where wholly owned by two or more companies, each such company) is substantially and regularly traded on a stock exchange in Ireland, a recognized stock exchange in a Qualified Jurisdiction or on such other stock exchange approved by the Irish Minister for Finance (which includes The New York Stock Exchange), and
(II)    with respect to any Taxes imposed by the Netherlands or any political subdivision or any authority or agency therein or thereof having power to tax, any person who is not a Dutch Tax Resident. For the avoidance of doubt, and without limiting the generality of the foregoing, a person is a Dutch Tax Resident if such person is dual resident in the Netherlands and another jurisdiction.
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AerCap and the Guarantors will make any required withholding or deduction and remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable law. AerCap and the Guarantors will provide the Trustee, for the benefit of the holders, with official receipts evidencing the payment of the Taxes with respect to which Additional Amounts are paid. If, notwithstanding the efforts of AerCap and the Guarantors to obtain such receipts, the same are not obtainable, AerCap or the Guarantors will provide the Trustee with other evidence. In no event, however, shall AerCap and the Guarantors be required to disclose any information they reasonably deem to be confidential.
If AerCap or the Guarantors are or become obligated to pay Additional Amounts under or with respect to any payment made on the Junior Subordinated Notes or any Guarantee, at least 30 days prior to the date of such payment, AerCap will deliver to the Trustee an Officers’ Certificate stating that Additional Amounts will be payable and the amount so payable and such other information necessary to enable the paying agent to pay Additional Amounts to holders on the relevant payment date. Whenever in the Indenture there is mentioned, in any context:
(1)    the payment of principal or interest;
(2)    redemption prices or purchase prices in connection with a redemption or purchase of Junior Subordinated Notes; or
(3)    any other amount payable on or with respect to any of the Junior Subordinated Notes or any Guarantee;
such reference shall be deemed to include payment of Additional Amounts as described under this heading to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
 
AerCap and the Guarantors will pay any present or future stamp, court or documentary taxes or any other excise, property or similar taxes, charges or levies that arise in any Relevant Taxing Jurisdiction from the execution, delivery, enforcement or registration of the Junior Subordinated Notes, the Indenture, any Guarantee or any other document or instrument in relation thereof, and AerCap and the Guarantors will agree to indemnify the holders for any such taxes paid by such holders. The obligations described under this heading will survive any termination, defeasance or discharge of the Indenture and will apply mutatis mutandis to any jurisdiction in which any successor Person to AerCap or any Guarantor is organized or otherwise resident for tax purposes or any political subdivision or taxing authority or agency thereof or therein.
Optional Redemption
On the First Call Date and any subsequent Reset Date, AerCap may redeem, at its option, all or part of the Junior Subordinated Notes, upon not less than 15 nor more than 45 days’ prior notice mailed by first class mail to each holder’s registered address, or delivered electronically if held by DTC, at a redemption price equal to 100% of the principal amount of the Junior Subordinated Notes being redeemed, plus an amount equal to any accrued and unpaid interest for the then-current Interest Period to, but excluding, such redemption date. In the event of a partial redemption of the Junior Subordinated Notes, the Trustee shall select the Junior Subordinated Notes to be redeemed in the manner described under “Selection and Notice.”
Any redemption or notice of any redemption may, at AerCap’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of any debt or equity financing, acquisition or other corporate transaction or event, and, at AerCap’s discretion, the redemption date may be delayed until such time as any or all of such conditions have been satisfied or waived; provided that in the event such conditions have not been satisfied or waived within 30 days of the original redemption date, the notice of redemption will be deemed to have been revoked. In addition, AerCap may provide in any notice of redemption that payment of the redemption price and the performance of its obligations with respect to such redemption may be performed by another Person; provided, however, that AerCap will remain obligated to pay the redemption price and perform its obligations with respect to such redemption in the event such other Person fails to do so.
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In addition to AerCap’s right to redeem Junior Subordinated Notes as set forth above, AerCap may at any time and from time to time purchase Junior Subordinated Notes pursuant to open-market transactions, tender offers or otherwise.
Redemption after the Occurrence of a Rating Agency Event
After the occurrence of a Rating Agency Event (as defined below), AerCap may redeem, at its option, in whole but not in part, at any time within 120 days after the conclusion of any review or appeal process instituted by AerCap following the occurrence of a Rating Agency Event or, in the absence of such review or appeal process, within 120 days of such Rating Agency Event upon not less than 15 nor more than 45 days’ prior notice mailed by first class mail to each holder’s registered address, or delivered electronically if held by DTC, at a redemption price equal to 102% of the principal amount of the Junior Subordinated Notes being redeemed, plus an amount equal to any accrued and unpaid interest for the then-current Interest Period to, but excluding, such redemption date.
“Rating Agency Event” means that any Rating Organization that then publishes a rating for AerCap amends, clarifies or changes the criteria it uses to assign equity credit to securities such as the Junior Subordinated Notes, which amendment, clarification or change results in:
(1)    the shortening of the length of time the Junior Subordinated Notes are assigned a particular level of equity credit by that Rating Organization as compared to the length of time they were, or would have been, assigned that level of equity credit by that Rating Organization or its predecessor on the Issue Date; or
(2)    the lowering of the equity credit assigned to the Junior Subordinated Notes by that rating agency as compared to the equity credit assigned by that Rating Organization or its predecessor on the Issue Date (including by assigning equity credit to a portion of the Junior Subordinated Notes that is less than the portion of the Junior Subordinated Notes assigned equity credit on the Issue Date).
 
Redemption for Changes in Withholding Taxes
AerCap may redeem the Junior Subordinated Notes, at its option, in whole but not in part, at any time upon not less than 15 nor more than 45 days’ notice (which notice shall be irrevocable) to the holders mailed by first-class mail to each holder’s registered address, or delivered electronically if held by DTC, at a redemption price equal to 100% of the principal amount of the Junior Subordinated Notes being redeemed, plus an amount equal to any accrued and unpaid interest for the then-current Interest Period to, but excluding, such redemption date and Additional Amounts, if any, in the event AerCap has become or would become obligated to pay, on the next date on which any amount would be payable with respect to the Junior Subordinated Notes, any Additional Amounts as a result of:
(1)    a change in or an amendment to the laws (including any regulations, rulings or protocols promulgated and treaties enacted thereunder) of any Relevant Taxing Jurisdiction affecting taxation; or
(2)    any change in or amendment to, or the introduction of, any official position regarding the application, administration or interpretation of such laws, regulations, rulings, protocols or treaties (including a holding, judgment or order by a court of competent jurisdiction), but, for the avoidance of doubt, not including the withdrawal or nonrenewal of any ruling, concession or confirmation in respect of procedures to establish a holder’s entitlement to an exemption from, or reduction of, a withholding tax,
which change or amendment is announced or becomes effective on or after the date on which the Junior Subordinated Notes are issued (or, in the case of a jurisdiction that becomes a Relevant Taxing Jurisdiction after such date, on or after such later date), and AerCap cannot avoid such obligation by taking reasonable measures available to AerCap. Notwithstanding the foregoing, no such notice of redemption will be given (i) earlier than 90 days prior to the earliest date on which AerCap would be obliged to make such payment of Additional Amounts and (ii) unless at the time such notice is given, such obligation to pay such Additional Amounts remains in effect.
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Before AerCap publishes or mails or delivers notice of redemption of the Junior Subordinated Notes as described above, AerCap will deliver to the Trustee an Officers’ Certificate stating that AerCap cannot avoid its obligation to pay Additional Amounts by taking reasonable measures available to it and that all conditions precedent to the redemption have been complied with. AerCap will also deliver an opinion of outside counsel stating that AerCap would be obligated to pay Additional Amounts as a result of a change or amendment described above and that all conditions precedent to the redemption have been complied with.
The foregoing will apply mutatis mutandis to any jurisdiction in which any successor Person to AerCap is organized or otherwise resident for tax purposes or any political subdivision or taxing authority or agency thereof or therein.
Selection and Notice
If less than all of the Junior Subordinated Notes are to be redeemed or repurchased at any time, selection of such Junior Subordinated Notes for redemption or repurchase will be made by the Trustee on a pro rata basis or by lot or otherwise in accordance with the procedures of DTC, unless AerCap notifies the Trustee in writing that the Junior Subordinated Notes are listed on any national securities exchange, in which case such selection shall be made in compliance with the requirements of the principal national securities exchange, if any, on which the Junior Subordinated Notes are listed; provided that no Junior Subordinated Notes of $150,000 or less shall be purchased or redeemed in part.
Notices of purchase or redemption shall be mailed by first class mail, postage prepaid, or delivered electronically if held by DTC, at least 15 but not more than 45 days before the purchase or redemption date to each holder of the Junior Subordinated Notes to be purchased or redeemed at such holder’s registered address. If any Junior Subordinated Note is to be purchased or redeemed in part only, any notice of purchase or redemption that relates to such Junior Subordinated Note shall state the portion of the principal amount thereof that has been or is to be purchased or redeemed. In the case of any book-entry Junior Subordinated Notes, notices of purchase or redemption will be given to DTC in accordance with its applicable procedures.
A new Junior Subordinated Note in principal amount equal to the unpurchased or unredeemed portion of any Junior Subordinated Note purchased or redeemed in part will be issued in the name of the holder thereof upon cancellation of the original Junior Subordinated Note. On and after the purchase or redemption date, unless AerCap defaults in payment of the purchase or redemption price, interest shall cease to accrue on the Junior Subordinated Notes or portions thereof purchased or called for redemption.
Certain Covenants
The Indenture contains the covenants summarized below.
Reports by AerCap
The Indenture requires AerCap to file with the Trustee, within 15 days after AerCap filed the same with, or furnished to, the SEC, copies of the annual reports and of the information, documents and other reports that, if AerCap is subject to the reporting requirements of either Section 13 or 15(d) of the Exchange Act, it files with, or furnishes to, the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If AerCap is not required to file with, or furnish to, the SEC information, documents or reports pursuant to either Section 13 or 15(d) of the Exchange Act, then the Indenture will require AerCap to file with the Trustee and file with, or furnish to, the SEC such reports, if any, as may be prescribed by the SEC pursuant to Section 314(a) of the Trust Indenture Act, within 15 days after AerCap filed the same with, or furnished to, the SEC.
For purposes of this covenant, AerCap will be deemed to have filed such information, documents and reports with the Trustee and the holders of the Junior Subordinated Notes when such information, documents and
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reports are filed with, or furnished to, the SEC via the EDGAR filing system (or any successor system), it being understood that the Trustee shall have no responsibility to determine if such filings have been made.
Reports by AerCap delivered to the Trustee should be considered for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein.
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Merger and Sale of Assets
The Indenture provides that AerCap may not consolidate, amalgamate or merge with or into or wind up into (whether or not AerCap is the surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1)    AerCap is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than AerCap) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of AerCap or under the laws of a Permitted Jurisdiction (AerCap or such Person, as the case may be, being herein called “Successor AerCap”);
(2)    Successor AerCap, if other than AerCap, expressly assumes all the obligations of AerCap under the Junior Subordinated Notes and the Indenture pursuant to a supplemental indenture;
(3)    if the Successor AerCap is other than AerCap, each Guarantor, unless it is the other party to the transactions, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Successor AerCap’s obligations under the Indenture and the Junior Subordinated Notes; and
(4)    Successor AerCap shall have delivered, or cause to be delivered, to the Trustee an Officers’ Certificate and an opinion of counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture, if any, comply with the Indenture;
provided, however, that (A) any Subsidiary may consolidate or amalgamate with or merge with or into AerCap; (B) AerCap may consolidate or amalgamate with or merge with or into or wind up into an Affiliate of AerCap solely for the purpose of reincorporating AerCap in a Permitted Jurisdiction; and (C) AerCap may be converted, reorganized or reconstituted in a Permitted Jurisdiction.
 
Successor AerCap (if other than AerCap) will succeed to, and be substituted for, AerCap under the Indenture and in such event AerCap will automatically be released and discharged from its obligations under the Indenture.
The Indenture provides that each Guarantor may not consolidate, amalgamate or merge with or into or wind up into (whether or not the applicable Guarantor is the surviving entity), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Subsidiary unless:
(1)    the applicable Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor or under the laws of a Permitted Jurisdiction (such Guarantor or such Person, as the case may be, being herein called “Successor Guarantor”);
(2)    the Successor Guarantor, if other than the applicable Guarantor, expressly assumes all the obligations of such Guarantor under the Junior Subordinated Notes and the Indenture pursuant to a supplemental indenture;
(3)    the Successor Guarantor, if other than the applicable Guarantor, shall have delivered, or cause to be delivered, to the Trustee an opinion of counsel (which may contain customary exceptions) stating that the Guarantee to be provided by such Successor Guarantor has been duly authorized, executed and delivered by such Successor Guarantor and constitutes the legal, valid and enforceable obligation of such Successor Guarantor; and
(4)    the Successor Guarantor shall have delivered, or cause to be delivered, to the Trustee an Officers’ Certificate and an opinion of counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture, if any, comply with the Indenture;
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provided, however, that (A) any Subsidiary of AerCap may consolidate or amalgamate with or merge with or into a Guarantor; (B) any Guarantor may consolidate or amalgamate with or merge with or into or wind up into an Affiliate of such Guarantor solely for the purpose of reincorporating such Guarantor in a Permitted Jurisdiction; and (C) any Guarantor may be converted, reorganized or reconstituted in a Permitted Jurisdiction.
Successor Guarantor (if other than the applicable Guarantor) will succeed to, and be substituted for the applicable Guarantor under the Indenture and such Guarantor’s Guarantee and in such event the applicable Guarantor will automatically be released and discharged from its obligation under the Indenture and such Guarantor’s Guarantee.
Future Subsidiary Guarantors
The Indenture provides that each Subsidiary that becomes a Guarantor pursuant to the terms of the Indenture shall promptly execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary shall become a Guarantor for all purposes of the Indenture until such Guarantee is released in accordance with the provisions of the Indenture.
Limitation of Remedies
No events of default or rights to accelerate apply to the Junior Subordinated Notes. The only remedies available to the holders of the Junior Subordinated Notes are as provided below.
If a Payment Default (as defined below) occurs and is continuing with respect to the Junior Subordinated Notes, the Trustee may pursue all legal remedies available to it, including the commencement of a judicial proceeding for the collection of the sums due and unpaid or AerCap’s winding up, subject to the limitations that may exist under applicable law in bankruptcy or insolvency proceedings, but the Trustee may not, in the case of a Payment Default in respect of an interest payment, declare the principal amount of any outstanding Junior Subordinated Notes to be due and payable.
A “Payment Default” will occur when the payment of interest (subject to AerCap’s right to elect to forgo payment thereof as described under “Principal Amount; Maturity and Interest—Optional Interest”), principal or the redemption price (when AerCap has exercised its right to redeem the Junior Subordinated Notes) has become due and has not been paid and such failure continues for 14 days. Holders of the Junior Subordinated Notes will have the right to institute suit for the enforcement of any such payment of interest or principal and such right may not be impaired without the consent of the holders of the Junior Subordinated Notes.
Subject to the provisions of this section, the Trustee may at its discretion and without further notice institute such proceedings against AerCap as it may think fit in order to enforce any term or condition binding on AerCap under the Indenture or the Junior Subordinated Notes (other than for the payment of any principal or satisfaction of any interest payments in respect of the Junior Subordinated Notes); provided, AerCap will not by virtue of the institution of any such proceedings be obligated to pay any sum or sums, in cash or otherwise, sooner than AerCap would otherwise have been obligated to pay such sum or sums.
The Trustee will not be bound to take any of the foregoing actions against AerCap to enforce the terms of the Indenture or the Junior Subordinated Notes unless (i) it will have been so requested in writing by the holders of at least 25% in principal amount of the Junior Subordinated Notes then Outstanding and (ii) it will have been offered security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request.
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Amendment, Supplement and Waiver of the Indenture
The Indenture contains provisions permitting AerCap and the Trustee to amend or supplement the Indenture with the consent of the holders of a majority in principal amount of the Junior Subordinated Notes and all other series of Junior Subordinated Notes Outstanding under the Indenture voting as a single group; provided that any amendment or supplement that affects the terms of any series of Junior Subordinated Notes as distinct from any other series of Junior Subordinated Notes shall require the consent of the holders of a majority in principal amount of the Outstanding Junior Subordinated Notes of such series. AerCap will not be permitted, however, to enter into any amendment, supplement or waiver without the consent of the holders of all affected Junior Subordinated Notes if the amendment, supplement or waiver would:
(1)    change the stated maturity of the principal of or any installment of principal or interest on any Junior Subordinated Note;
(2)    reduce the principal amount payable of, or the rate of interest on, any Junior Subordinated Note;
(3)    change the date on which any Junior Subordinated Notes may be subject to redemption, or reduce the redemption price therefor;
(4)    reduce any premium payable;
(5)    make any Junior Subordinated Note payable in a currency other than U.S. dollars;
(6)    impair the right of the holders of the Junior Subordinated Notes to institute suit for the enforcement of any payment on or after the stated maturity thereof;
(7)    release the Guarantee of any Guarantor that is a Significant Subsidiary;
(8)    amend, change or modify any provision of the Indenture affecting the ranking of the Junior Subordinated Notes in a manner adverse to the holders of the Junior Subordinated Notes; or
(9)    make any change in the preceding amendment, supplement or waiver provisions.
 
The Indenture also contains provisions permitting AerCap and the Trustee to amend or supplement the terms of the Indenture with respect to the Junior Subordinated Notes, without the consent of any holder of such Junior Subordinated Notes, for certain purposes including:
(1)    to evidence either AerCap’s succession by another Person;
(2)    to comply with the covenant described under the caption “Certain Covenants—Merger and Sale of Assets”;
(3)    to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;
(4)    to add covenants for the benefit of the holders of the Junior Subordinated Notes;
(5)    to add Guarantees under the Indenture in accordance with the terms of the Indenture;
(6)    to secure the Junior Subordinated Notes;
(7)    to evidence the appointment of a successor trustee;
(8)    to conform the text of the Indenture or the Junior Subordinated Notes to any provision of the “Description of Junior Subordinated Notes” in the prospectus supplement pursuant to which the Junior Subordinated Notes were initially offered to investors to the extent that such provision was intended by AerCap to be a verbatim recitation of a provision of the Indenture, which intent shall be evidenced by an Officers’ Certificate delivered to the Trustee; or
20



(9)    to cure any ambiguity, to correct or supplement any provision of the Indenture inconsistent with other provisions or make any other provision that does not adversely affect the interests of the holders the Junior Subordinated Notes in any material respect, as determined by AerCap.
Legal Defeasance and Covenant Defeasance
AerCap may, at its option, and at any time, elect to have all of its and the Guarantors’ obligations discharged under the Indenture with respect to the Junior Subordinated Notes (“legal defeasance”), other than:
(1)    the rights of holders to receive payments in respect of the principal of, premium, if any, and interest on the Junior Subordinated Notes when such payments are due, subject to AerCap’s right to elect to forgo payment of such interest;
(2)    AerCap’s obligations with respect to the register, transfer and exchange of such Junior Subordinated Notes and with respect to mutilated, destroyed, lost or stolen Junior Subordinated Notes;
(3)    AerCap’s obligations to maintain an office or agency in the place designated for payment of such Junior Subordinated Notes and with respect to the treatment of funds held by paying agents;
(4)    AerCap’s obligations to hold, or cause the paying agent to hold, in trust money for the payment of principal and interest, if applicable, due on the Junior Subordinated Notes at the time Outstanding for the benefit of the holders;
(5)    certain obligations to the Trustee; and
(6)    certain obligations arising in connection with such discharge of obligations.
AerCap may also, at its option, and at any time, elect to be released from the restriction described under the caption “Certain Covenants—Reports by AerCap” above with respect to the Junior Subordinated Notes (“covenant defeasance”).
The conditions AerCap must satisfy for legal defeasance or covenant defeasance include the following:
(1)    AerCap must have irrevocably deposited with the Trustee trust funds for the payment of the Junior Subordinated Notes. The trust funds must consist of U.S. dollars or U.S. Government Obligations, or a combination thereof, that will be in an amount sufficient without reinvestment to pay at maturity or redemption the entire amount of principal and interest on the Junior Subordinated Notes;
 
(2)    in the case of legal defeasance, AerCap shall have delivered, or cause to be delivered, to the Trustee an opinion of outside counsel confirming that (i) AerCap has received from, or there has been published by, the U.S. Internal Revenue Service (the “IRS”) a ruling or (ii) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in either case stating that, and based thereon such opinion of counsel shall confirm that, the beneficial owners of the Junior Subordinated Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner at the same times as would have been the case if such defeasance had not occurred;
(3)    in the case of covenant defeasance, AerCap shall have delivered, or cause to be delivered, to the Trustee an opinion of outside counsel confirming that the beneficial owners of the Junior Subordinated Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner at the same times as would have been the case if such defeasance had not occurred;
(4)    AerCap shall have delivered, or cause to be delivered, to the Trustee an opinion of outside counsel confirming that the beneficial owners of the Junior Subordinated Notes will not recognize income, gain or loss in the jurisdiction of tax residence of AerCap for income tax purposes as a result of such defeasance and will be subject to income tax in such jurisdiction on the same amounts, in the same manner and at the same times as would have been the case if such transaction had not occurred;
21



(5)    AerCap shall have delivered, or cause to be delivered, to the Trustee an Officers’ Certificate stating that the deposit was not made by AerCap with the intent of defeating, hindering, delaying or defrauding any creditors of AerCap; and
(6)    AerCap shall have delivered, or cause to be delivered, to the Trustee an Officers’ Certificate and an opinion of counsel (which opinion of counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to such defeasance, as the case may be, have been complied with.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as to the Junior Subordinated Notes when:
(1)    either:
(a)    all Junior Subordinated Notes theretofore authenticated and delivered, except lost, stolen or destroyed Junior Subordinated Notes that have been replaced or paid and Junior Subordinated Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(b)    all Junior Subordinated Notes not theretofore delivered to such Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year, and AerCap has irrevocably deposited or caused to be deposited with such Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on such Junior Subordinated Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest, if any, to the date of maturity or redemption;
(2)    AerCap has paid or caused to be paid all sums payable under the Indenture; and
(3)    AerCap has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of such Junior Subordinated Notes at maturity or the redemption date, as the case may be.
In addition, AerCap must deliver, or cause to be delivered, an Officers’ Certificate and an opinion of counsel to the Trustee, each stating that all conditions precedent to satisfaction and discharge have been satisfied.
 
Governing Law; Jury Trial Waiver
The Junior Subordinated Notes and the Indenture are governed by, and construed in accordance with, the laws of the State of New York without giving effect to any rule or principle that would result in the application of the law of any other jurisdiction.
The Indenture provides that AerCap, the Guarantors, the Trustee, and each holder of a Junior Subordinated Note by its acceptance thereof irrevocably waives, to the fullest extent permitted by applicable law, any and all right to a trial by jury in any legal proceeding arising out of or relating to the Indenture, the Junior Subordinated Notes or any transaction contemplated thereby.
Certain Definitions
The following definitions apply to the terms of the Junior Subordinated Notes.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition,
22



“control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Board of Directors” means, with respect to AerCap, either the board of directors of AerCap or any committee of that board duly authorized to act under the terms of the Indenture and with respect to any other Person, the board of directors or committee of such Person serving a similar function.
“Business Day” means any day other than Saturday, Sunday or any other day on which banking or trust institutions in New York or London are authorized generally or obligated by law, regulation or executive order to remain closed.
“Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership, unlimited liability company or limited liability company, partnership interests, membership interests (whether general or limited) or shares in the capital of the company and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Fitch” means Fitch Ratings, Ltd., a division of Fitch, Inc. or any successor ratings agency.
“Guarantee” means the guarantee by any Guarantor of AerCap’s obligations under the Indenture and the Junior Subordinated Notes.
“Guarantor” means each of the Subsidiaries of AerCap party to the Indenture as of the Issue Date, together with any other Subsidiary of AerCap that becomes a Guarantor under the Indenture in the future.
“Issue Date” means October 10, 2019.
“Junior Claims” means (i) the ordinary shares of AerCap and the common stock (or the equivalent thereof) of the relevant Guarantor, (ii) unless AerCap’s or the relevant Guarantor’s Articles of Association (or the equivalent thereof) expressly provide differently, any future shares in AerCap’s or the relevant Guarantor’s capital, respectively, (iii) in the case of ILFC, the Series A MAPS and the Series B MAPS and (iv) any future obligation of AerCap or the relevant Guarantor, as the case may be, that is expressly subordinated to the Junior Subordinated Notes or the Guarantees, as the case may be.
 
“Moody’s” means Moody’s Investor Service, Inc. or any successor ratings agency.
“Officer” means the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Managing Director, Executive Vice President, Senior Vice President or Vice President, any Treasurer or any Secretary or other executive officer or any duly authorized attorney in fact of AerCap.
“Officers’ Certificate” means, with respect to any Person, a certificate signed on behalf of such Person by two Officers of such Person that meets the requirements set forth in the Indenture.
“Outstanding” means, as of the date of determination, all Junior Subordinated Notes theretofore authenticated and delivered under the Indenture, except:
(1)    Junior Subordinated Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
23



(2)    Junior Subordinated Notes for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any paying agent (other than AerCap) in trust or set aside and segregated in trust by AerCap (if AerCap shall act as its own paying agent);
(3)    Junior Subordinated Notes that have been defeased pursuant to the procedures specified under the caption “Legal Defeasance and Covenant Defeasance” above; and
(4)    Junior Subordinated Notes that have been paid in lieu of reissuance relating to lost, stolen, destroyed or mutilated certificates, or in exchange for or in lieu of which other Junior Subordinated Notes have been authenticated and delivered pursuant to the Indenture, other than any such Junior Subordinated Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Junior Subordinated Notes are held by a bona fide purchaser in whose hands such Junior Subordinated Notes are valid obligations of AerCap and the Guarantors; provided, however, that in determining whether the holders of the requisite principal amount of the Outstanding Junior Subordinated Notes have given any request, demand, authorization, direction, notice, consent or waiver under the Indenture, Junior Subordinated Notes owned by AerCap or any other obligor upon the Junior Subordinated Notes or any Affiliate of AerCap or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Junior Subordinated Notes that the Trustee knows to be so owned shall be so disregarded. Junior Subordinated Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Junior Subordinated Notes and that the pledgee is not AerCap or any other obligor upon the Junior Subordinated Notes or any Affiliate of AerCap or of such other obligor.
“Parity Claims” means all existing and future securities or obligations of AerCap or the relevant Guarantor, as the case may be, that rank or are expressed to rank equally with the Junior Subordinated Notes or the Guarantees, as the case may be, in distribution or payment of any amounts thereunder by AerCap or the relevant Guarantor and in the distribution of assets pursuant to any liquidation, insolvency, dissolution, reorganization or similar proceeding of AerCap or the relevant Guarantor.
“Permitted Jurisdiction” means any of the United States, any state or territory thereof, the District of Columbia, any member state of the Pre-Expansion European Union, Switzerland, Bermuda, the Cayman Islands and Singapore.
“Person” means any individual, corporation, unlimited liability company, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Pre-Expansion European Union” means the European Union as of January 1, 2004, including the countries of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom, but not including any country which became or becomes a member of the European Union after January 1, 2004; provided that Pre-Expansion European Union shall not include any country whose long-term debt does not have a long-term rating of at least “Aa2” by Moody’s, “AA” by S&P, “AA” by Fitch or the equivalent rating category of another Rating Organization.
“Rating Organizations” means the following nationally recognized rating organizations: Moody’s, S&P and Fitch or, if any of Moody’s, S&P or Fitch or all three shall not make a rating on the Junior Subordinated Notes publicly available, a nationally recognized rating organization, or organizations, as the case may be, selected by AerCap that shall be substituted for any of Moody’s, S&P or Fitch or all three, as the case may be.
“S&P” means S&P Global Ratings, a division of S&P Global Inc., or any successor rating agency.
“Series A MAPS” means the Market Auction Preferred Stock, Series A, of International Lease Finance Corporation.
24



“Series B MAPS” means the Market Auction Preferred Stock, Series B, of International Lease Finance Corporation.
“SEC” means the U.S. Securities and Exchange Commission.
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as amended.
“Subsidiary” means, with respect to any specified Person, a corporation, limited liability company, partnership or trust more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof).
“U.S. Government Obligations” means securities that are:
(1)    direct obligations of the United States of America for the payment of which its full faith and credit is pledged, or
(2)    obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America.
In either case, the U.S. Government Obligations may not be callable or redeemable at the option of AerCap, and shall also include a depository receipt issued by a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended, as custodian with respect to such U.S. Government Obligation or a specific payment of principal of or interest on such U.S. Government Obligation held by the custodian for the account of the holder of such depository receipt. The custodian is not authorized, however, to make any deduction from the amount payable to the holder of the depository receipt except as required by law.
“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

25


Exhibit 8.1

Consolidated
ILFC Aruba A.V.V.
Aruba
ILFC Australia Holdings Pty. Ltd.
Australia
ILFC Australia Pty. Ltd.
Australia
Wombat 3495 Leasing Pty Ltd
Australia
Wombat 3547 Leasing Pty Ltd
Australia
Wombat 3668 Leasing Pty Ltd
Australia
Wombat V Leasing Pty Ltd
Australia
AerCap International Bermuda Limited
Bermuda
AerCap Leasing 3034 (Bermuda) Limited
Bermuda
AerCap Leasing MSN 2413 (Bermuda) Limited
Bermuda
AerFunding 1 Limited
Bermuda
AerFunding Bermuda Leasing Limited
Bermuda
Aircraft Lease Securitisation II Limited
Bermuda
Aquarius Aircraft Leasing Limited
Bermuda
Ararat Aircraft Leasing Limited
Bermuda
Belmar Bermuda Leasing Limited
Bermuda
CloudFunding III Limited
Bermuda
Copperstream Aircraft Leasing Limited
Bermuda
Flotlease 973 (Bermuda) Limited
Bermuda
Flying Fortress Bermuda Leasing Ltd.
Bermuda
Goldstream Aircraft Leasing Limited
Bermuda
ILFC (Bermuda) 5, Ltd.
Bermuda
ILFC (Bermuda) III, Ltd.
Bermuda
Lare Leasing Limited
Bermuda
LC (BERMUDA) NO 2 L.P.
Bermuda
LC (BERMUDA) NO. 2 LTD
Bermuda
Poseidon Leasing (Bermuda) Limited
Bermuda
Roselawn Leasing Limited
Bermuda
Ross Leasing Limited
Bermuda
Sierra Leasing Limited
Bermuda
Silverstream Aircraft Leasing Limited
Bermuda
Skylease Bermuda Limited
Bermuda
Wahaflot Leasing 3699 (Bermuda) Limited
Bermuda
Westpark 1 Aircraft Leasing Limited
Bermuda
Whitestream Aircraft Leasing Limited
Bermuda
Whitney Leasing Limited
Bermuda
AerCap Aircraft Purchase Limited
Cayman Islands
AerCap HK-320-B Limited
Cayman Islands
ILFC Cayman Limited
Cayman Islands
Eaststar Limited
China
1
        

North Star Company Limited
China
Southstar Limited
China
Sunstar Limited
China
Calais Location S.A.R.L.
France
Grenoble Location S.A.R.L.
France
ILFC France S.A.R.L.
France
Nancy Location S.A.R.L.
France
Aerborne Funding III Limited
Ireland
Aerborne Funding II Limited
Ireland
AerBorne Funding Limited
Ireland
AerCap A330 Holdings Limited
Ireland
AerCap Administrative Services Limited
Ireland
AerCap Aircraft 73B-30661 Limited
Ireland
AerCap Aircraft 73B-32841 Limited
Ireland
AerCap Aircraft 77B-32717 Limited
Ireland
AerCap Cash Manager Limited
Ireland
AerCap Finance Limited
Ireland
AerCap Financial Services (Ireland) Limited
Ireland
AerCap Holding & Finance Limited
Ireland
AerCap Ireland Asset Investment 1 Limited
Ireland
AerCap Ireland Asset Investment 2 Limited
Ireland
AerCap Ireland Capital Designated Activity Company
Ireland
AerCap Ireland Funding 1 Limited
Ireland
AerCap Ireland Limited
Ireland
AerCap Irish Aircraft Leasing 2 Limited
Ireland
AerCap Leasing 3034 Limited
Ireland
AerCap Leasing 32A-2406 Limited
Ireland
AerCap Leasing 32A-2448 Limited
Ireland
AerCap Leasing 8 Limited
Ireland
AerCap Leasing 946 Limited
Ireland
AerCap Partners 767 Holdings Limited
Ireland
AerCap Partners 767 Limited
Ireland
AerCap Partners I Holding Limited
Ireland
AerCap Partners I Limited
Ireland
AerFi Group Limited
Ireland
AerVenture Export Leasing Limited
Ireland
AerVenture Limited
Ireland
Aircraft Portfolio Holding Company Limited
Ireland
Aircraft Portfolio Holding Company No. 2 Limited
Ireland
Andes Aircraft Leasing Limited
Ireland
Andromeda Aircraft Leasing Limited
Ireland
Annamite Aircraft Leasing Limited
Ireland
2
Exhibit 8.1
Antares Aircraft Leasing Limited
Ireland
Arctic Leasing No.3 Limited
Ireland
Arfaj Aircraft Leasing Limited
Ireland
Artemis (Delos) Limited
Ireland
Artemis Aircraft 32A-1925 Limited
Ireland
Artemis Aircraft 32A-3309 Limited
Ireland
Artemis Aircraft 32A-3385 (Ireland) Limited
Ireland
Artemis Aircraft 32A-3388 (Ireland) Limited
Ireland
Artemis Aircraft 73B-30671 Limited
Ireland
Artemis Aircraft 77B-32725 Limited
Ireland
Artemis Ireland Leasing Limited
Ireland
Ballyfinn Aviation Limited
Ireland
Ballymoon Aircraft Solutions Limited
Ireland
Ballysky Aircraft Ireland Limited
Ireland
Ballystar Aircraft Solutions Limited
Ireland
Bandeira Aircraft Leasing Limited
Ireland
BlowfishFunding Limited
Ireland
Burgundy Aircraft Leasing Limited
Ireland
Calliope Limited
Ireland
Camden Aircraft Leasing Limited
Ireland
Capella Aircraft Leasing Limited
Ireland
Cash Manager Limited
Ireland
Castletroy Leasing Limited
Ireland
CelestialFunding Limited
Ireland
Celtago Funding Limited
Ireland
Celtago II Funding Limited
Ireland
Celtago II Leasing Limited
Ireland
Cesium Funding Limited
Ireland
Charleville Aircraft Leasing Limited
Ireland
CieloFunding Holdings Limited
Ireland
CieloFunding II Limited
Ireland
CieloFunding Limited
Ireland
Clarity Leasing Limited
Ireland
CloudFunding II Limited
Ireland
CloudFunding Limited
Ireland
CuttlefishFunding Limited
Ireland
Danang Aircraft Leasing Limited
Ireland
Danang Aircraft Leasing No. 2 Limited
Ireland
DartfishFunding Designated Activity Company
Ireland
Delos Aircraft 76B-29387 Designated Activity Company
Ireland
Delos Aircraft Limited
Ireland
Delphinus Aircraft Leasing Limited
Ireland
3
        

Diadem Aircraft Limited
Ireland
Eden Aircraft Holding No. 2 Limited
Ireland
Electra Funding Ireland Limited
Ireland
Eris Aircraft Limited
Ireland
Excalibur Aircraft Leasing Limited
Ireland
Fansipan Aircraft Leasing Limited
Ireland
FirefishFunding Limited
Ireland
Flotlease MSN 3699 Limited
Ireland
Flotlease MSN 973 Limited
Ireland
FlyFunding Limited
Ireland
Flying Fortress Ireland Leasing Limited
Ireland
Fortress Aircraft 32A-2730 Limited
Ireland
Fortress Aircraft 33A-0366 Limited
Ireland
Fortress Aircraft 76B-29383 Designated Activity Company
Ireland
Fortress Aircraft 78B-38761 Limited
Ireland
Fortress Ireland Leasing Limited
Ireland
Geministream Aircraft Leasing Limited
Ireland
Gladius Funding Limited
Ireland
Glide Aircraft 35A-29 Ltd
Ireland
Glide Aircraft 73B-41815 Limited
Ireland
Glide Aircraft 78B-38765 Limited
Ireland
Glide Funding Limited
Ireland
Goldfish Funding Limited
Ireland
Gunung Leasing Limited
Ireland
Harmonic Aircraft Leasing Limited
Ireland
Hyperion Aircraft Financing Limited
Ireland
Hyperion Aircraft Limited
Ireland
ILFC Aircraft 32A-1808 Limited
Ireland
ILFC Aircraft 32A-1884 Limited
Ireland
ILFC Aircraft 32A-1901 Limited
Ireland
ILFC Aircraft 32A-1905 Limited
Ireland
ILFC Aircraft 32A-2064 Limited
Ireland
ILFC Aircraft 32A-2076 Limited
Ireland
ILFC Aircraft 32A-2279 Limited
Ireland
ILFC Aircraft 32A-2707 Limited
Ireland
ILFC Aircraft 32A-2726 Limited
Ireland
ILFC Aircraft 32A-2797 Limited
Ireland
ILFC Aircraft 32A-3065 Limited
Ireland
ILFC Aircraft 32A-3070 Limited
Ireland
ILFC Aircraft 32A-3114 Limited
Ireland
ILFC Aircraft 32A-3116 Limited
Ireland
ILFC Aircraft 32A-3124 Limited
Ireland
4
Exhibit 8.1
ILFC Aircraft 32A-4619 Limited
Ireland
ILFC Aircraft 32A-591 Limited
Ireland
ILFC Aircraft 32A-666 Limited
Ireland
ILFC Aircraft 33A-1284 Limited
Ireland
ILFC Aircraft 33A-272 Limited
Ireland
ILFC Aircraft 33A-432 Limited
Ireland
ILFC Aircraft 33A-444 Limited
Ireland
ILFC Aircraft 33A-454 Limited
Ireland
ILFC Aircraft 33A-469 Limited
Ireland
ILFC Aircraft 33A-822 Limited
Ireland
ILFC Aircraft 33A-911 Limited
Ireland
ILFC Aircraft 73B-29344 Limited
Ireland
ILFC Aircraft 73B-29368 Limited
Ireland
ILFC Aircraft 73B-30658 Limited
Ireland
ILFC Aircraft 73B-30665 Limited
Ireland
ILFC Aircraft 73B-30667 Limited
Ireland
ILFC Aircraft 73B-30669 Limited
Ireland
ILFC Aircraft 73B-30672 Limited
Ireland
ILFC Aircraft 73B-30673 Limited
Ireland
ILFC Aircraft 73B-30694 Limited
Ireland
ILFC Aircraft 73B-30695 Limited
Ireland
ILFC Aircraft 73B-30696 Limited
Ireland
ILFC Aircraft 73B-30701 Limited
Ireland
ILFC Aircraft 73B-35275 Limited
Ireland
ILFC Aircraft 73B-38828 Limited
Ireland
ILFC Aircraft 73B-41784 Limited
Ireland
ILFC Aircraft 73B-41785 Limited
Ireland
ILFC Aircraft 73B-41789 Limited
Ireland
ILFC Aircraft 73B-41790 Limited
Ireland
ILFC Aircraft 73B-41791 Limited
Ireland
ILFC Aircraft 73B-41792 Limited
Ireland
ILFC Aircraft 73B-41793 Limited
Ireland
ILFC Aircraft 73B-41802 Limited
Ireland
ILFC Aircraft 73B-41803 Limited
Ireland
ILFC Aircraft 75B-26330 Limited
Ireland
ILFC Aircraft 75B-27208 Designated Activity Company
Ireland
ILFC Aircraft 75B-29381 Limited
Ireland
ILFC Aircraft 76B-27610 Limited
Ireland
ILFC Aircraft 76B-27616 Limited
Ireland
ILFC Aircraft 76B-27958 Limited
Ireland
ILFC Aircraft 76B-28111 Limited
Ireland
ILFC Aircraft 76B-28207 Limited
Ireland
5
        

ILFC Aircraft 76B-29435 Limited
Ireland
ILFC Aircraft 77B-29908 Limited
Ireland
ILFC Ireland Leasing Limited
Ireland
ILFC Ireland Limited
Ireland
Iridium Funding Limited
Ireland
Jade Aircraft Leasing Limited
Ireland
Jasmine Aircraft Leasing Limited
Ireland
Jasper Aircraft Leasing Limited
Ireland
Leostream Aircraft Leasing Limited
Ireland
Librastream Aircraft Leasing Limited
Ireland
Liffey Aircraft Leasing Limited
Ireland
Limelight Funding Limited
Ireland
Lishui Aircraft Leasing Limited
Ireland
Lyra Aircraft Leasing Limited
Ireland
Mainstream Aircraft Leasing Limited
Ireland
Melodic Aircraft Leasing Limited
Ireland
Menelaus I Limited
Ireland
Menelaus II Designated Activity Company
Ireland
Menelaus III Limited
Ireland
Menelaus IV Limited
Ireland
Menelaus V Limited
Ireland
Menelaus VI Limited
Ireland
Menelaus VII Limited
Ireland
Menelaus VIII Limited
Ireland
Mentes I Ireland Leasing Limited
Ireland
Mentes II Ireland Leasing Limited
Ireland
Mentes III Ireland Leasing Limited
Ireland
Mentes IV Ireland Leasing Limited
Ireland
Mentes V Ireland Leasing Limited
Ireland
Mentes VI Ireland Leasing Limited
Ireland
Mentes VII Ireland Leasing Limited
Ireland
Monophonic Aircraft Leasing Limited
Ireland
Moonlight Aircraft Leasing (Ireland) Limited
Ireland
Moyadda Limited
Ireland
NimbusFunding Limited
Ireland
Philharmonic Aircraft Leasing Limited
Ireland
Platinum Aircraft Leasing Limited
Ireland
Polyphonic Aircraft Leasing Limited
Ireland
Quadrant MSN 38774 Limited
Ireland
Quadrant MSN 5802 Limited
Ireland
Quadrant MSN 5869 Limited
Ireland
Quiescent Holdings Limited
Ireland
6
Exhibit 8.1
RainbowFunding Limited
Ireland
Rhodium Funding Limited
Ireland
Riggs Leasing Limited
Ireland
Rouge Aircraft Leasing Limited
Ireland
Scandium Funding Limited
Ireland
Scarlet Aircraft Leasing Limited
Ireland
Serpens Aircraft Leasing Limited
Ireland
Serranus Funding Limited
Ireland
Shrewsbury Aircraft Leasing Limited
Ireland
SkyFunding II Holdings Limited
Ireland
SkyFunding II Limited
Ireland
SkyFunding Leasing 1 Limited
Ireland
SkyFunding Limited
Ireland
Skylease MSN (3365) Limited
Ireland
Skylease MSN (3392) Limited
Ireland
Skylease MSN 3545 Limited
Ireland
Skylease MSN 3564 Limited
Ireland
Skylease MSN 3574 Limited
Ireland
Skylease MSN 3711 Limited
Ireland
Skylease MSN 3778 Limited
Ireland
Skylease MSN 3825 Limited
Ireland
Skylease MSN 3859 Limited
Ireland
Skylease MSN 4241 Limited
Ireland
Skylease MSN 4254 Limited
Ireland
Skylease MSN 4267 Limited
Ireland
Skyscape Limited
Ireland
SoraFunding Limited
Ireland
StratocumulusFunding Limited
Ireland
StratusFunding Limited
Ireland
Streamline Aircraft Leasing Limited
Ireland
Sunflower Aircraft Leasing Limited
Ireland
Symphonic Aircraft Leasing Limited
Ireland
Synchronic Aircraft Leasing Limited
Ireland
Tantalum Funding Limited
Ireland
Temescal Aircraft 32A-2383 Limited
Ireland
Temescal Aircraft 33A-0758 Limited
Ireland
TetraFunding Limited
Ireland
Transversal Aircraft Holdings Limited
Ireland
Transversal Aircraft Leasing Limited
Ireland
Triple Eight Aircraft Holdings Limited
Ireland
Triple Eight Aircraft Leasing Limited
Ireland
Tullycrine Aircraft Leasing Limited
Ireland
7
        

Verde Aircraft Finance Limited
Ireland
Verde Aircraft Investment Limited
Ireland
Virgostream Aircraft Leasing Limited
Ireland
Whitney Ireland Leasing Limited
Ireland
XLease MSN 3008 Limited
Ireland
XLease MSN 3420 Limited
Ireland
Acorn Aviation Limited
Isle of Man
AerCap Holding (IOM) Limited
Isle of Man
CRESCENT AVIATION LIMITED
Isle of Man
Stallion Aviation Limited
Isle of Man
Delos Finance S.a.r.l.
Luxembourg
ILFC Labuan ECA Ltd.
Malaysia
ILFC Labuan Ltd.
Malaysia
AerCap A330 Holdings B.V.
Netherlands
AerCap AerVenture Holding B.V.
Netherlands
AerCap Aviation Solutions B.V.
Netherlands
AerCap B.V.
Netherlands
AerCap Dutch Aircraft Leasing I B.V.
Netherlands
AerCap Dutch Aircraft Leasing IV B.V.
Netherlands
AerCap Dutch Aircraft Leasing VII B.V.
Netherlands
AerCap Dutch Global Aviation B.V.
Netherlands
AerCap Group Services B.V.
Netherlands
AerCap International B.V.
Netherlands
AerCap Leasing XIII B.V.
Netherlands
AerCap Leasing XXX B.V.
Netherlands
AerCap Netherlands B.V.
Netherlands
Annamite Aircraft Leasing B.V.
Netherlands
BlowfishFunding B.V.
Netherlands
Clearstream Aircraft Leasing B.V.
Netherlands
FodiatorFunding B.V.
Netherlands
Goldfish Funding B.V.
Netherlands
Harmony Funding B.V.
Netherlands
Harmony Funding Holdings B.V.
Netherlands
ILFC Aviation Services (Europe) B.V.
Netherlands
NimbusFunding B.V.
Netherlands
Sapa Aircraft Leasing B.V.
Netherlands
StratocumulusFunding B.V.
Netherlands
Worldwide Aircraft Leasing B.V.
Netherlands
AerCap Singapore Pte. Ltd.
Singapore
ILFC Singapore Pte. Ltd.
Singapore
32904 Sverige AB
Sweden
AerFi Sverige AB
Sweden
8
Exhibit 8.1
International Lease Finance Corporation (Sweden) AB
Sweden
AerCap UK Limited
United Kingdom
Aircraft 32A-3424 Limited
United Kingdom
Aircraft 32A-3454 Limited
United Kingdom
Archytas Aviation Limited
United Kingdom
ILFC UK Limited
United Kingdom
Temescal UK Limited
United Kingdom
Whitney UK Leasing Limited
United Kingdom
AerCap Global Aviation Trust
United States
AerCap Group Services, LLC
United States
AerCap Hangar 52, Inc.
United States
AerCap Leasing USA I, LLC
United States
AerCap Leasing USA II, LLC
United States
AerCap U.S. Global Aviation LLC
United States
AerCap, LLC
United States
AeroTurbine, LLC
United States
Aircraft 32A-1658 Inc.
United States
Aircraft 32A-1905 Inc.
United States
Aircraft 32A-1946 Inc.
United States
Aircraft 32A-2024 Inc.
United States
Aircraft 32A-2594 Inc.
United States
Aircraft 32A-2731 Inc.
United States
Aircraft 32A-585 Inc.
United States
Aircraft 32A-645 Inc.
United States
Aircraft 32A-726 Inc.
United States
Aircraft 32A-760 Inc.
United States
Aircraft 32A-775 Inc.
United States
Aircraft 32A-782 Inc.
United States
Aircraft 32A-993, Inc.
United States
Aircraft 33A-132, Inc.
United States
Aircraft 33A-358 Inc.
United States
Aircraft 34A-395 Inc.
United States
Aircraft 34A-48 Inc.
United States
Aircraft 34A-93 Inc.
United States
Aircraft 73B-26317 Inc.
United States
Aircraft 73B-28252 Inc.
United States
Aircraft 73B-30036 Inc.
United States
Aircraft 73B-30646 Inc.
United States
Aircraft 73B-30661 Inc.
United States
Aircraft 73B-30730 Inc.
United States
Aircraft 73B-32841 Inc.
United States
Aircraft 73B-38821 Inc.
United States
9
        

Aircraft 73B-41794 Inc.
United States
Aircraft 73B-41806 Inc.
United States
Aircraft 73B-41815 Inc.
United States
Aircraft 74B-27602 Inc.
United States
Aircraft 75B-28834 Inc.
United States
Aircraft 75B-28836 Inc.
United States
Aircraft 76B-26261 Inc.
United States
Aircraft 76B-26327 Inc.
United States
Aircraft 76B-26329 Inc.
United States
Aircraft 76B-27597 Inc.
United States
Aircraft 76B-27613 Inc.
United States
Aircraft 76B-28132 Inc.
United States
Aircraft 76B-28206 Inc.
United States
Aircraft 77B-29404 Inc.
United States
Aircraft 77B-32723 Inc.
United States
Aircraft Andros Inc.
United States
Aircraft B757 29377 Inc.
United States
Aircraft B767 29388 Inc.
United States
Aircraft Lotus Inc.
United States
Aircraft SPC-12, LLC
United States
Aircraft SPC-3, Inc.
United States
Aircraft SPC-4, Inc.
United States
Aircraft SPC-8, Inc.
United States
Aircraft SPC-9, LLC
United States
Apollo Aircraft Inc.
United States
Artemis US Inc.
United States
Brokat Leasing, LLC
United States
CABREA, Inc.
United States
Camden Aircraft Leasing Trust
United States
Charmlee Aircraft Inc.
United States
Cloudbreak Aircraft Leasing Inc.
United States
Diadem Aircraft Inc. (CA)
United States
Diadem Aircraft Inc. (DE)
United States
Doheny Investment Holding Trust
United States
Euclid Aircraft, Inc.
United States
Fleet Solutions Holdings LLC
United States
Flying Fortress Financing, LLC
United States
Flying Fortress Holdings, LLC
United States
Flying Fortress Investments, LLC
United States
Flying Fortress US Leasing Inc.
United States
ILFC Aircraft 32A-10072 Inc.
United States
Grand Staircase Aircraft, LLC
United States
ILFC Aircraft 78B-38799 Inc.
United States
10
Exhibit 8.1
ILFC Aviation Consulting, Inc.
United States
ILFC Dover, Inc.
United States
ILFC Volare, Inc.
United States
Interlease Aircraft Trading Corporation
United States
Interlease Management Corporation
United States
International Lease Finance Corporation
United States
Park Topanga Aircraft, LLC
United States
Pelican 35302, Inc.
United States
Temescal Aircraft, LLC
United States
Whitney US Leasing, Inc.
United States


11
Exhibit 12.1
CERTIFICATION
I, Aengus Kelly, certify that:
1.I have reviewed this annual report on Form 20-F of AerCap Holdings N.V.;
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.    The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the company and have:
(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)    Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)    Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5.    The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: March 2, 2021

[[5286539]]


/s/ Aengus Kelly
Signature
Aengus Kelly
Chief Executive Officer


[[5286539]]
Exhibit 12.2
CERTIFICATION
I, Peter Juhas, certify that:
1.    I have reviewed this annual report on Form 20-F of AerCap Holdings N.V.;
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.    The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the company and have:
(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)    Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)    Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5.    The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: March 2, 2021

[[5286542]]


/s/ Peter Juhas
Signature
Peter Juhas
Chief Financial Officer


[[5286542]]
Exhibit 13.1
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of AerCap Holdings N.V. (the “Company”), does hereby certify, to such officer’s knowledge, that:
The Annual Report on Form 20-F for the year ended December 31, 2020 (the “Form 20-F”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: March 2, 2021 By:
/s/ Aengus Kelly
Aengus Kelly
Chief Executive Officer
Date: March 2, 2021 By:
/s/ Peter Juhas
Peter Juhas
Chief Financial Officer







Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (Nos. 333-224192, 333-234028, and 333-235323) and on Form S-8 (Nos. 333-194638, 333-194637, 333-180323, 333-165839, and 333-154416) of AerCap Holdings N.V. of our report dated March 2, 2021 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Annual Report on Form 20-F.

Dublin, Ireland, March 2, 2021
PricewaterhouseCoopers

/s/ PricewaterhouseCoopers