The overall decrease in turnover ($164.1 million) and depreciation and impairment ($82.9 million) for the year ended December 31, 2018 compared to the same period last year is as a result of the net book value of aircraft sales being greater than acquisitions in the period (further details provided below).
•The gross profit margin increased to 59.1% for the year ended December 31, 2018 from 58.2% for the prior year. This is primarily driven by the change in age and mix of the portfolio, partially offset by a decrease in end-of-lease compensation and a decrease in supplemental rent.
•Operating income decreased by $18.6 million to $11.5 million for the year ended December 31, 2018 from $30.1 million for the prior year. The decrease was primarily due to a decrease of $18.7 million in lease termination income.
•Operating expenses decreased by $76.1 million to $164.6 million for the year ended December 31, 2018 from $240.7 million for the prior year. The decrease was primarily due to the reduction in the provision for intercompany receivables of $40.1 million and the reduction in other expenses of $23.6 million.
The most significant movement in the Statement of Financial Position between December 31, 2017 and December 31, 2018 was the reduction in the net book value of Fixed Assets - Aircraft. The net book value decreased by $1.4 billion following the sale of 116 aircraft with a net book value of $6.1 billion and depreciation and impairment of $657.1 million, partially offset by new acquisitions totalling $5.3 billion. Of the 116 aircraft sold during the year, 72 were intercompany sales.
During the year ended December 31, 2018, $770.0 million of scheduled repayments of the ILFC Legacy Notes were made. Secured notes of $1.275 billion that matured in September 2018 were also repaid.
In January 2018, AerCap Trust and AICDC co-issued $1.15 billion aggregate principal amount of 3.30%-3.875% senior unsecured notes due 2023-2028 (the "January 2018 Notes"). In June 2018, AerCap Trust and AICDC co-issued $600 million aggregate principal amount of 4.125% senior unsecured notes due 2023 (the "June 2018 Notes"). In August 2018, AerCap Trust and AICDC co-issued $600 million aggregate principal amount of 4.45% senior unsecured notes due 2025 (the "August 2018 Notes"). The proceeds from the offering were used for general corporate purposes.
AerCap Trust is constantly under review by Management, as future results depend on industry conditions and the ability of AerCap Trust to achieve satisfactory lease rates in the current environment and minimize downtime.
AerCap Trust intends to continue its existing activities during the coming year.