Slide 1: AerCap Holdings N.V. Fourth Quarter 2012 Earnings Call
AerCap Holdings N.V. Fourth Quarter 2012 Earnings Call February 20, 2013
Slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor
Disclaimer Incl. Forward Looking Statements & Safe Harbor This presentation contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are “forward-looking statements”. In some cases, forward-looking statements can be
Slide 3: 2012 Headlines
2012 Headlines Adjusted net income and earnings per share for the full year 2012 was $258.0 million and $1.96 respectively. During 2012: - 59 owned aircraft (~$1.4 billion) were sold with an average age of nearly 10 years bringing the average age of AerCap’s portfolio to 5.1 years, - 26.5 million
Slide 4: Portfolio Development
Portfolio Development 2010 2011 2012 Total Assets ($ million) 9,601 9,108 8,581 Average Age of Owned Aircraft 6.0 5.5 5.1 (Years) No. Aircraft Sold 16 21 59 Average Age of Sales (Years) 5.0 18.0 8.5 _____________________________________________________________________________________________________
Slide 5: Net Income
Net Income ($ Millions) 4Q 2011 4Q 2012 FY 2011 FY 2012 Reported Net Income 76.4 11.2 172.2 163.7 Adjusted for: loss from mark-to-market on interest 3.4 - 51.3 12.5 rate caps * Adjusted for: cost of share-based compensation* 1.3 1.7 5.4 6.3 Adjusted for: one time charge relating to the buy-out - - 2
Slide 6: Earnings Per Share
Earnings Per Share 4Q 2011 4Q 2012 FY 2011 FY 2012 Earnings Per Share $0.54 $0.09 $1.17 $1.24 Adjusted for: mark-to-market on interest rate caps, share based compensation, one time items relating to discontinued operations, one time charges relating to the buy-out of the Genesis portfolio servicing
Slide 7: Net Interest Margin (Net Spread) – Fourth Quarter 2012
Net Interest Margin (Net Spread) – Fourth Quarter 2012 ($ Millions) 4Q 2011 4Q 2012 Net Interest Margin (Net Spread)* 178.3 159.9 Annualized Margin % Total 9.0% 8.5% Excluding ALS Portfolio 8.4% 8.3% * Net Interest Margin (Net Spread) is basic lease rents less interest expense, excluding non-cash ch
Slide 8: Net Interest Margin (Net Spread) – Full Year 2012
Net Interest Margin (Net Spread) – Full Year 2012 ($ Millions) FY 2011 FY 2012 Net Interest Margin (Net Spread)* 718.1 684.2 Annualized Margin % Total 9.1% 8.7% Excluding ALS Portfolio 8.4% 8.3% * Net Interest Margin (Net Spread) is basic lease rents less interest expense, excluding non-cash charges
Slide 9: Revenue
Revenue ($ Millions) 4Q 2011 4Q 2012 FY 2011 FY 2012 Basic Lease Rents* 237.2 222.2 951.3 931.9 Maintenance Rents and Other 26.0 11.2 99.2 65.3 Receipts Management Fees and Interest 5.2 6.0 21.8 19.7 Income Other Revenue** 8.0 0.3 12.3 2.0 Net Gain (Loss) on Aircraft 0.1 (47.5) 9.3 (46.4) Sales*** T
Slide 10: Aircraft Sales
Aircraft Sales AerCap continues to optimize its portfolio through the sale of aircraft: In 2012, 59 aircraft were sold including 35 A320s, four A330s, 14 B737s, and six other aircraft. The ALS portfolio was part of the sales. In 2011, 18 aircraft were sold including three A320s, one A330, six B737s,
Slide 11: Expenses/Taxes
Expenses/Taxes ($ Millions) 4Q 2011 4Q 2012 FY 2011 FY 2012 Leasing Expenses* 15.2 12.5 58.4 72.1 SG&A** 22.5 23.1 120.7 83.4 Tax Rate 6.9% -2.9% 6.7% 5.2% * Increase in full year leasing expenses driven primarily from defaults and restructurings. ** Decrease in full year SG&A driven primarily from
Slide 12: Impact from Defaults and Restructurings
Impact from Defaults and Restructurings ($ Millions) FY 2010 FY 2011 FY 2012 Total Reserves vs. Costs Maintenance Rents Held 29.3 63.9 20.7 113.9 Impairments (10.9) (3.7) (11.7) (26.3) Leasing Expenses (9.8) (30.7) (41.2) (81.7) Net of Reserves & Costs 8.6 29.5 (32.2) 5.9 Post-tax Impact including 3
Slide 13: Cash
Cash ($ Millions) 2011 2012 Cash and Cash Equivalents at December 31st 411.1 520.4 (Excl. Restricted Cash) Total Cash Balance at December 31st 648.4 800.2 (Incl. Restricted Cash) Operating Cash Flow for Full Year 621.6 643.3 Note: An undrawn working capital facility of $285 million was also availabl
Slide 14: Debt and Equity
Debt and Equity ($ Millions) 4Q 2011 4Q 2012 Total Debt at Quarter-End 6,111 5,803 Average Cost of Debt (including ~0.4% 3.8% 4.2% relating to amortization of debt issuance costs)* Equity** 2,283 2,123 Debt / Equity Ratio 2.7 to 1 2.7 to 1 * Interest expense divided by average debt balance, excludin
Slide 15: 2013 Financial Outlook
2013 Financial Outlook Set forth below are the estimated drivers for AerCap’s 2013 financial performance, which are subject to change. 2013 expected aircraft purchases are ~$1.1 billion. As a result of the ALS sale, 2013 basic lease revenue is expected to decrease 3-6% over 2012. 2013 maintena
Slide 16: Supplemental Information
Supplemental Information 16
Slide 17: Aircraft Transactions Full Year 2012
Aircraft Transactions Full Year 2012 53 aircraft lease agreements & letters-of-intent executed 35 aircraft delivered to lessees 20 aircraft purchased & contracts/ letters of intent signed for a further 7 aircraft purchases 59 aircraft sold from our owned portfolio (including ALS) and 16 airc
Slide 18: Total Assets and Number of Aircraft
Total Assets and Number of Aircraft 2011 2012 ($ Millions) 10,000 9,108 8,581 8,000 6% decrease Total Assets 6,000 over 2011 Owned and on (Mainly driven by the sale Balance Sheet of ALS, which was 4,000 partially offset by new aircraft deliveries) 2,000 0 The decrease of 17 aircraft is driven by Num
Slide 19: High Quality and Well-Diversified Portfolio
High Quality and Well-Diversified Portfolio Aircraft Portfolio as of December 31, 2012 Aircraft under Sale Number of Number of / Purchase Owned Managed Aircraft on Contract Total Aircraft % Net Book Value Aircraft Order or LOI Aircraft Airbus A300 Freighter 0 0.0% 1 0 0 1 Airbus A319 24 8.7% 6 0 0 3
Slide 20: Aircraft Portfolio Valuation – As of September 30, 2012
Aircraft Portfolio Valuation – As of September 30, 2012 ($ Billion) Carrying External Value or Difference Appraisers Price Paid A320 Family, A330s, & B737NGs 8.08 8.83 9% (~97% of Portfolio) B737 Classics and All Others 0.23 0.24 4% (~3% of Portfolio) Total Aircraft Assets 8.31 9.07 9% Notes: - Base
Slide 21: Aircraft Portfolio Valuation (Based on PV of Rent & Residual Values)
Aircraft Portfolio Valuation (Based on PV of Rent & Residual Values) ($ Billion) Carrying PV of PV of Total Value / Contracted Residual Present Difference Price Paid Rent Value Value Future Value 8.31 5.37 3.54 8.91 7% Based on 3 Appraisers Future Value 8.31 5.37 3.65 9.02 9% Based on Ascend Notes:
Slide 22: Committed Aircraft Purchases
Committed Aircraft Purchases FY 2012 Committed 2013 Aircraft Purchases 1,106 1,115 ($ Millions) Number of Aircraft 20 25 Purchases (Units) 22
Slide 23: Portfolio Management Metrics Owned Aircraft
Portfolio Management Metrics Owned Aircraft Lease Portfolio FY 2011 FY 2012 Utilization Rate* 98.4% 98.5% Portfolio Yield** 13.2% 12.7% Average Term (Previous 12 Months) – New Leases for New Aircraft (Months) 137 149*** – New Leases for Used Aircraft (Months) 74 66**** *Days utilized weighted by boo
Slide 24: Leasing Expenses
Leasing Expenses ($ Millions) 4Q 2011 4Q 2012 FY 2011 FY 2012 Default & Restructuring 5.5 3.0 30.7 41.2 Related* Normal Transition Costs 1.4 2.8 9.1 12.2 Lessor Maintenance 6.2 4.5 10.2 9.3 Contributions Other Leasing Costs 2.1 2.2 8.4 9.4 Total Leasing Expenses 15.2 12.5 58.4 72.1 * 2012 default an
Slide 25: SG&A
SG&A ($ Millions) 4Q 2011 4Q 2012 FY 2011 FY 2012 Mark-to-market of: foreign currency hedges, foreign (1.1) 0.1 2.8 (2.9) currency cash balances, and other derivatives Share-based compensation 1.5 1.9 6.2 7.5 expenses Other Selling, General and 22.1 21.1 111.7 78.8 Administrative expenses* Total Sel
Slide 26: Tax Rate
Tax Rate FY 2011 FY 2012 Blended Tax Rate* 6.7% Charge 5.2% Charge * The blended effective tax rate in any year is impacted by the source and amount of earnings among AerCap’s different tax jurisdictions. 26