Slide 1: AerCap Holdings N.V. Second Quarter 2011 Earnings Call
AerCap Holdings N.V. Second Quarter 2011 Earnings Call August 5, 2011
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: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Net income was $72.8 million for Second Quarter 2011, exclusive of the impact relating to mark-to-market of interest rate caps, share-based compensation and the one-off charge relating to the buy-out of the Genesis portfolio servicing rights, an increase of 22% over
Slide 4: Net Income
Net Income ($ Million) 2Q 2010 2Q 2011 H1 2010 H1 2011 Total Net Income 48.9 30.8 83.3 102.9 Adjusted for: (Gain)/Loss from mark- 10.1 18.9 21.7 20.3 to-market on interest rate caps * Adjusted for: cost of share-based 0.6 1.7 1.3 3.4 compensation* Adjusted for: one-off charge relating to the buy-out
Slide 5: Earnings Per Share
Earnings Per Share 2Q 2010 2Q 2011 H1 2010 H1 2011 Earnings Per Share $0.41 $0.21 $0.81 $0.69 Adjusted for: mark-to-market on interest rate caps, share based compensation & one-off charge relating to the buy-out of the 0.09 0.28 0.23 0.30 Genesis portfolio servicing rights Adjusted Earnings Per Shar
Slide 6: Total Revenue
Total Revenue ($ Million) 2Q 2010 2Q 2011 Basic Lease Rents 233.5 251.2 Maintenance/End-of-Lease Revenue 27.2 32.9 Management Fees and Interest Income 4.1 5.4 Other Revenue 1.1 0.3 Revenue Excl. Sales 265.9 289.8 Sales Revenue 328.1 74.5 Total Revenue 594.0 364.3 6
Slide 7: Net Spread (Margin)
Net Spread (Margin) ($ Millions) 2Q 2010 2Q 2011 % Change Basic Lease Rents 233.5 251.2 8% Less: Interest Expense* (59.6) (64.2) 8% Net Spread (Margin) 173.9 187.0 8% Average Lease Assets 7,479 8,368 12% Annualized Margin (% Lease Assets) ** 9.30% 8.94% * Excludes non-cash charges relating to the ma
Slide 8: Sales
Sales ($ Million) 2Q 2010 2Q 2011 Aircraft Sales 282.8* 9.4** Engine Sales 9.4 16.8 Part Sales 35.9 48.3 Total Sales Revenue 328.1 74.5 Total Gain from Sales 14.5 21.1 * 2Q 2010 aircraft sales includes 2 new A330 forward sales agreed in 1st half 2009, 2 new A320 forward sales and 1 older B767 ** 2Q
Slide 9: Leasing Expenses and SG&A
Leasing Expenses and SG&A ($ Million) 2Q 2010 2Q 2011 % Change Operating lease in costs 3.1 3.0 (3%) Leasing expenses * 15.9 22.6 42% SG&A Ex. one-off charge below 34.9 37.9 9% Leasing Expenses and SG&A 53.9 63.5 18% (Excl. one-off charge below) One-off charge relating to buy- out of the Genesis por
Slide 10: Leasing Expenses
Leasing Expenses ($ Million) 2Q 2010 2Q 2011 % Change Default Related Leasing 0.0 4.3 NA Expenses* Normal Transition Costs 4.2 4.4 5% Lessor Maintenance 7.9 8.2 4% Contributions AeroTurbine & Other Leasing 3.8 5.7 44% Costs Total Leasing Expenses 15.9 22.6 42% * Costs in Q2 2011 relate to airline de
Slide 11: Impact from Defaults & Restructurings
Impact from Defaults & Restructurings ($ Million) FY 2010 YTD 2011 (Actual) (Actual) Lost Basic Lease Rents (Net of (3.4) (1.9) Security Deposits) Maintenance Rents Held 7.8 15.3 Default Related Leasing Expenses (7.8) (9.0) Default Related Impairment (5.5) 0.0 Charges Total Impact (Pre-tax) (8.9) 4.
Slide 12: Tax Rate
Tax Rate FY 2011 FY 2010 (Estimate) Tax Rate for Aircraft 8.9% Charge 8.9% Charge Tax Rate for Engine/Parts 34.2% Credit 38.1% Credit Blended Tax Rate* 8.6% Charge 8.0% Charge * The blended effective tax rate in any year is impacted by the source and amount of earnings among AerCap’s different tax j
Slide 13: Total Assets and Number of Aircraft/Engines
Total Assets and Number of Aircraft/Engines 2Q 2010 2Q 2011 ($ Millions) 9,571 10,000 9,098 8,000 Total Assets 5% increase over 2Q Owned and on 6,000 2010 Balance Sheet 4,000 2,000 Number of Aircraft 0 The increase of 8 aircraft is driven by Owned, On Order, Managed, the Waha Transaction (+16), Boei
Slide 14: Purchases of Aviation Assets
Purchases of Aviation Assets ($ Million) YTD 2011 Remaining Total 2011 * 2011 * Aircraft Related 575 175 750 Engines/Airframes 63 25 88 Total Purchases 638 200 838 Number of Aircraft 9 2 11 Purchases (Units) * Committed purchases as of June 30, 2011. Total committed purchases will exceed $1.0 billio
Slide 15: Portfolio Management Metrics Owned Aircraft
Portfolio Management Metrics Owned Aircraft Lease Portfolio FY 2010 YTD 2011 Utilization Rate 98.3% 98.3% Portfolio Yield* 13.3% 13.5% Average Term (Months) – New Leases for New Aircraft 138 **144 – New Leases for Used Aircraft 62 *** 74 * Lease revenue divided by average book value of flight equipm
Slide 16: Cash
Cash ($ Millions) 2Q 2011 Cash and Cash Equivalents at June 30, 2011 344.1 Total Cash Balance at June 30, 2011 535.1 (Incl. Restricted Cash) Operating Cash Flow for 2Q 2011 142.0 16
Slide 17: Debt and Equity
Debt and Equity ($ Millions) 2Q 2010 2Q 2011 Total Debt at Quarter-End 6,394 6,519 Average Cost of Debt* 3.6% 3.7% Equity 1,921 2,316 Debt / Equity Ratio 3.3 to 1 2.8 to 1 * Interest expense divided by average debt balance, excluding mark-to-market on interest rate caps and other small charges not r
Slide 18: 2011 Outlook – EPS Impact of Aircraft Sales / One-Offs
2011 Outlook – EPS Impact of Aircraft Sales / One-Offs YTD 2011 Remaining 2011 Committed Aircraft Sales $0.05 $0.02 Other One-Offs $0.01 $0.00 EPS Impact $0.06 $0.02 18
Slide 19: 2011 Financial Outlook
2011 Financial Outlook AerCap expects to grow earnings based on the committed aircraft purchases despite the continued uncertainties of the global economic environment. Set forth below are the anticipated drivers for AerCap’s 2011 financial performance, which are subject to change, in light of the h
Slide 20: Commercial Updates
Commercial Updates * (AERCAP 20
Slide 21: American Airlines Purchase-Leaseback
American Airlines Purchase-Leaseback AerCap has entered into a purchase-leaseback arrangement with American Airlines to finance up to 35 Boeing 737-800 Next Generation Aircraft. AerCap will purchase the aircraft from American and immediately lease the aircraft back to American under a purchase-l
Slide 22: Sale of AeroTurbine (Page 1 of 2)
Sale of AeroTurbine (Page 1 of 2) AerCap has entered into an agreement with International Lease Finance Corporation (ILFC) for the sale of its wholly-owned subsidiary AeroTurbine, Inc. The closing of the transaction is expected to occur in the coming months subject to satisfaction or waiver of c
Slide 23: Sale of AeroTurbine (Page 2 of 2)
Sale of AeroTurbine (Page 2 of 2) Financial Impact The sale will create a pre-tax book loss of ~$20 million. In addition, an ~$8 million tax asset will no longer be recoverable as a result of the sale. Transaction expenses of $22 million will be incurred. Inclusive of the sales proceeds less
Slide 24: Share Repurchase Program
Share Repurchase Program In 2010, AerCap initiated a share repurchase program. 118,237 shares were acquired under this program in second quarter 2011 for a consideration of $1.4 million. AerCap is initiating another share repurchase program. The new program will run through to December 30, 2
Slide 25: Amendment to Revolving Debt Facility
Amendment to Revolving Debt Facility AerCap’s revolving debt facility originally put in place during 2006 has been amended. The facility size is $775 million and is non-recourse. The amendment allows for an additional two year revolving period with a three year term-out period, extending the t
Slide 26: First Half (YTD) 2011 Highlights
First Half (YTD) 2011 Highlights Net income was $148.0 million for first half 2011, exclusive of the impact relating to mark-to-market of interest rate caps, share-based compensation and the one-off charge relating to the buy-out of the Genesis portfolio servicing rights, an increase of 39% over t
Slide 27: Appendix
Appendix * (AERCAP 27
Slide 28: Net Maintenance Contribution per Quarter
Net Maintenance Contribution per Quarter Avg. First 2 Avg. Qtr. 2010 Avg. Qtr. 2011 Qtrs. 2011 (Actual) (Forecast) (Actual) Maintenance 20.6 ~24.0 29.5 Rents Leasing (17.0) ~(18.0) (18.4) Expenses Pre-tax Impact 3.6 ~6.0 11.1 EPS Impact $0.02 $0.03 $0.07 (after tax) 28
Slide 29: Aircraft and Engine Transactions Year To Date (June) 2011
Aircraft and Engine Transactions Year To Date (June) 2011 19 aircraft lease agreements & letters-of-intent executed 18 aircraft and 24 engines delivered to lessees 9 aircraft and 15 engines purchased 6 aircraft and 9 engines sold from our owned and managed portfolios 29
Slide 30: High Quality and Well-Diversified Portfolio
High Quality and Well-Diversified Portfolio Aircraft Portfolio as of June 30, 2011 76% narrow body – “Work Aircraft under Sale Horses” of industry Number Number of / Purchase of Owned % Net Book Managed Aircraft on Contract or Total High share of liquid / remarket- Aircraft Value Aircraft Order