Aercap Holdings N.v. · NYSE:AER
Aercap — Wachovia Securities Equity Conference 2008
24 slides from Aercap's conference presentation, Jun 23, 2008
Slide 1: AerCap Holdings N.V.
AerCap Holdings N.V. Keith Helming Chief Financial Officer Wachovia Securities Equity Conference June 23, 2008
Slide 2: Forward Looking Statements & Safe Harbor
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 identified by th
Slide 3: AerCap Overview
AerCap Overview * (AERCAP
Slide 4: AerCap Overview
AerCap Overview Global aviation company with proven track record and integrated business model providing aircraft, engines and parts to customers in every major region of the world North America/Caribbean Total Assets $4.4Bn 17% of 2007 Europe lease revenues at December 31, 2007 39% of 2007 lease
Slide 5: What Makes AerCap Different?
What Makes AerCap Different? Our unique integrated platform allows us to create value throughout the life of aircraft and engines Manufacture Disassembly Disassemble Buy new aircraft Buy used aircraft Lease equipment to Sell used aircraft to aircraft for engine from the from the market a global cl
Slide 6: AerCap Portfolio & Risk Mitigants
AerCap Portfolio & Risk Mitigants 6
Slide 7: High Quality and Well Diversified Portfolio
High Quality and Well Diversified Portfolio Aircraft Portfolio as of March 31, 2008 Managed Owned Portfolio Portfolio 92% narrowbody – “Work Number of Number of Aircraft under Total Owned, Horses” of industry Number % Net book Aircraft Purchase Managed of Aircraft Value at 31 Number of on Order Co
Slide 8: AerCap Owned and Forward Order Aircraft
AerCap Owned and Forward Order Aircraft Comparison of Values from Appraisers versus Purchase Price of Aircraft Value of Aircraft Based on Data Published by External Appraisers ~$7.3 billion (~$9B incl. JV partner share)* Book Value/Cost of Aircraft ~$5.7 billion (~$7.5B incl. JV partner share)* ____
Slide 9: Customer Diversification
Customer Diversification Percentage of Lessee Lessee 2007 lease revenue Thai Airways International Public Co., Ltd. 6.0% Wizz Air Hungary Ltd. 4.2% US Airways 4.0% My Travel Airways PLC 3.9% Korean Air Lease & Finance Co., Ltd3. 3.4% Kingfisher Airlines Ltd. 3.4% Tombo Capital Corporation 3.3% India
Slide 10: Managing Our Aircraft Portfolio
Managing Our Aircraft Portfolio New Aircraft Leases (Months) Used Aircraft Leases (Months) 72.0 70.0 116.0 103.2 106.8 58.7 50.6 68.7 38.1 61.2 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Q1 Q1 Lease Terms in Months has Increased Significantly on AerCap Leases 10
Slide 11: Risk Mitigants
Risk Mitigants Portfolio purchased at significant discount to current market values Portfolio largely consists of favorable A320s and A330s Individual customer concentrations below 5% of lease revenue (all but one) Leases have good collateral (security deposits and maintenance reserves) Very ex
Slide 12: Recent Example of Airline Default
Recent Example of Airline Default Skybus in chapter 11 5 of AerCap A319s were at Skybus Demand for this type of aircraft is good AerCap was able to re-lease aircraft quickly to three different lessees at lease rentals the same (on average) as that received from Skybus AerCap had collected ~$
Slide 13: Environment
Environment * (AERCAP
Slide 14: 2008 Passenger Growth by Region
2008 Passenger Growth by Region 25 19.7 20 15.4 % Growth in RPKs 15 11 10 4.3 6.3 5.8 3.7 4 5 2.6 3.8 3 1.6 0 Africa Asia Europe Latin Middle North Total -5 Pacific America East America -4.3 -5.6 -10 March April Source: IATA 14
Slide 15: Fuel Costs
Fuel Costs Cost per seat/trip (500nm) at ~$65 per barrel - A320 = ~$12 - B734 = ~$14 - MD83 = ~$17 Cost per seat/trip (500nm) at ~$130 per barrel - A320 = ~$24 - B734 = ~$28 - MD83 = ~$33 Cost per seat/trip (500nm) at ~$195 per barrel - A320 = ~$36 - B734 = ~$42 - MD83 = ~$50 15
Slide 16: Funding
Funding * (AERCAP
Slide 17: Capital Requirements and Sources
Capital Requirements and Sources ~$6 Billion of Purchases ~$6 Billion (2008 – 2011) of Capital ~$1.0B Sales and Remaining ~$0.4B Financing Bank ~$1.3B Financing Sale of 7 Slots Cash Sources: ECA Completed Financings For Aircraft Cash in Bank in Process Portfolio Purchase Likely of Over $200 ~$1.0B F
Slide 18: Funding Environment
Funding Environment Capital Markets suspended, no immediate relief expected ECA Funding is available Commercial Bank Deals are available European Banks are most active in sector at present Funding Costs have risen The higher costs are to some extent, set off by lower interest rates Advance
Slide 19: Hedging Strategy and Interest Costs
Hedging Strategy and Interest Costs Hedging Strategy - Caps Used to Hedge Against Increases in Interest Rates - Caps Have an Initial Cost but Allow for the Benefits from Lower Interest Rates - Caps Generally Do Not Require Any Cash Collateral Lower Interest Costs Expected - AerCap Average Cost of
Slide 20: Growth Outlook & Quality of Earnings
Growth Outlook & Quality of Earnings 20
Slide 21: Balance Sheet Drivers
Balance Sheet Drivers ($ Billion) 2007 Expected Over Next 4 Years ~15 - 20% Growth Per Annum in Assets Expected Total Assets $4.4 Flight Equipment $3.2 Shareholder Equity $0.95 ~2x Current Equity Level Expected Debt/Equity Ratio 3.0 to 1 Lower Debt/Equity Ratio Expected 21
Slide 22: Sales Plan
Sales Plan 2008 Sales Revenue Expected to be Similar to 2007 (~$550 Million) - Aircraft Identified for Sale in 2008: 6 older A320s, 2 Fokkers, 2 A330s with Lessee Purchase Option, A300 Freighter, 3-4 Potential Others - AeroTurbine Aircraft Purchase/Sale Opportunities & Engine/Part Sales Outlook
Slide 23: Leasing Growth - Net Spread (Margin)
Leasing Growth - Net Spread (Margin) ($ Million) 2007 Avg. 2008 First Quarter Quarter % Increase Net Spread (Margin)* 70 86 23% * Net Spread = Basic rents minus interest expense (excluding non-cash charges relating to the mark-to-market of interest rate caps and ALS refinancing) 23
Slide 24: Growth & Quality of Earnings
Growth & Quality of Earnings Lease Assets and Margins Expected to Grow ~15-20% Per Annum Over 4 Years (2008 - 2011) Use of Caps and Lower Interest Rates, Along with Impact from Tax Restructuring, is Expected to Provide Significant Benefits Over 4 Year Period (2008 – 2011) % of Earnings from Sa
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