Aercap Holdings N.v. · NYSE:AER
Aercap — Q4 2007 Earnings Presentation
21 slides from Aercap's earnings presentation, Feb 27, 2008
Slide 1: AerCap Holdings N.V. Fourth Quarter 2007 Earnings Call
AerCap Holdings N.V. Fourth Quarter 2007 Earnings Call February 27, 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: Highlights
Highlights Net income was $57.0 million for fourth quarter 2007, exclusive of non-cash charges relating to mark-to-market of interest rate caps and share-based compensation Earnings per share for fourth quarter 2007 was $0.67 excluding the charges referenced above Total revenue for fourth quar
Slide 4: Aircraft and Engine Transactions
Aircraft and Engine Transactions 81 new aircraft lease agreements and letters-of-intent executed during 2007 33 aircraft and 51 engines delivered to lessees during 2007 40 aircraft and 18 engines purchased during 2007 24 aircraft and 22 engines sold during 2007 from our owned portfolio 4
Slide 5: Net Income
Net Income ($ Million) 4Q 2006 4Q 2007 FY 2006 FY 2007 Total Net Income (8.0) 45.1 109.0 188.5* Mark-to-market on interest rate 0.5 9.4 (6.8) 12.6 caps Share-based compensation 58.7 2.5 69.1 9.5 Net Income excluding above 51.2 57.0 171.3 210.6 charges ~$6.5 million over consensus 23% increase estima
Slide 6: Earnings Per Share
Earnings Per Share 4Q 2006 4Q 2007 FY 2006 FY 2007 Earnings Per Share $(0.10) $0.53 $1.38 $2.22* Adjusted for: mark-to-market on interest rate caps and share 0.73 0.14 0.79 0.26 based compensation Earnings Per Share excluding $0.63 $0.67 $2.17 $2.48 above charges ~$0.08 over * Full year 2007 also in
Slide 7: Total Revenue
Total Revenue ($ Million) 4Q 2006 4Q 2007 Basic Lease Rents 109 126* Basic rents Maintenance and End-of-Lease up 16% over 24 11 Revenue fourth Sales Revenue 65 138 quarter 2006 Management Fees and Interest 12 10 Income Other Revenue 2 0 Total Revenue 212 285 * 1Q 2008 expected to be ~$129 million ba
Slide 8: Sales Revenue
Sales Revenue Optimizing Our Portfolio with Sales ($ Million) 4Q2006 4Q 2007 Aircraft Sales 35 115 4Q 2007 (8 aircraft) Engine Sales 15 3 5 Fokker 100s 1 Dash8-100 Part Sales 15 20 1 A300 Freighter 1 A321 - 200 Sale Revenue 65 138 8
Slide 9: Leasing Expenses
Leasing Expenses ($ Million) 4Q 2006 4Q 2007 Maintenance Costs Paid By Lessor $4.5 $3.0 Transition Costs 3.0 -- Repossession Expenses 0.2 0.6 All Other 2.2 1.0 Total Leasing Expenses $9.9 $4.6 9
Slide 10: SG&A Expenses
SG&A Expenses FY 2006** FY 2007 % Change ($ Million) SG&A* 78.5 105.4 34% Revenues 814 1,177 45% SG&A as % of Revenue 9.7% 9.0% * Excluding share-based compensation ** Includes AeroTurbine for 8 months 10
Slide 11: Tax Rate
Tax Rate 2006 2007 Tax Rate for Aircraft 13.6% 9.8% Tax Rate for Engine/Parts* 8.0% 35.4% Blended Tax Rate 16.4% 11.8% * Engine / Parts business incurred a pre-tax loss in 2006, (due mostly to share-based compensation, which was not fully deductible for tax purposes,) resulting in a lower tax rate v
Slide 12: Total Assets and Number of Aircraft/Engines
Total Assets and Number of Aircraft/Engines ($ Million) 12/31/06 12/31/07 5,000 4,394 12 % increase over 12/31/06 3,918 Total Assets 4,000 Owned and on Balance Sheet 3,000 2,000 Number of Aircraft Owned, On Order, Managed, Decrease in units largely driven by Contracted, on LOI (units) 344 316 sales
Slide 13: Purchases of Aviation Assets
Purchases of Aviation Assets ($ Million) Full Year 2007 Committed 2008 Aircraft Related 693 658 Engines/Airframes 95 25 Total Purchases 788 683 Number of Aircraft 40 25 Purchases (Units) 13
Slide 14: Portfolio Management Metrics
Portfolio Management Metrics Aircraft Lease Portfolio FY 2006 FY 2007 Utilization Rate 98.9% 98.4% Portfolio Yield* 17% 18% Average Term (Months) – New Aircraft Leases 103 107** – Used Aircraft Leases 59 72 2008 Aircraft Lease Revenue Contracted as a % of 2007 Aircraft Lease Revenue: ~108% * Lease r
Slide 15: Debt
Debt ($ Million) 2006 2007 Total Debt at Year-End 2,555 2,893 Average Cost of Debt in Fourth Quarter* 7.6% 6.4% Debt / Equity Ratio at Year-End Based 3.4 to 1 3.0 to 1 on Book Equity of $950 million * Interest expense divided by average debt balance, excluding mark-to-market on interest rate caps 15
Slide 16: Interest Savings from Hedging Strategy
Interest Savings from Hedging Strategy AerCap uses caps to hedge against increases in interest rates - Caps have an initial cost but allow for the benefits from lower interest rates - Under no circumstances do caps require cash collateral Expected benefit in 2008 from lower interest rates: - Aer
Slide 17: Funding/Access to Capital
Funding/Access to Capital Cash Balance at December 31, 2007* $242 Million Operating Cash Flow for Full Year 2007** $206 Million Fourth Quarter Financings (Total of $440 Million) • A330 Pre-Delivery Payments Debt Facility $182 Million • Aircraft Acquisition Debt Facility $150 Million • AeroTurbine De
Slide 18: Contracted Purchases and Financing
Contracted Purchases and Financing 2008 and 2009 Contracted Purchases (Capex)* ~$1.8 billion Amount of Available Debt Financing** ~$1.6 billion Cash Requirement in 2008/2009*** ~$0.2 billion * Net of pre-delivery payments of ~$0.1 paid in previous years. ** Debt financing will be provided by either
Slide 19: AerCap Owned and Forward Order Aircraft
AerCap Owned and Forward Order Aircraft Value of Aircraft Based on Data Published by ~$9.0 billion External Appraisers* Book Value/Cost of Aircraft* ~$7.5 billion __________ Amount in Excess of Book Value/Cost ~$1.5 billion * Includes AerCap’s currently owned aircraft plus forward orders (and exclud
Slide 20: 2008 Financial Outlook
2008 Financial Outlook Purchases of aviation assets in 2008 expected to be ~$1 billion 2008 basic lease revenue expected to increase ~15% over 2007 2008 sales revenue expected to be comparable with 2007 (~50% already subject to LOI or contract) 2008 average cost of debt expected to be ~5.5%
Slide 21: Highlights
Highlights Net income was $57.0 million for fourth quarter 2007, exclusive of non-cash charges relating to mark-to-market of interest rate caps and share-based compensation Earnings per share for fourth quarter 2007 was $0.67 excluding the charges referenced above Total revenue for fourth quar