Aercap Holdings N.v. · NYSE:AER
Aercap — Q2 2008 Earnings Presentation
25 slides from Aercap's earnings presentation, Aug 7, 2008
Slide 1: AerCap Holdings N.V. Second Quarter 2008 Earnings Call
AerCap Holdings N.V. Second Quarter 2008 Earnings Call August 7, 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: Second Quarter 2008 Highlights
Second Quarter 2008 Highlights Net income was $58.2 million in the second quarter 2008, exclusive of non-cash impact relating to mark-to-market of interest rate caps and share-based compensation Earnings per share in the second quarter 2008 were $0.68 excluding the items referenced above Basic
Slide 4: Aircraft and Engine Transactions
Aircraft and Engine Transactions 49 new aircraft lease agreements and letters-of-intent executed during second quarter 2008 6 aircraft and 14 engines delivered to lessees during second quarter 2008 24 aircraft and 14 engines purchased during second quarter 2008 10 aircraft and 2 engines sold
Slide 5: Forward Order Aircraft
Forward Order Aircraft Total Option Option Option 5 5 5 Number of Aircraft Available Available Available 100 57 36 20 LOI LOI 15 9 LOI Sold Sold 7 4 Sold 7 7 Lease Lease Agreement Lease Agreement 45 Agreement 37 25 Delivered Delivered Delivered 8 6 2 As of Dec. 31, 2007 As of March 31, 2008 As of Ju
Slide 6: Net Income
Net Income ($ Million) 2Q 2007 2Q 2008 Total Net Income 34.2* 68.6 Adjusted for: Mark-to-market on interest rate caps (7.5) (11.9) (gains) Share-based compensation charges 2.0 1.5 Net Income excluding above 28.7 58.2 items * Second quarter 2007 net income included a $24 million charge (net of tax) r
Slide 7: Earnings Per Share
Earnings Per Share 2Q 2007 2Q 2008 Earnings Per Share $0.40* $0.81 Adjusted for: mark-to-market on interest rate caps and share (0.06) (0.13) based compensation Earnings Per Share $0.34 $0.68 excluding above items * Second quarter 2007 earnings per share included expenses from refinancing of $0.28 A
Slide 8: Net Spread (Margin)
Net Spread (Margin) ($ Millions) 2Q 2007 2Q 2008 % Change Basic Lease Rents 125 127 2% Less: Interest Expense* (50) (34) (32%) Net Spread (Margin) 75 93 24% Average Lease Assets 3,122 3,460 11% - Basic lease rents on floating rate leases were lower as a result of lower interest rates - Interest expe
Slide 9: Net Spread Trends
Net Spread Trends 2007 Avg. 2008 1st 2008 2nd ($ Millions) Quarter Quarter Quarter Net Spread (Margin)* 77 86 93 Growth in Net Spread Reflective of Growth in Leasing Income; 2008 Avg. Quarter Expected to be ~$95 Million (+23% over 2007) * Net Spread = Basic rents minus interest expense (excluding no
Slide 10: Total Revenue
Total Revenue ($ Millions) 2Q 2007 2Q 2008 Basic Lease Rents 125 127* Maintenance/End-of-Lease Revenue 16 18 Sales Revenue 84 180 Servicing Fees and Interest Income 13 8 Other Revenue 9 0 Up 35% over second Total Revenue 247 333 quarter 2007 * Amount is lower by ~$4 million from reduced rentals on f
Slide 11: Sales Revenue
Sales Revenue Optimizing Our Portfolio with Sales ($ Millions) 2Q 2007 2Q 2008 10 aircraft sold Aircraft Sales 59 150 1 Fokker 100 1 MD83 Engine Sales 5 8 1 MD82 Part Sales 20 22 1 B737-300 2 A321-200 4 A320-200 Total Sales Revenue 84 180 Gain from Aircraft Sales 18 32 11
Slide 12: Leasing Expenses and SG&A
Leasing Expenses and SG&A 2Q 2007 2Q 2008 % Change ($ Millions) Operating lease in costs 4.6 3.3 (28%) Leasing expenses 9.7 11.4 18% SG&A 27.6 32.7* 18% Total Leasing expenses and SG&A 41.9 47.4* 14% * $2.2 million of increase driven by higher Euro/U.S. dollar exchange rates 12
Slide 13: Tax Rate
Tax Rate FY 2007 1H 2008 Tax Rate for Aircraft 9.8% 7.6% Tax Rate for Engine/Parts 35.4% 27.5% Blended Tax Rate 11.8% 8.7% 13
Slide 14: Total Assets and Number of Aircraft/Engines
Total Assets and Number of Aircraft/Engines 6/30/2007 6/30/2008 ($ Millions) 5,218 5,000 18% increase over 4,411 2Q 2007 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) 346 314 sales
Slide 15: Purchases of Aviation Assets
Purchases of Aviation Assets ($ Millions) 1H 2008 Committed 2008 Aircraft Related 913 1,260 Engines/Airframes 20 37 Total Purchases 933 1,297 Number of Aircraft 43 51 Purchases (Units) 15
Slide 16: Portfolio Management Metrics
Portfolio Management Metrics Lease Portfolio FY 2007 2Q 2008 Utilization Rate 98.4% 97.6% Portfolio Yield (Year-to-Date)* 18.1% 17.4%** Average Term (Months) – New Aircraft Leases 107 120*** – Used Aircraft Leases 72 64**** * Lease revenue divided by average book value of flight equipment ** 2Q 2008
Slide 17: Aircraft Portfolio Valuation
Aircraft Portfolio Valuation Difference/ ($ Billion) NBV or External Appraisers Price Paid Appraisers Value A320 Family, A330s, & B737NGs (~95% of Portfolio; 5.37 6.93 23% …only ~12% > 8 Years of Age) B757s, B767s, A300s 0.08 0.13 38% (~1.5% of Portfolio) B737 Classics and All Others 0.20 0.26 23% (
Slide 18: Debt and Equity
Debt and Equity ($ Million) 2Q 2007 2Q 2008 Total Debt at end of Quarter 2,978 3,580 Average Cost of Debt in Quarter* 6.7% 4.1% Shareholder Equity at end of Quarter 856 1,073 Debt / Equity Ratio at end of Quarter 3.5 to 1 3.3 to 1 * Interest expense divided by average debt balance, excluding mark-to
Slide 19: Funding/Access to Capital
Funding/Access to Capital Unrestricted Cash Balance at June 30, 2008* $176 Million Operating Cash Flow for 2Q 2008** $86 Million Financing Transactions Completed in Q2 2008 – Nearly $2 Billion • ALS II – 30 new Aircraft Securitisation $1.0 Billion • TUI Portfolio Acquisition Facility $489 Million •
Slide 20: ALS II Limited
ALS II Limited $1 Billion “ALS II Ltd” Securitization provides financing requirements for 30 A320 family aircraft from forward order delivering between 2008 and 2010 Type of aircraft A319-100 5 aircraft Key features of deal include: ― Issuance of Class A1 and A2 floating rate notes ― Commitment to f
Slide 21: 2008 Financial Outlook
2008 Financial Outlook Purchases of aviation assets in all of 2008 expected to be ~$1.3 billion 2008 “net spread” from leasing (basic lease rents less interest expense) expected to increase ~23% over 2007 Full year 2008 gains from aircraft sales expected to be comparable with 2007 ― 2008 sales
Slide 22: Second Quarter 2008 Highlights
Second Quarter 2008 Highlights Net income was $58.2 million in the second quarter 2008, exclusive of non-cash impact relating to mark-to-market of interest rate caps and share-based compensation Earnings per share in the second quarter 2008 were $0.68 excluding the items referenced above Basic
Slide 23: Appendix: Additional Cash Flow Disclosures
Appendix: Additional Cash Flow Disclosures 23
Slide 24: Sales Revenue vs. Proceeds from Sales (Income vs. Cash Flow Statement)
Sales Revenue vs. Proceeds from Sales (Income vs. Cash Flow Statement) ($ Million) 2Q 2008 1H 2008 Sales Revenue ( from Income Statement) 181 323 Less: Inventory Sales* (34) (68) Add:Cash Received from Prior Period Sales 24 - Non-Cash Maintenance Sales Revenue (7) (7) Proceeds from Sales/Disposal of
Slide 25: Gain from Sales (Income vs. Cash Flow Statement)
Gain from Sales (Income vs. Cash Flow Statement) ($ Million) 2Q 2008 1H 2008 Gain from Sales (Income Statement) 40 73 …. Sales Revenue less COGS Less: Inventory Sales* (10) (20) Gain on Disposal of Assets 30 53 (Cash Flow Statement) * Reflected in Change in Assets /Liabilities in Cash Flow Statement