Slide 1: AerCap Holdings N.V. Third Quarter 2011 Earnings Call
AerCap Holdings N.V. Third Quarter 2011 Earnings Call November 8, 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: Third Quarter 2011 Financial Highlights
Third Quarter 2011 Financial Highlights Adjusted net income was $75.6 million for third quarter 2011, exclusive of the impact relating to mark-to-market of interest rate caps, share-based compensation, and one-time items relating to discontinued operations (disposition of AeroTurbine), an increase
Slide 4: Net Income
Net Income ($ Million) 3Q 2010 3Q 2011 YTD 2010 YTD 2011 Reported Net Income / (Loss) 51.9 (7.1) 135.1 95.8 Adjusted for: (Gain)/Loss from mark- 9.0 27.6 30.8 47.9 to-market on interest rate caps * Adjusted for: cost of share-based 0.2 1.6 1.5 4.1 compensation* Adjusted for: one-time items relating
Slide 5: Earnings Per Share
Earnings Per Share YTD YTD 3Q 2010 3Q 2011 2010 2011 Earnings Per Share $0.43 ($0.05) $1.25 $0.64 Adjusted for: mark-to-market on interest rate caps, share based compensation, one-time charges 0.08 0.56 0.30 0.86 relating to discontinued operations & buy-out of the Genesis portfolio servicing rights
Slide 6: Total Revenue
Total Revenue ($ Million) 3Q 2010 3Q 2011 Basic Lease Rents 225.1 238.6 Maintenance/End-of-Lease Revenue 14.3 27.0 Management Fees and Interest Income 3.9 5.3 Other Revenue 0.9 1.4 Revenue Excl. Sales 244.2 272.3 Sales Revenue 167.9 65.5 Total Revenue 412.1 337.8 6
Slide 7: Net Spread (Margin)
Net Spread (Margin) ($ Millions) 3Q 2010 3Q 2011 % Change Basic Lease Rents 225.1 238.6 6% Less: Interest Expense* (60.7) (56.3) (7%) Net Spread (Margin) 164.4 182.3 11% Average Lease Assets 7,475 7,955 6% Annualized Margin (% Lease Assets) 8.80% 9.17% * Excludes non-cash charges relating to the mar
Slide 8: Sales
Sales ($ Million) 3Q 2010 3Q 2011 Sales Revenue 167.9* 65.5** Gain from Sales 7.7 4.0 * 3Q 2010 aircraft sales includes sales of two new Airbus A320s and one new Airbus A330. ** 3Q 2011 aircraft sales includes the sales of six older aircraft (3 A320s, 1 A330, 1 B737-300 & 1 B757-200). 8
Slide 9: Leasing Expenses and SG&A
Leasing Expenses and SG&A ($ Million) 3Q 2010 3Q 2011 Variance Operating lease in costs 3.1 3.0 (0.1) Leasing expenses * 14.4 13.5 (0.9) SG&A** 11.8 32.0 20.2 Total Leasing Expenses/SG&A 29.3 48.5 19.2 * Details on slide 10 ** Details on slide 11 9
Slide 10: Leasing Expenses
Leasing Expenses ($ Million) 3Q 2010 3Q 2011 Variance Default Related Leasing 1.5 5.9 4.4 Expenses* Normal Transition Costs 6.9 3.4 (3.5) Lessor Maintenance 3.7 2.1 (1.6) Contributions Other Leasing Costs 2.3 2.1 (0.2) Total Leasing Expenses 14.4 13.5 (0.9) * Costs in Q3 2011 relate to airline defau
Slide 11: SG&A
SG&A ($ Million) 3Q 2010 3Q 2011 Variance Aircraft Management Fees 1.4 - (1.4) Mark-to-market of: foreign currency hedges, foreign (8.5) 11.4 19.9 currency cash balances, and other derivatives Share-based compensation 0.4 1.8 1.4 expenses Other Selling, General and 18.5 18.8 0.3 Administrative expen
Slide 12: Tax Rate
Tax Rate YTD 2011 FY 2010 & FY 2011 Estimate Blended Tax Rate* 8.6% Charge 6.6% Charge * The blended effective tax rate in any year is impacted by the source and amount of earnings among AerCap’s different tax jurisdictions. 12
Slide 13: Total Assets and Number of Aircraft/Engines
Total Assets and Number of Aircraft/Engines (Excluding Discontinued Operations) 3Q 2010 3Q 2011 ($ Millions) 9,339 9,553 10,000 8,000 Total Assets 2% increase over 6,000 3Q 2010 Owned and on Balance Sheet 4,000 2,000 0 Number of Aircraft The increase of 44 aircraft is driven by Owned, On Order, Mana
Slide 14: Committed Aircraft Purchases (As Of Sept. 30, 2011)
Committed Aircraft Purchases (As Of Sept. 30, 2011) ($ Million) FY 2011 FY 2012 Aircraft Purchases 934 932 Number of Aircraft 14 16 Purchases (Units) 14
Slide 15: Portfolio Management Metrics Owned Aircraft
Portfolio Management Metrics Owned Aircraft Lease Portfolio FY 2010 YTD 2011 Utilization Rate 98.3% 98.4% Portfolio Yield* 13.1% 13.2% Average Term (Months) – New Leases for New Aircraft 138 **147 – New Leases for Used Aircraft 62 *** 77 * Lease revenue divided by average book value of flight equipm
Slide 16: Cash
Cash ($ Millions) 3Q 2011 After AT Sale* Cash and Cash Equivalents at September 30, 274.3 427.2 2011 Total Cash Balance at September 30, 2011 485.0 637.9 (Incl. Restricted Cash) Operating Cash Flow for 3Q 2011 202.4 N/A *Pro-forma including cash impact from items relating to AeroTurbine sale 16
Slide 17: Debt and Equity
Debt and Equity ($ Millions) 3Q 2010 3Q 2011 Total Debt at Quarter-End 6,562 6,201 Average Cost of Debt (including 3.6% 3.6% amortization of debt issuance costs)* Average Cost of Debt (excluding 3.2% 3.2% amortization of debt issuance costs)* Equity 1,981 2,245 Debt / Equity Ratio 3.3 to 1 2.8 to 1
Slide 18: Share Repurchase Program
Share Repurchase Program AerCap had initiated share repurchase programs which allowed share repurchases of up to $100.0 million in 2011. 5.8 million shares had been acquired through September 30, 2011 at an average price of $10.47 per share (total consideration $60.6 million). • Average book val
Slide 19: 2011 Outlook – EPS Impact of Aircraft Sales / One-offs
2011 Outlook – EPS Impact of Aircraft Sales / One-offs YTD 2011 4Q 2011 Committed Aircraft Sales $0.06 $0.01 Other One-offs $0.01 $0.00 EPS Impact $0.07 $0.01 19
Slide 20: 2011 Financial Outlook (Excluding Discontinued Operations)
2011 Financial Outlook (Excluding Discontinued Operations) AerCap expects to grow EPS based on the committed aircraft purchases and the recently completed share repurchase program despite the continued uncertainties of the global economic environment. Set forth below are the anticipated drivers for
Slide 21: Commercial Update
Commercial Update * (AERCAP 21
Slide 22: Key Commercial Transactions Completed in 2011
Key Commercial Transactions Completed in 2011 Extension of $775 million Revolving Debt Facility ― Two year extension of revolving period to May 2013 then term out to 2016. ― Provides funding for up to 6 American Airlines aircraft. Buy-out of Genesis Servicing Contract from GECAS ― $24 million pa
Slide 23: Appendix
Appendix * (AERCAP 23
Slide 24: Impact from Defaults & Restructurings
Impact from Defaults & Restructurings ($ Million) FY 2010 YTD 2011 (Actual) (Actual) Lost Basic Lease Rents (Net of (3.4) (1.2) Security Deposits) Maintenance Rents Held 7.8 15.3 Default Related Leasing Expenses (7.8) (15.0) Default Related Impairment (5.5) 0.0 Charges Total Impact (Pre-tax) (8.9) (
Slide 25: Net Maintenance Contribution
Net Maintenance Contribution Full Year Full Year Full Year 2010 2011 Estimate 2012 Estimate * Maintenance 61.9 ~86.0 ~38.0 Rents Leasing (55.5) ~(59.0) ~(45.0) Expenses Pre-tax Impact 6.4 ~27.0 ~(7.0) EPS Impact $0.05 ~$0.16 ~($0.04) (after tax) * * 2012 estimates are adjusted for JV partners’ share
Slide 26: Aircraft and Engine Transactions Year To Date (September) 2011
Aircraft and Engine Transactions Year To Date (September) 2011 26 aircraft lease agreements & letters-of-intent executed 27 aircraft and 2 engines delivered to lessees 11 aircraft purchased 11 aircraft sold from our owned and managed portfolios 26
Slide 27: High Quality and Well-Diversified Portfolio
High Quality and Well-Diversified Portfolio Aircraft Portfolio as of September 30, 2011 Aircraft under Sale Number Number of / Purchase of Owned % Net Book Managed Aircraft on Contract or Total Aircraft Value Aircraft Order LOI Aircraft Airbus A300 Freighter 1 0.3% 0 0 0 1 Airbus A319 30 10.2% 0 0 0
Slide 28: Financial Impact of AeroTurbine Sale
Financial Impact of AeroTurbine Sale 28
Slide 29: Cash Impact from Items Relating to AeroTurbine Sale
Cash Impact from Items Relating to AeroTurbine Sale Cash ($ Million) Amount Purchase Price 228.0 AerCap Repurchase of Aircraft (57.2) Leasing Notes from AT Settlement of Intercompany 4.6 Receivables Transaction Related Expenses (22.5) Net Cash 152.9 29
Slide 30: Impact on Q3 Financial Statements from Items Relating to AeroTurbine Sale
Impact on Q3 Financial Statements from Items Relating to AeroTurbine Sale (Discontinued Operations) Assets Liabilities AT Before Sale 650.6 (391.0) Transfers (57.2)* 4.6** P&L Related Items (31.6)*** (22.5)**** Disposal Group Amount 561.8 (408.9) * Purchase by AerCap of Notes Relating to Aircraft Le