Aercap Holdings N.v. · NYSE:AER
Aercap — Q4 2010 Earnings Presentation
29 slides from Aercap's earnings presentation, Feb 24, 2011
Slide 1: Fourth Quarter 2010 Earnings Call
AerCap Holdings N.V. Fourth Quarter 2010 Earnings Call February 24, 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: Fourth Quarter 2010 Highlights
Fourth Quarter 2010 Highlights Net income was $56.3 million for fourth quarter 2010, exclusive of the impact relating to mark-to-market of interest rate caps and share-based compensation, an increase of 40% over fourth quarter 2009 Earnings per share for fourth quarter 2010 was $0.41, exclusive
Slide 4: Full Year 2010 Highlights
Full Year 2010 Highlights Net income was $223.9 million for 2010, exclusive of the impact relating to mark-to-market of interest rate caps and share-based compensation, a 49% increase over 2009 Earnings per share for 2010 was $1.95, exclusive of the impact relating to mark-to-market of interest
Slide 5: Net Income
Net Income ($ Million) 4Q 2009 4Q 2010 FY 2009 FY 2010 Total Net Income 43.2 72.4 165.2 207.6 Adjusted For: (Gain)/Loss from (3.7) (17.5) (18.2) 13.5 Mark-to-Market on Interest Rate Caps * Adjusted for: Cost of Share-Based 0.8 1.4 3.2 2.8 Compensation* Net Income excluding above 40.3 56.3 150.2 223.
Slide 6: Earnings Per Share
Earnings Per Share 4Q 2009 4Q 2010 FY 2009 FY 2010 Earnings Per Share $0.51 $0.53 $1.94 $1.81 Adjusted for: mark-to- market on interest rate caps (0.04) (0.12) (0.17) 0.14 and share based compensation Adjusted Earnings Per $0.47 $0.41 $1.77 $1.95 Share Average Shares Outstanding 85.0 136.0 85.0 115.
Slide 7: Sources of Earnings
Sources of Earnings ($ Millions) 2007 2010 3 Year Change Core Income (Primarily Leasing) 88.1 181.9 93.8 Gain from Sales & One-Off Revenue 122.5 42.0 (80.5) Adjusted Net Income (Ex MTM & Share Comp) 210.6 223.9 13.3 Core Income (Primarily Leasing) 42% 81% 39% Gain from Sales & One-Off Revenue 58% 19
Slide 8: Total Revenue
Total Revenue ($ Million) 4Q 2009 4Q 2010 FY 2009 FY 2010 Basic Lease Rents 156.6 245.2 581.9 878.4 Maintenance/End-of-Lease 9.1 25.6 68.7 82.4 Revenue Sales Revenue 115.9 121.3 324.8 850.0 Management Fees and 5.2 4.4 22.2 16.2 Interest Income Other Revenue 0.8 1.2 5.7 7.5 Total Revenue 287.6 397.7
Slide 9: Net Spread (Margin) - Fourth Quarter 2010
Net Spread (Margin) - Fourth Quarter 2010 ($ Millions) 4Q 2009 4Q 2010 % Change Basic Lease Rents 156.6 245.2 57% Less: Interest Expense* (30.2) (58.0) 92% Net Spread (Margin) 126.4 187.2 48% Average Lease Assets 5,025 8,075 61% Annualized Margin (% Lease Assets) ** 10.06% 9.27% * Excludes non-cash
Slide 10: Net Spread (Margin) – FY 2010
Net Spread (Margin) – FY 2010 ($ Millions) FY 2009 FY 2010 % Change Basic Lease Rents 581.9 878.4 51% Less: Interest Expense* (115.9) (212.6) 83% Net Spread (Margin) 466.0 665.8 43% Average Lease Assets 4,547 7,207 58% Annualized Margin (% Lease Assets) ** 10.25% 9.24% * Excludes non-cash charges re
Slide 11: Sales
Sales ($ Million) 4Q 2009 4Q 2010 FY 2009 FY 2010 Aircraft Sales 76.5 74.6 149.1* 666.5** Engine Sales 5.0 5.8 52.1 33.3 Part Sales 34.4 40.9 123.6 150.2 Total Sales Revenue 115.9 121.3 324.8 850.0 Total Gain from Sales 46.3 7.8 75.9 64.7 * 2009 aircraft sales include 5 forward positions, 1 new A320
Slide 12: Leasing Expenses and SG&A
Leasing Expenses and SG&A ($ Million) 4Q 2009 4Q 2010 FY 2009 FY 2010 Operating lease in costs 3.2 3.1 13.1 12.3 Leasing expenses * 13.3 24.4 65.2 68.1 SG&A 33.4 33.7 116.2 120.2 Other Expenses ** 1.1 0.0 3.0 0.0 Total Leasing Expenses 51.0 61.2 197.5 200.6 and SG&A * Details on following page ** Ac
Slide 13: Leasing Expenses
Leasing Expenses ($ Million) 4Q 2009 4Q 2010 FY 2009 FY 2010 Default Related Leasing 4.3 6.3 19.9* 7.8** Expenses Normal Transition Costs 4.2 2.5 12.9 15.9 Lessor Maintenance 0.8 8.7 12.5 21.5 Contributions AeroTurbine & Other 4.0 6.9 19.9 22.9 Leasing Costs Total Leasing Expenses 13.3 24.4 65.2 68.
Slide 14: Impact from Defaults & Restructuring
Impact from Defaults & Restructuring ($ Millions) 4Q 2010 FY 2010 FY 2009 Lost Basic Lease Rents (3.2) (3.4) (5.0) (Net of Security Deposits) Maintenance Rents Held 0.0 7.8 0.0 Default Related Leasing (6.3) (7.8)* (19.9) Expenses Default Related 0.0 (5.5) 0.0 Impairment Charges ** 2 Total Impact (Pr
Slide 15: Asset Impairments
Asset Impairments ($ Millions) Maintenance Asset Net Revenue* Impairments** Amount Actual 4th Qtr 2010 9.0 (8.9) 0.1 Full Year 2010 16.8 (14.4) 2.4 * Maintenance revenue reflects cash reserves held by AerCap on aircraft where lessee defaulted or an early termination was agreed ** $10.9 million of im
Slide 16: Tax Rate
Tax Rate FY 2009 FY 2010 Tax Rate for Aircraft 0.0% 8.9% Charge Tax Rate for Engine/Parts 36.8% Charge 34.2% Credit Blended Tax Rate* 1.9% Charge 8.6% Charge * The blended effective tax rate in any year is impacted by the source and amount of earnings among AerCap’s different tax jurisdictions. The
Slide 17: Total Assets and Number of Aircraft/Engines
Total Assets and Number of Aircraft/Engines Year-End 2009 Year-End 2010 ($ Millions) 9,601 10,000 8,000 6,770 Total Assets 42% increase over Owned and on 6,000 Year-end 2009 Balance Sheet 22% increase ($1.5B) 4,000 relates to Genesis Transaction 2,000 0 Number of Aircraft The increase of 59 aircraft
Slide 18: Purchases of Aviation Assets
Purchases of Aviation Assets ($ Million) Full Year 2010 Committed 2011 Aircraft Related 2,484 760 Engines/Airframes 75 - Total Purchases 2,559 760 Number of Aircraft Purchases 55 10 (Units) 18
Slide 19: Portfolio Management Metrics Owned Aircraft
Portfolio Management Metrics Owned Aircraft Lease Portfolio FY 2009 FY 2010 Utilization Rate 98.1% 98.3% Portfolio Yield* 14.3% 13.3% Average Term (Months) – New Leases for New Aircraft 139 **138 – New Leases for Used Aircraft 50 *** 62 * Lease revenue divided by average book value of flight equipme
Slide 20: Cash
Cash ($ Millions) FY 2010 Cash and Cash Equivalents at December 31, 2010 404.5 Total Cash Balance at December 31, 2010 626.9 (Incl. Restricted Cash) Operating Cash Flow for FY 2010 615.4 20
Slide 21: Debt and Equity
Debt and Equity ($ Millions) 4Q 2009 4Q 2010 Total Debt at Quarter-End 4,847 6,566 Average Cost of Debt* 2.5% 3.4% Equity 1,413 2,217 Debt / Equity Ratio** **3.4 to 1 **3.0 to 1 * Interest expense divided by average debt balance, excluding mark-to-market on interest rate caps and other small charges
Slide 22: 2011 Current Outlook – EPS Impact of Aircraft Sales / One-Offs
2011 Current Outlook – EPS Impact of Aircraft Sales / One-Offs 2010 2011 Committed Aircraft Sales $0.19 $0.00 Other One-Offs $0.02 $0.00 EPS Impact $0.21 $0.00 22
Slide 23: 2011 Financial Outlook
2011 Financial Outlook AerCap expects to grow earnings based on the committed aircraft purchases despite the continued uncertainties of the global economic environment. Set forth below are the anticipated drivers for AerCap’s 2011 financial performance, which are subject to change, in light of the h
Slide 24: Appendix
Appendix * (AERCAP 24
Slide 25: Aircraft and Engine Transactions Full Year 2010
Aircraft and Engine Transactions Full Year 2010 33 aircraft lease agreements & letters-of-intent executed 51 aircraft and 53 engines delivered to lessees 55 aircraft and 24 engines purchased (excluding the Genesis & Waha transactions) 20 aircraft and 16 engines sold from our owned and manage
Slide 26: Forward Order Aircraft
Forward Order Aircraft Boeing Order Boeing Order 15 15 4 Additional 4 Additional 4 Additional Options Options (1) Purchases Purchases Purchases 5 5 (2) (2) (2) Available LOI Sold Sold 20 3 16 16 Available Sold Lease 57 Lease 12 Agreements Agreements 10 Sold 15 9 Lease LOI Agreements 4 Lease 41 Deliv
Slide 27: High Quality and Well-Diversified Portfolio
High Quality and Well-Diversified Portfolio Aircraft Portfolio as of December 31, 2010 Aircraft 78% narrow body – “Work under Number Number of Purchase Horses” of industry of Owned % Net Book Managed Aircraft Contract Total Aircraft Value Aircraft on Order or LOI Aircraft High share of liquid /
Slide 28: Interest on Debt
Interest on Debt ($ Millions) 4Q 2009 4Q 2010 FY 2009 FY 2010 Interest on Debt from Financial 23.8 38.2 92.2 240.3 Statements Less: Mark-to-Market on Interest Rate Caps 6.4 19.8 23.7 (27.7) Interest on Debt Excl. MTM on 30.2 58.0 115.9 212.6 Caps (for Net Spread calc.) Less: Impact from Genesis Tran
Slide 29: Debt & Interest Rate Hedging
Debt & Interest Rate Hedging Segmentation of Debt Based on Type of Interest $ Billions (Approx.) Rate Hedge (December 31, 2010) Fixed Rate Debt 1.6 * Debt under Fixed Rate Swaps (from Genesis 0.8 Transaction) Debt Covered by Interest Rate Caps 3.0 Debt Related to Floating Rate/Short Term Leases 1.1