Aercap Holdings N.v. · NYSE:AER
Aercap — Investor Day (November 2019)
96 slides from Aercap's investor day presentation, Nov 11, 2019
Slide 1: Capital Markets Day
Capital Markets Day AerCap Holdings N.V. November 11, 2019 D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 2: Disclaimer Including Forward Looking Statements & Safe Harbor
Disclaimer Including Forward Looking Statements & Safe Harbor This presentation contains certain statements, estimates and forecasts with as required by applicable law, we do not undertake any obligation to, and will respect to future performance and events. These statements, estimates and not, upda
Slide 3: Introduction
Introduction Joseph McGinley Head of Investor Relations D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 4: Today's Speakers
Today’s Speakers Introduction Joseph McGinley Head of Investor Relations AerCap Overview Aengus Kelly Chief Executive Officer Leasing Philip Scruggs President & Chief Commercial Officer Bart Ligthart Portfolio Management Head of Trading and Portfolio Management Joe Venuto Technical Chief Technical O
Slide 5: AerCap Update
AerCap Update Aengus Kelly Chief Executive Officer D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 6: Today's Key Messages
Today’s Key Messages Aircraft leasing is a growing industry AerCap is the global leader with a superior platform Our portfolio is high-quality and well-diversified Culture of action leads to superior performance Track record of long-term value creation will continue © 2019 AerCap | Confidential prop
Slide 7: Aircraft Leasing is a Growing Industry
Aircraft Leasing is a Growing Industry AIR TRAVEL MARKET IS MIDDLE CLASS IS GROWING GROWING AND FLYING Air traffic has doubled every 15 Over the next 20 years, the global years and this growth is forecast middle class is expected to grow to continue from 4 billion to 6 billion AIRLINES NEED OVER INC
Slide 8: AerCap is the Global Leader
AerCap is the Global Leader Total assets of over $43bn, makes AerCap the largest aircraft lessor in the world 15% 12% 32% This is only a selected group of lessors LEASING MARKET SHARE by fleet size 41% © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission
Slide 9: AerCap is the Global Leader – Deliveries
AerCap is the Global Leader – Deliveries Over the past 25 years, AerCap has been the largest customer of the OEMs Deliveries from OEMs Since 1994 1468 1015 990 817 732 673 552 535 531 476 AerCap GECAS American United Delta Southwest China Eastern IAG Ryanair China Southern Airlines Airlines Airlines
Slide 10: Global Leader – The Past 5 Years
Global Leader – The Past 5 Years >2,000 AIRCRAFT >$15 BILLION >$5 BILLION Purchased, Operating Net income leased or sold cash flow ~$10 BILLION ~$23 BILLION ~$4 BILLION De-levering Capex Returned to 3.8x to 2.7x Shareholders See Appendix for a reconciliation of Adjusted Debt / Equity Ratio to the co
Slide 11: Global Leader – Superior Platform
Global Leader – Superior Platform AerCap’s superior platform delivers superior returns CAPITAL MANAGEMENT Disciplined deployment LIQUIDITY of excess capital Diversified funding LEASING sources >$40bn of contracted PORTFOLIO future lease revenue OPTIMIZATION Data-driven decision-making PORTFOLIO MANA
Slide 12: Culture of Action Drives Strong Performance
Culture of Action Drives Strong Performance Our wealth of information allows us to act quickly and decisively 787 Air Berlin Jet Airways Purchase Repossession Repossession © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 12
Slide 13: Culture of Action Mitigates Key Risks
Culture of Action Mitigates Key Risks Credit Funding Residual value © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 13
Slide 14: AerCap Portfolio Transformation – 2014
AerCap Portfolio Transformation – 2014 In 2014, AerCap had an overall fleet average age of 7.7 years and lease term of 5.7 years AerCap’s Transition to New Technology % of Fleet 35% Current Technology New Technology 30% A320 Family 737NGs 25% 20% A330s 15% 777s 10% 787s 5% 0% - 3 6 9 12 Average Age
Slide 15: AerCap Portfolio Transformation – 2015
AerCap Portfolio Transformation – 2015 In 2015, AerCap had an overall fleet average age of 7.7 years and lease term of 5.9 years AerCap’s Transition to New Technology % of Fleet 35% Current Technology New Technology 30% 737NGs A320 Family 25% 20% A330s 15% 777s 787s 10% 5% 0% A350s - 3 6 9 12 Averag
Slide 16: AerCap Portfolio Transformation – 2016
AerCap Portfolio Transformation – 2016 In 2016, AerCap had an overall fleet average age of 7.4 years and lease term of 6.4 years AerCap’s Transition to New Technology % of Fleet 35% Current Technology New Technology 30% 737NGs 25% A320 Family 20% 787s 15% A330s 10% 777s 5% A350s A320neo Family 0% -
Slide 17: AerCap Portfolio Transformation – 2017
AerCap Portfolio Transformation – 2017 In 2017, AerCap had an overall fleet average age of 6.8 years and lease term of 6.9 years AerCap’s Transition to New Technology % of Fleet 35% Current Technology New Technology 30% 25% 737NGs 787s 20% A320 Family 15% A330s A320neo Family 10% 777s A350s 5% 0% -
Slide 18: AerCap Portfolio Transformation – 2018
AerCap Portfolio Transformation – 2018 In 2018, AerCap had an overall fleet average age of 6.3 years and lease term of 7.4 years AerCap’s Transition to New Technology % of Fleet 35% Current Technology New Technology 30% 25% 787s 737NGs 20% A320neo Family A320 Family 15% 10% A330s A350s 777s 5% 737 M
Slide 19: AerCap Portfolio Transformation – 3Q 2019
AerCap Portfolio Transformation – 3Q 2019 Now - AerCap has an overall fleet average age of 6.2 years and lease term of 7.5 years AerCap’s Transition to New Technology % of Fleet 35% Current Technology New Technology 30% 787s 25% 20% A320neo Family 737NGs 15% A320 Family 10% A350s A330s 5% 777s E2s 7
Slide 20: AerCap's High Quality Portfolio
AerCap’s High Quality Portfolio AerCap has the highest proportion of new technology aircraft among the top 10 lessors Average Age of Current Technology Aircraft 11 years 6 years 6 years 7 years 7 years 4 years 7 years 11 years 5 years 7 years Current Technology New Technology 100% 45% 48% 59% 62% 64
Slide 21: Long-Term Value Creation Throughout the Cycle
Long-Term Value Creation Throughout the Cycle AerCap’s dynamic approach to capital allocation adds value throughout the cycle Debt Paydown Purchase Aircraft CAPITAL ALLOCATION OPTIONS Return Capital M&A © 2019 AerCap | Confidential property of the company, not for disclosure or use without permissio
Slide 22: Long-Term Sustainable Returns
Long-Term Sustainable Returns AerCap’s long-term focus is one of our core values ENVIRONMENTAL SOCIAL GOVERNANCE Purchase only new-generation, fuel-efficient Encourage social mobility and contribute Majority independent Board. Board is aircraft. By 2021, new technology aircraft to the growth, afford
Slide 23: Well-Positioned for the Future
Well-Positioned for the Future 55% >$40 2027 BILLION NEW TECHNOLOGY CONTRACTED FUTURE AVERAGE AIRCRAFT AS % OF LEASE REVENUES LEASE END DATE CURRENT FLEET NBV © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 23
Slide 24: Leasing
Leasing Philip Scruggs President & Chief Commercial Officer D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 25: Introduction
Introduction Strong Demand for Aircraft The AerCap Platform is a Competitive Advantage Stable and Predictable Revenue © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 25
Slide 26: New Technology Stimulates Demand
New Technology Stimulates Demand Greater range opens new routes A321-100 A321LR 767 787 1994 Original A321-100 NEW YORK CITY AMMAN BORDEAUX MONTREAL 2019 767-300ER 11.4h A321LR 229 passengers 787-8 15.1h 248 passengers SINCE ENTERING SERVICE, THE 787 HAS CONNECTED 235 NEW POINT-TO-POINT ROUTES For i
Slide 27: New Technology Stimulates Demand
New Technology Stimulates Demand More efficient new technology aircraft drive the replacement cycle The A320neo Power – 20% Fuel Burn Saving per Seat 100% 20% SAVINGS 80% CEO Costs Engine + 15 Seats Sharklets Installation Impact NEO Costs Performance on Weight & Drag © 2019 AerCap | Confidential pro
Slide 28: The AerCap Advantage – Vision, Reach & Scale
The AerCap Advantage – Vision, Reach & Scale Systematic aggregation and distribution of proprietary information ~1,000 CUSTOMER TRIP REPORTS The volume of market intelligence ~500 416 LETTERS OF gathered in a Optimal INTENT 12-month window gives us decision- Aircraft unparalleled insight making Tran
Slide 29: The AerCap Advantage – Vision, Reach & Scale
The AerCap Advantage – Vision, Reach & Scale Vision, reach and scale in an opaque market translates into the systematic, repeatable aggregation and distribution of information across the AerCap business that allows us to make better decisions. © 2019 AerCap | Confidential property of the company, no
Slide 30: The AerCap Advantage – Vision
The AerCap Advantage – Vision Managing our order book to provide unique solutions to complex problems Airline A A320neo position Airline B A320neo position Airline C MAX position accelerated from H2 2019 Airline C A320neo position 2018 SCENARIO Airline A: Seeking deferral of 3 units from H1 3 x 1H 2
Slide 31: The AerCap Advantage – Reach
The AerCap Advantage – Reach LONG-STANDING RELATIONSHIPS NEW RELATIONSHIPS Years of Number of AerCap Lessor AerCap Lessor Customer Customer Number of Aircraft Relationship Aircraft Market Position Market Position 32 86 #1 17 #1 27 76 #1 6 #1 22 23 #1 13 #1 24 30 #1 6 #2 31 37 #1 9 #2 16 21 #1 7 #1 2
Slide 32: The AerCap Advantage – Scale
The AerCap Advantage – Scale AerCap’s scale facilitates large, complex deals Access to Modern, Fuel-Efficient Aircraft Access to a Diverse Portfolio of Used Aircraft 8 new Boeing 787-9s & 25 used Airbus A319s EgyptAir 15 new Airbus A320neo Family United Airlines Access to AerCap’s diverse order bo
Slide 33: Stable and Predictable Revenue
Stable and Predictable Revenue Early placements drive stability Used Aircraft Required Placements Order Book Required Placements 63 19 3 15 - - REMAINING 2019 2020 2021 REMAINING 2019 2020 2021 Aircraft requiring placement OVER THE LAST 2 YEARS, AERCAP HAS EXECUTED OVER 466 LEASE TRANSACTIONS AERCAP
Slide 34: Stable and Predictable Revenue
Stable and Predictable Revenue Long lease terms drive predictability 18 13.7 16 years AerCap typically 12.1 11.8 leases new aircraft years 14 years 11.3 11.1 10.9 years years years for 12 years 12 (Years) 10 7.5 6.8 6.9 8 6.9 7.2 8.2 6 Average Lease Term 4 Average Age 6.2 5.3 4.9 2 4.2 3.7 3.1 0 ACG
Slide 35: Clear Visibility of Top Line Revenue
Clear Visibility of Top Line Revenue ~3% ~100% ~98% ~93% Click to insert chart\ ~97% 2020 2021 2022 Contracted lease revenues through 2022 Contracted revenues as a % of expected total lease rents Assumed lease revenues Refer to slide 2: Disclaimer incl. Forward Looking Statements & Safe Harbor. © 20
Slide 36: Conclusions
Conclusions Strong Demand for Aircraft The AerCap Platform is a Competitive Advantage Stable and Predictable Revenue © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 36
Slide 37: Portfolio Management
Portfolio Management Bart Ligthart Head of Trading and Portfolio Management D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 38: Introduction
Introduction Liquid Market for Aircraft Sales Proven Aircraft Selection Process and Execution Deep and Stable Buyer Base © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 38
Slide 39: Last 5 Years Trading Track Record
Last 5 Years Trading Track Record AerCap is the dominant player in mid-life aircraft sales FOCUS ON MID-LIFE AIRCRAFT TO IMPROVE OVERALL QUALITY OF OUR PORTFOLIO AND EARNINGS 56% NARROWBODY 521 Includes 451 Owned and 70 Managed Aircraft ~$11B Last 5 Years Owned Aircraft Sales 15 YEARS Average Age of
Slide 40: Repeatable Sales Performance
Repeatable Sales Performance AerCap’s trading results since 2006 have been consistent and repeatable ~$16.5 ~860 ~8% ~30% BILLION Owned Aircraft Owned & Managed Average Average Sale Premium Sales Proceeds Aircraft Sold Gain on Sale to Book Equity Value © 2019 AerCap | Confidential property of the co
Slide 41: Realizing Platform Value
Realizing Platform Value AerCap’s platform ensures consistent and repeatable sales results BUY THE RIGHT AIRCRAFT LONG-TERM LEASES Optimal ~860 Execution Aircraft Sales Since 2006 UTILIZE TECHNICAL DATABASE EXPERIENCED TEAMS © 2019 AerCap | Confidential property of the company, not for disclosure or
Slide 42: Aircraft Selection Process
Aircraft Selection Process BETTER MARKET EXPERIENCE & DISCIPLINE BUYER BASE INFORMATION PROCESSES ~1,000 Trip Reports Over 1,250 Technical Focused on long-term Transacted with >50 per year transactions in the last 5 value maximization non-airline buyers years and selling right assets in the
Slide 43: Disciplined Sales Program
Disciplined Sales Program Disciplined sales approach in line with portfolio transformation strategy NARROWBODY ~$5.7bn WIDEBODY ~$4.5bn OTHER ~$0.8bn 56 92 44% 29 62 56% 54 $2.2bn $1.7bn 19 Last 5 years $1.7bn 48 $1.5bn 43 48 $1.1bn $0.8bn $0.6bn $0.8bn $0.6bn A319 A320 A321 B737-700 B737-800 A330 A
Slide 44: Trading Depth, Scale & Diversification
Trading Depth, Scale & Diversification Global buyer base has developed over the last 5 years of proactive trading End-of-Life, 4% Airline, 19% Lessor, 13% 66% 18% NORTH 7% ~$11B AMERICA EUROPE 9% Last 5 Years Owned Aircraft ASIA PACIFIC Sold MIDDLE EAST & OTHER Financial Investor, 64% © 2019 AerCap
Slide 45: The Business Case for Aircraft Investments
The Business Case for Aircraft Investments Investment rationale is different across investor spectrum % of AerCap Sales Investor Segment Investment Rationale % Far East / High Growth Lessors Strategic Growth / Scale Up 14 0–8 Established Lessors Stable Long-Term Contracted Cash Flows YEARS
Slide 46: Stimulating Demand from New Buyers
Stimulating Demand from New Buyers 2 large portfolios sold to new entrant NCB Capital, the largest bank in Saudi Arabia Sourcing first Educating Assistance time aviation buyers on with fund Executing Servicing buyers industry raising transaction portfolio 1 2 3 4 5 2 40 $1.4 PORTFOLIOS AIRCRAFT BILL
Slide 47: Conclusions
Conclusions Liquid Market for Aircraft Sales Proven Aircraft Selection Process and Execution Deep and Stable Buyer Base © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 47
Slide 48: Technical
Technical Joe Venuto Technical D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 49: Introduction
Introduction Depth and Experience of Technical Team Unmatched Proprietary Systems and Information Technical Team is Involved in all Asset Decisions of the Company Capability Drives Portfolio Optimization and Financial Benefit for AerCap © 2019 AerCap | Confidential property of the company, not for d
Slide 50: AerCap's Technical Expertise
AerCap’s Technical Expertise Average Knowledge Team size Completed experience of Base System (KBS) ~27 >1,250 ~100 >600 YEARS EVENTS PEOPLE AIRCRAFT TRANSITIONS OUR TECHNICAL TEAM SIZE IS LARGER THAN MOST OTHER LESSORS’ ENTIRE STAFF © 2019 AerCap | Confidential property of the company, not for discl
Slide 51: Critical Information Advantage
Critical Information Advantage ~320 HEAVY AIRFRAME EVENTS ~530 High volume of ENGINE maintenance events OVERHAULS and aircraft transitions in the last Knowledge Optimal 5 years feeds our ~220 APU Base System decision- proprietary database OVERHAULS (KBS) making ~180 LANDING GEAR OVERHAULS >600 AIRCR
Slide 52: Technical Monitoring, ~$1 Billion Budget
Technical Monitoring, ~$1 Billion Budget AerCap actively monitors maintenance events across all aircraft components Airframes Landing Gear APU Engines Engine LLPs © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 52
Slide 53: Portfolio Optimization Case Studies
Portfolio Optimization Case Studies 18 x A319s and Boeing 767 12 x B737s Transitioned from Asia Engine exchange to United and Southwest >$70m BENEFIT Boeing 777-300ER 777-200ER Galleys Retirements and engines Designed utilized elsewhere in fleet engineering solution © 2019 AerCap | Confidential prop
Slide 54: Types of Aircraft Transitions
Types of Aircraft Transitions BACK-TO-BACK REPOSSESSION EARLY TRANSFER RETURN Scheduled return and delivery. Non-scheduled aircraft repossession (prior Cooperative discussions that result in an The “Tricky Triangle” – different objectives to lease expiry date) due to lessee default or aircraft comin
Slide 55: Conclusions
Conclusions Depth and Experience of Technical Team Unmatched Proprietary Systems and Information Technical Team is Involved in all Asset Decisions of the Company Capability Drives Portfolio Optimization and Financial Benefit for AerCap © 2019 AerCap | Confidential property of the company, not for di
Slide 56: Risk
Risk Anton Joiner Chief Risk Officer D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 57: Introduction
Introduction Diversification and Quality Scale and Agility Culture of Action © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 57
Slide 58: Pivotal Role of Risk Management
Pivotal Role of Risk Management Multi-disciplinary approach to customer credit management Lessee Watch Workout / Diligence List Repossession WATCH MONITOR MANAGE THROUGH OUR DAILY AIRLINE INTERACTIONS, AERCAP HAS UNMATCHED VISIBILITY ON MARKET DEVELOPMENTS © 2019 AerCap | Confidential property of th
Slide 59: Credit Strength and Diversity
Credit Strength and Diversity Strong underlying lessee credit quality despite challenges for certain airlines Trade Receivables Strong Portfolio Customer Credit Score Despite Numerous Credit Events 10 200 Outstanding 10 = DEFAULT 5.77 ≈ BB 8 = 4 Days 150 Payables 6 (Credit Score) ($ million) 100 4 5
Slide 60: Active Use of Lease Protections
Active Use of Lease Protections Sample Lease Protections Full Restriction Ability to Advance Lessor’s “Hell or operational on removal ground rental power to high water” indemnities of parts aircraft payment de-register payment clause Lessee hull Entire cost loss, war Maintenance Security Strict Deta
Slide 61: Repossession Management
Repossession Management AerCap has successfully repossessed aircraft in challenging jurisdictions Lithuania Ukraine AerCap has repossessed Poland >125 Denmark Belgium Russia Bulgaria UK Georgia Aircraft Germany Armenia France Afghanistan Italy Spain Greece India from Cape El Salvador Verde Pakistan
Slide 62: Scale and Agility in Action: Shaheen
Scale and Agility in Action: Shaheen Example of our ability to de-risk effectively in a challenging environment ($ million) A330s Sold to Other Lessors Peak exposure of 20 aircraft with a NBV $400 Sold Off Lease of ~$400m at Sept. 30, 2016 Leased to Another Party Process $300 Sell down Conti
Slide 63: Scale and Agility in Action: Primera
Scale and Agility in Action: Primera Decisive action and preparation are key components of a successful aircraft repossession AerCap had 3 aircraft on lease when Primera filed for bankruptcy – effective risk mitigation began 2 months prior to bankruptcy -4 HOURS +12 HOURS +18 HOURS +24 HOURS +36 HOU
Slide 64: Results of Active Risk Management
Results of Active Risk Management ~1% AVERAGE CREDIT COSTS OF LEASE REVENUE © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 64
Slide 65: Conclusions
Conclusions Diversification and Quality Scale and Agility Culture of Action © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 65
Slide 66: Funding & Liquidity
Funding & Liquidity Brian Canniffe Group Treasurer D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 67: Introduction
Introduction Broad and Growing Financing Market Diversification of Capital Structure Upward Ratings Trajectory © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 67
Slide 68: Evolution of Aviation Financing
Evolution of Aviation Financing New aircraft delivery financing has doubled over the past decade • AVIATION FINANCING IS NOW A MORE FINANCEABLE ASSET CLASS Sources of Delivery Financing 143 122 122 122 126 10 115 5 16 10 5 104 96 17 49 27 40 49 77 37 54 ($ Billion) 69 32 38 62 25 31 21 43 21 22 37 3
Slide 69: Conservative Approach to Liquidity & Funding
Conservative Approach to Liquidity & Funding Access to Debt Mix Leverage Capital Diverse sources Secured debt-to-total assets 2.7 to 1 of funding trending towards 20% debt-to-equity target Liquidity Interest Rate Risk Sources to uses Hedged interest rate greater than 1.2x exposure See Appendix for a
Slide 70: AerCap's Diversified Capital Structure
AerCap’s Diversified Capital Structure 4Q 2009 3Q 2019 Unsecured Unsecured Senior Revolvers Term Subordinated Senior Revolvers Term Subordinated Notes Loans Notes Notes Loans Notes $5.0bn $0 $0 $0 $0 $15.4bn ($0 drawn) $2.0bn $2.3bn Secured Secured Export Institutional ABS Warehouse Other Export Ins
Slide 71: Diversified Funding Footprint
Diversified Funding Footprint AerCap’s banking group is geographically diversified NORTH AMERICA EMEA ASIA PACIFIC Dec. 2009 Sep. 2019 Dec. 2009 Sep. 2019 Dec. 2009 Sep. 2019 2% 9% 28% 35% $0.1B $6.0B $5.9B $6.3B $0.6B $4.8B 89% 37% 4 25 19 29 5 68 Lenders Lenders Lenders Lenders Lenders Lenders © 2
Slide 72: Benefits of Secured Funding
Benefits of Secured Funding AerCap has reduced secured debt-to-total assets to ~24% at September 30, 2019 DIVERSIFICATION PRICING AMORTIZING FLEXIBILITY DEEP SUPPLY © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 72
Slide 73: Industry Leading Liquidity Position
Industry Leading Liquidity Position We continue to maintain strong liquidity with $9.1 billion available as of September 30, 2019 • AERCAP HAS CONSISTENTLY MAINTAINED STRONG LIQUIDITY COVERAGE EVERY QUARTER Liquidity Levels and Coverage from 3Q14 to 3Q19 2.0x 2.0x 1.6x 1.7x 1.6x 1.6x 1.5x 1.5x 1.5x
Slide 74: Upward Ratings Trajectory
Upward Ratings Trajectory AerCap’s credit metrics have continued to improve, leading to positive rating actions BBB Baa3 BBB- Stable Positive Stable Fitch Criteria 2.7x Debt/Equity Ratio Differentiated Risk Management Liquid Aircraft Portfolio Robust Liquidity Policy Average Age approaching 6 years
Slide 75: Conclusions
Conclusions Broad and Growing Financing Market Diversification of Capital Structure Upward Ratings Trajectory © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 75
Slide 76: Financial Outlook
Financial Outlook Peter Juhas Chief Financial Officer D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 77: Introduction
Introduction Predictable Earnings and Cash Flows Effective Capital Allocation Well-Positioned for Future Attractive Entry Point for Investors © 2019 AerCap | Confidential property of the company, not for disclosure or use without permission 77
Slide 78: Predictable, Contracted Lease Rents
Predictable, Contracted Lease Rents Lease revenues are highly predictable because our leases are long-dated and contracted well in advance ~3% ~100% ~98% ~93% Click to insert chart\ ~97% 2020 2021 2022 Contracted lease revenues through 2022 Contracted revenues as a % of expected total lease rents As
Slide 79: Consistent Earnings and Cash Flows
Consistent Earnings and Cash Flows AerCap’s platform has generated strong and consistent results US GAAP Net Income (~$2.1 billion) $ mm 350 300 AVERAGE: ~$265 MILLION PER QUARTER 250 200 $331 150 $266 $265 $263 $270 $254 $233 $234 100 50 0 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 © 2019 AerCap | Con
Slide 80: Aircraft Sales at Attractive Margins
Aircraft Sales at Attractive Margins We have consistently sold aircraft at a significant premium to our carrying values Sales Volume and Margin Over the Last 8 Quarters $ mm 800 40% Sales Volume Gain on Sale 700 35% 600 30% 500 25% 400 20% $757 $738 18% 300 $642 15% 13% $561 $515 $502 12% $340 200 1
Slide 81: Effective Capital Allocation
Effective Capital Allocation Dynamic capital allocation policy enables deployment of capital towards most productive uses Aircraft Purchases ~$23 billion Strong capital generation provides De-Levering Mergers & financial flexibility Acquisitions ~$10 and capital allocation opportunities billion Retu
Slide 82: Capturing Arbitrage Benefits
Capturing Arbitrage Benefits Taking advantage of the differential between public and private markets for aircraft to create value Aircraft Sales and Share Repurchases Since 2016 150% Over the last 13 years we have ~132% sold ~860 aircraft at an average gain on sale of ~8%, which 125% represents a
Slide 83: Recycling Excess Capital
Recycling Excess Capital Proactive capital allocation approach results in a stronger, more valuable business Higher EPS Better quality portfolio Use of proceeds Lower lease assets and Sales of older, less from aircraft sales to revenues desirable aircraft at a purchase stock at a Lower lease
Slide 84: Superior Return of Capital to Shareholders
Superior Return of Capital to Shareholders AerCap has created significant value for long-term shareholders through disciplined capital allocation ~87m ~$4bn >41% 99th shares of share of the company percentile of all repurchased repurchases repurchased S&P 500 companies since 2015 since 2015 since 20
Slide 85: Key Performance Drivers and Metrics
Key Performance Drivers and Metrics Main drivers are new aircraft deliveries, aircraft sales and capital redeployment 2018A 2019E 2020E EPS Excluding Gain on Sales $5.65 ~$6.80 – $7.00 ~$7.00 – $7.40 Contracted Purchases ($ billion) $5.9 ~$4.7 ~$4.2 Expected Aircraft Sales ($ billion) $2.2 ~$2.2 ~$1
Slide 86: Positive EPS Outlook
Positive EPS Outlook Record EPS expected in 2019 with continued growth in 2020 TBD $0.90 YTD $6.83 $1.18 ~$6.80 - $7.00 ~$7.00 - $7.40 $5.65 2018A 2019E 2020E Diluted EPS Excluding Gain on Sales Gain on Sales Refer to slide 2: Disclaimer incl. Forward Looking Statements & Safe Harbor. © 2019 AerCap
Slide 87: Attractive Entry Point
Attractive Entry Point AerCap has a higher return on current market value than other North American financial institutions 2019E Return on Equity / Price-to-Book Ratio 14% 12% 11% 11% 10% 10% 10% 10% 9% 9% 9% 9% 9% 9% 8% 8% 8% 8% 8% 5% AER CMA CFG C FITB KEY SIVB RF ZION HBAN MTB BAC WFC PNC JPM STI
Slide 88: Equity Overhang Removed
Equity Overhang Removed The volatility and downward pressure created by large legacy shareholder sales is coming to an end AIG ~98 million SHARES SOLD Since 2015, legacy shareholders AIG and Waha have sold ~120 million 46% → 0% AerCap shares AerCap These sales created volatility and ~133 million
Slide 89: Compelling Opportunity for Investors
Compelling Opportunity for Investors EXPECTED BOOK VALUE PER SHARE OF ~$100 BY 2023 Book Value Per Share Trajectory Predictable earnings and cash flows ~$72 $63 $57 Effective capital allocation $49 $42 $37 Well-positioned for future: strong performance in 2019 and positive outlook for 2020 Attractiv
Slide 90: Thank You
Go raibh maith agat Danke GRAZIE THANK YOU Bedankt GRACIAS Merci AerCap House T: +353 1 819 2010 65 St. Stephen’s Green E: contact@aercap.com Dublin D02 YX20 W: aercap.com Ireland D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h
Slide 91: Q&A
Q&A D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 92: Appendix
Appendix D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Slide 93: Capital Structure
Capital Structure Summary Sept. 30, 2019 Adjusted Debt / Equity Ratio 2.75 to 1 Adjusted Debt/Equity Calculation ($ million) Sept. 30, 2019 Debt (including fair value adjustments) 29,284 Adjusted for: • Unrestricted cash & cash equivalents (1,037) • 50% equity credit for long-term subordinated debt
Slide 94: Endnotes
Endnotes Unless otherwise stated, data as of September 30, 2019. SLIDE 16: AerCap Portfolio Transformation – 2016 1. As of December 31, 2016, weighted average age based on NBV of the owned fleet. SLIDE 7: Aircraft Leasing is a Growing Industry 2. NBV as a percentage of the overall fleet NBV as of De
Slide 95: Endnotes
Endnotes SLIDE 28: The AerCap Advantage – Vision, Reach & Scale SLIDE 45: The Business Case for Aircraft Investments Last 12 months ends September 30, 2019. Includes owned and managed aircraft that have been leased, In the five years to September 30, 2019. Includes finance and sales-type leases. pur
Slide 96: Endnotes
Endnotes SLIDE 80: Aircraft Sales at Attractive Margins SLIDE 88: Equity Overhang Removed As of September 30, 2019. Owned aircraft sold, including sales and reclassifications to finance and sales-type AerCap ordinary shares outstanding as of September 30, 2019 excludes restricted stock. leases. SLID