Aercap Holdings N.v. · NYSE:AER
Aercap — Merger or Acquisition (December 2013)
34 slides from Aercap's merger presentation, Dec 17, 2013
Slide 1: AerCap Presentation
AerCap Presentation AerCap Holdings N.V. December 2013
Slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor
Disclaimer Incl. Forward Looking Statements & Safe Harbor * This presentation may contain certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are intended to be covered by the safe harbor for “forward-looking statements
Slide 3: Non-GAAP Information
Non-GAAP Information * Discussions during this conference call will include certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles. Reconciliations of those non-U.S. GAAP financial measures to the most directly comparable U.S. GAAP financia
Slide 4: Creating the industry leader
Creating the industry leader *
Slide 5: Transaction Summary
Transaction Summary Consideration AerCap will acquire 100% of ILFC, in exchange AIG will receive $3.0 billion in cash and 97,560,976 AER shares the cash portion of the consideration will be funded through a combination of new debt financing and cash of the combined company A committed acquisition fa
Slide 6: Strategic Rationale for ILFC Acquisition
Strategic Rationale for ILFC Acquisition AerCap's acquisition of ILFC will create the leading global franchise in the aircraft leasing industry The combination presents a unique strategic opportunity to bring together the outstanding and experienced personnel from both companies, along with a divers
Slide 7: Key Highlights of Combined Operations
Key Highlights of Combined Operations * Top Class Team and Scalable Business AerCap's management team has continuously produced industry-leading results The aircraft leasing business is highly scalable Prudent Financial Strategy Core of AerCap's success Proven track record of rapidly deleveraging De
Slide 8: AerCap Overview
AerCap Overview *
Slide 9: AerCap: Industry Leading Aircraft Lessor
AerCap: Industry Leading Aircraft Lessor * Retained Earnings of $1.4 billion ~99% fleet utilization since 2006 $3.5 billion committed purchases through 2018 Conservative Debt/equity ratio of 2.6 41% EPS growth YTD 2013 ~270 Aircraft sold since 2006 at a gain of $320 million Record Net Income YTD of
Slide 10: AerCap's Business Principles
* AerCap’s Business Principles Capital Structure Leasing Strategy Highly diversified customer base Wide geographical coverage Obtain security deposits and maintenance reserves to protect against lessee defaults Proactive risk management Focus on long-term funding to match fund long-term assets Limit
Slide 11: AerCap Strengths
* AerCap Strengths Modern portfolio of in-demand aircraft Global customer base and presence Continuous portfolio management Longterm and robust funding structure Appropriate hedging policy Top class management team Efficient and scalable platform Low tax jurisdiction Unadjusted GAAP Net Income from
Slide 12: Active Portfolio Manager of Aircraft
* Active Portfolio Manager of Aircraft AerCap, along with GECAS, is the most active aircraft portfolio manager in the industry and is uniquely positioned to improve the management the ILFC fleet Average age of 267 aircraft (incl. 82 managed aircraft) sold since 2006 was ~13 years Gain of ~$320 milli
Slide 13: Intensive Management of High Risk Accounts
* * Intensive Management of High Risk Accounts * Month end balances over 30 days Continuous reduction in AerCap outstanding receivables – clear industry leadership on collections No deferred balances Multiple strategies to enforce rights from high risk customers – emphasis on minimizing exposure at
Slide 14: Combined Company
Combined Company *
Slide 15: Aircraft Portfolio is High Quality and Diversified
Aircraft Portfolio is High Quality and Diversified * Type and Number of Aircraft AerCap ILFC Combined A319s 24 123 147 A320s 90 162 252 A321s 8 86 94 A330s 34 90 124 B737NGs 63 230 293 B767s 3 48 51 B777s - 71 71 Others 9 121 130 Owned Aircraft 231 931 1,162 Managed Aircraft 96 71 167 Total 327 1,00
Slide 16: Attractive Order Book of Combined Company
Attractive Order Book of Combined Company * Combined order book contains the most in-demand, new technology aircraft: A350s, B787s, A320-NEOs Type 2013-2018 Thereafter B737 54 - B787 73 4 A320Ceo 2 - A320Neo 105 50 A321Ceo 15 - A330 3 - A350 29 - E190/195 5 45 Total Aircraft 286 99 PF Combined Lease
Slide 17: Combined Company Customer Base and Global Presence
Combined Company Customer Base and Global Presence Top Ten Lessees: Top Ten Countries: * Country Percentage China 12% France 9% United States of America 7% Russia 6% United Kingdom 6% United Arab Emirates 5% Germany 3% Spain 3% Hong Kong 3% South Korea 2% Others* 44% Total 2012 Lease Revenue 100% *
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Slide 19: Liquidity Profile (as of Closing)
Liquidity Profile (as of Closing) * Sources (for First 12 Months) Sources (for First 12 Months) ILFC Unsecured Revolver $2.3 AerCap Unsecured Revolvers 0.5 AerCap Warehouse 0.3 AIG Revolver 1.0 Unrestricted Cash 1.1 Operating Cash Flow 3.1 Total Sources $8.3 Uses (for First 12 Months) Debt Maturitie
Slide 20: Debt/Equity Ratio of Combined Company
Debt/Equity Ratio of Combined Company * AerCap has historically maintained a conservative capital structure and has a proven track record of de-leveraging Initial debt/equity ratio is higher than targeted leverage due to the expected write-down of ILFC’s equity under purchase accounting Robust earni
Slide 21: AerCap's Track Record of Deleveraging
AerCap’s Track Record of Deleveraging * AerCap's Net Debt/Equity Ratio During this time period, AerCap's leverage ratio halved, while assets almost tripled
Slide 22: Pro Forma Financials
Pro Forma Financials *
Slide 23: Snapshot of Combined Company
Snapshot of Combined Company * Creating the Industry Leader Existing fleet of ~1,300 aircraft Order-book of 385 aircraft Total airline customers of over 200 Aircraft assets of ~$35 billion Total assets of ~$41 billion Total debt of ~$31 billion Total equity of ~$5-6 billion Annual revenue of ~$5 bil
Slide 24: Opening Day Balance Sheet
Opening Day Balance Sheet ($ Billions) Total Assets ~$41 Aircraft Assets ~$35 Equity ~$5-6 Debt/Equity Ratio ~5.5x * Pro Forma Assets and Capital Structure Both the planned reduction in leverage and future profits are underpinned by the fact that ~85% of lease revenues are contracted for the next 3
Slide 25: Pro Forma Earnings
($ Billions, Except EPS) Run-rate Earnings Driven by Write Down/Fair Value ~$0.3 Run-rate Earnings Driven by Cost/Tax Synergies ~$0.3 Run-rate Earnings Per Share ~$4.00+ Run-rate Return on Equity ~15% * Pro Forma Earnings
Slide 26: Pro Forma Ratings
Pro Forma Ratings Existing Existing Existing Existing Agency Agency AerCap ILFC Combined AerCap ILFC Combined Corporate Corporate Corporate Unsecured Unsecured Unsecured S&P BBB- BBB- BB+ BB+ BBB- TBD * Fitch BBB- BB BB+ BB+ BB BB+ Moodys NR Ba3 Ba3 NR Ba3 Ba3 * S&P process differs as analysis to ta
Slide 27: Capital Management
Capital Management We expect the Combined Company to have deep access to all funding markets Combined, AerCap and ILFC have raised over $39 billion of financing in the last several years – many times the expected financing need of the Combined Company over the next few years The Combined Company has
Slide 28: Pro Forma Cash Flows, Liquidity, Debt Structure
($ Billions) Annual Operating Cash Flows (Excl. Sales) ~$3 Revolving Lines of Credit as of Closing* ~$4 Unrestricted Cash as of Closing ~$1 Secured/Unsecured Debt Mix ~40% / ~60% * Pro Forma Cash Flows, Liquidity, Debt Structure Liquidity sources for next 12 months of ~$8 billion (as of closing) * R
Slide 29: Operating Cash Flow and Contractual Debt Obligations
Operating Cash Flow and Contractual Debt Obligations * ($ Billions) Pro Forma Annual Operating Cash Flow ~$3 Cash Flow from Aircraft Sales ~$1 Adjusted Operating Cash Flow ~$4 Contractual Debt Repayment ~($3.5) Operating Cash Flow Net of Debt* ~$0.5 Assumes no debt raised to finance ongoing debt mat
Slide 30: Next Steps, Timeline, & Summary
Next Steps, Timeline, & Summary *
Slide 31: Integration Priorities
Integration Priorities * * Transfer of Assets Alignment of Operating Systems Combination of Operating Platforms/Transfer of Personnel Portfolio optimization/aircraft sales Receivables Management
Slide 32: Next Steps and Transaction Timeline
Next Steps and Transaction Timeline * Shareholder Vote Required Approvals Closing AerCap will convene a meeting of its shareholders for the purpose of obtaining the required vote. Expected within 60 days Waha Capital, AerCap’s largest shareholder with a current stake of 26%, has agreed to vote in fa
Slide 33: Creates the Industry Leader
* Creates the Industry Leader Highly Attractive (in-the-money) Order Book Reduction in Tax Expense from Transfer to Existing AerCap Locations Rapidly Improving Operating Metrics Highly Scalable Platform Provides Operating Efficiencies Best in Class Management Team Industry leading franchise with sig
Slide 34: Thank you
Thank you ‘Confidential property othe company, not for dsosureor use without permision 34 www.aercap:com
AerCap Holdings — Merger or Acquisition (December 2013) on 6ix