Aercap Holdings N.v. · NYSE:AER
Aercap — Q3 2010 Earnings Presentation
28 slides from Aercap's earnings presentation, Nov 5, 2010
Slide 1: Third Quarter 2010 Earnings Call
AerCap Holdings N.V. Third Quarter 2010 Earnings Call November 5, 2010
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 2010 Highlights
Third Quarter 2010 Highlights Net income was $61.1 million for third quarter 2010, exclusive of the impact relating to mark-to-market of interest rate caps and share- based compensation Earnings per share for third quarter 2010 was $0.51, exclusive of the impact relating to mark-to-market of int
Slide 4: Aircraft and Engine Transactions Year to Date (September) 2010
Aircraft and Engine Transactions Year to Date (September) 2010 21 aircraft lease agreements & letters-of-intent executed 43 aircraft and 35 engines delivered to lessees 51 aircraft and 15 engines purchased 15 aircraft and 13 engines sold from our owned portfolio 4
Slide 5: Net Income
Net Income ($ Millions) 3Q 2009 3Q 2010 Total Net Income 35.5 51.9 Adjusted For: (Gain)/Loss from Mark-to-Market on 3.0 9.0 Interest Rate Caps * Adjusted for: Cost of Share- Based Compensation 0.7 0.2 Net Income Excluding Above Adjustments 39.2 61.1 * Adjustment reduced for tax impact as well as the
Slide 6: Earnings Per Share
Earnings Per Share ($) 3Q 2009 3Q 2010 Earnings Per Share 0.42 0.43 Adjusted for: mark-to-market on interest rate caps and share 0.04 0.08 based compensation Adjusted Earnings Per Share 0.46 0.51 Average Shares Outstanding 85.0 119.4 * (Millions) * Increase of 34.4 million shares relates to Genesis
Slide 7: Total Revenue
Total Revenue ($ Millions) 3Q 2009 3Q 2010 Basic Lease Rents 142.4 233.9 Maintenance/End-of-Lease Revenue 11.4 20.1 Sales Revenue 49.0 218.2 Management Fees and Interest Income 5.3 3.8 Other Revenue 4.4 2.1 Total Revenue 212.5 478.1 7
Slide 8: Net Spread (Margin)
Net Spread (Margin) ($ Millions) 3Q 2009 3Q 2010 % Change Basic Lease Rents 142.4 233.9 64% Less: Interest Expense* (27.8) (62.1) 123% Net Spread (Margin) 114.6 171.8 50% Average Lease Assets 4,596 7,788 70% Annualized Margin (% Lease Assets) ** 9.97% 8.82% * Excludes non-cash charges relating to th
Slide 9: Sales
Sales ($ Millions) 3Q 2009 3Q 2010 Aircraft Sales 5.2 168.2* Engine Sales 13.2 10.3 Part Sales 30.6 39.7 Total Sales Revenue 49.0 218.2 Total Gain from Sales 9.0 16.1 * Includes sales of two new Airbus A320s and one new Airbus A330. 9
Slide 10: Leasing Expenses and SG&A
Leasing Expenses and SG&A ($ Millions) 3Q 2009 3Q 2010 % Change Operating Lease In Costs 3.3 3.1 (6%) Leasing Expenses * 10.6 17.3 63% SG&A** 27.8 21.7 (22%) Total Leasing Expenses and 41.7 42.1 1% SG&A * Details on following page. ** 3Q 2010 SG&A includes $8.5m mark-to-market gain relating to forei
Slide 11: Leasing Expenses
Leasing Expenses ($ Millions) 3Q 2009 3Q 2010 % Change Default Related Leasing 4.3* 1.5** (65%) Expenses Normal Transition Costs 3.2 6.9 116% Lessor Maintenance 1.6 3.7 131% Contributions AeroTurbine & Other Leasing 1.5 5.2 247% Costs Total Leasing Expenses 10.6 17.3 63% *Costs in 2009 relate to air
Slide 12: Impact from Defaults & Restructuring
Impact from Defaults & Restructuring ($ Millions) 3Q 2010 YTD 2010 FY 2009 Lost Basic Lease Rents (0.2) (0.2) (5.0) (Net of Security Deposits) Maintenance Rents Held 2.9 7.8 0.0 Default Related Leasing (1.5) (1.5) (19.9) Expenses Default Related (2.8) (5.5) (0.0) Impairment Charges 2 Total Impact (P
Slide 13: Tax Rate
Tax Rate FY 2009 YTD 2010 Tax Rate for Aircraft 0.0% 9.3% Charge Tax Rate for Engine/Parts 36.8% Charge (29.8%) Income Blended Tax Rate* 1.9% Charge 9.0% Charge * The blended effective tax rate in any year is impacted by the source and amount of earnings among AerCap’s different tax jurisdictions. T
Slide 14: Total Assets and Number of Aircraft/Engines
Total Assets and Number of Aircraft/Engines 3Q 2009 3Q 2010 ($ Millions) 9,339 10,000 8,000 6,418 Total Assets 46% increase over Owned and on 6,000 3Q 2009 Balance Sheet ~23% increase ($1.5B) 4,000 relates to Genesis Transaction 2,000 0 Number of Aircraft The increase of 20 aircraft is driven Owned,
Slide 15: Purchases of Aviation Assets
Purchases of Aviation Assets ($ Millions) YTD Committed Total 2010 Remaining 2010 2010 Aircraft Related 2,311 151 2,462 Engines/Airframes 54 1 55 Total Purchases 2,365 152 2,517 Number of Aircraft 51 3 54 Purchases (Units) 15
Slide 16: Portfolio Management Metrics Owned Aircraft
Portfolio Management Metrics Owned Aircraft Lease Portfolio FY 2009 YTD 2010 Utilization Rate 98.1% 98.3% Portfolio Yield* 14.3% 13.2% 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 equipment.
Slide 17: Cash
Cash ($ Millions) 3Q 2010 Cash and Cash Equivalents at September 30, 2010 285.8 Total Cash Balance at September 30, 2010 519.7 (Incl. Restricted Cash) Operating Cash Flow for 3Q 2010 150.5 17
Slide 18: Debt and Equity
Debt and Equity ($ Millions) 3Q 2009 3Q 2010 Total Debt at Quarter-End 4,593 6,562 Average Cost of Debt* 2.6% 3.7% Equity 1,335 1,981 Debt / Equity Ratio** **3.4 to 1 **3.3 to 1 * Interest expense divided by average debt balance, excluding mark-to-market on interest rate caps and other small charges
Slide 19: Interest on Debt
Interest on Debt ($ Millions) 3Q 2009 3Q 2010 YTD 2009 YTD 2010 Interest on Debt from Financial 32.8 75.1 68.3 202.1 Statements Less: Mark-to-Market on Interest Rate Caps (5.0) (13.0) 17.2 (47.6) Interest on Debt Excl. MTM on 27.8 62.1 51.1 154.5 Caps (for Net Spread calc.) Less: Impact from Genesis
Slide 20: Debt & Interest Rate Hedging
Debt & Interest Rate Hedging Segmentation of Debt Based on Type of Interest $ Billions (Approx.) Rate Hedge (September 30, 2010) Fixed Rate Debt 1.3 Debt under Fixed Rate Swaps (from Genesis 0.8 Transaction) Debt Covered by Interest Rate Caps 2.6 Debt Related to Floating Rate/Short Term Leases 1.8 a
Slide 21: 2010 Financial Outlook
2010 Financial Outlook AerCap expects to grow earnings based on the committed aircraft purchases despite the continued uncertainties of the financial markets. Set forth below are the anticipated drivers for AerCap’s 2010 financial performance, which are subject to change, in light of the highly flui
Slide 22: 4Q 2010 Outlook – EPS Impact of Aircraft Sales / One-Offs
4Q 2010 Outlook – EPS Impact of Aircraft Sales / One-Offs 3Q 2010 4Q 2010 Committed Aircraft Sales $0.06 $0.02 Other One-Offs $0.00 $0.00 EPS Impact $0.06 $0.02 22
Slide 23: 2011 Outlook – EPS Impact of Aircraft Sales / One-Offs
2011 Outlook – EPS Impact of Aircraft Sales / One-Offs 2010 2011 Committed Aircraft Sales $0.22 $0.00* Other One-Offs $0.01 $0.00 EPS Impact $0.23 $0.00 * There are currently no contracted or executed LOI’s of aircraft sales in 2011. 23
Slide 24: Appendix
Appendix * (AERCAP 24
Slide 25: Forward Order Aircraft
Forward Order Aircraft 4 4 Additional 4 4 4 Options Options (1) Additional Purchases Additional Additional Additional 5 5 (2) Purchases Purchases Purchases Purchases (2) (2) (2) (2) Available LOI Sold Sold Sold Sold 20 3 12 16 16 16 Available 57 Sold 12 Lease Lease Lease Lease Agreements Agreements
Slide 26: High Quality and Well-Diversified Portfolio
High Quality and Well-Diversified Portfolio Aircraft Portfolio as of September 30, 2010 79% narrow body – “Work Horses” of industry Number of % Net Number of Aircraft under Owned Book Managed Aircraft Purchase / Sale Total High share of liquid / remarket- Aircraft Value Aircraft on Order Contrac
Slide 27: Aircraft Portfolio Valuation – As of Sept. 30, 2010
Aircraft Portfolio Valuation – As of Sept. 30, 2010 Carrying Difference/ ($ Billion) External Value or Appraisers Appraisers Price Paid Value A320 Family, A330s, & B737NGs 6.98 7.88 13% (~95% of Portfolio) B747s, B757s, B767s, A300s (~2% of Portfolio) 0.28 0.27 (4%) B737 Classics and All Others 0.16
Slide 28: Aircraft Portfolio Valuation (Based on PV of Rent & Residual Values)
Aircraft Portfolio Valuation (Based on PV of Rent & Residual Values) ($ Billion) Carrying PV of PV of Total Value / Contracted Residual Present Difference / Price Paid Rent Value Value PV Future Value 7.42 4.51 3.69 8.20 10% Based on 3 Appraisers Future Value 7.42 4.51 3.59 8.10 8% Based on Ascend N