For
Investors:
Keith Helming
Chief
Financial Officer
+31
20 655 9670
Peter
Wortel
Investor
Relations
+31
20 655 9658
For Media:
Frauke Oberdieck
PRESS RELEASE Corporate
Communications
+31
20 655 9616
FOR
IMMEDIATE RELEASE foberdieck@aercap.com
AerCap Holdings N.V. Reports Third Quarter 2009 Financial
Results
23% growth in net spread and 22% growth in total assets
demonstrate AerCap’s ability to deliver profitable growth.
Third
Quarter 2009 Highlights
·
Third quarter 2009 net income was $35.5 million, compared
with net income of $51.3 million for the same period in 2008. Third quarter
2009 net income excluding the impact of the mark-to-market of interest rate
caps and share-based compensation was $39.2 million, compared with $61.2
million in third quarter 2008 on the same basis. The decrease in net income was
largely due to lower maintenance revenue and lower income from the sale of
assets in third quarter 2009 as compared to third quarter 2008.
·
Third quarter 2009 basic and diluted earnings per share were
$0.42. Third quarter 2009 basic and diluted earnings per share excluding the
impact of the mark-to-market of interest rate caps and share-based compensation
were $0.46.
·
Net spread, the difference between basic lease rents and
interest expense excluding the impact from the mark-to-market of interest rate
caps, was $114.6 million in third quarter 2009 compared to $93.3 million in
third quarter 2008, an increase of 23%. This measure reflects the increase in
leasing income.
·
Basic lease revenue for the third quarter 2009 was $142.4
million, compared to $132.9 million for the same period in 2008, an increase of
7%. Total lease revenue for the third quarter 2009 was $153.8 million, compared
to $167.9 million for the same period in 2008, a decrease of 8%. The decrease
in total lease revenue was due to lower maintenance rents in third quarter 2009
as compared to third quarter 2008.
·
Total revenue for the third quarter 2009 was $212.5 million,
compared to $301.9 million for the same period in 2008. The
decrease was mainly due to lower aircraft sales revenue and lower maintenance
revenue, partially offset by higher basic lease revenue.
·
Sales revenue for the third quarter 2009 was $49.0 million,
compared to $122.4 million for the same period in 2008, and was generated from
the sale of one aircraft, three engines and parts inventory. In addition, on October 29, 2009, we executed
agreements for the sale of three of our A330-300 forward order aircraft
delivering in 2010 (the sales will be recorded at time of delivery).
·
Total assets were $6.4 billion at September 30, 2009, an
increase of 22% over total assets of $5.3 billion at September 30, 2008.
·
Committed purchases of aviation assets delivered or scheduled
for delivery in 2009 are $1.8 billion, of which $1.1 billion closed in the nine
month period ended September 30, 2009.
Previously disclosed Third Quarter 2009 Highlights
·
In third
quarter 2009, AerCap announced that the Boards of Directors of AerCap Holdings
N.V. and Genesis Lease Limited had approved a definitive
agreement under which AerCap and Genesis will merge in an all share-for-share
transaction.
AerCap’s CFO,
Summary of Financial Results
AerCap recorded a third quarter 2009 net income of
$35.5 million or $0.42 earnings per basic and diluted share. Included in the
third quarter 2009 net income amount were charges relating to mark-to-market of
interest rate caps and share-based compensation of $3.7 million or $0.04 per
basic and diluted share, net of tax. The after-tax charge relating to the
mark-to-market of our interest rate caps was $3.0 million and the after-tax
charge from share-based compensation was $0.7 million.
Detailed Financial Data
($ in Millions)
Operating results
Total revenue in third quarter 2009 decreased 30%
compared with third quarter 2008. This decrease was largely driven by lower
sales revenue and lower maintenance revenue, partially offset by higher basic
lease revenue.
Net income excluding the impact of mark-to-market
of interest rate caps and share-based compensation decreased by 36%. This
decrease was
also driven by lower maintenance revenue ($20.6 million) and lower income from
the sale of assets ($5.8 million), partially offset by an increase in net spread.
Revenue breakdown
Basic lease rents continue to increase when compared to prior periods as a result of our growing asset base. The increase in basic lease rents of 7% was less than the increase in average lease assets of 23%, as a result of decreasing interest rates. The impact of decreasing interest rates on basic lease rents was offset by lower interest expense. While basic lease rents for the third quarter 2009 increased 7% compared to third quarter 2008 to $142.4 million, interest expense excluding the impact of mark-to-market of interest rate caps decreased 30% compared with third quarter 2008 to $27.8 million, as shown in the table below. We refer to the difference in these amounts as net spread, which increased 23% in third quarter 2009 over the same period in 2008 to an amount of $114.6 million. Our average lease assets increased by 23% to $4.6 billion compared to third quarter 2008.
Maintenance related revenues, including
end-of-lease compensation, decreased $23.6 million in third quarter 2009 to
$11.4 million from $35.0 million in third quarter 2008. The decrease was
largely due to $21.2 million of non-recurring maintenance revenue in third
quarter 2008. The non-recurring
maintenance revenue related to a change in the estimate of the amount of
maintenance rent expected to be reimbursed to lessees plus airline defaults.
The change in estimate arose from the implementation of an improved model used
to forecast future maintenance reimbursements, as disclosed in our previous
filings. Since third quarter 2008 AerCap records as revenue all maintenance
rent receipts not expected to be repaid to lessees. In third quarter 2008,
$16.6 million was recorded as maintenance revenue as a result of the change in
estimate. Of the $16.6 million, $12.9 million was collected from lessees during
prior periods and was non-recurring. In addition, the termination of certain
leases due to airline defaults triggered the recognition of $8.3 million of
maintenance related revenues in third quarter 2008.
Effective tax rate
AerCap’s blended effective tax rate during the nine
month period ended September 30, 2009 was 2.5%, consisting of 0.4% for AerCap’s
aircraft business and 36.4% for AerCap’s engine and parts business. The annual
blended effective tax rate for 2008 was positive 0.3% (income).
Financial position
As of September 30, 2009, AerCap’s
portfolio consisted of 304 aircraft and 85 engines that were either owned, on
order, under contract or letter of intent, or managed.
Notes Regarding Financial Information
Presented In This Press Release
The financial information presented in this press release is not
audited.
The following is a
definition of non-GAAP measures used in this press release and a reconciliation
of such measure to the most closely related GAAP measure:
Net income excluding the impact of
mark-to-market of interest rate caps and share-based compensation. This
measure is determined by adding the mark-to-market on our interest rate caps and
share-based compensation during the applicable period, net of related tax
benefits, to GAAP net income. AerCap believes this measure provides investors
with a more meaningful view on AerCap’s operational performance and allows
investors to better understand its operational performance in relation to past
and future reporting periods. AerCap uses interest rate caps to allow it to
benefit from decreasing interest rates and protect against the negative impact
of rising interest rates on its floating rate debt. Management determines the
appropriate level of caps in any period with reference to the mix of floating
and fixed cash inflows from the Company’s lease and other contracts. AerCap
does not apply hedge accounting to its interest rate caps. As a result, AerCap
is required to recognize the change in fair value of the interest rate caps in
AerCap’s income statement during each period. Following is a reconciliation of
net income excluding the impact of mark-to-market of interest rate caps and
share-based compensation to net income for the three and nine month periods
ended September 30, 2009 and 2008:
Earnings per share
excluding the impact of mark-to-market of interest rate caps and share-based
compensation are determined by dividing the amount of net income excluding such
impact by the average number of shares outstanding for that period. The average
number of shares is based on a daily average.
Net spread. This measure is the difference between basic lease rents and interest expense
excluding the impact from the mark-to-market of interest rate caps and
non-recurring charges. AerCap believes this measure provides investors a better
way to understand the changes and trends related to the earnings of its leasing
activities. This measure reflects the impact from changes in the number of
aircraft leased, lease rates, utilization rates, as well as the impact from the
use of interest rate caps instead of swaps for hedging purposes. The
reconciliation of net spread to basic lease rents for the three and nine month
periods ended September 30, 2009 and 2008 is included above.
Conference Call
In connection with the earnings release, management
will host an earnings conference call today, Friday, November 6, 2009 at 9:30 am
Eastern Time / 3:30 pm Central European Time. The call can be accessed
live by dialing (U.S./Canada) 800-676-6978 toll
free or +1-706-634-5464 (International) and
referencing code 35504602 at least 5 minutes before start time, or by visiting
AerCap’s website at http://www.aercap.com
under “Investor Relations.”
The presentation slides
for the conference call will be posted on AerCap’s website in advance of the
call. A replay of the call
will be available beginning at 10:30 am Eastern Time / 4:30 pm Central European
Time on November 6, 2009 and continuing through December 6, 2009. To access the
recording, call (U.S./Canada) 800-642-1687
toll free or +1-706-645-9291 (International) and enter passcode 35504602. The webcast
replay will be archived in the "Investor Relations" section of the
company's website for one year.
In addition,
a New York Group Lunch Presentation for
investors and analysts will be hosted by AerCap’s management today, Friday, November 6,
2009, at 12:30 pm Eastern Time at The New York Palace (the
To
participate in either event, please register at:
www.sharedvalue.net/aercap/q309results
For further
information, contact
or Mark
Walter (Shared Value): +44 (0)20 7321 5039 (aercap@sharedvalue.net).
About AerCap Holdings N.V.
AerCap is an integrated global aviation
company with a leading market position in aircraft and engine leasing, trading
and parts sales. The company also provides aircraft management services and
performs aircraft maintenance, repair and overhaul services and aircraft
disassemblies. AerCap is headquartered in The Netherlands and has offices in
Forward
Looking Statements
This press
release 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 identified by the use of forward-looking terminology such as “may,” “might,” “will," “should,” “expect,” “plan,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue” or the
negatives thereof or variations thereon or similar terminology. All statements
other than statements of historical fact included in this press release are forward-looking
statements and are based on various underlying assumptions and expectations and
are subject to known and unknown risks, uncertainties and assumptions, may
include projections of our future financial performance based on our growth
strategies and anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about future
events. There are important factors that could cause our actual results, level
of activity performance or achievements to differ materially from the results,
level of activity, performance or achievements expressed or implied in the
forward-looking statements. As a result, there can be no assurance that the
forward-looking statements included in this press release will prove to be
accurate or correct. In light of these risks, uncertainties and assumptions,
the future performance or events described in the forward-looking statements in
this press release might not occur. Accordingly, you should not rely upon
forward-looking statements as a prediction of actual results and we do not
assume any responsibility for the accuracy or completeness of any of these
forward-looking statements. We do not undertake any obligation to, and will
not, update any forward-looking statements, whether as a result of new
information, future events or otherwise.
For more information regarding AerCap and to be added to our
email distribution list, please visit http://www.aercap.com.
Financial Statements Follow
