For
Investors:
Keith
Helming
Chief Financial Officer
+31 20 655 9670
Peter Wortel
Investor Relations
+31 20 655 9658
For Media:
Frauke
Oberdieck
Corporate
Communications
+31 20 655 9616
PRESS RELEASE
FOR IMMEDIATE RELEASE
AerCap Holdings N.V. Reports Second Quarter 2010 Financial
Results
Net spread, which is the margin
earned on our leased assets, was $169.0 million for the second quarter of 2010,
an increase of 50% over second quarter 2009
The
all-share acquisition of Genesis Lease Limited (“Genesis”) which was completed
on March 25, 2010 is fully reflected in all AerCap
Holdings N.V. second quarter 2010 consolidated financial statements. The
Genesis Transaction was not included in the AerCap
Holdings N.V. first quarter 2010 income statement (including the number of
outstanding shares used for earnings per share calculations) other than a one
line item reflecting a $0.3 million amalgamation gain (net of transaction
expenses and tax). The impact of the Genesis Transaction was also reflected in
one line item in the AerCap Holdings N.V. first
quarter 2010 consolidated cash flow statement (purchase of subsidiaries, net of
cash acquired).
Second Quarter 2010 Highlights
·
Second quarter 2010 basic and diluted earnings per share were $0.41,
compared with $0.67 for the same period in 2009. Second
quarter 2010 basic and diluted earnings per share excluding the impact of the
mark-to-market of interest rate caps and share-based compensation were $0.50,
compared with $0.46 in the second quarter 2009 on the same basis.
·
Second quarter 2010 net income was $48.9 million, compared with net
income of $56.6 million for the same period in 2009. Second quarter 2010 net income
excluding the impact of the mark-to-market of interest rate caps and
share-based compensation was $59.6 million, compared with $39.1 million in the
second quarter 2009 on the same basis.
·
Net spread, the difference between basic lease rents and interest
expense excluding the impact from the mark-to-market of interest rate caps, was
$169.0 million in the second quarter of 2010 compared to $112.6 million in the
second quarter of 2009, an increase of 50%. This measure reflects the increase
in leasing income and excludes income derived from the sale of aircraft.
·
Sales revenue for the second quarter 2010 was $328.1 million, compared
to $117.9 million for the same period in 2009, and was generated from the sale
of five aircraft, five engines and parts inventory.
·
Basic lease rents for the second quarter of 2010 were $228.6 million,
compared to $141.4 million for the same period in 2009, an increase of 62%.
Total lease revenue (basic rents, maintenance rents and end-of-lease compensation)
for the second quarter of 2010 was $260.7 million, compared to $169.8 million
for the same period in 2009, an increase of 54%.
·
Total revenue for the second quarter of 2010 was $594.7 million,
compared to $294.7 million for the same period in 2009. The increase was mainly
due to the increase in sales revenue and an increase in lease revenue which was
primarily driven by the Genesis Transaction and the deliveries of forward order
aircraft.
·
Total assets were $9.1 billion at June 30, 2010, an increase of 48% over
total assets of $6.1 billion at June 30, 2009. The Genesis Transaction
accounted for $1.5 billion of the increase in total assets. The remaining
$1.5 billion increase was driven primarily by deliveries of forward order aircraft.
·
Committed purchases of aviation assets delivered or scheduled for
delivery in 2010 are $2.5 billion, of which $1.8 billion closed in the first
half year of 2010.
Financing
Highlights – previously disclosed
· AerCap signed agreements for $380 million of new debt
facilities in the second quarter and a total of $835 million in the year to
date. In addition, a $151 million refinancing through the issuance of notes
guaranteed by the
Klaus
Heinemann, CEO of AerCap, commented: “AerCap has continued to deliver asset, revenue and net
margin growth quarter after quarter while maintaining earnings per share that
are consistently at the top end of the range among our listed competitors. AerCap’s solid liquidity is reflected in our total cash
position, which now exceeds $500 million and represents one third of our
current market capitalization.”
AerCap’s CFO, Keith
Helming, said: “We are pleased with
our second quarter results which include a full quarter's financial impact of the Genesis Transaction, which is performing according to our
expectations. The 48% year-on-year increase in total
assets as well as the 50% increase in net spread highlight the
profitability of our growing and diverse lease portfolio. In addition, our committed capital expenditures are essentially fully funded and we have
secured $835 million of new debt facilities year-to-date 2010 which
demonstrates AerCap’s ability to tap global financing
markets throughout varying market conditions.”
Summary of
Financial Results
AerCap recorded second quarter 2010 net income of $48.9
million or $0.41 earnings per basic and diluted share. Second quarter 2010 net income
included net charges relating to mark-to-market of interest rate caps and
share-based compensation of $10.7 million or $0.09 per basic and diluted share,
net of tax. The after-tax charge relating to the mark-to- market of our
interest rate caps was $10.1 million reflecting changes in forecasted interest
rates. The after-tax charge from share-based compensation was $0.6 million.
Detailed
Financial Data
($ in Millions)
Operating results
Total revenue in
the second quarter of 2010 increased 102% compared to the second quarter of
2009. This increase resulted primarily from an increase in sales revenue and
basic lease rents driven by the additional aircraft acquired in the Genesis
Transaction and the deliveries of forward order aircraft. For similar reasons,
net income excluding the impact of mark-to-market of interest rate caps and
share-based compensation increased by 52%.
Revenue breakdown
Basic lease
rents were $228.6 million for the second quarter of 2010, an increase of 62%
compared to the second quarter of 2009, as a result of our growing asset base.
Our average lease assets increased by 71% to $7.5 billion compared to the
second quarter of 2009. As shown in the table below, interest expense excluding
the impact of the mark-to-market of interest rate caps was $59.6 million in the
second quarter of 2010, an increase of $30.8 million over the same period in 2009.
The increase was primarily driven by the Genesis Transaction ($17.3 million)
and the increase in our lease portfolio from the delivery of forward order
aircraft. As a result, net spread increased 50% to $169.0 million in the second
quarter of 2010 over the same period in 2009.
Effective tax
rate
AerCap’s blended effective tax rate during the first half year of 2010 was 8.8% (charge), consisting of 9.5% (charge) for AerCap’s aircraft business and 32.1% (income) for AerCap’s engine and parts business. The blended effective tax rate in 2009 was 1.9% (charge).
Financial position
As of June 30, 2010, AerCap’s portfolio consisted of 327 aircraft and 87 engines
that were either owned, on order, under contract or letter of intent, or
managed. This includes the 53 aircraft that AerCap
added through the Genesis Transaction in March 2010. Subsequent to quarter-end,
one of our lessees, Mexicana, filed for bankruptcy protection.
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 non-cash charges related to the mark-to-market losses on our
interest rate caps and share based compensation during the applicable period,
net of related tax benefits, to GAAP net income. In addition to GAAP net
income, we believe this measure may provide investors with supplemental
information regarding our operational performance and may further assist
investors in their understanding of our operational performance in relation to
past and future reporting periods. We use interest rate caps to allow us to
benefit from decreasing interest rates and protect against the negative impact
of rising interest rates on our 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 our lease and other contracts. We do not apply hedge
accounting to our interest rate caps. As a result, we recognize the change in
fair value of the interest rate caps in our 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 six month periods ended June 30, 2010 and 2009:
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 (refer to second
table under Revenue breakdown section of this press release). 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. We believe this measure may further assist investors in their
understanding of the changes and trends related to the earnings of our 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 to hedge our interest rate risk.
The reconciliation of net spread to basic lease rents for the three and six
month periods ended June 30, 2010 and 2009 is included above.
Conference Call
In connection with the
earnings release, management will host an earnings conference call today,
Thursday, August 5, 2010 at 9:30 am Eastern Time / 3:30 pm Central European
Time. The call can be accessed live by dialing (U.S./Canada) 1-888-935-4575 or
(International) +31-20-707-5512 and
referencing code 4905052 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. The webcast replay will be archived in the
"Investor Relations" section of the company's website for one year.
To participate in either event, please register at: http://client.sharedvalue.net/AerCap/Q210
For further
information, contact Peter Wortel: +31 20 655 9658 (pwortel@aercap.com)
or
Mark Walter (Shared Value): +44 (0)20 7321 5039 (aercap@sharedvalue.net).
About AerCap Holdings N.V.
AerCap is the world’s
leading independent aircraft leasing company. AerCap
also provides engine leasing, aircraft management services, 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,”
“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
*
The increase of $69.5 million in interest on debt in the second quarter 2010 as
compared to the second quarter 2009 was primarily driven by (i) a $38.7 million increase in the mark-to-market on
interest rate caps, (ii) a $17.3 million increase from the Genesis Transaction
and (iii) the increase in our lease portfolio from the delivery of our forward
order aircraft. The same items were also the primary drivers for the increase
in the first half year of 2010 as compared to the first half year of 2009.
Certain reclassifications have
been made to prior years consolidated statements of cash flow to reflect the
current year presentation.