AerCap Holdings N.V. Reports Fourth Quarter and Full Year 2006 Financial Results
AMSTERDAM, Netherlands, Feb. 28 /PRNewswire-FirstCall/ -- Highlights * Full year 2006 net income was $88.0 million. Fourth quarter 2006 net income excluding charges for share-based compensation was $41.5 million and full year 2006 net income excluding charges for share-based compensation was $156.3 million. * Fourth quarter revenue was $211.6 million, up 78% over fourth quarter 2005 and revenue for the full year 2006 was $814.4 million, up 65% over full year 2005. * Flight equipment held for lease was $3.0 billion as of December 31, 2006, up 36% from December 31, 2005. * Purchases of aviation assets in the fourth quarter were $522.8 million and $973.2 million for the full year 2006. * An initial public offering of 26.1 million common shares was completed on November 21, 2006 at a price of $23 per share, with proceeds of $156.4 million retained by the Company, and used primarily to pay down indebtedness. * An agreement was signed on December 11, 2006 with Airbus for a firm order of 20 new A330-200 aircraft to be delivered 2008 through 2010. * A Chinese aircraft leasing joint venture was launched on October 26, 2006 with China Aviation Supplies Import & Export Group Corporation and Calyon Airfinance. Summary of Financial Results
AerCap Holdings N.V. (the "Company" or "AerCap") (NYSE: AER) announced the results of its operations for the quarter ended December 31, 2006 and for the full year 2006.
The Company recorded net income excluding charges for share-based compensation for the fourth quarter 2006 of $41.5, or $0.51 per diluted common share. For the full year 2006, net income excluding charges for share-based compensation was $156.3 million, or $1.98 per diluted common share. Net income excluding charges for share-based compensation for the fourth quarter 2006 increased 55% over the similar measure in the fourth quarter 2005 and net income for the full year 2006 increased 88% over the full year 2005 net income.
In accordance with FAS 123(R), the Company recorded non-cash, share-based compensation charges of $58.7 million, net of tax, in the fourth quarter 2006 and $68.3 million, net of tax, for the full year 2006. The recognition of the majority of these charges was triggered in connection with the Company's IPO and relate to restricted shares and share options held by members of the Company's management team, independent directors and a consultant in entities which have controlling interest in the Company. An amount equal to the pre- tax charge for share-based compensation was recognized as an increase to additional paid-in capital and, as a result, there was no effect on the net equity of the Company, other than the positive impact of the related tax benefit.
After charges for share-based compensation, net loss for the fourth quarter of 2006 was $17.2 million, or a loss of $0.21 per diluted common share and net income for the full year 2006 was $88.0 million, or $1.11 per diluted common share.
Klaus Heinemann, CEO of AerCap, commented, "We are focused on investing for growth which is key to our business strategy. We completed the purchase of 28 aircraft during the fourth quarter, bringing the total aircraft purchased in 2006 to 41. In addition, our already contracted investment in new Airbus equipment provides a strong growth pipeline for the rest of the decade." AerCap's CFO, Keith Helming, added, "Our strong net income performance for 2006 was due in part, to our diversified sources of revenue which include leasing, service fees and sales of aircraft, engines and parts."
Detailed Financial Data ($ in Millions) Operating results: % increase % increase Fourth over Fourth Full over Full Quarter 2006 Quarter 2005 Year 2006 Year 2005 (A) Revenues $211.6 78% $814.4 65% Net income excluding charges for share-based compensation 41.5 55% 156.3 88% Net (loss)/income (17.2) (164%) 88.0 6% (A) - 2005 figures are combined results of the predecessor and successor companies Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and charges for share-based compensation) was $451.5 million for the full year 2006, up 39% over the 2005 combined results of the predecessor and successor companies. Revenue breakdown: Fourth Quarter 2006 Full Year 2006 Lease revenue $132.8 $443.9 Sales revenue 64.7 301.4 Management fees, interest income and other revenue 14.1 69.1 Financial position: % Increase over December 31, December 31, December 31, 2006 2005 2005 Flight equipment held for lease $2,966.8 $2,189.3 36% Total assets 3,923.0 3,061.2 28% Total liabilities 3,161.1 2,641.6 20% Total equity 729.9 419.7 74%
As of December 31, 2006, our portfolio consisted of 344 aircraft and 57 engines that were either owned, on order, under contract or letter of intent, or managed. The number of aircraft and engines in our portfolio increased 64% since December 31, 2005 (241 aircraft and 4 engines).
Financings in Fourth Quarter 2006
AerCap completed several financings during the fourth quarter 2006. The net proceeds from the sale of shares by the Company in its initial public offering were used primarily to pay down debt relating to the acquisition of AeroTurbine. Additionally, a revolving line of credit for AeroTurbine was amended and increased to $220 million. AerCap also signed a $248 million financing with a bank syndicate to fund the purchase of an aircraft portfolio from GATX Corporation and established a pre-delivery payments facility for its AerVenture joint venture.
Notes Regarding Financial Information Presented In This Press Release The financial information presented in this press release is not audited.
Following are definitions of certain non-GAAP measures used in this press release and a reconciliation of such measures to the most closely related GAAP measure:
Net income excluding charges for share-based compensation. This measure is determined by adding charges for share-based compensation, net of related tax benefits to GAAP net income. The Company uses this measure to evaluate and communicate the results of its operations in periods where significant non-cash charges for share-based compensation have been recognized. The majority of these charges were recognized in connection with the Company's public offering and related to a series of share-based awards granted in the twelve months prior to the public offering. The Company does not expect share-based charges of a similar magnitude to occur in comparable periods in the future. The Company believes this measure provides investors with a more meaningful view on the Company's operational performance and allows investors to better understand the Company's operational performance in relation to past and future reporting periods. Following is a reconciliation of net income excluding charges for share-based compensation to net income:
Reconciliation of net income excluding charges for share-based compensation Fourth to net income ($ million) Quarter 2006 Full Year 2006 Net (loss)/income ($17.2) $88.0 Plus: Charges for share-based compensation, net of taxes 58.7 68.3 Equals: Net income excluding charges for share-based compensation $41.5 $156.3
Earnings per share excluding share-based compensation are determined by dividing the amount of net income excluding charges for share-based compensation by the average number of shares outstanding for that period. The average number of shares is based on a daily average.
Adjusted EBITDA. Adjusted EBITDA is determined by adding the amounts for charges relating to interest, depreciation and amortization, taxes and share- based compensation to the amount of net income. Adjusted EBITDA provides management with a useful measure of the Company's operating performance because it assists management in comparing the Company's operating performance in different periods without the impact of the Company's capital structure (primarily interest charges on our outstanding debt), non-cash expenses related to our long-lived asset base (primarily depreciation and amortization) and non-cash expenses related to share-based compensation. Following is a reconciliation of Adjusted EBITDA to net income:
Reconciliation of Adjusted EBITDA to net income Full Year 2006 Full Year 2005 Net income $88.0 $83.4 Plus: Interest charge 166.2 114.6 Income taxes 16.3 14.7 Depreciation and amortization 102.4 112.3 Share-based compensation 78.6 - Equals: Adjusted EBITDA $451.5 $325.0
The non-GAAP measures used in this press release are not intended to be considered in isolation or as a substitute for the GAAP measures to which they most closely relate.
References to financial information for full year 2005 data include the six months ended June 30, 2005 for the predecessor company, AerCap B.V. (formerly known as debis AirFinance B.V.) and the six months ended December 31, 2005 for the successor company, AerCap Holdings N.V. This combined presentation is included because it is the way management analyzes the results of the Company and for the convenience of investors. The combination of these two periods is not in accordance with US GAAP and should be considered supplemental information only.
In connection with the earnings release, management will host an earnings conference call on Wednesday, February 28, 2007 at 9:30 A.M. eastern time. All interested parties are welcome to participate on the live call. The conference call can be accessed by (800) 218-9073 (U.S. domestic) or (303) 262-2211 (International); there is no passcode.
A webcast of the conference call will be available at http://www.aercap.com. For those who are not able to listen to the live call a replay will be available through March 7, 2007 and can be accessed by dialing toll-free (800) 405-2236 (U.S. domestic) or (303) 590-3000 (International), passcode 11083292.
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. AerCap also provides aircraft management services and performs aircraft and engine maintenance, repair and overhaul services and aircraft disassemblies through its certified repair stations. AerCap has a fleet of over 300 aircraft owned, managed or under contracted orders and a diversified commercial engine portfolio. AerCap is headquartered in The Netherlands and has offices in Ireland and the United States.
Forward Looking Statements
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not necessarily limited to, statements relating to future operations. Words such as "expect(s)" and similar expressions are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements. AerCap can give no assurance that its expectations will be attained. There are important factors that could cause actual results, level of activity, performance or achievements to differ from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release may 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. Such forward-looking statements speak only as of the date of this press release. AerCap expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
For more information regarding AerCap and to be added to our email distribution list, please visit http://www.aercap.com.
Financial Statements Follow AerCap Holdings N.V. Consolidated Balance Sheets - Unaudited (In thousands of U.S. Dollars) December 31, 2006 December 31, 2005 Assets Cash and cash equivalents $131,201 $183,554 Restricted cash 112,277 157,730 Trade receivables, net of provisions 25,058 6,575 Flight equipment held for operating leases, net 2,966,779 2,189,267 Net investment in direct finance leases - 1,072 Notes receivable, net of provisions 167,451 196,621 Prepayments on flight equipment 166,630 115,657 Investments 18,001 3,000 Goodwill 6,776 - Intangibles 34,229 38,571 Inventory 82,811 - Derivative assets 17,871 18,420 Deferred income taxes 101,477 99,346 Other assets 92,416 51,421 Total Assets $3,922,977 $3,061,234 Liabilities and Shareholders' Equity Accounts payable $6,958 $2,574 Accrued expenses and other liabilities 92,466 76,563 Accrued maintenance liability 285,788 150,322 Lessee deposit liability 77,686 56,386 Term debt 2,555,139 2,172,996 Accrual for onerous contracts 111,333 152,634 Deferred revenue 28,391 22,009 Derivative liabilities - 8,087 Deferred income taxes 3,383 - Total liabilities 3,161,144 2,641,571 Minority interest 31,938 - Shareholders' equity 592,237 370,000 Retained earnings 137,659 49,663 Total shareholders' equity 729,896 419,663 Total Liabilities and Shareholders' equity $3,922,977 $3,061,234 AerCap Holdings N.V. Consolidated Income Statements - Unaudited (In thousands of U.S. Dollars, except per share data) Three month Three month period ended period ended December 31, 2006 December 31, 2005 Revenues Lease revenue $132,794 $92,243 Sales revenue 64,740 12,489 Management fee revenue 3,742 3,630 Interest revenue 8,025 9,887 Other revenue 2,322 832 Total revenues 211,623 119,081 Expenses Depreciation and amortisation 30,040 23,441 Cost of goods sold 37,013 10,574 Interest on term debt 54,787 19,874 Operating lease in costs 6,307 4,966 Leasing expenses 20,796 7,763 Provision for doubtful notes and accounts receivable 661 3,219 Selling, general and administrative expenses 19,151 16,012 Shared-based compensation 63,642 - Total expenses 232,397 85,849 (Loss) income from continuing operations before income taxes and minority interest (20,774) 33,232 Provision for income taxes 3,770 (6,484) Net (loss) income before minority interest (17,004) 26,748 Minority interest, net of taxes (143) - Net (loss) income $(17,146) $26,748 Basic and diluted (loss) earnings per share (0.21) 0.34 Weighted average shares outstanding basic and diluted 81,259,179 78,236,957 AerCap Holdings N.V. Consolidated Income Statements - Unaudited (In thousands of U.S. Dollars, except per share data) Combined AerCap AerCap AerCap Successor and Holdings N.V. B.V. Holdings N.V. Predecessor (Successor) (Predecessor) Year Ended Year Ended June 27 to Six Months December 31, December 31, December 31, Ended June 2006 2005 2005 30, 2005 Revenues Lease revenue $443,925 $348,901 $173,568 $175,333 Sales revenue 301,405 92,063 12,489 79,574 Management fee revenue 14,072 14,186 7,674 6,512 Interest revenue 34,681 33,465 20,335 13,130 Other revenue 20,336 4,465 1,006 3,459 Total revenues 814,419 493,080 215,072 278,008 Expenses Depreciation and amortisation 102,387 112,325 45,918 66,407 Cost of goods sold 220,277 68,206 10,574 57,632 Interest on term debt 166,219 114,599 44,742 69,857 Operating lease in costs 25,232 25,318 11,441 13,877 Leasing expenses 47,394 21,901 12,213 9,688 Provision for doubtful notes and accounts receivable (186) 6,163 3,002 3,161 Selling, general and administrative expenses 70,729 46,508 26,949 19,559 Share-based compensation 78,635 - - - Total expenses 710,687 395,020 154,839 240,181 Income from continuing operations before income taxes and minority interest 103,732 98,060 60,233 37,827 Provision for income taxes (16,324) (14,697) (10,570) (4,127) Net income before minority interest 87,408 83,363 49,663 33,700 Minority interest, net of taxes 588 - - - Net income $87,996 $83,363 $49,663 $33,700 Basic and diluted earnings per share 1.11 1.07 0.63 45.78 Weighted average shares outstanding - basic and diluted 78,992,513 78,236,957 78,236,957 736,203 AerCap Holdings N.V. Condensed Consolidated Statements of Cash Flows - Unaudited (In thousands of U.S. Dollars) Combined AerCap AerCap Successor and Holdings N.V. AerCap B.V. Holdings N.V. Predecessor (Successor) (Predecessor) Year Ended Year Ended June 27 to Six Months December 31, December 31, December 31, Ended June 2006 2005 2005 30, 2005 Net cash provided by operating activities $348,379 $216,513 $109,238 $107,275 Net cash (used in) provided by investing activities (843,289) (1,540,402)(A) (1,431,259) 14,525 Net cash provided by (used in) financing activities 443,558 1,363,467 1,505,472 (142,005) Net (decrease) increase in cash and cash equivalents $(51,352) $39,578 $183,451 $(20,205) (A) - Includes the elimination of cash acquired of 123,668 relating to the purchase of AerCap B.V. by AerCap Holdings N.V.
SOURCE AerCap Holdings N.V.
Released February 28, 2007