Fourth Quarter 2016 Financial Results February 21, 2017 AerCap Holdings N.V.
Disclaimer Incl. Forward Looking Statements & Safe Harbor This presentation contains certain statements, estimates and forecasts events described in the forward-looking statements in this presentation with respect to future performance and events. These statements, might not occur. Accordingly, you should not rely upon forward-looking estimates and forecasts are “forward - looking statements”. In some statements as a prediction of actual results and we do not assume any cases, forward-looking statements can be identified by the use of responsibility for the accuracy or completeness of any of these forward- forward- looking terminology such as “may,” “might,” “should,” “expect,” looking statements. Except as required by applicable law, we do not “plan,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or undertake any obligation to, and will not, update any forward-looking “continue” or the negatives thereof or variations thereon or similar statements, whether as a result of new information, future events or terminology. All statements other than statements of historical fact otherwise. included in this presentation are forward-looking statements and are No warranty or representation is given concerning such information, based on various underlying assumptions and expectations and are which must not be taken as establishing any contractual or other subject to known and unknown risks, uncertainties and assumptions commitment binding upon AerCap Holdings N.V. or any of its and may include projections of our future financial performance based subsidiaries or associated companies. on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and In addition to presenting financial results in conformity with U.S. projections about future events. There are important factors that could generally accepted accounting principles (“GAAP“), this presentation cause our actual results, level of activity, performance or achievements includes certain non-GAAP financial measures. Reconciliations of such to differ materially from the results, level of activity, performance or non-GAAP financial measures are set forth or referred to in the achievements expressed or implied in the forward-looking statements. presentation where relevant. Non-GAAP financial measures should be As a result, we cannot assure you that the forward-looking statements considered in addition to, not as a substitute for or superior to, financial included in this presentation will prove to be accurate or correct. In light measures determined in conformity with GAAP. of these risks, uncertainties and assumptions, the future performance or 3 2 4
AerCap Investment Case AerCap is the global leader in aircraft leasing Resilient industry fundamentals Global platform with unmatched breadth and reach Strong earnings and cash flow generation Disciplined portfolio management Strong liquidity and access to capital Hedging strategies to mitigate risk Highly experienced management team with deep industry expertise 3 3 4
2016 Financial Results and Highlights Financial Results Highlights • 458 aircraft transactions in 2016 , including Net Income 126 widebody transactions (US GAAP) • 99.5% fleet utilization 4Q FY ($ million) • 7.4 years average age of owned fleet and 2016 2016 6.4 years average remaining lease term Net Income 364.7 1,046.6 • 98% of new aircraft deliveries through 2018 and 78% through 2019 leased • Over $3.0 billion of sales closed in 2016 Diluted Earnings Per Share (US GAAP) • $9.5 billion of available liquidity • 2.7 to 1 adjusted debt/equity ratio 4Q FY ($) 2016 2016 • Upgraded to Investment Grade rating by Moody’s Diluted EPS 2.01 5.52 • $49.33 book value per share • Repurchased 5.7 million shares in 4Q 2016 for $241 million and 25 million shares in 2016 for $966 million Note: Net Income (US GAAP) & Diluted EPS (US GAAP) include the cost for the amortization of the • New $350 million share repurchase program maintenance rights asset (not adjusted) authorized, which will run through June 30, 2017 3 4 4
Net Income ($ million) 4Q 2016 4Q 2015 FY 2016 FY 2015 Reported Net Income (US GAAP) 364.7 264.2 1,046.6 1,178.7 Key Highlights 4Q Results: • 4Q 2016 reported net income (US GAAP) up significantly over 4Q 2015 (+38%) driven by higher gains on sale and other non-recurring items, as well as lower AeroTurbine losses Full Year Results: • The decrease in year over year net income was due to various items, including sales of older aircraft during 2015 and 2016, which reduced average lease assets by ~$1.6 billion (proceeds were used to repurchase shares) Components of Net Income ($ million) 4Q 2016 4Q 2015 FY 2016 FY 2015 Gains on sale and other non-recurring items 1 115.4 57.0 248.2 194.4 AeroTurbine results, including restructuring related expenses (13.6) (86.2) (123.4) (80.4) Maintenance rights amortization impact 2 (33.6) (16.7) (128.0) (72.8) All other earnings 296.5 310.1 1,049.8 1,137.5 Reported Net Income 364.7 264.2 1,046.6 1,178.7 Includes gain on sale of assets, income from lease terminations, net insurance proceeds, a gain related to the repayment of a note receivable earlier than expected and gains from the (1) settlement of asset value guarantees. Represents the difference between the amortization cost of the maintenance rights asset as compared to depreciation expense if this asset had been classified as flight equipment. Please (2) refer to slide 17 for additional detail regarding the maintenance rights amortization impact. 3 5 4
Earnings Per Share ($) 4Q 2016 4Q 2015 FY 2016 FY 2015 Reported Diluted Earnings Per Share 2.01 1.33 5.52 5.72 Key Highlights 4Q Results: • 4Q 2016 reported diluted earnings per share (US GAAP) up significantly over 4Q 2015 (+51%) driven by higher gains on sale and other non-recurring items, as well as lower AeroTurbine losses Full Year Results: • Diluted earnings per share was impacted by the same factors as net income, but was favorably impacted by the repurchase of 40.7 million shares for $1.7 billion during 2015 and 2016 (~20% of total shares outstanding) Components of Earnings Per Share ($) 4Q 2016 4Q 2015 FY 2016 FY 2015 Gains on sale and other non-recurring items 1 0.64 0.29 1.31 0.94 AeroTurbine results, including restructuring related expenses (0.07) (0.43) (0.65) (0.39) Maintenance rights amortization impact 2 (0.19) (0.08) (0.67) (0.35) All other earnings 1.63 1.55 5.53 5.52 Reported Diluted Earnings Per Share 2.01 1.33 5.52 5.72 Includes gain on sale of assets, income from lease terminations, net insurance proceeds, a gain related to the repayment of a note receivable earlier than expected and gains from the (1) settlement of asset value guarantees. Represents the difference between the amortization cost of the maintenance rights asset as compared to depreciation expense if this asset had been classified as flight equipment. Please (2) refer to slide 17 for additional detail regarding the maintenance rights amortization impact. 3 6 4
Book Value Per Share % Incr/(Decr) ($ million except Book Value Per Share) Dec. 31, 2016 Dec. 31, 2015 over Dec. 31, 2015 Total Shareholders’ Equity $8,524 $8,349 2% Ordinary Shares Outstanding 176.2 200.3 Unvested Restricted Stock (3.4) (3.0) Ordinary Shares Outstanding 172.8 197.3 (12%) (excl. Unvested Restricted Stock) 1 Book Value Per Share $49.33 $42.31 17% Ordinary shares outstanding used to calculate book value per share excludes unvested restricted stock. (1) 3 7 4
Revenues and Other Income ($ million) 4Q 2016 4Q 2015 FY 2016 FY 2015 Basic Lease Rents 1,061.8 1,148.8 4,395.3 4,635.8 Maintenance Rents and Other Receipts 159.1 136.7 472.3 355.8 Net Gain on Sale of Assets 58.7 43.4 138.5 183.3 Other Income 89.0 9.1 146.0 112.7 Total Revenues and Other Income 1,368.6 1,338.0 5,152.1 5,287.6 • Basic lease rents decreased primarily due to sales of older aircraft during 2015 and 2016, which reduced average lease assets by ~$1.6 billion • 4Q 2016 other income included $73.2 million of non-recurring income from lease terminations and a gain related to the repayment of a note receivable earlier than expected 3 8 4
Net Interest Margin (Net Spread) ($ million) 4Q 2016 4Q 2015 FY 2016 FY 2015 Net Interest Margin (Net Spread) 1 790.5 874.3 3,305.0 3,554.0 Average Lease Assets 2 34,192 35,836 34,857 36,311 Annualized Net Spread 9.3% 9.8% 9.5% 9.8% Average Cost of Debt 3.9% 3.7% 3.7% 3.6% (including all fees) 3 Average Age of Owned Fleet 7.4 7.7 7.4 7.7 (as of December 31, 2016 and 2015) • Net spread reduction was primarily impacted by lower age of owned fleet and higher average cost of debt • Average cost of debt increased primarily due to the issuance of new longer-term bonds to replace shorter-term ILFC notes, which had lower reported interest expense as a result of ILFC acquisition purchase accounting Net Interest Margin is calculated as basic lease rents less interest expense, excluding the non-cash charges related to the mark-to-market of interest rate caps and swaps. (1) Includes flight equipment held for operating leases, flight equipment held for sale, net investment in finance and sales-type leases and maintenance rights intangible asset. (2) Interest expense divided by average debt balance, excluding mark-to-market on interest rate caps and swaps. (3) 3 9 4
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