AerCap Holdings N.V. Reports Strong Financial Results

Amsterdam, Netherlands; May 6, 2014 – AerCap Holdings N.V. (“AerCap,” “the Company,” NYSE: AER) announced that its adjusted net income was $79.9 million for the first quarter of 2014. Adjusted earnings per share were $0.70 for the first quarter of 2014, an increase of 17% over the first quarter of 2013.

Key Highlights

The debt to equity ratio was 2.5 to 1 at March 31, 2014, compared with 2.6 to 1 for the same period in 2013.
As previously disclosed, we signed financing transactions for $2.82 billion, primarily relating to an agreement to replace ILFC’s $2.3 billion unsecured revolving credit facility with a new $2.75 billion four-year unsecured revolving credit facility, to become effective upon the closing of the ILFC transaction.
Our fleet utilization rate was 98.9% for the first quarter of 2014. The average age of the owned fleet as of March 31, 2014 was 5.6 years and the average remaining contracted lease term was 6.6 years.
During the first quarter 2014, we purchased three aircraft with a total value of $0.2 billion and the future aircraft purchases were $3.3 billion as of March 31, 2014, relating to 41 aircraft, including five purchase rights. The 36 aircraft that are fully committed are all placed on long term leases with an average term of 11.9 years.
As previously disclosed, 29 aircraft transactions were executed during the first quarter of 2014.
Subsequent to the first quarter of 2014, on April 22, 2014, we completed the sale of 100% of the class A common shares in Genesis Funding Limited, an aircraft securitisation vehicle with a portfolio of thirty-seven aircraft with an average age of thirteen years valued at approximately $750 million.
Aengus Kelly, CEO of AerCap, commented: “We are extremely pleased with the first quarter financial results. Our consistent profitability coupled with deleveraging validates our strategy to maintain a modern portfolio of aircraft on lease to a global customer base financed by a long term stable liability structure. Further, our sale of Genesis Funding Limited takes the level of aircraft sales since 2006 to more than 300 aircraft with an average age of approximately 13 years, thereby reducing the average age of our fleet to 5.0 years. With continued focus and discipline, we are well positioned for future success to benefit all AerCap constituents.”

First Quarter 2014 Financial Results

First quarter 2014 reported net income was $54.7 million, compared with $67.5 million for the same period in 2013. First quarter 2014 reported basic earnings per share were $0.48, compared with $0.59 for the same period in 2013. The decrease in net income and earnings per share from first quarter 2013 was driven primarily by costs incurred in first quarter 2014 relating to the ILFC transaction.
First quarter 2014 adjusted net income was $79.9 million, compared with $68.0 million for the same period in 2013. First quarter 2014 adjusted earnings per share were $0.70, compared with $0.60 for the same period in 2013.
Net interest margin earned on lease assets, or net spread, was $176.8 million in the first quarter of 2014 compared with $152.9 million for the same period in 2013. Net interest margin as a percentage of average lease assets was 8.7% for the first quarter 2014, compared with 8.3% for the same period in 2013.
Total owned assets increased by 10% to $9.5 billion as of March 31, 2014 from $8.7 billion as of March 31, 2013 and total managed aircraft were valued at $2.4 billiona).

Includes aircraft under our management and owned by our non-consolidated joint ventures. The aircraft value was based on the average appraised value provided by three external appraisers between September 2013 and March 2014.

First quarter 2014 adjusted net income increased 18% over the same period in 2013 driven primarily by higher lease income during the first quarter of 2014.

First quarter 2014 adjusted earnings per share increased 17% over the same period in 2013 driven primarily by the higher income as discussed above.

Basic lease rents were $234.9 million for the first quarter of 2014, compared with $212.9 million in the same period in 2013. The increase was driven primarily by new aircraft purchases. Our average lease assets were $8.1 billion, compared with $7.4 billion for the same period in 2013.

Lease revenue for the first quarter of 2014 was $249.1 million, compared with $226.8 million for the same period in 2013.

Net gain on sale of assets for the first quarter of 2014 was $9.8 million, compared with $11.0 million for the same period in 2013.

Other revenue for the first quarter of 2014 was $0.1 million, compared with $0.9 million for the same period in 2013.

a) Interest on debt excluding the impact of mark-to-market of interest rate caps for the three months ended March 31, 2014 and 2013 includes $6.6 million and $7.6 million of amortization of debt issuance costs, respectively.

As shown in the table above, interest expense excluding the impact of the mark-to-market of interest rate caps was $58.1 million in the first quarter of 2014, a 3% decrease compared with the same period in 2013. Net spread was $176.8 million in the first quarter of 2014, compared with $152.9 million in the same period in 2013.

AerCap’s blended effective tax rate during the first quarter of 2014 was 8.5%. The blended effective tax rate for the year ended December 31, 2013 was 8.4%. The blended effective tax rate in any year is impacted by the source and amount of earnings among AerCap’s different tax jurisdictions.

As of March 31, 2014, AerCap’s portfolio consisted of 377 aircraft that were owned, on order, under contract, managed or owned by AerDragon, a non-consolidated joint venture. The average age of the owned fleet as of March 31, 2014 was 5.6 years and the average remaining contracted lease term was 6.6 years.