MAY 9TH, 2017

AerCap Holdings N.V. Reports Financial Results for the First Quarter 2017 and Authorizes New Share Repurchase Program of $300 Million

DUBLIN—(BUSINESS WIRE)—AerCap Holdings N.V. (NYSE:AER):

Net income of $261.2 million for the first quarter of 2017
Diluted earnings per share of $1.48 for the first quarter of 2017
Highlights

105 aircraft transactions executed in the first quarter of 2017, including 22 widebody transactions.
99.7% fleet utilization rate for the first quarter of 2017.
7.3 years average age of owned fleet and 6.5 years average remaining lease term.
Signed financing transactions for $7.2 billion.
$9.5 billion of available liquidity.
Adjusted debt/equity ratio of 2.7 to 1.
Upgraded to investment grade rating by Moody’s.
$51.20 book value per share.
Repurchased 6.6 million shares in the first quarter of 2017 for $293 million and 9.5 million shares year to date through May 5, 2017 for $427 million.
Board authorized a new $300 million share repurchase program, which will run through September 30, 2017.
Aengus Kelly, CEO of AerCap, commented: “AerCap delivered another quarter of consistent results. During the first quarter, we generated $1.48 of earnings per share and net income of $261.2 million. The strong operational performance of the business is evidenced in 105 aircraft transactions executed during the quarter, as well as the 99.7% fleet utilization level achieved. We also received our third investment grade rating from Moody’s and completed $7.2 billion of financing transactions, further strengthening AerCap’s balance sheet.”

First Quarter 2017 Financial Results

Net income of $261.2 million, compared with $223.1 million for the same period in 2016. Diluted earnings per share of $1.48, compared with $1.13 for the same period in 2016.
The increase in net income and diluted earnings per share was driven primarily by higher gain on sale of assets and lower maintenance rights expense, partially offset by lower income as a result of the sale of mid-life and older aircraft, which reduced average lease assets. Diluted earnings per share was also favorably impacted by the repurchase of 31.6 million shares for $1.3 billion during the full year 2016 and the first quarter of 2017.

Components of Net Income/Earnings Per Share

Maintenance rights amortization impact 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 refer to Notes regarding Financial Information Presented in this Press Release for additional detail.

Revenue and Net Spend

Basic lease rents were $1,067.1 million for the first quarter of 2017, compared with $1,139.3 million for the same period in 2016. The decrease was primarily due to the sale of mid-life and older aircraft during 2016 and 2017, which reduced average lease assets. Our average lease assets for the first quarter of 2017 were $34.1 billion, compared with $35.5 billion for the same period in 2016.

Maintenance rents and other receipts were $89.9 million for the first quarter of 2017, compared with $150.4 million for the same period in 2016. During the first quarter of 2016, the higher maintenance rents were primarily driven by lease terminations and amendments.

Net gain on sale of assets for the first quarter of 2017 was $47.3 million, relating to 21 aircraft sold and three aircraft reclassified to finance leases, compared with $19.0 million for the same period in 2016, relating to 19 aircraft sold and nine aircraft reclassified to finance leases.

Other income for the first quarter of 2017 was $32.5 million, compared with $9.3 million for the same period in 2016. During the first quarter of 2017, the increase in other income was primarily related to contractual payments from a lease termination agreement with a lessee.

As shown in the table above, adjusted interest expense was $279.2 million in the first quarter of 2017, compared with $273.6 million for the same period in 2016.

Annualized net spread was 9.2% in the first quarter of 2017, compared with 9.8% for the same period in 2016. The decrease was primarily a result of the lower age of our owned fleet and the higher average cost of debt. Our 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.

Other Expenses

We did not record any asset impairment charges for the first quarter of 2017, compared to $44.6 million recorded for the same period in 2016. Asset impairment recorded in the first quarter of 2016 was driven by impairments resulting from lease termination and amendments, which were more than offset by $62.1 million primarily due to the release of maintenance rents. Leasing expenses were $122.4 million for the first quarter of 2017, compared with $167.4 million for the same period in 2016. The decrease in leasing expenses was primarily related to lower maintenance rights expense due to fewer maintenance events during the first quarter of 2017. Restructuring related expenses were $9.9 million for the first quarter of 2017, compared with $12.6 million for the same period in 2016. Restructuring related expenses in the first quarter of 2017 and 2016 represented non-recurring charges related to the downsizing of AeroTurbine.

Effective Tax Rate

AerCap’s effective tax rate was 13.0% during the first quarter of 2017, compared to 13.5% for the same period in 2016. The effective tax rate for the full year 2016 was 14.5%. The 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, 2017, AerCap’s portfolio consisted of 1,541 aircraft that were owned, on order or managed (including aircraft owned by AerDragon, a non-consolidated joint venture). The average age of our owned fleet as of March 31, 2017 was 7.3 years and the average remaining contracted lease term was 6.5 years.

Share Repurchase Program

We have authorized a new $300 million share repurchase program, which will run through September 30, 2017. Repurchases under the program may be made through open market purchases or privately negotiated transactions in accordance with applicable U.S. federal securities laws. The timing of repurchases and the exact number of common shares to be purchased will be determined by the Company’s management, in its discretion, and will depend upon market conditions and other factors. The program will be funded using the Company’s cash on hand and cash generated from operations. The program may be suspended or discontinued at any time.