AerCap Holdings N.V. Reports First Quarter 2010 Financial Results

AMSTERDAM, May 7 /PRNewswire-FirstCall/ -- AerCap Holdings N.V. (the "Company" or "AerCap") (NYSE: AER) today announced the results of its operations for the first quarter ended March 31, 2010.

On March 25, 2010, AerCap completed an all-share acquisition of Genesis Lease Limited ("Genesis"), pursuant to which Genesis amalgamated with AerCap International Bermuda Limited, a subsidiary of AerCap (the "Genesis Transaction"). The resulting amalgamated company continues as a subsidiary of AerCap. The Genesis Transaction is fully reflected in the AerCap Holdings N.V. consolidated balance sheet as of March 31, 2010. The Genesis Transaction has no impact on 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 is 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). From the second quarter of 2010, the Genesis Transaction will fully impact AerCap Holdings N.V.'s income statement and cash flow statement.

First Quarter 2010 Highlights

  • First quarter 2010 net income was $34.4 million, compared with net income of $30.0 million for the same period in 2009. First quarter 2010 net income excluding the impact of the mark-to-market of interest rate caps and share-based compensation was $46.7 million, compared to net income of $31.5 million in the first quarter 2009 on the same basis.
  • First quarter 2010 basic and diluted earnings per share were $0.40. First 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 $0.55.
  • Net spread, the difference between basic lease rents and interest expense excluding the impact from the mark-to-market of interest rate caps, was $133.0 million in the first quarter of 2010 compared to $112.5 million in the first quarter of 2009, an increase of 18%. This measure reflects the increase in leasing income.
  • Basic lease rents for the first quarter of 2010 were $165.8 million, compared to $141.4 million for the same period in 2009, an increase of 17%. Total lease revenue (basic rents, maintenance rents and end-of-lease compensation) for the first quarter of 2010 was $175.4 million, compared to $161.2 million for the same period in 2009, an increase of 9%.
  • Sales revenue for the first quarter of 2010 was $182.4 million, compared to $41.7 million for the same period in 2009, and was generated from the sale of five aircraft, three engines and parts inventory.
  • Total revenue for the first quarter of 2010 was $364.0 million, compared to $208.5 million for the same period in 2009. The increase was mainly due to the increase in sales revenue and an increase in lease revenues from higher basic lease rents.
  • Committed purchases of aviation assets delivered or scheduled for delivery in 2010 are $2.2 billion, of which $0.9 billion closed in the first quarter of 2010.
  • Total assets were $8.7 billion at March 31, 2010, an increase of 50% over total assets of $5.8 billion at March 31, 2009. The Genesis Transaction accounted for $1.6 billion of the increase in total assets (please refer to "Financial position" for details).  The remaining $1.3 billion increase was driven primarily by deliveries of forward order aircraft.

Klaus Heinemann, CEO of AerCap, commented: "AerCap increased its flight equipment portfolio by 71% to $7.2 billion during the last twelve months, inclusive of the Genesis Transaction.  For the remaining quarters of this year, we have further portfolio growth of $1.3 billion contracted and placed. Our revenue grew by 75% compared to the same quarter last year reflecting an improved market for sales.  With such improvement, we also increased our net income (excluding the mark-to-market of interest rate caps and share-based compensation) by 48%. Finally, with a continued focus on liquidity, we expanded our total cash position by 38% to $440 million and improved our debt/equity ratio from 3.6 to 3.3. As a result of these efforts, AerCap is firmly established as the leading independent global aviation lessor with a sound balance sheet and ample liquidity as we enter a new cyclical upturn in our industry."

AerCap's CFO, Keith Helming, said: "We are pleased with our first quarter results. Our net spread increased 18% year-on-year, highlighting the continued growth in our lease earnings. AerCap also strengthened its cash position in 2010 through the completion of the Genesis Transaction and the signing of a debt financing agreement which funds are available for general corporate purposes.  In addition, the integration of the Genesis Transaction is progressing well and is expected to be completed during the second quarter of 2010."  

Summary of Financial Results

AerCap recorded a first quarter 2010 net income of $34.4 million or $0.40 earnings per basic and diluted share. First quarter 2010 net income amount included net charges relating to mark-to-market of interest rate caps and share-based compensation of $12.3 million or $0.15 per basic and diluted share, net of tax. The after-tax charge relating to the mark-to-market of our interest rate caps was $11.6 million which reflects changes in forecasted interest rates and the after-tax charge from share-based compensation was $0.7 million.

Detailed Financial Data

($ in Millions)














Operating results:









Three months ended
March 31,



2010


2009


% increase/ (decrease)








Revenues


$         364.0


$         208.5


75%

Net income


34.4


30.0


15%

Net income excluding the impact of mark-to-market of interest rate caps and share-based compensation


46.7


31.5


48%



Total revenue in the first quarter of 2010 increased 75% compared to the first quarter of 2009. This increase resulted primarily from an increase in sales revenue and higher basic lease rents.

Net income for the first quarter of 2010 excluding the impact of mark-to-market of interest rate caps and share-based compensation increased by 48%. This increase was caused by higher income from the sale of assets and an increase in net spread.

Revenue breakdown:









Three months ended
March 31,



2010


2009


% increase/ (decrease)








Lease revenue:







  Basic lease rents


$         165.8


$         141.4


17%

  Maintenance rents


9.50


12.60


(25%)

  End-of-lease compensation and other receipts


-


7.20


(100%)

Lease revenue


$         175.3


$         161.2


9%

Sales revenue


182.4


41.7


337%

Management fees and interest income


3.9


5.4


(28%)

Other revenue


2.4


0.2


100%

Total revenue


$         364.0


$         208.5


75%



Basic lease rents were $165.8 million for the first quarter of 2010, an increase of 17% compared to the first quarter of 2009, as a result of our growing asset base. Our average lease assets increased by 32% to $5.4 billion compared to the first quarter of 2009. As shown in the table below, interest expense excluding the impact of the mark-to-market of interest rate caps was $32.8 million in the first quarter of 2010, a 13% increase compared to the first quarter of 2009. We refer to the difference in basic lease rents and interest expense on debt excluding the mark-to-market on interest rate caps as net spread, which increased 18% to $133.0 million in the first quarter of 2010 over the same period in 2009.



Three months ended
March 31,



2010


2009


% increase/ (decrease)


Basic lease rents


$ 165.8


$ 141.4


17%








Interest on debt


$   51.4


$   29.5


74%

Plus: mark-to-market of interest rate caps


(18.6)


(0.6)


(3,000%)

Interest on debt excluding the impact of mark-to-market of interest rate caps  


$   32.8


$   28.9


13%








Net Spread  


$ 133.0


$ 112.5


18%



Effective tax rate

AerCap's blended effective tax rate during the first quarter of 2010 was 10.0% (charge), consisting of 11.3% (charge) for AerCap's aircraft business and -30.8% (income) for AerCap's engine and parts business. The blended effective tax rate in 2009 was 1.9% (charge).

Financial position:









March 31, 2010


March 31, 2009


% Increase over March 31, 2009








Flight equipment held for lease


$       7,198.4


$       4,204.7


71%

Total assets


8,709.5


5,790.1


50%

Total liabilities


6,849.7


4,629.1


48%

Total equity


1,859.8


1,161.0


60%



As of March 31, 2010, AerCap's portfolio consisted of 338 aircraft and 88 engines that were either owned, on order, under contract or letter of intent, or managed. This includes the 54 aircraft that AerCap added through the Genesis Transaction. The fair value of the Genesis assets acquired can be summarized as follows:







Fair value of net assets acquired







(In thousands of U.S. Dollars)








Cash and cash equivalents  




$                                103,691

Restricted cash




31,456

Flight equipment held for operating leases




1,337,412

Intangibles (lease premium)




42,975

Deferred income taxes




34,089

Other assets




6,915

Total assets




1,556,538








Accrued maintenance liability




$                              (107,757)

Debt




(947,013)

Derivative liabilities




(66,196)

Other liabilities




(32,222)

Total liabilities




(1,153,188)








Net assets acquired




$                                403,350








Consideration paid (34.4 million shares at a share price of $10.83, exchange ratio 1:1)




(372,327)








Amalgamation gain




$                                  31,023








Transaction expenses, net of tax




(30,749)








Amalgamation gain, net of transaction expenses and tax




$                                       274



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 month periods ended March 31, 2010 and 2009:



Three months ended
March 31,



2010


2009


% increase/ (decrease)








Net income


$   34.4


$   30.0


(15%)

Plus: mark-to-market of interest rate caps, net of tax  


11.6


0.7


1,557%

          share-based compensation, net of tax


0.7


0.8


(13%)

Net income excluding the impact of mark-to-market of interest rate caps and share-based compensation


$   46.7


$   31.5


48%



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 rents for the three month periods ended March 31, 2010 and 2009 is included above.

Conference Call

In connection with the earnings release, management will host an earnings conference call today, Friday, May 7, 2010 at 9:30 am Eastern Time / 3:30 pm Central European Time. The call can be accessed live by dialing (U.S./Canada) 800-676-6978 or (International) +1-706-634-5464 and referencing code 66118682 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. A replay of the call will be available beginning at 10:30 am Eastern Time / 4:30 pm Central European Time on May 7, 2010 continuing through June 7, 2010. To access the recording, call 800-642-1687 (U.S./Canada) or +1-706-645-9291 (International) and enter passcode 66118682. The webcast replay will be archived in the "Investor Relations" section of the company's website for one year.

In addition, an Investor & Analyst Day presentation will be hosted by AerCap's management today, Friday, May 7, 2010, at 12:30 pm Eastern Time at The New York Palace (the Garrison Room), 455 Madison Avenue, New York. Doors will open at 12:00 pm.

To participate in either event, please register at: www.sharedvalue.net/aercap/Q110results_I&A_Presentation

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 Ireland, the United States, Singapore, China and the United Kingdom.

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

AerCap Holdings N.V.

Consolidated Balance Sheets - Unaudited

(In thousands of U.S. Dollars)










March 31, 2010


December 31, 2009


March 31, 2009








Assets







Cash and cash equivalents


$          225,908


$                  182,617


$          175,081

Restricted cash


214,485


140,746


144,954

Trade receivables, net of provisions


51,709


48,070


46,657

Flight equipment held for operating leases, net


7,198,401


5,230,437


4,204,749

Flight equipment held for sale


-


-


76,566

Net investment in direct finance leases


33,099


34,532


30,152

Notes receivables, net of provisions


50,379


138,488


127,440

Prepayments on flight equipment


411,351


527,666


539,572

Investments


21,596


21,031


18,678

Goodwill


6,776


6,776


6,776

Intangibles, net


80,177


31,399


42,309

Inventory


97,988


102,538


94,148

Derivative assets


30,105


44,866


19,631

Deferred income taxes


111,362


80,098


81,231

Other assets


176,193


180,237


182,134

Total Assets


$       8,709,529


$               6,769,501


$       5,790,078















Liabilities and Equity














Accounts payable


$            19,986


$                    11,832


$            24,246

Accrued expenses and other liabilities


80,506


80,399


81,213

Accrued maintenance liability


371,847


228,006


207,042

Lessee deposit liability


146,285


126,093


102,397

Debt*


6,082,544


4,846,664


4,133,991

Accrual for onerous contracts


13,190


22,363


28,496

Deferred revenue


57,799


33,011


40,133

Derivative liabilities


77,587


7,801


11,557

Total liabilities


6,849,744


5,356,169


4,629,075








Share capital


1,163


699


699

Additional paid-in capital


965,875


593,133


635,406

Retained earnings


698,576


664,177


528,964

Total AerCap Holdings N.V. shareholders' equity


1,665,614


1,258,009


1,165,069

Non-controlling interest


194,171


155,323


(4,066)

Total Equity


1,859,785


1,413,332


1,161,003








Total Liabilities and Equity


$       8,709,529


$               6,769,501


$       5,790,078








* Includes $60.4 million of subordinated debt received from our joint venture partner relating to the TUI portfolio acquisition








Supplemental information


March 31, 2010


December 31, 2009


March 31, 2009

Debt/equity ratio


3.3


3.4


3.6

Debt/equity ratio (adjusted for subordinated debt)


3.1


3.2


3.3



AerCap Holdings N.V.



Consolidated Income Statements - Unaudited



(In thousands of U.S. Dollars, except share and per share data)






Three months ended



March 31,



2010


2009






Revenues





Lease revenue


$    175,310


$    161,213

Sales revenue


182,454


41,717

Interest revenue


1,322


2,621

Management fee revenue


2,533


2,741

Other revenue


2,417


210

Total Revenues


364,036


208,502






Expenses





Depreciation


63,377


51,247

Asset impairment


-


7,217

Cost of goods sold


156,138


33,824

Interest on debt


51,402


29,486

Operating lease in costs


3,151


3,314

Leasing expenses


10,490


19,161

Provision for doubtful notes and accounts receivable


740


1,232

Selling, general and administrative expenses


29,879


27,213

Total Expenses


315,177


172,694






Income from continuing operations before income taxes


48,859


35,808






Provision for income taxes


(4,886)


(1,860)

Amalgamation gain, net of transaction expenses and tax


274


-






Net Income


44,247


33,948






Net (income) attributable to non-controlling interest


(9,848)


(3,994)






Net Income attributable to AerCap Holdings N.V.


$      34,399


$      29,954






Basic and diluted earnings per share


$          0.40


$          0.35






Weighted average shares outstanding - basic and diluted


85,036,957


85,036,957



AerCap Holdings N.V.





Consolidated Statements of Cash Flows





(In thousands of U.S. Dollars)







Three months ended March 31,



2010


2009






Net income


44,247


33,948

Adjustments to reconcile net income to net cash provided by operating activities





Depreciation


63,377


51,247

Asset impairment


-


7,217

Amortisation of debt issuance cost


5,306


3,834

Amortisation of intangibles


3,203


4,790

Provision for doubtful notes and accounts receivable


696


1,232

Capitalised interest on pre-delivery payments


(160)


(371)

Gain on disposal of assets


(20,223)


448

Change in fair value of derivative instruments


22,339


(1,002)

Deferred taxes


4,765


1,241

Share-based compensation


879


1,002

Changes in assets and liabilities





   Trade receivables and notes receivable, net


1,650


4,284

   Inventories


5,413


14,484

   Other assets and derivative assets


7,638


(4,188)

   Other liabilities


(14,300)


(26,199)

   Deferred revenue


12,746


5,212

Net cash provided by operating activities


137,576


97,179






Purchase of flight equipment


(629,729)


(288,087)

Proceeds from sale/disposal of assets


142,626


1,792

Prepayments on flight equipment


(48,527)


(158,504)

Purchase of subsidiaries, net of cash acquired


70,618


-

Purchase of intangibles


(9,006)


-

Movement in restricted cash


(42,283)


(31,557)

Net cash used in investing activities


(516,301)


(476,356)






Issuance of debt


719,378


445,700

Repayment of debt


(342,819)


(96,485)

Debt issuance costs paid


(9,931)


(3,370)

Maintenance payments received


30,584


23,768

Maintenance payments returned


(9,924)


(14,552)

Security deposits received


9,388


8,014

Security deposits returned


(2,564)


(2,961)

Capital contributions from non-controlling interests


29,000


-

Net cash provided by financing activities


423,112


360,114






Net increase (decrease) in cash and cash equivalents


44,387


(19,063)

Effect of exchange rate changes


(1,096)


581

Cash and cash equivalents at beginning of period


182,617


193,563

Cash and cash equivalents at end of period


225,908


175,081



Certain reclassifications have been made to prior years consolidated statements of cash flow to reflect the current year presentation.

For Investors:

Keith Helming

Chief Financial Officer

+31 20 655 9670

khelming@aercap.com


Peter Wortel

Investor Relations

+31 20 655 9658

pwortel@aercap.com


For Media:

Frauke Oberdieck

Corporate Communications

+31 20 655 9616

foberdieck@aercap.com



SOURCE AerCap Holdings N.V.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.