EX-99.1 2 a08-14066_1ex99d1.htm EX-99.1

 

Exhibit 99.1

 

 

 

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

PRESS RELEASE

 

Corporate Communications

 

 

+31 20 655 9616

FOR IMMEDIATE RELEASE

 

foberdieck@aercap.com

 

 

AerCap Holdings N.V. Reports First Quarter 2008 Financial Results

 

Amsterdam, Netherlands; May 9, 2008 - AerCap Holdings N.V. (the “Company” or “AerCap”) (NYSE: AER) today announced the results of its operations for the first quarter ended March 31, 2008.

 

First Quarter 2008 Highlights

 

 

·

 

First quarter 2008 net income was $50.9 million, compared with $60.6 million for the same period in 2007.  First quarter 2008 net income excluding non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation was $59.9 million, compared with $66.7 million in first quarter 2007 on the same basis.

 

 

 

 

 

·

 

The decrease in net income in first quarter 2008 compared with first quarter 2007 was driven by maintenance, sales, and other revenue which do not occur evenly throughout all quarters.  First quarter 2007 had a higher amount of these revenues than first quarter 2008.

 

 

 

 

 

·

 

First quarter 2008 basic and diluted earnings per share were $0.60.  First quarter 2008 basic and diluted earnings per share excluding non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation were $0.71.

 

 

 

 

 

·

 

Basic lease rents increased 7% in the first quarter 2008 compared to the first quarter 2007, while interest expense excluding non-cash charges relating to the mark-to-market of interest rate caps decreased 11%.  The difference between basic lease rents and the adjusted interest expense was $85.6 million in first quarter 2008 compared to $72.7 million in first quarter 2007, an increase of 18%.

 

 

 

 

 

·

 

Sales revenue for the first quarter 2008 was $142.5 million, compared to $148.9 million for the same period in 2007, and was generated from the sale of eight aircraft and the sale of parts inventory.  Total revenue for the first quarter 2008 was $294.5 million, compared to $309.5 million for the same period in 2007.

 

 

 

 

1



 

 

 

 

 

 

 

·

 

Total assets were $4.6 billion at March 31, 2008, an increase of 14% over total assets of $4.0 billion at March 31, 2007.

 

 

 

 

 

·

 

Committed purchases of aviation assets delivered or scheduled for delivery in 2008 are $1.2 billion, of which $277.1 million closed in first quarter 2008.  Total committed purchases include the purchase of a 21 used aircraft portfolio which is subject to a signed letter of intent.

 

Significant Items Previously Disclosed Occurring Subsequent to Quarter End

 

 

·

 

AerVenture, AerCap’s joint venture with LoadAir and AlFawares of Kuwait, closed a $269.2 million credit facility with HSH Nordbank AG to finance the pre-delivery payments for 37 new A320 family aircraft under forward order from Airbus, scheduled for delivery between November 2009 and May 2011. The funding requirements for all remaining pre-delivery payments of AerVenture have been met with this transaction.

 

 

 

 

 

·

 

AerCap increased its pre-delivery payment funding facility by $68.4 million. This facility was arranged by Citi and is to be used to finance the pre-delivery payments relating to A330 aircraft under forward order with Airbus, scheduled for delivery between January and April 2010.

 

Klaus Heinemann, CEO of AerCap, commented, “Our first quarter results continue to show the strength of our business model.  The focus we have on properly managing the liability side of our business, combined with our contracted orders of state of the art, fuel-efficient aircraft, positions us for strong future earnings growth.”

 

AerCap’s CFO, Keith Helming, added, “We are pleased with our first quarter 2008 net income result.  The year-over-year increase in basic rents is reflective of the growth of our leasing portfolio.  In addition, we continue to realize the benefits of decreasing interest costs through the combination of lower interest rates and the utilization of caps for interest rate hedging.”

 

Summary of Financial Results

 

AerCap recorded first quarter 2008 net income of $50.9 million or $0.60 per basic and diluted share.  Included in the first quarter 2008 net income amount were non-cash charges related to the mark-to-market of interest rate caps and share-based compensation of $9.0 million or $0.11 per basic and diluted share, net of tax.  The after-tax charge relating to the mark-to-market of our interest rate caps was $7.6 million and the after-tax charge from share-based compensation was $1.4 million.

 

Detailed Financial Data

($ in Millions)

 

Operating results

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

 

 

 

 

% increase/

 

 

 

2008

 

2007

 

(decrease)

 

Revenue

 

$

294.5

 

$

309.5

 

–5

%

Net income (loss)

 

50.9

 

60.6

 

–16

%

 

 

 

 

2



 

 

Total revenue in first quarter 2008 decreased 5% compared with first quarter 2007.  This decrease was largely driven by a lower amount of other revenue in first quarter 2008.  Other revenue in first quarter 2007 included $10.7 million relating to the elimination of a guarantee liability, which did not occur in first quarter 2008.  The decrease in net income in first quarter 2008 compared to the first quarter 2007 was also driven primarily by the lower amount of other revenue.

 

Revenue breakdown

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

 

 

 

 

% increase/

 

 

 

2008

 

2007

 

(decrease)

 

Lease revenue:

 

 

 

 

 

 

 

Basic rents

 

$

126.5

 

$

118.6

 

7

%

Maintenance rents

 

9.2

 

11.9

 

–23

%

End-of-lease compensation

 

8.2

 

9.2

 

–11

%

Lease revenue

 

$

143.9

 

$

139.7

 

3

%

Sales revenue

 

142.5

 

148.9

 

–4

%

Interest revenue

 

4.9

 

7.3

 

–33

%

Management fee revenue

 

3.1

 

3.0

 

3

%

Other revenue

 

0.1

 

10.6

 

–99

%

Total revenue

 

$

294.5

 

$

309.5

 

–5

%

 

As indicated in the table above, the growth in the Company’s leased assets and the continued strength of lease rates is reflected in our revenue through the increase in basic rents.  Partially offsetting the growth in basic rents are decreases in floating rate lease rentals which result from the decrease in interest rates.  This decrease in basic rents on floating rate leases is completely offset by lower interest costs on the debt associated with the floating rate leases. While basic lease rents for the first quarter 2008 increased 7% compared to first quarter 2007 to $126.5 million, interest expense excluding non-cash charges relating to the mark-to-market of interest rate caps decreased 11% compared with first quarter 2007 to $40.9 million, as shown in the table below.  The difference in these amounts was $85.6 million in first quarter 2008 compared to $72.7 million in first quarter 2007, an increase of 18%.

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2008

 

2007

 

Basic rents

 

$

126.5

 

$

118.6

 

 

 

 

 

 

 

Interest on debt

 

$

49.6

 

$

50.5

 

Less: Non-cash charges relating to the mark-to-market of interest rate caps, net of tax

 

(8.7

)

(4.6

)

Interest on debt excluding non-cash charges related to the mark-to-market of interest rate caps

 

$

40.9

 

$

45.9

 

 

 

 

 

 

 

Basic rents net of interest on debt excluding non-cash charges related to the mark-to-market of interest rate caps

 

$

85.6

 

$

72.7

 

 

Effective tax rate

 

AerCap’s effective tax rate during the first quarter 2008 was 8.3%, consisting of 8.0% for AerCap’s aircraft business and 14.2% for AerCap’s engine and parts business.  The effective tax rate in first quarter 2007 was 11.8%.

 

 

 

 

3



 

 

Financial position

 

 

 

March 31,

 

March 31,

 

% increase/

 

 

 

2008

 

2007

 

(decrease)

 

Flight equipment held for lease

 

$

3,279.2

 

$

3,074.5

 

7

%

Total assets

 

4,594.7

 

4,026.4

 

14

%

Total liabilities

 

3,561.2

 

3,180.7

 

12

%

Total equity

 

1,002.9

 

814.0

 

23

%

 

As of March 31, 2008, AerCap’s portfolio consisted of 320 aircraft and 71 engines that were either owned, on order, under contract or letter of intent, or managed.

 

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 a non-GAAP measure used in this press release and a reconciliation of such measure to the most closely related GAAP measure:

 

Net income excluding non-cash charges relating to the 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.  AerCap believes this measure provides investors with a more meaningful view on AerCap’s operational performance and allows investors to better understand its operational performance in relation to past and future reporting periods.  AerCap uses interest rate caps to allow the Company to benefit from decreasing interest rates and protect against the negative impact of rising interest rates on its 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 the Company’s lease and other contracts.  AerCap does not apply hedge accounting to its interest rate caps.  As a result, AerCap is required to recognize the change in fair value of the interest rate caps in AerCap’s income statement during each period.  Following is a reconciliation of net income excluding non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation to net income for the three month periods ended March 31, 2008 and 2007:

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2008

 

2007

 

Net income

 

$

50.9

 

$

60.6

 

Plus: Non-cash charges relating to the mark-to-market of interest rate caps, net of tax

 

7.6

 

4.0

 

Non-cash charges related to share-based compensation, net of tax

 

1.4

 

2.1

 

Net income excluding non-cash charges related to the mark-to-market of interest rate caps and share-based compensation

 

$

59.9

 

$

66.7

 

 

Earnings per share excluding non-cash charges related to the mark-to-market of interest rate caps and share-based compensation are determined by dividing the amount of net income excluding such charges by the average number of shares outstanding for that period.  The average number of shares is based on a daily average.

 

 

 

4



 

 

Conference Call

 

In connection with the earnings release, management will host an earnings conference call on Friday, May 9, 2008 at 9:30 am Eastern Time / 3:30 pm Central European Time. The call can be accessed live by dialing (U.S./Canada) 800-772-1085 or (International) +1-706-634 5464 and referencing code 44711149 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 to 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 9, 2008 and continuing through June 19, 2008. To access the recording, call 800-642-1687 (U.S./Canada) or +1-706-645-9291 (International) and enter passcode 44711149. The replay will be archived in the “Investor Relations” section of the Company’s website for one year.

 

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 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,” “will,” “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

 

 

 

 

5



 

 

 

AerCap Holdings N.V.

Consolidated Balance Sheets - Unaudited

(In thousands of U.S. Dollars)

 

 

 

 

March 31, 2008

 

December 31, 2007

 

March 31, 2007

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

197,170

 

$

241,736

 

$

140,103

 

Restricted cash

 

127,150

 

95,072

 

99,459

 

Trade receivables, net of provisions

 

64,969

 

35,591

 

32,458

 

Flight equipment held for operating leases, net

 

3,279,244

 

3,050,160

 

3,074,519

 

Flight equipment held for sale

 

51,857

 

136,135

 

 

Notes receivables, net of provisions

 

199,037

 

184,820

 

166,344

 

Prepayments on flight equipment

 

284,368

 

247,839

 

150,621

 

Investments

 

11,678

 

11,678

 

16,091

 

Goodwill

 

6,776

 

6,776

 

6,776

 

Intangibles, net

 

45,427

 

41,855

 

49,080

 

Inventory

 

83,469

 

90,726

 

72,115

 

Derivative assets

 

18,896

 

21,763

 

18,764

 

Deferred income taxes

 

82,392

 

85,253

 

87,612

 

Other assets

 

142,217

 

144,823

 

112,489

 

Total Assets

 

$

4,594,650

 

$

4,394,227

 

$

4,026,431

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

9,246

 

$

16,376

 

$

7,222

 

Accrued expenses and other liabilities

 

87,294

 

81,379

 

70,828

 

Accrued maintenance liability

 

261,948

 

255,535

 

257,829

 

Lessee deposit liability

 

89,197

 

83,628

 

72,591

 

Debt

 

3,044,462

 

2,892,744

 

2,665,987

 

Accrual for onerous contracts

 

28,378

 

46,411

 

72,718

 

Deferred revenue

 

35,663

 

33,574

 

29,065

 

Deferred income taxes

 

4,997

 

3,425

 

4,490

 

Total liabilities

 

3,561,185

 

3,413,072

 

3,180,730

 

 

 

 

 

 

 

 

 

Minority interest

 

30,579

 

30,782

 

31,685

 

 

 

 

 

 

 

 

 

Share capital

 

699

 

699

 

699

 

Additional paid-in capital

 

604,105

 

602,469

 

593,999

 

Retained earnings

 

398,082

 

347,205

 

219,318

 

Total shareholders’ equity

 

1,002,886

 

950,373

 

814,016

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’

 

 

 

 

 

 

 

Equity

 

$

4,594,650

 

$

4,394,227

 

$

4,026,431

 

 

 

 

 

6



 

 

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,

 

 

 

2008

 

2007

 

Revenues

 

 

 

 

 

Lease revenue

 

$

143,856

 

$

139,703

 

Sales revenue

 

142,463

 

148,885

 

Interest revenue

 

4,877

 

7,272

 

Management fee revenue

 

3,174

 

3,025

 

Other revenue

 

163

 

10,587

 

Total Revenues

 

294,533

 

309,472

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

Depreciation

 

38,475

 

33,932

 

Cost of goods sold

 

110,019

 

118,003

 

Interest on debt

 

49,596

 

50,484

 

Operating lease in costs

 

3,640

 

6,237

 

Leasing expenses

 

6,390

 

4,032

 

Provision for doubtful notes and accounts receivable

 

548

 

(141

)

Selling, general and administrative expenses

 

30,622

 

26,585

 

Total Expenses

 

239,290

 

239,132

 

 

 

 

 

 

 

Income from continuing operations before income taxes and minority interest

 

55,243

 

70,340

 

 

 

 

 

 

 

Provision for income taxes

 

(4,570

)

(10,026

)

 

 

 

 

 

 

Net income before minority interest

 

50,673

 

60,314

 

 

 

 

 

 

 

Minority interest, net of taxes

 

203

 

252

 

 

 

 

 

 

 

Net Income

 

$

50,876

 

$

60,566

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

0.60

 

0.71

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

85,036,957

 

85,036,957

 

 

 

 

 

7



 

 

AerCap Holdings N.V.

Consolidated Statements of Cash Flows - Unaudited

(In thousands of U.S. Dollars)

 

 

 

 

Three months ended March 31,

 

 

 

2008

 

2007

 

Net income

 

50,876

 

60,566

 

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

 

 

 

 

 

Minority interest

 

(203

)

(252

)

Depreciation

 

38,474

 

33,932

 

Amortisation of debt issuance cost

 

3,392

 

1,708

 

Amortisation of intangibles

 

3,504

 

1,944

 

Gain on elimination of fair value guarantee

 

 

(10,736

)

Provision for doubtful notes and accounts receivable

 

548

 

(141

)

Capitalised interest on pre-delivery payments

 

(669

)

(1,564

)

Gain on disposal of assets

 

(22,949

)

(24,961

)

Change in fair value of derivative instruments

 

2,867

 

(893

)

Deferred taxes

 

4,434

 

10,016

 

Share-based compensation

 

1,636

 

2,446

 

Changes in assets and liabilities

 

 

 

 

 

Trade receivables and notes receivable, net

 

(20,240

)

(6,152

)

Inventories

 

10,473

 

10,779

 

Other assets

 

(1,546

)

(7,498

)

Accounts payable and accrued expenses, including accrued maintenance liability, lessee deposits

 

(3,721

)

(51,185

)

Deferred revenue

 

2,090

 

674

 

Net cash provided by operating activities

 

68,966

 

18,683

 

 

 

 

 

 

 

Purchase of flight equipment

 

(234,904

)

(223,585

)

Proceeds from sale/disposal of assets

 

83,487

 

126,905

 

Prepayments on flight equipment

 

(72,445

)

(18,650

)

Purchase of intangibles

 

(8,627

)

(16,794

)

Movement in restricted cash

 

(32,078

)

12,818

 

Net cash used in investing activities

 

(264,567

)

(119,306

)

 

 

 

 

 

 

Issuance of debt

 

278,081

 

246,503

 

Repayment of debt

 

(126,363

)

(135,655

)

Debt issuance costs paid

 

(367

)

(1,459

)

Net cash provided by financing activities

 

151,351

 

109,389

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

(44,250

)

8,766

 

Effect of exchange rate changes

 

(316

)

136

 

Cash and cash equivalents at beginning of period

 

241,736

 

131,201

 

Cash and cash equivalents at end of period

 

197,170

 

140,103

 

 

 

 

 

8