AerCap Holdings N.V. Reports Third Quarter 2012 Financial Results

Amsterdam, Netherlands; November 7, 2012 – AerCap Holdings N.V. (the “Company” or “AerCap”) (NYSE: AER) today announced the results of its operations for the third quarter ended September 30, 2012.

Third Quarter 2012 Financial Highlights

Third quarter 2012 reported net income was $57.9 million, compared with a $7.1 million loss for the same period in 2011. Third quarter 2011 included a $53.5 million one-time charge relating to discontinued operations. Third quarter 2012 reported basic and diluted earnings per share was $0.45, compared with a reported basic and diluted loss per share of $0.05 for the same period in 2011.
Third quarter 2012 adjusted net income was $62.2 million, compared with third quarter 2011 adjusted net income of $75.6 million. Third quarter 2012 adjusted earnings per share was $0.48, compared with $0.51 for the same period in 2011. The decrease in adjusted net income and adjusted earnings per share was primarily the result of increased default and restructuring related costs and a lower gain on the sale of aircraft.
Net interest margin earned on lease assets, or net spread, was $176.5 million in the third quarter of 2012 compared with $182.3 million for the same period in 2011. Net interest margin as a percentage of average lease assets was 8.77% for third quarter 2012 as compared to 9.17% for third quarter 2011. The decrease in net interest margin is driven primarily by the higher interest cost relating to the increase in the amount of long-term fixed rate funding plus the impact from defaults mentioned above.
Total assets were $9.1 billion at September 30, 2012, a decrease of 4% over total assets of $9.6 billion at September 30, 2011. The net decrease is primarily attributable to the sale of AeroTurbine, which was partially offset by new aircraft deliveries.
Debt to equity ratio was 2.8 to 1 at September 30, 2012, unchanged from the September 30, 2011 period.
Committed purchases of aviation assets delivered or scheduled for delivery in 2012 are $1,101 million, of which $743 million closed in the first nine months of 2012. The total amount of aircraft acquisitions in the third quarter 2012 was $225 million.
Repurchases of 12.9 million shares were completed in third quarter 2012 with a total cost of $154.7 million (average price per share of $11.99). Repurchases of 18.5 million shares were completed in the first nine months of 2012 with a total cost of $217.4 million (average price per share of $11.75). The book value per share at September 30, 2012 was $18.25.
The total amount of financing transactions closed in the third quarter 2012 was $210 million. The total amount of financing transactions completed in the first nine months was $860 million.

Aengus Kelly, CEO of AerCap, commented: “During the third quarter we remained focused on executing our operating strategy. In that regard, we maintained a fleet wide utilization rate of 98%, and continued our efforts to optimize the fleet through the acquisition of next generation aircraft along with the disposal of certain older aircraft. Related to aircraft acquisitions, we raised over $210 million of long term debt to finance deliveries. Finally, due to our robust liquidity position, we took advantage of a unique opportunity during the quarter to acquire 12.9 million of our shares at an average price of $11.99. This repurchase coupled with the repurchases completed earlier this year demonstrate our commitment and focus to enhance shareholder value.”

AerCap’s CFO, Keith Helming, added: “Given the ongoing volatility in the global markets, we are pleased with the financial results reported today. We continue our concerted efforts to optimize our aircraft portfolio with an average age of 5.8 years, which is among the youngest in the aircraft leasing sector. In addition, our liquidity profile remains strong which positions us further to execute on additional investment opportunities.”

Net Income

The decrease in adjusted net income, in the third quarter of 2012 compared with the third quarter of 2011, was mainly the result of increased default and restructuring related costs and a lower gain on the sale of aircraft.

Revenue and Net Spread

Basic lease rents were $239.5 million for the third quarter of 2012, compared to $238.6 for the same period in 2011. Our average lease assets increased by 1% to $8.1 billion compared with the third quarter of 2011.

Basic rents, maintenance rents and other receipts, or total lease revenue, for the third quarter of 2012 was $263.6 million, compared to $265.6 million for the same period in 2011, a decrease of 1%. The decrease is driven by the impact from defaults and restructurings previously mentioned.

Net gain on sale of aircraft for the third quarter of 2012 was $0.6 million, compared to $4.0 million for the same period in 2011. During the third quarter of 2012 we sold one A330 aircraft and one A320 aircraft.

Effective Tax Rate

AerCap’s blended effective tax rate during the first nine months of 2012 was 5.5%. The blended effective tax rate in 2011 was 6.7%.

As of September 30, 2012, AerCap’s portfolio consisted of 337 aircraft that were either owned, on order, under contract or letter of intent, or managed.