AerCap Holdings N.V. Reports Fourth Quarter and Full Year 2009 Financial Results
Net spread, which is the margin earned on our leased assets, was $466 million for full year 2009, an increase of 30% over the prior year.
AMSTERDAM, Feb. 24 /PRNewswire-FirstCall/ -- AerCap Holdings N.V. (the "Company" or "AerCap") (NYSE: AER) today announced the results of its operations for the fourth quarter and full year ended December 31, 2009.
Fourth Quarter 2009 Highlights
- Fourth quarter 2009 net income was $43.2 million, compared to a net loss of $19.0 million for the same period in 2008. Fourth quarter 2009 net income excluding the impact of the mark-to-market of interest rate caps and share-based compensation was $40.3 million, compared to net income of $18.7 million in fourth quarter 2008 on the same basis.
- Fourth quarter 2009 basic and diluted income per share was $0.51. Fourth quarter 2009 basic and diluted earnings per share excluding the impact of the mark-to-market of interest rate caps and share-based compensation were $0.47.
- Net spread, the difference between basic lease rents and interest expense excluding the impact from the mark-to-market of interest rate caps, was $126.4 million in fourth quarter 2009 compared to $87.8 million in fourth quarter 2008, an increase of 44%. This measure reflects the increase in leasing income.
- Basic lease rents for the fourth quarter 2009 were $156.6 million, compared to $134.7 million for the same period in 2008, an increase of 16%. Total lease revenue for the fourth quarter 2009 was $165.7 million, compared to $149.1 million for the same period in 2008, an increase of 11%.
- Sales revenue for the fourth quarter 2009 was $115.9 million, compared to $170.9 million for the same period in 2008, and was generated from the sale of eight aircraft, two engines and parts inventory. Sales revenue for four of the eight aircraft sold were sales of forward order positions. These sales are recorded in sales revenue on a net basis (i.e. sales price less cost of goods sold) at the time of the related delivery. The recognition of the net gain on sale as sales revenue instead of the gross sales amount was the primary cause of the reduction in sales revenue in fourth quarter 2009 as compared to the same period in 2008.
- Total revenue for the fourth quarter 2009 was $287.6 million, compared to $326.4 million for the same period in 2008. The decrease was mainly due to sales revenue reflected on a net basis as discussed above, partially offset by higher basic lease rents.
- Total assets were $6.8 billion at December 31, 2009, an increase of 25% over total assets of $5.4 billion at December 31, 2008.
Full Year 2009 Key Financial Highlights
- Full year 2009 net income was $165.2 million, compared to $151.8 million for the full year 2008. Full year 2009 net income excluding the impact of the mark-to-market of interest rate caps and share-based compensation was $150.2 million, down 24% compared to $197.8 million for the full year 2008. This decrease was mainly caused by lower gains from sales.
- Full year 2009 basic and diluted earnings per share was $1.94. Full year 2009 basic and diluted earnings per share excluding the impact of the mark-to-market of interest rate caps and share-based compensation was $1.77.
- Net spread for the full year 2009 was $466.0 million, up 30% compared to the full year 2008.
- Basic lease rents for the full year 2009 were $581.9 million, up 12% compared to the full year 2008.
- Sales revenue for the full year 2009 was $324.8 million, down 47% compared to the full year 2008 and was generated from the sale of 15 aircraft, 15 engines and parts inventory. Sales revenue for five of the 15 aircraft sold were sales of forward order positions. These sales are recorded in sales revenue on a net basis (i.e. sales price less cost of goods sold) at the time of the related delivery. The recognition of the net gain on sale as sales revenue instead of the gross sales amount was the primary cause of the reduction in sales revenue in full year 2009 as compared to full year 2008.
- Total revenue for the full year 2009 was $1,003.3 million, down 20% compared to the full year 2008 resulting primarily from sales revenue reflected on a net basis as discussed above, partially offset by higher basic rents.
- Aviation assets purchased and delivered in 2009 were $1.9 billion.
Fourth Quarter 2009 Financing Highlights - Previously Disclosed
- During the fourth quarter, AerCap signed agreements for three separate debt facilities totaling $484 million. This brings the total debt facilities arranged by AerCap during 2009 to $1.7 billion, and $5.0 billion during the last two years.
Genesis Transaction Update
- All regulatory approvals have been obtained and the registration statement was declared effective by the Securities and Exchange Commission (SEC) on February 3, 2010. Transitional activities are on track and closing is expected on March 25, 2010.
Klaus Heinemann, CEO of AerCap, commented: "AerCap management used 2009 to best position the company for the impending economic recovery by progressively growing and upgrading its aircraft fleet with the addition of $1.9 billion of brand new, state of the art aircraft. Our efforts have resulted in a 30% increase of revenue from leasing activity after deduction of interest cost (net spread). AerCap is well positioned as the largest global independent aircraft leasing company to take full advantage of the industry recovery which is now well underway in most markets."
AerCap's CFO, Keith Helming, said: "In spite of the challenges presented by the global financial crisis throughout 2009, AerCap has grown its basic rents and net spread from 2008 levels, including an increase in net spread of 44% in fourth quarter 2009. Moreover, while global economic conditions have been weak, the year-over-year margin of net spread divided by average lease assets, which is a proxy for the lease margin, has improved. These improvements continue to validate AerCap's commitment to grow assets under management, while maintaining a commensurate return on investment, as reflected in our 2009 financial results."
Summary of Financial Results
AerCap recorded a fourth quarter 2009 net income of $43.2 million or $0.51 income per basic and diluted share. Fourth quarter 2009 net income amount included net income relating to mark-to-market of interest rate caps and share-based compensation of $2.9 million or $0.04 per basic and diluted share, net of tax. The after-tax gain relating to the mark-to-market of our interest rate caps was $3.7 million and the after-tax charge from share-based compensation was $0.8 million.
Detailed Financial Data
($ in Millions)
Operating results:
------------------
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
% increase/ % increase/
2009 2008 (decrease) 2009 2008 (decrease)
---- ---- ---------- ---- ---- ----------
Revenues $287.6 $326.4 (12%) $1,003.3 $1,256.3 (20%)
Net income 43.2 (19.0) 327% 165.2 151.8 9%
Net income
excluding the
impact of mark-
to-market of
interest rate
caps and share-
based
compensation 40.3 18.7 116% 150.2 197.8 (24%)
Total revenue in fourth quarter 2009 decreased 12% compared to fourth quarter 2008. This decrease resulted primarily from sales revenue reflected on a net basis as discussed above, partially offset by higher basic lease rents.
Net income for the fourth quarter excluding the impact of mark-to-market of interest rate caps and share-based compensation increased by 116%. This increase was caused by higher income from the sale of assets and an increase in net spread.
Revenue breakdown
-----------------
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
% increase/ % increase/
2009 2008 (decrease) 2009 2008 (decrease)
---- ---- ---------- ---- ---- ----------
Lease revenue:
Basic lease
rents $156.6 $134.7 16% $581.9 $520.7 12%
Maintenance
rents 9.1 11.7 (22%) 59.0 69.3 (15%)
End-of-lease
compensation
and other
receipts - 2.7 (100%) 9.7 15.2 (36%)
--- --- ---- --- ---- ---
Lease revenue $165.7 $149.1 11% $650.6 $605.2 8%
Sales revenue 115.9 170.9 (32%) 324.8 616.6 (47%)
Management fees
and interest
income 5.2 6.4 (19%) 22.2 30.3 (27%)
Other revenue 0.8 - 100% 5.7 4.2 36%
--- --- --- --- --- --
Total revenue $287.6 $326.4 (12%) $1,003.3 $1,256.3 (20%)
====== ====== === ======== ======== ===
Basic lease rents were $156.6 million for the fourth quarter 2009, an increase of 16% compared to fourth quarter 2008, as a result of our growing asset base. Our average lease assets increased by 29% to $5.0 billion compared to fourth quarter 2008. The percentage increase in basic rents was less than the percentage increase in average lease assets which results from a decrease in interest rates. Decreasing interest rates reduce basic lease rents but also reduce interest expense. As shown in the table below, interest expense excluding the impact of the mark-to-market of interest rate caps was $30.2 million in the fourth quarter 2009, a 36% decline compared to fourth quarter 2008. 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 44% to $126.4 million in fourth quarter 2009 over the same period in 2008.
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
% increase/ % increase/
2009 2008 (decrease) 2009 2008 (decrease)
---- ---- ---------- ---- ---- ----------
Basic lease
rents $156.6 $134.7 16% $581.9 $520.7 12%
Interest on debt $23.8 $99.0 (76%) $92.2 $219.2 (58%)
Plus: mark-to-
market of
interest rate
caps 6.4 (52.1) 112% 23.7 (58.1) 141%
--- ----- --- ---- ----- ---
Interest on debt
excluding the
impact of mark-
to-market of
interest rate
caps $30.2 $46.9 (36%) $115.9 $161.1 (28%)
----- ----- --- ------ ------ ---
Net Spread $126.4 $87.8 44% $466.0 $359.6 30%
====== ===== === ====== ====== ===
Effective tax rate
AerCap's effective tax rate during the twelve month period ended December 31, 2009 was negative 1.9% (a charge), consisting of 0.0% for AerCap's aircraft business and 36.8% for AerCap's engine and parts business. The annual blended effective tax rate for 2008 was positive 0.3% (income).
Financial position:
-------------------
% Increase over
December 31, December 31, December 31,
2009 2008 2008
------------ ------------ ---------------
Flight equipment
held for lease $5,230.4 $3,989.6 31%
Total assets 6,769.5 5,410.8 25%
Total liabilities 5,356.2 4,284.8 25%
Total equity 1,413.3 1,126.1 26%
As of December 31, 2009, AerCap's portfolio consisted of 291 aircraft and 92 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 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 and twelve month periods ended December 31, 2009 and 2008:
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
% increase/ % increase/
2009 2008 (decrease) 2009 2008 (decrease)
---- ---- ---------- ---- ---- ----------
Net income $43.2 $(19.0) 327% $165.2 $151.8 9%
Plus: mark-to-
market of interest
rate caps, net of
tax (3.7) 35.9 (110%) (18.2) 39.6 (146%)
share-based
compensation,
net of tax 0.8 1.8 (56%) 3.2 6.4 (50%)
--- --- --- --- --- ---
Net income excluding
the impact of mark-
to-market of interest
rate caps and
share-based
compensation $40.3 $18.7 116% $150.2 $197.8 (24%)
===== ===== ==== ====== ====== ===
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 and twelve month periods ended December 31, 2009 and 2008 is included above.
Conference Call
In connection with the earnings release, management will host an earnings conference call today, Wednesday, February 24, 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 50019420 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 12:30 pm Eastern Time / 6:30 pm Central European Time on February 24, 2010 and continuing through March 24, 2010. To access the recording, call 800-642-1687 (U.S./Canada) or +1-706-645-9291 (International) and enter passcode 50019420. The webcast replay will be archived in the "Investor Relations" section of the company's website for one year.
In addition, a New York Group Lunch Presentation for investors and analysts will be hosted by AerCap's management today, Wednesday, February 24, 2010, at 12:30 pm Eastern Time at The New York Palace (the Louis 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/q409results
For further information, contact Peter Wortel: +31 20 655 9658 ([email protected]) or Mark Walter (Shared Value): +44 (0)20 7321 5039 ([email protected]).
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 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)
December 31, 2009 December 31, 2008
----------------- -----------------
Assets
Cash and cash equivalents $182,617 $193,563
Restricted cash 140,746 113,397
Trade receivables, net of provisions 48,070 43,649
Flight equipment held for operating
leases, net 5,230,437 3,989,629
Net investment in direct finance leases 34,532 30,571
Notes receivables, net of provisions 138,488 134,067
Prepayments on flight equipment 527,666 448,945
Investments 21,031 18,678
Goodwill 6,776 6,776
Intangibles, net 31,399 47,099
Inventory 102,538 102,879
Derivative assets 44,866 19,352
Deferred income taxes 80,098 82,471
Other assets 180,237 179,750
------- -------
Total Assets $6,769,501 $5,410,826
========== ==========
Liabilities and Equity
Accounts payable $11,832 $7,510
Accrued expenses and other liabilities 80,399 104,750
Accrued maintenance liability 228,006 202,834
Lessee deposit liability 126,093 98,584
Debt* 4,846,664 3,790,487
Accrual for onerous contracts 22,363 33,306
Deferred revenue 33,011 34,922
Derivative liabilities 7,801 12,378
Total liabilities 5,356,169 4,284,771
Share capital 699 699
Additional paid-in capital 593,133 609,327
Retained earnings 664,177 499,011
------- -------
Total AerCap Holdings N.V. shareholders'
equity 1,258,009 1,109,037
Non-controlling interest 155,323 17,018
------- ------
Total Equity 1,413,332 1,126,055
---------- ----------
Total Liabilities and Equity $6,769,501 $5,410,826
========== ==========
* Includes $63 million of subordinated debt received from our joint
venture partner relating to the TUI portfolio acquisition
AerCap Holdings N.V.
Consolidated Income Statements - Unaudited
(In thousands of U.S. Dollars, except share and per share data)
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Revenues
Lease revenue $165,672 $149,119 $650,604 $605,253
Sales revenue 115,878 170,925 324,781 616,554
Interest revenue 2,449 3,584 10,105 18,515
Management fee revenue 2,780 2,779 12,074 11,749
Other revenue 781 25 5,703 4,181
--- -- ----- -----
Total Revenues 287,560 326,432 1,003,267 1,256,252
Expenses
Depreciation 60,843 46,061 220,996 169,392
Asset impairment 11,242 11,100 32,574 18,789
Cost of goods sold 69,604 146,596 248,897 506,312
Interest on debt 23,833 98,990 92,152 219,172
Operating lease in costs 3,235 3,303 13,090 14,512
Leasing expenses 13,279 32,356 65,164 55,569
Provision for doubtful
notes and accounts
receivable 555 2,685 963 3,746
Selling, general and
administrative expenses 33,405 31,616 116,201 128,268
Other expenses 1,065 - 2,965 -
----- --- ----- ---
Total Expenses 217,061 372,707 793,002 1,115,760
------- ------- ------- ---------
Income (loss) from
Continuing operations
before income taxes 70,499 (46,275) 210,265 140,492
Provision for income taxes (423) 15,851 (3,894) 431
------ ------- ------- -------
Net income (loss) 70,076 (30,424) 206,371 140,923
Net (income) loss
attributable to non-
controlling interest (26,912) 11,426 (41,205) 10,883
------- -------- -------- --------
Net Income (loss)
attributable to AerCap
Holdings N.V. $43,164 $(18,998) $165,166 $151,806
======= ======== ======== ========
Basic and diluted
earnings (loss) per share $0.51 $(0.22) $1.94 $1.79
Weighted average shares
outstanding - basic and
diluted 85,036,957 85,036,957 85,036,957 85,036,957
AerCap Holdings N.V.
Consolidated Statements of Cash Flows
(In thousands of U.S. Dollars)
Three months ended Twelve months ended
December 31, December 31,
------------------ -------------------
2009 2008 2009 2008
---- ---- ---- ----
Net income (loss) 70,076 (30,424) 206,371 140,922
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities
Depreciation 60,843 46,061 220,996 169,392
Asset impairment 11,242 11,100 32,574 18,789
Amortisation of debt
issuance cost 4,575 4,328 16,364 16,239
Amortisation of intangibles 3,202 3,788 15,701 14,615
Gain on discounted
purchase of securitized
bonds - - - (2,783)
Provision for doubtful
notes and accounts
receivable 424 2,685 1,364 3,746
Capitalised interest
on pre-delivery
payments (172) 210 (1,106) (2,098)
Gain on disposal of assets (37,046) (15,073) (36,007) (80,341)
Change in fair value of
derivative instruments (3,287) 48,742 (18,929) 51,646
Deferred taxes 365 (15,161) 2,228 (642)
Share-based compensation 1,000 1,475 3,910 6,858
Changes in assets and
liabilities
Trade receivables and
notes receivable, net (836) (6,784) (6,686) (5,208)
Inventories 2,092 (14,683) 35,238 (5,469)
Other assets and
derivative assets 7,285 (929) (7,236) (48,580)
Other liabilities (7,251) (12,861) (63,968) (75,823)
Deferred revenue (171) (3,594) (1,613) 1,348
---- ------ ------ -----
Net cash provided by
operating activities 112,341 18,880 399,201 202,611
Purchase of flight equipment (416,415) (287,515) (1,264,446) (1,286,609)
Proceeds from sale/
disposal of assets 73,238 135,048 153,481 467,539
Prepayments on flight
equipment (50,251) (132,839) (453,305) (339,422)
Receipt of notes
receivable in defeasance
structures - 44,157 - 44,157
Purchase of investments - (7,550) - (17,550)
Sale of investments - - - 6,234
Purchase of intangibles - - - (21,410)
Movement in restricted cash (19,679) 54,446 (27,349) (18,325)
------- ------ ------- -------
Net cash used in investing
activities (413,107) (194,253) (1,591,619) (1,165,386)
Issuance of debt 588,397 494,446 2,431,839 1,642,784
Repayment of debt (332,878) (306,972) (1,414,456) (742,258)
Debt issuance costs paid (12,398) (6,314) (32,723) (44,933)
Maintenance payments received 25,235 19,677 99,664 98,980
Maintenance payments returned (8,529) (17,588) (46,897) (64,572)
Security deposits received 15,806 16,571 42,169 43,644
Security deposits returned (2,215) (15,344) (12,840) (25,842)
Capital contributions from
non-controlling interests 7,500 5,000 111,700 5,000
----- ----- ------- -----
Net cash provided by
financing activities 280,918 189,476 1,178,456 912,803
Net (decrease) increase in
cash and cash equivalents (19,848) 14,103 (13,962) (49,972)
Effect of exchange
rate changes (912) 3,016 3,016 1,799
Cash and cash
equivalents at
beginning of period 203,377 176,444 193,563 241,736
------- ------- ------- -------
Cash and cash
equivalents at end
of period 182,617 193,563 182,617 193,563
======= ======= ======= =======
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 |
|
Peter Wortel |
|
Investor Relations |
|
+31 20 655 9658 |
|
For Media: |
|
Frauke Oberdieck |
|
Corporate Communications |
|
+31 20 655 9616 |
|
SOURCE AerCap Holdings N.V.
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