2017 Investor Day AerCap Holdings N.V - cloudfront.net
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2017 Investor Day AerCap Holdings N.V. November 13, 2017
Disclaimer Incl. Forward Looking Statements & Safe Harbor
This presentation contains certain statements, estimates and forecasts with not rely upon forward-looking statements as a prediction of actual results and
respect to future performance and events. These statements, estimates and we do not assume any responsibility for the accuracy or completeness of any
forecasts are “forward-looking statements”. In some cases, forward-looking of these forward-looking statements. Except as required by applicable law, we
statements can be identified by the use of forward-looking terminology such as do not undertake any obligation to, and will not, update any forward-looking
“may,” “might,” “should,” “expect,” “plan,” “intend,” “estimate,” “anticipate,” statements, whether as a result of new information, future events or otherwise.
“believe,” “predict,” “potential” or “continue” or the negatives thereof or
No warranty or representation is given concerning such information, which
variations thereon or similar terminology. All statements other than statements
must not be taken as establishing any contractual or other commitment
of historical fact included in this presentation are forward-looking statements
binding upon AerCap Holdings N.V. or any of its subsidiaries or associated
and are based on various underlying assumptions and expectations and are
companies.
subject to known and unknown risks, uncertainties and assumptions and may
include projections of our future financial performance based on our growth In addition to presenting financial results in conformity with U.S. generally
strategies and anticipated trends in our business. These statements are only accepted accounting principles (“GAAP“), this presentation includes certain
predictions based on our current expectations and projections about future non-GAAP financial measures. Reconciliations of such non-GAAP financial
events. There are important factors that could cause our actual results, level of measures are set forth or referred to in the presentation where relevant. Non-
activity, performance or achievements to differ materially from the results, level GAAP financial measures should be considered in addition to, not as a
of activity, performance or achievements expressed or implied in the forward- substitute for or superior to, financial measures determined in conformity with
looking statements. As a result, we cannot assure you that the forward-looking GAAP.
statements included in this presentation will prove to be accurate or correct. In
light of these risks, uncertainties and assumptions, the future performance or Due to rounding, numbers presented throughout this document may not add
events described in the forward-looking statements in this presentation might up precisely to the totals provided and percentages may not precisely reflect
not occur. Accordingly, you should the absolute figures.
324
Agenda
| Introduction Brian Canniffe
Head of Investor Relations
| AerCap Update Aengus Kelly
Chief Executive Officer
| Leasing Philip Scruggs
President & Chief Commercial Officer
334
Agenda
| Portfolio Management Edward O’Byrne
Chief Investment Officer
| Financial Performance Peter Juhas
Chief Financial Officer
| Q&A and Closing Remarks
344
AerCap Update Aengus Kelly
Chief Executive Officer
Key Highlights Since Last Investor Day
AerCap continued to perform strongly over the past 12 months…
Significant Level of Aircraft Transactions
• Executed 418 transactions: leased 240, purchased 52, and sold and parted-out 126 aircraft1 2
Strong Marketing Activity
• Leased 100% of new aircraft deliveries through 2018 and 91% through 20193
Exceeded Sales Target
• $2.5 billion of sales revenue1
Strong Liquidity
• $8.9 billion available liquidity including $1.5 billion cash3
Strong Earnings & Cash Flow
• Generated $1.2 billion of net income1
(1) In the twelve months to September 30, 2017.
(2) Includes owned and managed aircraft.
(3) As of September 30, 2017.
364
Key Highlights Since Last Investor Day
…and achieved several key milestones
New Order for 30 Boeing 787-9s
• Making AerCap the largest customer for the 787 Dreamliner
Investment Grade Credit Ratings
• Only independent lessor with Investment Grade ratings from Moody’s, Fitch, and S&P
10 Year Unsecured Bond
• Raised $1 billion at 3.65% coupon
Share Repurchases
• Over $1 billion capital returned to shareholders in the last 12 months; $2.6 billion cumulatively to date1
Continued Book Value Per Share Growth
• 17% growth from $46.91 to current value of $55.06 per share2
(1) Last 12 months ends September 30, 2017. Cumulative to date is since the start of share repurchase program in June 2015 through October 27, 2017.
(2) As of September 30, 2017.
374
Industry Overview
Stable Demand
U.S. Profitability Peaked? Stable Demand Facilitate Portfolio Sales
European Rationalization
Travel Airline Competitive OEM Managed Capital
Widebodies
Growth Health Landscape Production Platforms Markets
Larger Platforms in Hands Rational Duopoly Attracted by Stable
of Experienced Teams Returns
7.7% Growth in 20171 SLB Returns Compressed Supply Chain Issues Supportive
(1) IATA Passenger Analysis as of September 2017.
384
The Importance of Scale
937
LEASED
Market
Intelligence
340 Information
SOLD
Advantage
Value vs.
Price
137
BOUGHT
Number of transactions from July 1, 2014 to September 30, 2017. Includes owned and managed aircraft.
394
Optimal Decision-Making
LEASING
DECISION
Market
Intelligence
Information SALES
Advantage DECISION
Value vs.
Price
BUYING
DECISION
3 10 4AerCap’s Business Principles
Our key business principles result in AerCap’s consistent profitability
PORTFOLIO LEASING STRATEGY HEDGING PROGRAM
MANAGEMENT CAPITAL STRUCTURE
• Focus on maintaining • Proactive risk • Focus on highly • Protection against
the most liquid aircraft management diversified, long-term interest rate volatility
types through aircraft • Highly diversified funding and long-term through a mix of
acquisitions and customer base assets interest rate caps,
disposals • Investment Grade swaps and fixed-rate
• Security deposits and loans
• Assets owned in maintenance ratings
appropriate tax reserves • Relationships with over
jurisdictions 100 banking institutions
globally
CONSISTENT
PROFITABILITY
3 11 4Consistent Earnings & Cash Flow Generation
AerCap’s platform has generated strong and consistent results
US GAAP Net Income (~$2.1 billion)
($ million)
400
350
300
AVERAGE: ~$265 MILLION PER QUARTER
250
200
365
150
264 283 266
261
223 233 226
100
50
0
4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
3 12 4Book Value Per Share Growth
AerCap has grown book value per share by ~16% per year since 3Q 2014
$55
$55
$53
$51
$50 $49
$47
$45
$45 $44
$42
$41
$40 $39
$39
$37
$36
$35
$30
3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q'16 1Q'17 2Q'17 3Q'17
3 13 4Conclusions
Strong Demand for Aircraft Due to High Travel Growth
Scale is a Competitive Advantage
Positive Outlook for AerCap
3 14 4Leasing Philip Scruggs
President & Chief Commercial OfficerGrowing Industry
AIR TRAFFIC IS
A GROWING MARKET
Since 1986, air traffic has
doubled every 15 years,
growth forecast to continue1
MIDDLE CLASS IS
GROWING AND FLYING
Middle class to grow
from 2.9 billion to
4.9 billion in 20 years2
AIRLINES NEED OVER
41,030 NEW AIRCRAFT
Boeing has increased 20-year
forecast by 1,410 aircraft;
China’s estimate alone
increased by 6% since 20161 INCREASING DEMAND
FOR OPERATING LEASES
Over the past 20 years, the
world fleet has doubled with the
leased fleet quadrupling3
See Appendix for Endnotes.
3 16 4Strong 2017 Traffic Figures
TRAFFIC
+7.7% GROWTH 81.7%
GLOBAL AND LOAD GLOBAL LOAD
TRAFFIC FACTORS FACTOR
+7.0% 83.0%
Worldwide Worldwide
Domestic Domestic
+8.0% 81.0%
Worldwide Worldwide
International International
IATA Passenger Analysis as of September 2017.
3 17 4Global Demand Movement from 2012
High
Low
2017
IATA: Passenger Traffic Growth (RPK) %, 2012-2017F.
3 18 4Aircraft Placement Remains Strong
The placement of our upcoming scheduled expiries and new aircraft deliveries is on track
Used Aircraft Required Placements1 Order Book Required Placements2
85
33 18
0 0 0
Remaining 2017 2018 2019 Remaining 2017 2018 2019
AERCAP HAS EXECUTED 240 LEASE TRANSACTIONS OVER THE PAST 12 MONTHS 3
(1) Required placements for owned fleet. Excludes aircraft leased either under a lease or letter of intent and aircraft identified as sale or part-out as of November 7, 2017.
(2) Required placements for aircraft on order. Excludes aircraft leased either under a lease or letter of intent as of November 7, 2017.
(3) Includes owned and managed aircraft, as of September 30, 2017.
3 19 4Vision, Reach & Scale – The AerCap Advantage
Lessor scale enables fleet-wide solutions
Air Berlin Monarch Loong Air
10 x Widebodies 9 x Narrowbodies 20 x Narrowbodies
3 20 4AerCap’s 787 Vision
Timing, vision and product will make this order successful
This aircraft will We know the 30 787-9 Makes AerCap We have We are already
be an integral size and aircraft – first the largest already placed placing aircraft
part of many location of the widebody customer for 97% of our from our new
airlines mid-sized 787 demand order since the 787 previous 787s order
widebody fleet 2007 Dreamliner
3 21 4AerCap Understands Widebody Aircraft
AerCap leased, purchased and sold 395 widebody aircraft since July 20141
395 WIDEBODY TRANSACTIONS
230 64 101
LEASED PURCHASED SOLD
(1) Number of transactions from July 1, 2014 to September 30, 2017. Includes owned and managed aircraft.
3 22 4Widebody Aircraft – What Drives Demand
Long-Haul
Operations by LCCs
Growing Demand for
Long-Haul Travel
Connecting New Destinations
3 23 4777 Aircraft Continue to Be Placed
Placement status of Boeing 777s
28
View as of: 12
12
1
YE 2014 1 4
2015 2016 2017 2018 2019
17
View as of: 10
2 5
YE 2015 - 1
51 777s 2015 2016 2017 2018 2019
LEASED OR SOLD
SINCE YE 20144 View as of: 8 9
3 - 1
YE 2016 -
2015 2016 2017 2018 2019
View as of:
- - - - 6
Now4
2015 2016 2017 2018 2019
See Appendix for Endnotes.
3 24 4Clear Visibility of Top Line Revenue
Revenue for the next 3 years already contracted
Contracted revenues through 2020 Contracted revenues as a % of expected total rental revenue
Assumed
~5% ~99%
~96%
~86%
~95%
2018 2019 2020
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
3 25 4Our Planes Are Consistently Flying and Earning Revenue
99.5%
UTILIZATION RATE
YTD as of September 30, 2017.
3 26 4Conclusions
Strong Demand for Aircraft
Scale is a Competitive Advantage
Clear Visibility of Future Revenue
3 27 4Edward O’Byrne Portfolio Management Chief Investment Officer
Portfolio Management
Discipline enables sustainable superior returns for our leasing portfolio
GOALS ACTIONS RESULTS
• Maintain the Most • Disciplined Investment • 99+ % Portfolio
Liquid Portfolio of / Divestment Policy Utilization
In-Demand Assets
• Prudent Depreciation • Consistently Profitable,
• Balance Yield & Policy Average Margin of 5 –
Manage Residual Value 10%
• World’s Most Active
• Generate Minimum of Mid-Life Aircraft • ~$2.5 Billion of Sales in
$1 Billion in Annual Trader the last 12 months
Liquidity
3 29 4Portfolio Transformation
2014 2017 2021
Our portfolio will grow by over 25% from today, new
technology will represent over two-thirds of our fleet by 2021
~$36B ~$43B
VALUE VALUE
New Tech. (Potential SLBs)
7.6 ~6
AVG. AGE AVG. AGE
New Tech.
Current Technology WB Actual & Contracted
1
& Out-of-Production Aircraft
737NG
A320 Family
See Appendix for Endnotes.
3 30 4Attractive Order Book of Liquid Aircraft
AerCap is well-positioned to meet future demand
($ billion) CAPITAL EXPENDITURE
6.0
A320neo Family
5.0
A350
4.0
E-Jet E2
ORDERBOOK 3.0 $6.0
MAKEUP $5.5 $5.5
737 MAX
$5.0
$4.5
2.0
787 1.0
0.0
2017 2018 2019 2020 2021
As of September 30, 2017.
3 31 4Trading Depth, Scale & Diversification
Over a decade of proactive trading
End of Life, 2%
Airline, 11%
63% 17%
6% Lessor, 30%
$12B+
NORTH EUROPE
AMERICA
14%
MIDDLE
OWNED AIRCRAFT
EAST & SOLD SINCE 2006
OTHER
ASIA
PACIFIC
500+
AIRCRAFT
Financial
Investor, 57%
As of September 30, 2017.
3 32 4Aircraft Trading Results
Last 12 months’ trading activity remains above targets
109 $2.5B 15
years
Owned Sales Average Age
Aircraft Sold2 37% Proceeds1 63% of Aircraft
Sold2
Widebody Narrowbody
FOCUS ON MID-LIFE AIRCRAFT TO
IMPROVE OVERALL QUALITY OF
OUR PORTFOLIO & EARNINGS
See Appendix for Endnotes.
3 33 4The Business Case for Aircraft Investments
Investment rationale is different across investor spectrum
% OF AER SALES1 INVESTOR SEGMENT RATIONALE STRONG INDUSTRY FUNDAMENTALS
• Far East / High Growth
• Strategic Growth / Scale Up
7% 0–8 Lessors
• Stable Long-Term Contracted • Proven long-term resilient growth market
YEARS • Established Lessors
Cash Flows
• Retail Products • Big-ticket infrastructure like deals
• Institutional Investors • Stable Medium-Term Contracted
• Long lived assets match long-term
8 – 15 • Insurance Cash Flows liabilities
55% • Pension Funds • Strong Current Yield
YEARS
• Established Lessors • Low Volatility Returns • Uncorrelated to traditional asset classes
• Build-to-fly: Rational supply by OEMs
• Hedge Fund High Yield
34% 15 – 20 Desks
• High Yield Bond Equivalent • High current income
YEARS Transaction
• Specialized Lessors
• High asset utilization underpinned by
long-term leases and low portfolio churn
• Airline Purchases at • Airline’s Spare Aircraft
20+ • Low aircraft value volatility – a fraction of
4% Lease End • High Yielding All Equity
YEARS • Part-Out Transactions shipping volatility
(1) In the twelve months to September 30, 2017. Includes finance and sales-type leases.
3 34 4Key Investment Themes
Are Supply & Demand Balanced?
White
OEMs Tails
Deliveries Cancellations
2016 Deliveries Stable Very Limited
No White Tails 1
at ~8% Fleet Cancellations
Stored Secondary Forward
LESSORS Aircraft Market Placements
~6% in 2016, Lowest 99.5% Utilization 91% of AerCap
Forward Orderbook
Rate Since 20001 Rate for AerCap2 Leased through 20192
Load
AIRLINES Factors Profitability
Global Load Factor Airline Net Profits
81.7%3 $100B+ in Last 3 Years4
See Appendix for Endnotes.
3 36 4High Productivity Gains … Maxed Out?
Aircraft productivity has reached optimum levels and thus will be difficult to improve further;
This will lead to a tighter correlation between traffic growth and aircraft demand
2004
A330-200 10.4 188 73.5%
Hours/day PAX/flight Load factor
Present
A330-200 11.5 206 80.3%
Hours/day PAX/flight Load factor
YEARLY RPK PER
AIRCRAFT
1 Present = 1.2x 1 2004
Source: FlightGlobal Fleets Analyzer, Boeing, IATA.
3 37 4Traffic Growth Continues to Exceed OEM Production
Elevated traffic growth and diminishing efficiency gains are driving aircraft demand; While the delivery rate
remains stable, fleet growth is resulting in higher demand for used aircraft and low retirement
10%
8.0%
8%
7.4% Traffic Growth Rate
6% 5.9% Net Fleet Increase
4.2%
4%
3.4% Average Retirement Rate1
RETIREMENT RATE BELOW
HISTORICAL AVERAGE
2% 2.1% Retirement Rate 2016
0%
2010 2011 2012 2013 2014 2015 2016
Net Fleet Increase IATA RPK Growth Rate
(1) Average Retirement Rate 2007-2016.
Source: FlightGlobal Fleets Analyzer: Airbus, Boeing, McDonnell-Douglas passenger jets.
3 38 4Conclusions
Balanced Supply and Demand for Aircraft
Disciplined Portfolio Transformation Strategy
Scale is a Competitive Advantage
3 39 4Financial Performance Peter Juhas
Chief Financial OfficerFinancial Summary
STRONG EARNINGS RAISED ~$11 BILLION
AND CASH FLOW OF FINANCING
2017 is another
$1.7+ BILLION AIRCRAFT year of strong RETURNED ~$900 MILLION TO
SHAREHOLDERS THROUGH
SALES YTD operating and SHARE REPURCHASES
financial
performance
INVESTMENT GRADE
RATINGS FROM DOUBLE DIGIT BVPS
MOODY’S, FITCH, AND GROWTH
S&P
3 41 4Improved Debt / Equity Ratio
AerCap has significantly de-levered since July 2014
Adjusted Debt / Equity Ratio1
3.8x
3.5x
3.4x S&P Fitch Moody’s
3.3x Upgrade to BBB- Upgrade to BBB- Upgrade to Baa3
3.2x
3.1x
3.0x
2.9x
2.7x 2.8x 2.8x
2.7x 2.7x
2.7x 2.7x 2.7x
Jun-2014 Sep-2014 Dec-2014 Mar-2015 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016 Sep-2016 Dec-2016 Mar-2017 Jun-2017 Sep-2017
See Appendix for Endnotes and a reconciliation of Adjusted Debt / Equity Ratio to the comparable GAAP measure.
3 42 4Excess Capital Deployment
We have continued to deploy excess capital for share repurchases
$53.06 $55.06
$51.20
$49.33
$46.91
$45.26
$43.66 $49.26 • In 2016, we repurchased 25 million shares
$44.73 $45.04 at an average price of $38.62 for a total of
$42.43
$966 million
$38.03 $37.73
$36.49 • Average discount to book value of 16%
$293 $293 $293
$266
$234 $241
• In 2017, we have purchased 19.2 million
$198
shares at an average price of $46.37, for a
total of $888 million1
• Average discount to book value of 13%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Share Repurchases ($mm) BVPS Avg Repurchase Price
(1) Through October 27, 2017.
3 43 4Track Record of Returning Capital to Shareholders
Returned more capital to our shareholders than 96% of S&P 500 companies1
Shares Repurchased since June 2015 2
Remaining AerCap Shares
28%
72%
See Appendix for Endnotes.
3 44 4Conservative Approach to Liquidity & Funding
Target: ≥ 1.2x NTM sources-to-uses coverage
Liquidity • 1.3x NTM sources-to-uses
• $8.9 billion of available liquidity
Target: Diverse sources of funding
Access
• ~$36 billion of funding raised since the ILFC transaction
to Capital
announcement
AerCap is
committed to
maintaining Target: ≤ 30% secured debt to total assets
Debt Mix
• ~29% secured debt to total assets
a strong
balance sheet
Target: Range of 2.7-3.0 to 1 debt-to-equity ratio
Leverage
• 2.7 to 1 debt-to-equity ratio
Target: Fully hedged
Interest
• Interest rate risk fully hedged through interest rate caps,
Rate Risk
swaps and natural hedges
As of September 30, 2017. See Appendix for a reconciliation of Adjusted Debt / Equity Ratio to the comparable GAAP measure.
3 45 4Strong Liquidity Position
$8.9 billion of available liquidity as of September 30, 2017
Sources vs. Uses (Next 12 Months) Liquidity Levels Since July 2014
($ billion)
10.5 10.0 3.0x
Sources (for 12 months to September 30, 2018) ($ billion) 9.5 9.5
9.2 9.1 9.0 9.0 8.9
2.8x
Unsecured Revolver 3.9 9.0 2.6x
Other Facilities and Contracted Sales 3.5 2.4x
Unrestricted Cash 1.5 7.3 7.2 2.2x
7.5
Total Available Liquidity 8.9 6.6 6.6 6.4 2.0x
Estimated Operating Cash Flow 3.2 1.7x 1.6x
1.6x
1.8x
6.0 1.6x
1.5x 1.5x 1.5x 1.5x 1.5x
Total Sources1 12.1 1.6x
1.3x 1.3x
1.2x 1.2x 1.4x
4.5 1.2x
Uses (for 12 months to September 30, 2018)
1.2x Target 1.0x
Debt Maturities (3.1)
3.0 0.8x
Capex (Cash payments for purchases)2 (6.0)
0.6x
Total Uses (9.1)
1.5 0.4x
0.2x
Excess Coverage (Sources less Uses) 3.0 0.0 0.0x
Ratio of Sources to Uses 1.3x
Available Liquidity Ratio of Sources to Uses
(1) Sources assume no additional financing for deliveries of new aircraft purchases.
(2) Includes cash payments for next 12 months’ aircraft deliveries and pre-delivery payments.
3 46 4Global Funding Partners
Over 100 bank relationships and over 450 fixed income investors
Asia Pacific
North America Aozora Bank First Abu Dhabi Bank The Nomura Trust and
The Bank of East Asia Banking Co.
Fuyo General Lease Co.
AIG MetLife NTT Finance
Bank of Kaohsiung The Gunma Bank
Apple Bank Morgan Stanley Samsung Life Insurance
Bank of Taiwan
Bank of America New York Life Europe The Hachijuni Bank
Shanghai Commercial &
Principal Bank SinoPac The Higo Bank Savings Bank
Barings
Citi RBC Cathay United Bank Hua Nan Commercial Shinkin Central Bank
ABN Amro Deutsche Bank Bank
Citizens Bank Regions Bank CBA The Shizuoka Bank
Airbus Bank DVB The Hyakugo Bank
Everbank Scotia CDB SMBC
Allied Irish Bank European ECAs ICBC
Fifth Third Bank SunTrust Chailease Finance SMTB
Goldman Sachs Toronto Dominion AKA Helaba (B.V.I) Co. Industrial Bank of Korea State Bank of India
JP Morgan US Ex-Im Barclays HSBC Chang Hwa Bank
Industrial Bank of Taiwan Taichung Commercial
Key Corp Wells Fargo BLB ING China Merchants Bank Bank
BNP Paribas KFW The Iyo Bank
The Chiba Bank Taipei Fubon Bank
Bank of Ireland Natixis The Joyo Bank
The Chugoku Bank Taishin International
CIC Nord LB KEB Hana Bank Bank
CCB
Commerzbank Rabobank KGI Bank Taiwan Business Bank
CTBC Bank
Taiwan Cooperative
Credit Agricole RBS Development Bank of Korea Development Bank
Bank
Japan Land Bank of Taiwan
Credit Suisse Santander Taiwan Shin Kong
DBS Bank Mega ICBC Commercial Bank
Dekabank Siemens
E.SUN Commercial Mizuho The Tokyo Star Bank
Société Générale Bank
MUFG Yuanta Commercial
Ex-Im Bank of ROC Bank
Recent additions to lender group First Commercial Bank National Australia Bank Woori Bank
of Taiwan
3 47 4AerCap’s Hedging Program
AerCap’s hedging program protects the company against increases in interest rates
FORMS OF HEDGING1
We continuously monitor our
interest rate exposure to
CASH, FLOATING
13% RATE LEASES & OTHER ensure we remain fully hedged
INTEREST RATE
CAPS & SWAPS
19%
A 100 bps increase in
FIXED RATE DEBT interest rates would increase
our annual interest expense
by ~$25 million
68%
Primarily driven by the
difference between current
rates and strike rates of caps
Total Debt: ~$27B
(1) As of September 30, 2017.
3 48 4AerCap’s Prudent Aircraft Values
Disciplined approach to carrying values
AIRCRAFT VALUE CONSERVATIVE DEPRECIATION
GAIN ON SALE
APPROACH
• Focused on buying • We perform detailed • Average gain on sale of
aircraft at the right reviews of depreciation 5 – 10%
price schedules by aircraft
each year
• ~75% of aircraft fair
valued in June 20141 • Overall depreciation rate
of over 6%2, versus ~5%
implied by industry
standard curve
The volume of our transactions provides us with a unique insight into aircraft values
(1) Percentage of net book value as of September 30, 2017.
(2) Depreciation rate, including maintenance rights amortization.
3 49 4Financial Outlook
On Track for a Strong Full Year 2017
Expected full year 2017 financial performance
~$5.0 ~$1.2 ~$1.0 ~$6.20
billion billion billion
TOTAL GAAP PRE-TAX GAAP GAAP
REVENUE EARNINGS NET INCOME DILUTED EPS
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
3 51 4Highly Predictable Revenue
Revenue line booked well into the future
~95% of our lease
rents through 2020 are
already contracted
~99% ~96% Average remaining lease
~86% term of 6.6 years
Provides significant visibility
2018 2019 2020 and stability to our future
Contracted Assumed revenues and cash flows
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
3 52 4Key Drivers
Younger aircraft portfolio while maintaining strong margins
2017E 2018E 2019E
Weighted Average Age1 ~6.9 ~6.4 ~6.2
Yield2 ~12.2% ~11.6% ~11.2%
Average Interest Rate3 (including debt issuance costs & fees) ~4.0% ~4.0% ~4.0%
Net Spread ~9.0% ~8.5% ~8.1%
Depreciation Rate (including maintenance rights amortization) ~6.1% ~5.5% ~5.1%
Net Spread Less Depreciation4 ~2.9% ~3.0% ~3.0%
• Weighted average age of portfolio will decrease as we take delivery of new aircraft, resulting in both a
lower yield and a lower depreciation rate
• Increasing level of new technology aircraft reduces average age and overall risk in aircraft portfolio
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
See Appendix for Endnotes.
3 53 4Excess Capital Generation
AerCap will continue to generate significant excess capital
($ billion) 2018E 2019E
• We expect to generate a total of $1.0+
Contracted purchases ~6.0 ~5.5 billion of excess capital during 2018 and
2019 after contracted purchases
Expected sales ~1.5 ~1.0
• This assumes ~$1.5 billion of asset
Expected excess capital sales in 2018 and ~$1.0 billion in 2019
remaining after contracted ~0.7 ~0.3
purchases
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
3 54 4EPS Outlook
Core EPS will continue to grow
GAAP DILUTED EPS OUTLOOK
• 2017 Earnings on Track:
~$6.20 TBD • Core EPS of ~$5.05 and total EPS of
TBD
~$6.20
~$1.15
• 2018 Core EPS:
• Up ~5% over 2017, primarily driven by
redeployment of excess capital
~$6.00 -
~$5.30 - $6.20
~$5.05 $5.50 • 2019 Core EPS:
• Up ~10% over 2018, primarily driven by
asset growth
2017E 2018E 2019E
Core EPS Gain on Sales and Non-recurring Items
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
3 55 4Financial Summary
Positive outlook for AerCap
BOOK VALUE PER SHARE TRAJECTORY
STRONG
PERFORMANCE IN
2017
~$57
$49 PRUDENT
$42
$37
BALANCE SHEET
ATTRACTIVE
GROWTH OUTLOOK
2014A 2015A 2016A 2017E 2018E 2019E 2020E FOR BVPS
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor.
3 56 4Closing Remarks
LEVERAGING SCALE
INVESTMENT DISCIPLINE
RELENTLESS EXECUTION
CONSISTENT PROFITABILITY
VALUE CREATION
3 57 4Q&A
Appendix
Strong Growth Over the Long Term
Airlines need 41,030 new aircraft over the next 20 years
Boeing Has Increased its Forecast from the 2016 Current Market Outlook by 1,410 Aircraft1
Growth
North
46,950 America
Replacement
21%
Stay in-service
23,470 Latin
Asia America
Pacific 8%
41,030 38%
23,480
NEW AIRCRAFT
Middle
17,560
East
23,480 8%
Africa
5,920 3%
Europe C.I.S.
2016 2036
19% 3%
(1) Boeing Current Market Outlook 2017, includes regional jets.
3 60 4Air Travel Growth
Resilient, growing air travel market expected to continue
World Annual Traffic1 Robust Global Traffic
Oil, Financial, Expected
Oil Gulf Asian 9/11 & Euro crises growth p.a.
crisis crisis crisis & SARS & Russia, Ebola through 2036
• Air traffic doubles every
15 years1
4.4%
• 2017 world traffic has grown
by 7.7% to date2
• 2017 total passenger
x2 x2 expected to be 4.1 billion, up
from 3.8 billion in 20163
x2
1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 2036
(1) Airbus Global Market Forecast 2017, RPK: Revenue-Passenger-Kilometers.
(2) IATA Passenger Analysis as of September 2017.
(3) IATA June 2017 Forecast – Actual or estimate for 2016 and forecast for 2017 for global commercial airlines.
3 61 4Middle Class Is Growing and Flying
Middle class to grow from 2.9 billion to 4.9 billion in 20 years
Middle Class (millions of people)1
History Forecast
5,000 4,950
4,000 3,900
3,624 Emerging Countries
3,000 2,900
2,695
2,000 1,950 1,822
1,350 981
501 456 Developing Countries
1,000 216 322
73 144
781 828 850 865 859 Mature Countries
0
1996e2 2006 2016 2026 2036
5.8 6.6 7.4 8.2 8.9 World population (billion)
23% 30% 39% 47% 56% % of world population
(1) Oxford Economics, Airbus; Households with yearly income between $20,000 and $150,000 at PPP in constant 2016 prices.
(2) Estimate split for 1996 by region.
3 62 4Increasing Demand for Operating Leases
Over the past 20 years the world fleet has DOUBLED
while the operating lease fleet size has QUADRUPLED
Leasing Represents a Significant
Proportion of Global Fleet on Operating Lease1 Share of Major Airlines’ Fleets2
% Leased
19,000
18,929
86% VIRGIN ATLANTIC
17,000
Owned fleet
15,000
Leased fleet 14,829 58% SPIRIT
13,000
12,774 KLM
55%
11,000 10,701
51% AIR FRANCE
9,000
9,111
44% AMERICAN
7,000
43%
5,000 Leased CHINA SOUTHERN
41%
3,000
41% BRITISH AIRWAYS
1,000 22%
(1,000) 1997 2002 2007 2012 2017 25% CATHAY PACIFIC
(1) FlightGlobal Fleets Analyzer as of September 30 for each respective year: Airbus, Boeing, McDonnell-Douglas in-service passenger jets.
(2) FlightGlobal Fleets Analyzer as of September 30, 2017: Leased summary share, Airbus, Boeing, McDonnell-Douglas in-service, passenger jets.
3 63 4Investment Grade Ratings
AerCap is the only independent lessor with three IG ratings
Standard & Poor’s BBB- Fitch BBB- Moody’s Baa3
INVESTMENT GRADE RATINGS (STABLE) Stable (STABLE) Stable (STABLE) Stable
APR. 2016 JUL. 2016 FEB. 2017
MAR. 2016 Moody’s upgrades Fitch upgrades Moody’s upgrades
Standard & AerCap to Ba1 AerCap to AerCap to Baa3
FEB. 2015 BBB-
Poor’s upgrades
Both Standard & AerCap to BBB-
Poor’s and Moody’s
MAY 2014 place AerCap on
Acquisition of ILFC positive outlook
Note: Three IG ratings refer to AerCap’s Investment Grade rating status with the three main rating agencies: Standard & Poor’s, Fitch Ratings, and Moody’s.
3 64 4Adjusted Debt / Equity Ratio
Adjusted Debt/Equity Calculation ($ million) Sept. 30, 2017
Debt (including fair value adjustments) 27,288
Adjusted for:
• Unrestricted cash & cash equivalents (1,454)
• 50% equity credit for long-term subordinated debt (750)
2.7 to 1
ADJUSTED Adjusted Debt 25,084
DEBT / EQUITY
RATIO1 Equity 8,603
Adjusted for:
• 50% equity credit for long-term subordinated debt 750
Adjusted Equity 9,353
(1) As of September 30, 2017.
3 65 4Endnotes
SLIDE 16: Growing Industry SLIDE 36: Are Supply and Demand Balanced?
1. Airbus Global Market Forecast 2017-2036; Boeing Current Market Outlook 1. FlightGlobal Fleets Analyzer as of October 27, 2017: Airbus, Boeing,
2017. McDonnell-Douglas in-service, on order and in-storage passenger jets.
2. Oxford Economics, Airbus; Yearly household income $20,000-$150,000. 2. Utilization YTD as of September 30, 2017. Placements as of September 30,
3. FlightGlobal Fleets Analyzer as of September 30 for each respective year: 2017.
Airbus, Boeing, McDonnell-Douglas in-service passenger jets. 3. IATA Passenger Analysis as of September 2017.
4. IATA Industry Statistics June 2017 – actual for 2015 and 2016, forecast for
SLIDE 24: 777 Aircraft Continue to be Placed 2017 for system-wide global commercial airlines.
1. Scheduled expiries as of December 31, 2014.
2. Required placements as per our 4Q 2015 financial results presentation SLIDE 42: Improved Debt / Equity Ratio
3. Required placements as of December 31, 2016. 1. Adjusted Debt/equity ratios are calculated by dividing adjusted debt by
4. Placed aircraft include released, extended, sold or to be parted-out either adjusted equity. Adjusted debt is calculated as follows: debt less cash and
under a contract or letter of intent as of October 20, 2017. cash equivalents, less 50% equity credit for long-term subordinated debt.
Adjusted equity is calculated as follows: total equity plus 50% equity credit for
long-term subordinated debt.
SLIDE 30: Portfolio Transformation
As of June 30, 2014; September 30, 2017; December 31, 2021, respectively. Incl. SLIDE 44: Track Record of Returning Capital to Shareholders
maintenance rights intangible & net investment in finance and sales-type leases.
Refer to slide 2: Disclaimer Incl. Forward Looking Statements & Safe Harbor. 1. Sourced from CapitalQ; reflects AerCap rank relative to S&P 500 constituents
as of May 4, 2017.
1. Widebody: 777s, A330s; Out-of-production aircraft: 757s, 767s, 737 classics,
2. As of September 30, 2017.
CRJ, MD-11, 747s, A340s, A310s.
SLIDE 33: Aircraft Trading Results SLIDE 53: Key Drivers
1. Age at year-end.
1. As of September 30, 2017. Owned aircraft sold including sales and
reclassifications to finance and sales-type leases. 2. Basic lease rents divided by average book value of flight equipment, net
2. As of September 30, 2017. Owned aircraft sold excluding sales and investment in finance and sales type leases and maintenance rights
reclassifications to finance and sales-type leases. intangible.
3. Interest expense including fair value amortization divided by average debt,
including debt fair value.
4. Depreciation rate including maintenance rights amortization.
3 66 4AerCap Holdings N.V. AerCap House 65 St. Stephen’s Green Dublin 2, Ireland +353 1 819 2010 contact@aercap.com Follow us on
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