Adjusted net income for the full year of 2011 was $303.1 million, an increase of 35% over the prior year.
Amsterdam, Netherlands; February 22, 2012 - 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, 2011.
Fourth Quarter 2011 Net Income and Earnings Per Share
* Fourth quarter 2011 reported net income was $76.4 million, compared with $72.4 million for the same period in 2010. Fourth quarter 2011 reported basic and diluted earnings per share was $0.54, compared to $0.53 for the same period in 2010. * Fourth quarter 2011 adjusted net income was $79.8 million, an increase of 42% compared to $56.3 million for the same period in 2010. Adjusted net income excludes non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation, and excludes the impact from discontinued operations. Fourth quarter 2011 adjusted earnings per share was $0.57, compared to $0.41 for the same period in 2010.
Aengus Kelly, CEO of AerCap, commented: "During 2011, AerCap continued to deliver industry leading results with full year adjusted net income of $303 million and fourth quarter adjusted net income of $80 million. These results demonstrate the robust nature of the AerCap platform, driven by our modern fuel efficient fleet and proactive management of our liability structure.
In 2011, AerCap executed a number of key strategic transactions including the sale of AeroTurbine, the execution of a $100 million share buyback program and the closing of the American Airlines purchase-leaseback transaction. On the operational side, we leased 30 aircraft, acquired 13 aircraft, sold 21 aircraft and raised $1.5 billion of funding. These transactions, which I believe will be meaningfully accretive to shareholder value over time, coupled with our robust liquidity profile and disciplined and focused leadership team uniquely position AerCap to take advantage of any opportunities that may arise in 2012."
AerCap's CFO, Keith Helming, added: "Our 900 basis points net interest margin for 2011 clearly demonstrates the superior profitability of the AerCap portfolio which benefits from a low cost basis, attractive and fully hedged borrowing costs, and low tax rates which results from operating within favourable tax jurisdictions. In addition, the Company remains well capitalized, with a debt/equity ratio of 2.7 times, $650 million of total cash, and annual operating cash flows in excess of $600 million. The combination of these factors position the Company for accretive growth in 2012 and beyond."
Additional Fourth Quarter 2011 Financial Highlights
* Net interest margin earned on lease assets, or net spread, was $178.3 million in the fourth quarter of 2011 compared to $178.9 million for the same period in 2010. Net interest margin as a percent to average lease assets was 8.97% for fourth quarter year 2011 as compared to 9.23% for fourth quarter 2010. * Total assets were $9.1 billion at December 31, 2011, a decrease of 5% over total assets of $9.6 billion at December 31, 2010. The decrease was driven primarily by the sale of AeroTurbine and the sale of our 50% interest in a joint venture containing three A330 aircraft (a decrease of $0.6 billion from both). * Debt to equity ratio was 2.7 times at December 31, 2011, compared to 3.0 times at December 31, 2010. * We entered into debt facility agreements totaling $0.4 billion in fourth quarter 2011.
Full Year 2011 Highlights
* Full year 2011 reported net income was $172.2 million, compared with $207.6 million for full year 2010. Full year 2011 reported basic and diluted earnings per share was $1.17, compared with $1.81 for full year 2010. * Full year 2011 adjusted net income was $303.1 million, an increase of 35% compared to $223.9 million for full year 2010. Full year 2011 adjusted net income excludes non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation, a one-time charge relating to the buy out of the Genesis portfolio servicing rights and excludes a loss from discontinued operations. Full year 2011 adjusted earnings per share was $2.07, compared to $1.95 for full year 2010. * Net interest margin earned on lease assets, or net spread, was $718.1 million for the full year 2011 compared to $633.7 million in the full year 2010, an increase of 13%. Net interest margin as a percent to average lease assets was 9.05% for full year 2011 as compared to 9.20% for full year 2010. * Basic lease rents for the full year 2011 were $951.3 million, up 13% compared to the full year 2010. * Net gain on sale of assets for the full year 2011 was $9.3 million and was generated from the sale of 18 older aircraft and three A330s through the sale of a 50% interest in a joint venture. In addition 10 older aircraft were sold as part of the AeroTurbine disposition. * Total revenue for the full year 2011 was $1.1 billion, up 14% compared to the full year 2010 resulting primarily from an increase in basic lease rents driven by the additional aircraft acquired in the Genesis Transaction and the deliveries of forward order aircraft. * We acquired $0.9 billion of aircraft assets including four purchase- leaseback aircraft with American Airlines. In first quarter 2012, we have completed an additional two purchase-leaseback aircraft with American Airlines. * We entered into debt facility agreements totaling $1.5 billion for full year 2011.
Summary of Financial Results
Three months ended Twelve months ended December 31, December 31, 2011 2010 % increase/ 2011 2010 % increase/ (decrease) (decrease)
Net income $ 76.4 $ 72.4 6% $ 172.2 $ 207.6 (17%)
Plus: mark-to- 3.4 (17.5) 119% 51.3 13.5 280% market of interest rate caps, net of tax
share-based 1.3 1.4 (7%) 5.4 2.8 93% compensation, net of tax Net income excluding 81.1 56.3 44% 228.9 223.9 2% the impact of mark- to-market of interest rate caps and share- based compensation
Plus: (Income) (1.3) - - 52.8 - - loss on discontinued operations
buy-out of - - - 21.4 - - the Genesis portfolio servicing rights Adjusted net $ 79.8 $ 56.3 42% $ 303.1 $ 223.9 35% income
Revenue breakdown
Three months ended Twelve months ended December 31, December 31, 2011 2010 % increase/ 2011 2010 % increase/ (decrease) (decrease)
Lease revenue:
Basic lease $ 237.2 $ 235.3 1% $ 951.3 $ 840.4 13% rents
Maintenance 26.0 19.2 35% 99.2 61.9 60% rents and other receipts Lease revenue $ 263.2 $ 254.5 3% $ 1,050.5 $ 902.3 16%
Net gain on sale 0.1 (0.2) 150% 9.3 36.2 (74%) of assets
Management fees 5.1 4.6 11% 21.8 16.9 29% and interest income
Other revenue 8.0 - - 12.4 3.9 218% Total revenue $ 276.4 $ 258.9 7% $ 1,094.0 $ 959.3 14%
Basic lease rents were $237.2 million for the fourth quarter of 2011, an increase of 1% compared to the same period in 2010. Our average lease assets increased by 3% to $8.0 billion compared to the fourth quarter of 2010.
Basic rents, maintenance rents and other receipts, or total lease revenue, for the fourth quarter of 2011 was $263.2 million, compared to $254.5 million for the same period in 2010, an increase of 3%.
Net gain on sale of assets for the fourth quarter of 2011 was $0.1 million, compared to a $0.2 million loss for the same period in 2010. Net gain on sale of assets for the fourth quarter of 2011 was generated from the sale of 9 older aircraft.
Total revenue for the fourth quarter of 2011 was $276.4 million, compared to $258.9 million for the same period in 2010.
Three months ended Twelve months ended December 31, December 31, 2011 2010 % increase/ 2011 2010 % increase/ (decrease) (decrease)
Basic $ 237.2 $ 235.3 1% $ 951.3 $ 840.4 13% lease rents
Interest $ 62.8 (a) $ 36.6 72% $ 292.5 (a) $ 234.0 25% on debt
Plus: (3.9) 19.8 (120%) (59.3) (27.3) (117%) mark-to- market of interest rate caps Interest $ 58.9 $ 56.4 4% $ 233.2 $ 206.7 13% on debt excluding the impact of mark- to-market of interest rate caps
Net $ 178.3 $ 178.9 (0%) $ 718.1 $ 633.7 13% interest margin, or net spread
a. Interest on debt for the quarter ended December 31, 2011 includes $7.0 million of amortization of debt issuance costs. Interest on debt for the year ended December 31, 2011 includes $30.6 million of amortization of debt issuance costs.
As shown in the table above, interest expense excluding the impact of the mark- to-market of interest rate caps was $58.9 million in the fourth quarter of 2011, a 4% increase compared to the same period in 2010. Net spread in the fourth quarter of 2011 was unchanged compared with the same period in 2010.
Selling, general and administrative expenses breakdown
Three months ended Twelve months ended December 31, December 31, 2011 2010 % increase/ 2011 2010 % increase/ (decrease) (decrease)
Aircraft $ 0.1 $ 1.8 (94%) $ 26.8 (a) $ 6.4 319% management fees
Mark-to-market (1.1) (0.3) (267%) 2.8 (1.7) 265% of foreign currency hedges, foreign currency balances and other derivatives
Share-based 1.5 1.1 36% 6.2 2.9 114% compensation expenses
Other selling, 22.0 20.8 6% 84.9 (b) 73.0 16% general and administrative expenses Total selling, $ 22.5 $ 23.4 (4%) $ 120.7 $ 80.6 50% general and administrative expenses
a. Includes a one-time charge of $24.5 million ($21.4 million, net of tax) relating to the buy-out of the Genesis portfolio servicing rights. b. Includes one-time charges of $5.2 million relating to termination and severance costs.
Effective tax rate
AerCap's blended effective tax rate during the full year 2011 was 6.7%. The blended effective tax rate in 2010 was 8.6%.
Financial position
December 31, December 31, % increase/ 2011 2010 (decrease) over December 31, 2010
Total cash (incl. $ $ 3% restricted) 648.4 626.9
Flight equipment (2%) held for lease 7,895.9 8,061.3
Total assets (5%) 9,107.6 9,600.6
Debt (7%) 6,111.2 6,566.2
Total liabilities (8%) 6,824.3 7,383.2
Total equity 3% 2,283.3 2,217.4
Debt/equity ratio 2.7 3.0 (10%)
As of December 31, 2011, AerCap's portfolio consisted of 350 aircraft that were either owned, on order, under contract or letter of intent, or managed and inclusive of the American Airlines purchase-leaseback transaction where the remaining aircraft are subject to confirmation on an aircraft by aircraft basis.
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:
Adjusted net income and adjusted earnings per share. These measures are 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. For 2011, adjusted net income and adjusted earnings per share also exclude a one-time charge relating to the buy out of the Genesis portfolio servicing rights and excludes a loss from discontinued operations. Adjusted earnings per share are determined by dividing the amount of adjusted net income by the average number of shares outstanding for that period. The average number of shares is based on a daily average. In addition to GAAP net income and earnings per share, we believe these measures 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 the mark-to-market of interest rate caps and share-based compensation to net income for the three- and twelve-month periods ended December 31, 2011 and 2010:
Three months ended Twelve months ended December 31, December 31, 2011 2010 % increase/ 2011 2010 % increase/ (decrease) (decrease)
Net income $ 76.4 $ 72.4 6% $ 172.2 $ 207.6 (17%)
Plus: mark-to- 3.4 (17.5) 119% 51.3 13.5 280% market of interest rate caps, net of tax
share-based 1.3 1.4 (7%) 5.4 2.8 93% compensation, net of tax Net income 81.1 56.3 44% 228.9 (a) 223.9 2% excluding the impact of mark-to- market of interest rate caps and share-based compensation
a. Adjusted net income for the twelve months ended December 31, 2011 excluding the mark-to-market of interest rate caps, share-based compensation, the buy out of the third party servicing contract and the one-time charges relating to the sale of AeroTurbine was $303.1 million, an increase of 35% compared to the same period in 2010.
Net interest margin, or 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. 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- and twelve- month periods ended December 31, 2011 and 2010 is included above.
Conference Call
In connection with the earnings release, management will host an earnings conference call today, Wednesday, February 22, 2012 at 9:30 am Eastern Time / 3:30 pm Central European Time. The call can be accessed live by dialing (U.S./Canada) 1-480-629-9818 or (International) 31-20-794-8504 and referencing code 4501595 at least 5 minutes before start time, or by visiting AerCap's website athttp://www.aercap.com under "Investor Relations".
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 22, 2012, at 12:30 pm Eastern Time at The New York Palace (the Henry Room), 455 Madison Avenue, New York. Doors will open at 12:00 pm.
To participate in either event, please register at:http://client.sharedvalue.net/AerCap/Q411
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 and has one of the youngest fleets in the industry. AerCap has $9.1 billion of assets on its balance sheet and 350 aircraft with a focus on fuel-efficient narrowbodies and widebodies. AerCap is a New York Stock Exchange-listed company (AER) headquartered in The Netherlands with offices in Ireland, the United States, China, Singapore, the United Arab Emirates, 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 visithttp://www.aercap.com.
Financial Statements Follow
AerCap Holdings N.V. Consolidated Balance Sheets - Unaudited (In thousands of U.S. Dollars) December 31, 2011 December 31, 2010 Assets Cash and cash equivalents $ 411,081 $ 404,450 Restricted cash 237,325 222,464 Trade receivables, net of provisions 16,063 49,055 Flight equipment held for operating 7,895,874 8,061,260 leases, net Net investment in direct finance 25,094 30,069 leases Notes receivables, net of provisions 5,200 15,497 Prepayments on flight equipment 95,619 199,417 Investments 84,079 72,985 Goodwill - 6,776 Intangibles, net 29,677 58,637 Inventory 13,953 121,085 Derivative assets 21,050 55,211 Deferred income taxes 91,258 94,560 Other assets 181,359 209,141 Total Assets $ 9,107,632 $ 9,600,607 Liabilities and Equity Accounts payable $ 4,142 $ 16,045 Accrued expenses and other liabilities 74,458 121,389 Accrued maintenance liability 452,582 420,824 Lessee deposit liability 102,844 130,031 Debt 6,111,165 * 6,566,163 Accrual for onerous contracts 3,971 12,928 Deferred revenue 47,994 60,061 Derivative liabilities 27,159 55,769 Total liabilities 6,824,315 7,383,210 Share capital 1,570 1,570 Additional paid-in capital 1,340,205 1,333,025 Treasury stock (100,000) - Accumulated other comprehensive income (8,513) 5,005 Retained earnings 1,043,974 871,750 Total AerCap Holdings N.V. 2,277,236 2,211,350 shareholders' equity Non-controlling interest 6,081 6,047 Total Equity 2,283,317 2,217,397 Total Liabilities and Equity $ 9,107,632 $ 9,600,607 * Includes $64.3 million of subordinated debt received from our joint venture partners Supplemental information December 31, 2011 December 31, 2010 Debt/equity ratio 2.7 3.0 Debt/equity ratio (adjusted for 2.6 2.8 subordinated debt)
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, 2011 2010 2011 2010 Revenues Lease revenue $ 263,197 $ 254,496 $ 1,050,536 $ 902,320 Net gain on sale of 125 (197) 9,284 36,204 assets Management fee 4,185 4,057 19,059 12,975 revenue Interest revenue 912 536 2,761 3,913 Other revenue 8,034 39 12,283 3,866 Total Revenues 276,453 258,931 1,093,923 959,278 Expenses Depreciation 89,832 86,715 361,210 307,706 Asset impairment 4,011 5,423 15,594 10,905 Interest on debt 62,795 36,610 292,486 233,985 Operating lease in 3,012 3,061 12,069 12,332 costs Leasing expenses 15,174 22,792 58,432 55,458 Provision for 1,024 39 3,335 39 doubtful notes and accounts receivable Selling, general and 22,481 23,429 120,746 80,627 administrative expenses Total Expenses 198,329 178,069 863,872 701,052 Income from 78,124 80,862 230,051 258,226 continuing operations before income taxes and income of investments accounted for under the equity method Provision for income (5,374) (6,317) (15,460) (22,194) taxes Net Income of 2,393 1,400 10,904 3,713 investments accounted for under the equity method Net income from 75,143 75,945 225,495 239,745 continuing operations Income (loss) from 1,318 (425) (52,745) (3,199) discontinued operations (AeroTurbine, including loss on disposal), net of tax Bargain purchase - - - 274 gain ("Amalgamation gain"), net of transaction expenses Net Income 76,461 75,520 172,750 236,820 Net income (73) (3,079) (526) (29,247) attributable to non- controlling interest Net Income $ 76,388 $ 72,441 $ 172,224 $ 207,573 attributable to AerCap Holdings N.V. Basic and diluted $ 0.54 $ 0.53 $ 1.17 $ 1.81 earnings per share Weighted average 140,562,684 136,000,708 146,587,752 114,952,639 shares outstanding - basic and diluted
Certain reclassifications have been made to prior years consolidated income statements to reflect the current year presentation.
AerCap Holdings N.V. Consolidated Statements of Cash Flows - Unaudited (In thousands of Three months ended Twelve months ended U.S. Dollars) December 31, December 31, 2011 2010 2011 2010 Net income 76,461 75,520 172,750 236,820 Adjustments to reconcile net income to net cash provided by operating activities Amalgamation gain - - - (31,023) Depreciation 89,832 93,835 384,855 333,754 Asset impairment 4,011 8,955 24,496 14,437 Amortisation of 7,036 6,733 33,001 26,410 debt issuance cost Amortisation of 3,382 5,978 17,319 22,070 intangibles Provision for 1,024 392 4,843 1,312 doubtful notes and accounts receivable Capitalised (301) (122) (675) (590) interest on pre- delivery payments Gain on disposal of (125) (1,153) (12,939) (37,203) assets (Income) loss on (1,300) - 52,763 - discontinued operations (AeroTurbine) Mark-to-market of (5,357) (35,136) 23,167 769 non-hedged derivatives Deferred taxes 11,300 5,465 23,874 17,707 Share-based 1,469 1,746 6,236 3,402 compensation Changes in assets and liabilities Trade receivables (1,861) 2,937 (16,434) (371) and notes receivable, net Inventories 2,517 (8,578) (18,100) 3,183 Other assets and (169) (2,804) (41,056) (8,320) derivative assets Other liabilities (2,741) 31,845 (23,255) 45,073 Deferred revenue (446) (6,872) (9,289) 14,182 Net cash provided 184,732 178,741 621,556 641,612 by operating activities Purchase of flight (79,950) (150,912) (763,159) (1,939,874) equipment Proceeds from 24,957 70,593 140,785 664,218 sale/disposal of assets Prepayments on (13,794) (29,335) (47,077) (140,094) flight equipment Purchase of - - - 103,691 subsidiaries, net of cash acquired Proceeds from 119,917 - 119,917 - sale/disposal of subsidiaries, net of cash disposed Purchase of - - (2,500) (7,500) investments Purchase of - - - (9,006) intangibles Movement in (26,694) 11,490 (15,831) (50,262) restricted cash Net cash (used in) 24,436 (98,164) (567,865) (1,378,827) provided by investing activities Issuance of debt 189,100 212,201 1,672,089 2,324,609 Repayment of debt (278,751) (272,245) (1,626,556) (1,485,690) Debt issuance costs (7,254) (12,796) (37,306) (60,889) paid Maintenance 35,106 23,680 110,358 90,165 payments received Maintenance (10,772) (13,683) (54,751) (42,250) payments returned Security deposits 6,100 4,643 20,135 29,535 received Security deposits (3,951) (14,395) (37,190) (39,710) returned Issuance of equity - 110,243 - 110,243 interests Repurchase of (39,368) - (100,000) - shares Capital - - - 32,375 contributions from non-controlling interests Net cash (used in) (109,790) 37,648 (53,221) 958,388 provided by financing activities Net increase 99,378 118,225 470 221,173 (decrease) in cash and cash equivalents Effect of exchange (143) 462 6,161 660 rate changes Cash and cash equivalents 37 509 - - - of discontinued operations at beginning of period Cash and cash 274,337 285,763 404,450 182,617 equivalents at beginning of period Cash and cash 411,081 404,450 411,081 404,450 equivalents at end of period
Certain reclassifications have been made to prior years consolidated statements of cash flows to reflect the current year presentation.
For Investors: Keith Helming Peter Wortel Chief Financial Officer Investor Relations 31 20 655 9670 31 20 655 9658 khelming@aercap.com pwortel@aercap.com
For Media: Frauke Oberdieck Corporate Communications 31 20 655 9616 foberdieck@aercap.com
AerCap Fourth Quarter 2011 Earnings: http://hugin.info/149317/R/1588166/498313.pdf
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: AerCap Holdings N.V. via Thomson Reuters ONE
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