PR Newswire | Apr 28, 2021 07:01AM EDT

04/28 06:00 CDT

AerCap Holdings N.V. Reports Financial Results for the First Quarter 2021 DUBLIN, April 28, 2021

DUBLIN, April 28, 2021 /PRNewswire/ -- AerCap Holdings N.V. (NYSE: AER), the global leader in aircraft leasing, today reported financial results for the first quarter of 2021 ended March 31, 2021.

* Net income for the first quarter of 2021 was $228 million, or $1.76 per share. This was primarily impacted by $100 million of cash accounting and $25 million of GECAS transaction-related expenses, pre-tax. This compares to net income of $277 million, or earnings per share of $2.14, for the same period in 2020. * Excluding GECAS transaction-related expenses, net income for the first quarter of 2021 was $250 million, or $1.93 per share.

Aengus Kelly, Chief Executive Officer of AerCap, said,"The first quarter of 2021 was an exceptional one for AerCap, as we announced plans to acquire GECAS from GE, a transaction that we believe will create significant long-term value for our shareholders. At the same time, we continued to focus on our business and we are pleased to report a significant increase in our leasing activity. During the quarter, AerCap signed 60 lease agreements with airlines in 15 countries, the highest demand we have seen in 18 months. We believe this progress reflects the growing confidence of our airline customers as they plan for the future. While parts of the world remain under governmental restrictions, it is clear that there is significant pent-up consumer demand for air travel. As the vaccine rollout progresses, AerCap's global fleet of in-demand new technology aircraft will enable us to support our customers as the recovery in air travel continues."

Highlights:

* Signed lease agreements for 60 aircraft, including 28 widebody aircraft, in the first quarter of 2021. * Completed the offering of $1 billion of 5-year senior unsecured notes with a 1.75% coupon. * Announced entry into a definitive agreement to acquire GE Capital Aviation Services. * Closed a $19 billion bridge facility and $5 billion term loan agreement associated with the GECAS transaction with a consortium of 20 banks. * Entered into a new $4.35 billion revolving credit facility subject to the closing of the GECAS transaction, increasing our total revolving credit facilities to $9 billion post-closing.

Attractive Aircraft Fleet:

* AerCap has placed 100% of its new aircraft deliveries from its order book through 2022. * New technology aircraft comprise 63% of AerCap's fleet. The average age of the company's owned fleet was 6.6 years as of March 31, 2021 and the average remaining contracted lease term was 7.3 years. * The fleet utilization rate for the first quarter of 2021 was 96%, and only 7% of the company's aircraft by book value are scheduled to come off lease through the end of 2022.

Strong Balance Sheet:

* AerCap ended the first quarter with $8.6 billion in total sources of liquidity, representing next 12 months' sources-to-uses coverage ratio of 1.7x. * Adjusted debt/equity ratio of 2.5 to 1, below the company's target of 2.7x to 1. * Secured debt-to-total assets ratio of 24%.

Revenue and Net Spread

Three months ended March 31,

2021 2020 % increase/ (decrease)

(U.S. Dollars in millions)

Lease revenue:

Basic lease rents $889 $1,031(14%)

Maintenance rents and other receipts183 134 36%

Total lease revenue 1,072 1,165 (8%)

Net gain on sale of assets 5 58 (92%)

Other income 19 15 27%

Total Revenues and other income $1,095$1,238(12%)



Basic lease rents were $889 million for the first quarter of 2021, compared with $1,031 million for the same period in 2020. The decrease was primarily due to lease restructurings, transitions and the impact of airline bankruptcies.

Maintenance rents and other receipts were $183 million for the first quarter of 2021, compared with $134 million for the same period in 2020. The increase was primarily due to higher maintenance revenue recognized as a result of lease terminations during the first quarter of 2021.

Net gain on sale of assets for the first quarter of 2021 was $5 million, relating to nine aircraft sold for $184 million, compared with $58 million for the same period in 2020, relating to 12 aircraft sold for $265 million. The decrease was primarily due to the lower volume and composition of asset sales.

Other income for the first quarter of 2021 was $19 million, compared with $15 million for the same period in 2020. The increase was primarily driven by higher interest income.

Three months ended March 31,

2021 2020 % increase/ (decrease)

(U.S. Dollars in millions)



Basic lease rents $889 $1,031 (14%)



Interest expense 281 319 (12%)

Adjusted for:

Mark-to-market of interest rate caps and swaps 10 (13) NA

Interest expense excluding mark-to-market of interest rate caps and swaps 291 306 (5%)

Net interest margin (*) $598 $725 (17%)

Depreciation and amortization, including maintenance rights expense (401) (432) (7%)

Net interest margin, less depreciation and amortization $197 $293 (33%)



Average lease assets (*) $36,362 $37,671 (3%)



Annualized net spread (*) 6.6% 7.7%

Annualized net spread less depreciation and amortization (*) 2.2% 3.1%



(*) Refer to "Notes Regarding Financial Information Presented in This Press Release" for details relating to these non-GAAP measures

Interest expense excluding mark-to-market of interest rate caps and swaps was $291 million for the first quarter of 2021, compared with $306 million for the same period in 2020. AerCap's average cost of debt was 3.7% for the first quarter of 2021, compared with 3.8% for the same period in 2020, excluding debt issuance costs, upfront fees and other impacts.

Selling, General and Administrative Expenses

Three months ended March 31,

2021 2020 % increase/ (decrease)

(U.S. Dollars in millions)



Selling, general and administrative expenses $41 $47 (11%)

Share-based compensation expenses 16 18 (11%)

Total selling, general and administrative expenses$57 $65 (11%)

Other Expenses

Asset impairment charges were $16 million for the first quarter of 2021, compared to $14 million for the same period in 2020. Asset impairment charges recorded in the first quarter of 2021 related to lease terminations and sales transactions and were offset by related maintenance revenue. Leasing expenses were $45 million for the first quarter of 2021, compared with $103 million for the same period in 2020. The decrease was primarily due to a decrease in leasing expenses as a result of lower lessor maintenance contributions, as well as a decrease in maintenance rights expense as a result of lower maintenance activity during the period and the lower maintenance rights asset balance.

Effective Tax Rate

The company's effective tax rate was 15% for the first quarter of 2021, compared to 13.5% for the first quarter of 2020. The effective tax rate is impacted by the source and amount of earnings among our different tax jurisdictions as well as the amount of permanent tax differences relative to pre-tax income.

Book Value Per Share

March 31, 2021 March 31, 2020

(U.S. Dollars in millions, except share and per share data)



Total AerCap Holdings N.V. shareholders' equity $9,139 $9,383



Ordinary shares outstanding 130,734,441 129,637,008

Unvested restricted stock (2,591,959) (2,300,595)

Ordinary shares outstanding (excl. unvested restricted stock) 128,142,482 127,336,413



Book value per ordinary share outstanding (excl. unvested restricted stock)$71.32 $73.69

Financial Position

% increase/ March 31, 2021 December 31, 2020 (decrease) over December 31, 2020

(U.S. Dollars in millions)



Total cash, cash equivalents and restricted cash $1,675 $1,495 12%

Total lease assets (*) 36,076 36,642 (2%)

Total assets 42,065 42,048 0%

Debt 28,553 28,742 (1%)

Total liabilities 32,858 33,116 (1%)

Total AerCap Holdings N.V. shareholders' equity 9,139 8,864 3%

Total equity 9,207 8,932 3%



(*) Refer to "Notes Regarding Financial Information Presented in This Press Release" for details relating to this non-GAAP measure

Aircraft Portfolio

As of March 31, 2021, AerCap's portfolio consisted of 1,321 aircraft that were owned, on order or managed. The average age of the company's owned fleet as of March 31, 2021 was 6.6 years (3.2 years for new technology aircraft, 12.3 years for current technology aircraft) and the average remaining contracted lease term was 7.3 years.

Notes Regarding Financial Information Presented in This Press Release

The financial information presented in this press release is not audited.

Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

The following are definitions of non-GAAP measures used in this press release. We believe these measures may further assist investors in their understanding of our operational performance.

Net income / earnings per share excluding GECAS transaction-related expenses

Net income excluding GECAS transaction-related expenses is calculated as net income excluding the after-tax impact of transaction-related expenses of $25 million. Earnings per share excluding GECAS transaction-related expenses is calculated by dividing net income excluding GECAS transaction-related expenses by the weighted average of our ordinary shares outstanding. Given the relative significance of this item during the first quarter of 2021, we have chosen to present this measure in order to assist investors in their understanding of the changes and trends related to our earnings.

Three months ended March 31, 2021

Earnings Net income per share

(U.S. Dollars in millions, except per share data)



Net income / earnings per share $228 $1.76



Transaction-related expenses 25 0.20

Income tax effect (3) (0.02)



Net income / earnings per share excluding GECAS transaction-related expenses$250 $1.93

Adjusted debt/equity ratio

This measure is the ratio obtained by dividing adjusted debt by adjusted equity.

* Adjusted debt means consolidated total debt less cash and cash equivalents, and less a 50% equity credit with respect to certain long-term subordinated debt. * Adjusted equity means total equity, plus the 50% equity credit relating to the long-term subordinated debt.

Adjusted debt and adjusted equity are adjusted by the 50% equity credit to reflect the equity nature of those financing arrangements and to provide information that is consistent with definitions under certain of our debt covenants. We believe this measure may further assist investors in their understanding of our capital structure and leverage.

March 31, 2021 December 31, 2020

(U.S. Dollars in millions, except debt/equity ratio)



Debt $28,553 $28,742



Adjusted for:

Cash and cash equivalents (1,448) (1,249)

50% credit for long-term subordinated debt(1,125) (1,125)

Adjusted debt $25,980 $26,368





Equity $9,207 $8,932



Adjusted for:

50% credit for long-term subordinated debt1,125 1,125

Adjusted equity $10,332 $10,057



Adjusted debt/equity ratio 2.5 to 1 2.6 to 1

Net interest margin, annualized net spread, annualized net spread less depreciation and amortization and average cost of debt

Net interest margin is calculated as the difference between basic lease rents and interest expense, excluding the impact of the mark-to-market of interest rate caps and swaps. Annualized net spread is net interest margin expressed as a percentage of average lease assets. Annualized net spread less depreciation and amortization is net interest margin less depreciation and amortization, including maintenance rights expense, expressed as a percentage of average lease assets. Average cost of debt is calculated as interest expense, excluding mark-to-market on interest rate caps and swaps, debt issuance costs, upfront fees and other impacts, divided by average debt balance. We believe these measures may further assist investors in their understanding of the changes and trends related to the earnings of our leasing activities. These measures reflect the impact from changes in the number of aircraft leased, lease rates and utilization rates, as well as the impact from changes in the amount of debt and interest rates.

Lease assets

Lease assets include flight equipment held for operating leases, flight equipment held for sale, net investment in finance and sales-type leases and maintenance rights assets.

Conference Call

In connection with its report of first quarter 2021 results, management will host a conference call with members of the investment community today, Wednesday, April 28, 2021, at 8:30 am Eastern Time. The call can be accessed live by dialing (U.S./Canada) +1 929 477 0448 or (International) +353 1 246 5638 and referencing code 1398377 at least 5 minutes before start time, or by visiting AerCap's website at www.aercap.com under "Investors".

The webcast replay will be archived in the "Investors" section of the company's website for one year.

For further information, contact Joseph McGinley: +353 1 418 0428 (jmcginley@aercap.com).

About AerCap

AerCap is the global leader in aircraft leasing. AerCap serves approximately 200 customers in approximately 80 countries with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and has its headquarters in Dublin with offices in Shannon, Los Angeles, Singapore, Amsterdam, Shanghai, Abu Dhabi, Seattle and Toulouse.

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, and 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, including the impacts of, and associated responses to, the Covid-19 pandemic, 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, we cannot assure you 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. Except as required by applicable law, 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 www.aercap.com and follow us on Twitter www.twitter.com/aercapnv.



AerCap Holdings N.V

Unaudited Consolidated Balance Sheets

(U.S. Dollars in thousands)



March 31, 2021December 31, 2020



Assets

Cash and cash equivalents $1,447,514 $1,248,772

Restricted cash 227,942 246,518

Trade receivables 215,030 170,675

Flight equipment held for operating leases, net 34,568,148 35,156,450

Investment in finance and sales-type leases, net 881,148 878,451

Flight equipment held for sale 43,513 -

Prepayments on flight equipment 2,246,329 2,111,659

Maintenance rights and lease premium, net 630,633 649,914

Other intangibles, net 219,340 224,634

Deferred income tax assets 128,485 131,532

Other assets 1,456,881 1,229,434

Total Assets $42,064,963 $42,048,039





Liabilities and Equity

Accounts payable, accrued expenses and other liabilities $1,003,335 $1,109,325

Accrued maintenance liability 1,717,688 1,750,395

Lessee deposit liability 629,629 600,321

Debt 28,553,115 28,742,081

Deferred income tax liabilities 953,962 913,431

Total liabilities 32,857,729 33,115,553



Ordinary share capital (eu)0.01 par value, 350,000,000 ordinary shares authorized as of March 31, 2021 and December 31, 2020;

138,847,345 and 138,847,345 ordinary shares issued and 130,734,441 and 130,398,538 ordinary shares outstanding

(including 2,591,959 and 2,552,346 unvested restricted stock) as of March 31, 1,721 1,721 2021 and December 31, 2020, respectively

Additional paid-in capital 2,088,760 2,078,125

Treasury shares, at cost (8,112,904 and 8,448,807 ordinary shares

as of March 31, 2021 and December 31, 2020, respectively) (443,228) (459,994)

Accumulated other comprehensive loss (133,633) (155,085)

Accumulated retained earnings 7,625,705 7,399,703

Total AerCap Holdings N.V. shareholders' equity 9,139,325 8,864,470

Non-controlling interest 67,909 68,016

Total Equity 9,207,234 8,932,486



Total Liabilities and Equity $42,064,963 $42,048,039





AerCap Holdings N.V

Unaudited Consolidated Income Statements

(U.S. Dollars in thousands, except share and per share data)



Three months ended March 31,

2021 2020



Revenues and other income

Lease revenue:

Basic lease rents $889,087 $1,030,794

Maintenance rents and other receipts 182,895 134,285

Total lease revenue 1,071,982 1,165,079

Net gain on sale of assets 4,795 58,366

Other income 18,573 14,732

Total Revenues and other income 1,095,350 1,238,177



Expenses

Depreciation and amortization 396,558 415,798

Asset impairment 16,332 13,947

Interest expense 280,817 318,617

Loss on debt extinguishment 6,061 -

Leasing expenses 44,532 103,297

Selling, general and administrative expenses 57,351 64,584

Transaction-related expenses 25,478 -

Total Expenses 827,129 916,243



Loss on investment at fair value (2,463) -



Income before income taxes and income of investments accounted for under the 265,758 321,934 equity method



Income tax expense (39,864) (43,461)

Equity in net earnings of investments accounted for under the equity method 2,152 1,331



Net income $228,046 $279,804



Net income attributable to non-controlling interest (21) (2,980)



Net income attributable to AerCap Holdings N.V. $228,025 $276,824



Basic earnings per share $1.78 $2.16

Diluted earnings per share $1.76 $2.14



Weighted average shares outstanding - basic 127,883,690 128,299,745

Weighted average shares outstanding - diluted 129,484,250 129,340,501





AerCap Holdings N.V

Unaudited Consolidated Statements of Cash Flows

(U.S. Dollars in thousands)



Three months ended March 31,

2021 2020



Net income $228,046 $279,804

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

Depreciation and amortization 396,558 415,798

Asset impairment 16,332 13,947

Amortization of debt issuance costs, debt discount, debt premium and lease 15,944 16,298 premium

Amortization of fair value adjustment on debt (4,119) (16,267)

Maintenance rights write-off 15,209 33,393

Maintenance liability release to income (68,472) (63,422)

Share-based compensation 15,926 17,757

Net gain on sale of assets (4,795) (58,366)

Deferred income taxes 40,382 44,616

Collections of finance and sales-type leases 25,763 19,115

Loss on investment at fair value 2,463 -

Loss on debt extinguishment 6,061 -

Transaction-related expenses 14,595 -

Other 10,984 57,638

Changes in operating assets and liabilities:

Trade receivables (45,496) (49,342)

Other assets (90,206) (96,013)

Accounts payable, accrued expenses and other liabilities (174,823) 13,962

Net cash provided by operating activities 400,352 628,918



Purchase of flight equipment (11,039) (61,326)

Proceeds from sale or disposal of assets 160,198 176,961

Prepayments on flight equipment (79,879) (350,836)

Net cash provided by (used in) investing activities 69,280 (235,201)



Issuance of debt 1,188,357 4,200,000

Repayment of debt (1,357,263) (918,422)

Debt issuance and extinguishment costs paid, net of debt premium received (170,002) (1,739)

Maintenance payments received 75,917 144,876

Maintenance payments returned (30,237) (95,189)

Security deposits received 56,382 28,392

Security deposits returned (49,869) (48,608)

Dividend paid to non-controlling interest holders and others (128) (1,228)

Repurchase of shares and tax withholdings on share-based compensation (1,841) (118,571)

Net cash (used in) provided by financing activities (288,684) 3,189,511



Net increase in cash, cash equivalents and restricted cash 180,948 3,583,228

Effect of exchange rate changes on cash, cash equivalents and restricted cash (782) (1,032)

Cash, cash equivalents and restricted cash at beginning of period 1,495,290 1,300,347

Cash, cash equivalents and restricted cash at end of period $1,675,456 $4,882,543



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SOURCE AerCap Holdings N.V.