DUBLIN–(BUSINESS WIRE)–lt;a href=”https://twitter.com/hashtag/FirstQuarter?src=hash” target=”_blank”gt;#FirstQuarterlt;/agt;–AerCap Holdings N.V. (“AerCap”) (NYSE: AER):
- Net income of $234.2 million for the first quarter of 2019
- Diluted earnings per share of $1.68 for the first quarter of 2019
Highlights
- New technology aircraft now comprise over 50% of our owned fleet.
- Over $40 billion of contracted future lease revenues.
- Average current lease expires in the third quarter of 2026.
-
6.2 years average age of owned fleet (1.9 years for new technology
aircraft, 10.8 years for current technology aircraft). - 7.4 years average remaining lease term.
- 99.2% fleet utilization rate for the first quarter of 2019.
- Aircraft purchases of $1.2 billion in the first quarter of 2019.
-
$11.1 billion of available liquidity and adjusted debt/equity ratio of
2.8 to 1. -
Repurchased 3.1 million shares in the first quarter of 2019 for $137
million.
Aengus Kelly, CEO of AerCap, commented: “I am pleased to announce
another strong quarter for AerCap, with earnings per share of $1.68 and
net income of $234.2 million. The foundation of AerCap’s success is our
longstanding, deeply ingrained culture of action and discipline. Coupled
with our scale and informational advantages, these enable us to produce
superior economic results consistently, quarter after quarter and year
after year.”
First Quarter 2019 Financial Results
-
Lease revenue was $1,162.1 million, compared with $1,120.3 million for
the same period in 2018, primarily due to the delivery of new
technology aircraft from January 2018 through March 2019, resulting in
a $2.3 billion increase in average lease assets. -
Net income was $234.2 million, compared with $265.4 million for the
same period in 2018. Diluted earnings per share was $1.68, compared
with $1.72 for the same period in 2018. -
Net income was primarily affected by lower net gain on sale of assets,
partially offset by higher lease rents. Our sales volume was
significantly lower in the first quarter of 2019 than in the first
quarter of 2018, resulting in lower net gain on sale of assets. This
was partially offset by higher lease rents primarily resulting from
the increase in average lease assets. -
Diluted earnings per share was affected by the same factors as net
income and by the repurchase of 17.0 million shares from January 2018
through March 2019.
|
Revenue and Net Spread |
|||||||||
| Three months ended March 31, | |||||||||
| % increase/ | |||||||||
| 2019 | 2018 | (decrease) | |||||||
| (U.S. Dollars in millions) | |||||||||
| Lease revenue: | |||||||||
| Basic lease rents | $1,075.3 | $1,032.9 | 4 | % | |||||
| Maintenance rents and other receipts | 86.8 | 87.4 | (1 | %) | |||||
| Lease revenue | 1,162.1 | 1,120.3 | 4 | % | |||||
| Net gain on sale of assets | 21.5 | 89.3 | (76 | %) | |||||
| Other income | 21.4 | 9.5 | 125 | % | |||||
| Total Revenues and other income | $1,205.0 | $1,219.1 | (1 | %) | |||||
Basic lease rents were $1,075.3 million for the first quarter of 2019,
compared with $1,032.9 million for the same period in 2018. The increase
was primarily due to the increase in average lease assets.
Net gain on sale of assets for the first quarter of 2019 was $21.5
million, relating to 19 aircraft sold for $340.0 million, compared with
$89.3 million for the same period in 2018 relating to 21 aircraft sold
for $756.8 million. The decrease was primarily due to the lower volume
and composition of asset sales.
Other income for the first quarter of 2019 was $21.4 million, compared
with $9.5 million for the same period in 2018. The increase was
primarily the result of net insurance proceeds recognized during the
first quarter of 2019 and higher interest income.
| Three months ended March 31, | ||||||
| % increase/ | ||||||
| 2019 | 2018 | (decrease) | ||||
| (U.S. Dollars in millions) | ||||||
| Basic lease rents | $1,075.3 | $1,032.9 | 4% | |||
| Interest expense | 334.2 | 274.4 | 22% | |||
| Adjusted for: | ||||||
| Mark-to-market of interest rate caps | (15.9) | 16.5 | NA | |||
| Interest expense excluding mark-to-market of interest rate caps | 318.3 | 290.9 | 9% | |||
| Net interest margin (*) | $757.0 | $742.0 | 2% | |||
| Depreciation and amortization, including maintenance rights expense | (447.2) | (476.4) | (6%) | |||
| Net interest margin less depreciation and amortization (*) | $309.8 | $265.6 | 17% | |||
| Average lease assets (*) | $37,266 | $34,934 | 7% | |||
| Annualized net spread (*) | 8.1% | 8.5% | ||||
| Annualized net spread less depreciation and amortization (*) | 3.3% | 3.0% | ||||
(*) 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 of $15.9
million was $318.3 million for the first quarter of 2019, compared with
$290.9 million for the same period in 2018. Our average cost of debt was
4.2% for the first quarter of 2019, compared with 4.0% for the same
period in 2018.
|
Selling, General and Administrative |
|||||||||
| Three months ended March 31, | |||||||||
| % increase/ | |||||||||
| 2019 | 2018 | (decrease) | |||||||
| (U.S. Dollars in millions) | |||||||||
| Selling, general and administrative expenses | $49.5 | $54.1 | (9 | %) | |||||
| Share-based compensation expenses | 17.4 | 31.7 | (45 | %) | |||||
| Total selling, general and administrative expenses | $66.9 | $85.8 | (22 | %) | |||||
Selling, general and administrative expenses were $66.9 million for the
first quarter of 2019, compared with $85.8 million for the same period
in 2018. The decrease was primarily due to a decrease in share-based
compensation and other compensation-related expenses.
Other Expenses
Leasing expenses were $91.7 million for the first quarter of 2019,
compared with $132.5 million for the same period in 2018. The decrease
was primarily due to a decrease in maintenance rights expense as a
result of the lower maintenance rights asset balance as well as a
decrease in other leasing expenses recognized as a result of lease
terminations. Asset impairment charges were $5.0 million for the first
quarter of 2019, compared to $2.1 million recorded for the same period
in 2018. Asset impairment charges recorded in the first quarter of 2019
related to sales transactions and was more than offset by maintenance
revenue.
Effective Tax Rate
Our effective tax rate for the first quarter of 2019 was 13.0%, the same
as for the first quarter of 2018. The effective tax rate for the full
year 2018 was 12.5%. The effective tax rate is impacted by the source
and amount of earnings among our different tax jurisdictions.
|
Book Value Per Share |
||||||
| March 31, 2019 | March 31, 2018 | |||||
|
(U.S. Dollars in millions, except share and per share data) |
||||||
| Total AerCap Holdings N.V. shareholders’ equity | $8,906.2 | $8,592.6 | ||||
| Ordinary shares outstanding | 139,597,805 | 147,156,242 | ||||
| Unvested restricted stock | (2,418,788 | ) | (2,991,371 | ) | ||
| Ordinary shares outstanding (excl. unvested restricted stock) | 137,179,017 | 144,164,871 | ||||
|
Book value per ordinary share outstanding (excl. unvested restricted stock) |
$64.92 | $59.60 | ||||
|
Financial Position |
||||||||
| March 31, 2019 |
December 31, |
% increase/ (decrease) over December 31, 2018 |
||||||
| (U.S. Dollars in millions, except debt/equity ratio) | ||||||||
| Total cash, cash equivalents and restricted cash | $2,574.2 | $1,415.0 | 82% | |||||
| Total lease assets (*) | 37,662.8 | 37,244.6 | 1% | |||||
| Total assets | 44,717.0 | 43,208.9 | 3% | |||||
| Debt | 30,759.2 | 29,507.6 | 4% | |||||
| Total liabilities | 35,747.2 | 34,328.3 | 4% | |||||
| Total AerCap Holdings N.V. shareholders’ equity | 8,906.2 | 8,828.0 | 1% | |||||
| Total equity | 8,969.8 | 8,880.6 | 1% | |||||
|
(*) Refer to “Notes Regarding Financial Information Presented in This Press Release” for details relating to these non-GAAP measures |
||||||||
As of March 31, 2019, AerCap’s portfolio consisted of 1,400 aircraft
that were owned, on order or managed. The average age of our owned fleet
as of March 31, 2019 was 6.2 years and the average remaining contracted
lease term was 7.4 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.
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, 2019 | ||
|
(U.S. Dollars in millions, |
||
| Debt | $30,759 | |
| Adjusted for: | ||
| Cash and cash equivalents | (2,348) | |
| 50% credit for long-term subordinated debt | (750) | |
| Adjusted debt | $27,661 | |
| Equity | $8,970 | |
| Adjusted for: | ||
| 50% credit for long-term subordinated debt | 750 | |
| Adjusted equity | $9,720 | |
| Adjusted debt/equity ratio | 2.8 to 1 |
Net interest margin, annualized net spread and annualized net spread
less depreciation and amortization
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. 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. 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 the earnings release, management will host an
earnings conference call today, Wednesday, May 1, 2019, at 8:30 am
Eastern Daylight 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 7778627 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 ([email protected]).
About AerCap
AerCap is the global leader in aircraft leasing with, as of March 31,
2019, 1,400 owned, managed or on order aircraft in its portfolio. AerCap
has one of the most attractive order books in the industry. 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 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, 2019 | December 31, 2018 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $2,348,132 | $1,204,018 | |||||
| Restricted cash | 226,099 | 211,017 | |||||
| Trade receivables | 94,174 | 40,379 | |||||
| Flight equipment held for operating leases, net | 35,082,698 | 35,052,335 | |||||
| Maintenance rights and lease premium, net | 1,058,090 | 1,113,190 | |||||
| Flight equipment held for sale | 633,558 | 184,129 | |||||
| Net investment in finance and sales-type leases | 994,154 | 1,003,286 | |||||
| Prepayments on flight equipment | 2,984,323 | 3,024,520 | |||||
| Other intangibles, net | 323,276 | 328,570 | |||||
| Deferred income tax assets | 142,918 | 138,281 | |||||
| Other assets | 829,532 | 909,190 | |||||
| Total Assets | $44,716,954 | $43,208,915 | |||||
| Liabilities and Equity | |||||||
| Accounts payable, accrued expenses and other liabilities | $1,103,283 | $1,009,945 | |||||
| Accrued maintenance liability | 2,261,049 | 2,237,494 | |||||
| Lessee deposit liability | 781,586 | 768,677 | |||||
| Debt | 30,759,154 | 29,507,587 | |||||
| Deferred income tax liabilities | 842,101 | 804,598 | |||||
| Total liabilities | 35,747,173 | 34,328,301 | |||||
|
Ordinary share capital €0.01 par value, 350,000,000 ordinary shares authorized as of March 31, 2019 and December 31, 2018; |
|||||||
|
151,847,345 and 151,847,345 ordinary shares issued and 139,597,805 and 142,674,664 ordinary shares outstanding |
|||||||
|
(including 2,418,788 and 2,429,442 unvested restricted stock) as of March 31, 2019 and December 31, 2018, respectively |
1,866 | 1,866 | |||||
| Additional paid-in capital | 2,728,071 | 2,712,417 | |||||
| Treasury shares, at cost 12,249,540 and 9,172,681 ordinary shares | |||||||
| as of March 31, 2019 and December 31, 2018, respectively) | (611,601 | ) | (476,085 | ) | |||
| Accumulated other comprehensive loss | (37,470 | ) | (1,824 | ) | |||
| Accumulated retained earnings | 6,825,312 | 6,591,674 | |||||
| Total AerCap Holdings N.V. shareholders’ equity | 8,906,178 | 8,828,048 | |||||
| Non-controlling interest | 63,603 | 52,566 | |||||
| Total Equity | 8,969,781 | 8,880,614 | |||||
| Total Liabilities and Equity | $44,716,954 | $43,208,915 | |||||
| AerCap Holdings N.V. | |||||||
| Unaudited Consolidated Income Statements | |||||||
| (U.S. Dollars in thousands, except share and per share data) | |||||||
| Three months ended March 31, | |||||||
| 2019 | 2018 | ||||||
| Revenues and other income | |||||||
| Lease revenue: | |||||||
| Basic lease rents | $1,075,282 | $1,032,875 | |||||
| Maintenance rents and other receipts | 86,811 | 87,419 | |||||
| Net gain on sale of assets | 21,541 | 89,300 | |||||
| Other income | 21,393 | 9,532 | |||||
| Total Revenues and other income | 1,205,027 | 1,219,126 | |||||
| Expenses | |||||||
| Depreciation and amortization | 425,849 | 422,713 | |||||
| Asset impairment | 5,031 | 2,108 | |||||
| Interest expense | 334,179 | 274,449 | |||||
| Leasing expenses | 91,721 | 132,468 | |||||
| Selling, general and administrative expenses | 66,873 | 85,782 | |||||
| Total Expenses | 923,653 | 917,520 | |||||
| Income before income taxes and income of investments accounted for | |||||||
| under the equity method | 281,374 | 301,606 | |||||
| Provision for income taxes | (36,579 | ) | (39,228 | ) | |||
|
Equity in net earnings of investments accounted for under the equity method |
2,102 | 3,341 | |||||
| Net income | $246,897 | $265,719 | |||||
| Net income attributable to non-controlling interest | (12,711 | ) | (320 | ) | |||
| Net income attributable to AerCap Holdings N.V. | $234,186 | $265,399 | |||||
| Basic earnings per share | $1.70 | $1.80 | |||||
| Diluted earnings per share | $1.68 | $1.72 | |||||
| Weighted average shares outstanding – basic | 138,153,456 | 147,194,589 | |||||
| Weighted average shares outstanding – diluted | 139,618,644 | 154,146,803 | |||||
| AerCap Holdings N.V. | |||||||
| Unaudited Consolidated Statements of Cash Flows | |||||||
| (U.S. Dollars in thousands) | |||||||
| Three months ended March 31, | |||||||
| 2019 | 2018 | ||||||
| Net income | $246,897 | $265,719 | |||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
| Depreciation and amortization | 425,849 | 422,713 | |||||
| Asset impairment | 5,031 | 2,108 | |||||
| Amortization of debt issuance costs, debt discount and lease premium | 19,033 | 23,503 | |||||
| Amortization of fair value adjustment on debt | (27,060 | ) | (41,100 | ) | |||
|
Accretion of fair value adjustment on deposits and maintenance liabilities |
4,309 | 5,413 | |||||
| Maintenance rights write-off | 52,357 | 100,827 | |||||
| Maintenance liability release to income | (46,285 | ) | (42,230 | ) | |||
| Net gain on sale of assets | (21,541 | ) | (89,300 | ) | |||
| Deferred income taxes | 37,769 | 39,772 | |||||
| Collections of finance and sales-type leases | 19,890 | — | |||||
| Other | 51,770 | 23,306 | |||||
| Changes in operating assets and liabilities: | |||||||
| Trade receivables | (55,039 | ) | (15,944 | ) | |||
| Other assets | (10,172 | ) | 563 | ||||
| Accounts payable, accrued expenses and other liabilities | 42,892 | 42,618 | |||||
| Net cash provided by operating activities | 745,700 | 737,968 | |||||
| Purchase of flight equipment | (815,274 | ) | (447,998 | ) | |||
| Proceeds from sale or disposal of assets | 312,431 | 598,195 | |||||
| Prepayments on flight equipment | (280,335 | ) | (681,616 | ) | |||
| Collections of finance and sales-type leases | — | 21,031 | |||||
| Other | (11 | ) | (12,514 | ) | |||
| Net cash used in investing activities | (783,189 | ) | (522,902 | ) | |||
| Issuance of debt | 1,816,306 | 1,594,823 | |||||
| Repayment of debt | (537,246 | ) | (1,084,956 | ) | |||
| Debt issuance costs paid | (13,863 | ) | (26,043 | ) | |||
| Maintenance payments received | 174,390 | 181,937 | |||||
| Maintenance payments returned | (108,437 | ) | (149,100 | ) | |||
| Security deposits received | 86,860 | 42,096 | |||||
| Security deposits returned | (78,270 | ) | (29,878 | ) | |||
| Dividend paid to non-controlling interest holders | (1,674 | ) | (2,700 | ) | |||
| Repurchase of shares and tax withholdings on share-based compensation | (140,978 | ) | (313,371 | ) | |||
| Net cash provided by financing activities | 1,197,088 | 212,808 | |||||
| Net increase in cash, cash equivalents and restricted cash | 1,159,599 | 427,874 | |||||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(403 | ) | 131 | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,415,035 | 2,024,125 | |||||
| Cash, cash equivalents and restricted cash at end of period | $2,574,231 | $2,452,130 | |||||
Contacts
For Investors: Joseph McGinley
Head of Investor Relations
[email protected];
+353 1 418 0428
For Media: Gillian Culhane
Vice President Corporate
Communications
[email protected];
+353 1 636 0945
