AerCap Holdings N.V. (NYSE:AER):
- Net income of $266.3 million for the
fourth quarter of 2017 and $1,076.2 million for the full year
2017
- Diluted earnings per share of $1.67
for the fourth quarter of 2017 and $6.43 for the full year
2017
Highlights
- 402 aircraft transactions executed in
2017, including 119 widebody transactions.
- 99.1% fleet utilization rate for the
full year 2017.
- 6.8 years average age of owned
fleet.
- 6.9 years average remaining lease
term.
- $5.3 billion of aircraft purchased and
$2.4 billion of aircraft sold in 2017.
- Ordered 30 Boeing 787 aircraft and 50
Airbus A320neo Family aircraft in 2017.
- $9.6 billion of available liquidity and
adjusted debt/equity ratio of 2.8 to 1.
- 16% increase in book value per share
since December 31, 2016.
- Repurchased 23.7 million shares in 2017
for $1.1 billion.
- New $200 million share repurchase
program authorized, which will run through June 30, 2018.
Aengus Kelly, CEO of AerCap, commented: “I am very pleased to
report another strong set of financial results for 2017 which is
due to the hard work and relentless focus on execution of our
team. During the year, we generated earnings per share of
$6.43 and net income of $1.1 billion. Our platform also
purchased a record $5.3 billion of new aircraft in
2017, and sold approximately $2.4 billion of mid-life
assets, as part of our transition to new technology
aircraft.”
Full Year 2017 Financial
Results
- Net income of $1,076.2 million,
compared with $1,046.6 million for 2016.
- Diluted earnings per share of $6.43,
compared with $5.52 for 2016, an increase of 16%, primarily driven
by the repurchase of 48.7 million shares during 2016 and 2017.
Fourth Quarter 2017 Financial
Results
- Net income of $266.3 million, compared
with $364.7 million for the same period in 2016. Diluted earnings
per share of $1.67, compared with $2.01 for the same period in
2016.
- The decrease in net income was
primarily due to the fact that during the fourth quarter of 2016,
we recognized income from lease terminations and a gain related to
the repayment of a note receivable earlier than expected.
- The decrease in diluted earnings per
share was driven by the same factors as net income, partially
offset by the repurchase of 29.4 million shares from October 2016
through December 2017.
Revenue and Net Spread
Three months ended December 31, Year ended
December 31, 2017 2016
% increase/
(decrease)
2017 2016
% increase/
(decrease)
(U.S. Dollars in millions) (U.S. Dollars in millions)
Lease revenue: Basic lease rents $ 1,035.3 $ 1,061.8 (2%) $
4,194.2 $ 4,395.3 (5%) Maintenance rents and other receipts 162.6
159.1 2% 519.6 472.3 10% Lease revenue 1,197.9 1,220.9 (2%) 4,713.8
4,867.6 (3%) Net gain on sale of assets 48.5 58.7 (17%) 229.1 138.5
65% Other income 16.6 89.0 (81%) 94.6 146.0 (35%)
Total Revenues
and other income $ 1,263.0 $ 1,368.6 (8%)
$ 5,037.5 $ 5,152.1 (2%)
Basic lease rents were $1,035.3 million for the fourth quarter
of 2017, compared with $1,061.8 million for the same period in
2016. The decrease was primarily due to the sale of mid-life and
older aircraft during 2016 and 2017.
Maintenance rents and other receipts were $162.6 million for the
fourth quarter of 2017, compared with $159.1 million for the same
period in 2016.
Net gain on sale of assets for the fourth quarter of 2017 was
$48.5 million, relating to 27 aircraft sold and two aircraft
reclassified to finance leases, compared with $58.7 million for the
same period in 2016, relating to 37 aircraft sold and three
aircraft reclassified to finance leases. The decrease was primarily
due to the composition of asset sales.
Other income for the fourth quarter of 2017 was $16.6 million,
compared with $89.0 million for the same period in 2016. Other
income for the fourth quarter of 2016 included income from lease
terminations and a gain related to the repayment of a note
receivable earlier than expected.
Three months ended December 31, Year ended
December 31, 2017 2016
% increase/
(decrease)
2017 2016
% increase/
(decrease)
(U.S. Dollars in millions) (U.S. Dollars in millions)
Basic lease rents $ 1,035.3 $ 1,061.8
(2%) $ 4,194.2 $ 4,395.3 (5%)
Interest expense 271.5 252.7 7% 1,112.4 1,091.9 2% Adjusted for:
Mark-to-market of interest rate caps and swaps 3.4 18.6 (82%)
(14.2) (1.6) 788% Adjusted interest expense 274.9 271.3 1% 1,098.2
1,090.3 1%
Net
interest margin, or net spread (*) $ 760.4 $
790.5 (4%) $ 3,096.0 $ 3,305.0 (6%)
Average lease assets $ 34,748 $ 34,192 2% $ 34,228 $ 34,857
(2%)
Annualized net spread (*) 8.8% 9.3%
9.0% 9.5% (*) Refer to "Notes Regarding
Financial Information Presented in This Press Release" for details
relating to these non-GAAP measures
As shown in the table above, adjusted interest expense was
$274.9 million for the fourth quarter of 2017, compared with $271.3
million for the same period in 2016.
Annualized net spread was 8.8% for the fourth quarter of 2017,
compared with 9.3% for the same period in 2016. The decrease was
primarily the result of the lower age of our owned fleet which is
driven by aircraft sales and purchases from October 2016 to
December 2017.
Selling, General and Administrative
Expenses
Three months ended December 31, Year ended
December 31, 2017 2016
% increase/
(decrease)
2017 2016
% increase/
(decrease)
(U.S. Dollars in millions) (U.S. Dollars in millions)
Selling, general and administrative expenses $ 67.4 $ 70.3
(4%) $ 240.6 $ 248.2 (3%) Share-based compensation expenses 28.9
26.5 9% 107.7 102.8 5%
Total selling, general and administrative
expenses $ 96.3 $ 96.8 (1%) $ 348.3
$ 351.0 (1%)
Other Expenses
Asset impairment charges were $10.4 million for the fourth
quarter of 2017, compared with $11.4 million recorded for the same
period in 2016. Asset impairment recorded in the fourth quarter of
2017 primarily related to lease terminations and was more than
offset by maintenance revenue recognized as a result of these lease
terminations. Leasing expenses were $141.2 million for the fourth
quarter of 2017, compared with $143.3 million for the same period
in 2016.
Effective Tax Rate
Our effective tax rate for the full year 2017 was 13.3%,
compared with the effective tax rate of 14.5% for the full year
2016. The effective tax rate is impacted by the source and amount
of earnings among our different tax jurisdictions. The effective
tax rate in 2017 reflects our re-assessment of our deferred tax
assets and liabilities, including as a result of recent U.S. tax
reform legislation. The effective tax rate in 2016 included a
valuation allowance related to the AeroTurbine losses.
Book Value Per Share
December 31,
2017
December 31,
2016
(U.S. Dollars in millions, except
share
and per share data)
Total AerCap Holdings N.V. shareholders' equity $
8,579.7 $ 8,524.4 Ordinary shares outstanding
152,992,101 176,247,154 Unvested restricted stock (3,007,752)
(3,426,810)
Ordinary shares outstanding (excl. unvested
restricted stock) 149,984,349 172,820,344
Book value per ordinary share outstanding (excl. unvested
restricted stock) $ 57.20 $ 49.33
Book value per share has increased 16% since December 31,
2016.
Financial Position
December 31,
2017
December 31,
2016
% increase/
(decrease) over
December 31,
2016
(U.S. Dollars in millions, except debt/equity ratio)
Total cash (incl. restricted) $ 2,024.1 $ 2,364.6 (14%) Total
assets 42,040.1 41,620.5 1% Debt 28,420.7 27,717.0 3% Total
liabilities 33,401.3 33,038.2 1% Total AerCap Holdings N.V.
shareholders' equity 8,579.7 8,524.4 1% Total equity 8,638.8
8,582.3 1% Adjusted debt (*) 26,011.1 24,931.6 4% Adjusted equity
(*) 9,388.8 9,332.3 1% Adjusted debt/equity ratio (*) 2.8 to 1 2.7
to 1 4% (*) Refer to "Notes Regarding Financial Information
Presented in This Press Release" for details relating to these
non-GAAP measures
As of December 31, 2017, AerCap’s portfolio consisted of 1,531
aircraft that were owned, on order or managed. The average age of
our owned fleet as of December 31, 2017 was 6.8 years and the
average remaining contracted lease term was 6.9 years.
Share Repurchase Program
Our Board of Directors approved a new share repurchase program
authorizing total repurchases of up to $200 million of AerCap
ordinary shares through June 30, 2018. Repurchases under the
program may be made through open market purchases or privately
negotiated transactions in accordance with applicable U.S. federal
securities laws. The timing of repurchases and the exact number of
common shares to be purchased will be determined by the Company’s
management, in its discretion, and will depend upon market
conditions and other factors. The program will be funded using the
Company’s cash on hand and cash generated from operations. The
program may be suspended or discontinued at any time.
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 is a definition 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.
December 31,
2017
December 31,
2016
(U.S. Dollars in millions,
except
debt/equity ratio)
Debt $ 28,421 $ 27,717 Adjusted
for: Cash and cash equivalents (1,660) (2,035) 50% credit for
long-term subordinated debt (750) (750)
Adjusted debt $
26,011 $ 24,932 Equity $
8,639 $ 8,582 Adjusted for: 50% credit for
long-term subordinated debt 750 750
Adjusted equity $
9,389 $ 9,332 Adjusted debt/equity ratio
2.8 to 1 2.7 to 1
Net interest margin, or net spread, and annualized net
spread
Net interest margin, or net spread, is 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 spread for the applicable period, scaled to a one
year period. 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.
Conference Call
In connection with the earnings release, management will host an
earnings conference call today, Wednesday, February 14, 2018, at
8:30 am Eastern Daylight Time. The call can be accessed live by
dialing (U.S./Canada) +1 323 794 2423 or (International) +353 1 246
5621 and referencing code 4730385 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 details and to
register for this event please email: aercap@instinctif.com.
For further information, contact Joseph McGinley: +353 1 418
0428 (jmcginley@aercap.com) or Mark Walter (Instinctif Partners):
+44 20 7457 2020 (aercap@instinctif.com).
About AerCap
AerCap is the global leader in aircraft leasing with, as of
December 31, 2017, 1,531 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, Fort Lauderdale, 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)
December
31, 2017 December 31, 2016 Assets Cash and
cash equivalents $ 1,659,669 $ 2,035,447 Restricted cash 364,456
329,180 Trade receivables 73,877 64,923 Flight equipment held for
operating leases, net 32,396,827 31,501,973 Maintenance rights
intangible and lease premium, net 1,501,858 2,167,925 Flight
equipment held for sale 630,789 107,392 Net investment in finance
and sales-type leases 995,689 755,882 Prepayments on flight
equipment 2,930,303 3,265,979 Other intangibles, net 355,512
397,101 Deferred income tax assets 151,234 215,445 Other assets
979,930 779,206
Total Assets $ 42,040,144 $
41,620,453 Liabilities and Equity Accounts
payable, accrued expenses and other liabilities $ 1,017,374 $
1,132,536 Accrued maintenance liability 2,461,799 2,750,576 Lessee
deposit liability 827,470 859,099 Debt 28,420,739 27,716,999
Deferred income tax liabilities 673,948 578,979 Total liabilities
33,401,330 33,038,189 Ordinary share capital €0.01 par
value, 350,000,000 ordinary shares authorized as of December 31,
2017 and December 31, 2016; 167,847,345 and 187,847,345 ordinary
shares issued and 152,992,101 and 176,247,154 ordinary shares
outstanding (including 3,007,752 and 3,426,810 unvested restricted
stock) as of December 31, 2017 and December 31, 2016, respectively
2,058 2,282 Additional paid-in capital 3,714,563 4,505,019 Treasury
shares, at cost (14,855,244 and 11,600,191 ordinary shares as of
December 31, 2017 and December 31, 2016, respectively) (731,442)
(490,092) Accumulated other comprehensive income (loss) 14,274
(1,769) Accumulated retained earnings 5,580,257 4,509,007 Total
AerCap Holdings N.V. shareholders' equity 8,579,710 8,524,447
Non-controlling interest 59,104 57,817 Total Equity 8,638,814
8,582,264
Total Liabilities and Equity $
42,040,144 $ 41,620,453 AerCap Holdings
N.V. Unaudited Consolidated Income Statements (U.S.
Dollars in thousands, except share and per share data)
Three months ended December 31, Year ended
December 31, 2017 2016 2017
2016 Revenues and other income Lease revenue $
1,197,837 $ 1,220,872 $ 4,713,802 $ 4,867,623 Net gain on sale of
assets 48,525 58,681 229,093 138,522 Other income 16,647 89,004
94,598 145,986
Total Revenues and other income
1,263,009 1,368,557 5,037,493 5,152,131
Expenses Depreciation and amortization 425,423
433,533 1,727,296 1,791,336 Asset impairment 10,383 11,428 61,286
81,607 Interest expense 271,500 252,679 1,112,391 1,091,861 Leasing
expenses 141,164 143,306 537,752 582,530 Restructuring related
expenses - 8,272 14,605 53,389 Selling, general and administrative
expenses 96,256 96,768 348,291 351,012
Total Expenses
944,726 945,986 3,801,621 3,951,735
Income before income taxes and income of investments
accounted for under the equity method 318,283
422,571 1,235,872 1,200,396 Provision
for income taxes (50,019) (60,712) (164,718) (173,496) Equity in
net earnings of investments accounted for under the equity method
1,880 3,556 9,199 12,616
Net income $ 270,144
$ 365,415 $ 1,080,353 $ 1,039,516 Net
(income) loss attributable to non-controlling interest (3,893)
(765) (4,202) 7,114
Net income
attributable to AerCap Holdings N.V $ 266,251 $
364,650 $ 1,076,151 $ 1,046,630 Basic
earnings per share $ 1.74 $ 2.07 $ 6.68 $ 5.64 Diluted earnings per
share $ 1.67 $ 2.01 $ 6.43 $ 5.52 Weighted average shares
outstanding - basic 153,018,890 175,871,138 161,059,552 185,514,370
Weighted average shares outstanding - diluted 159,609,223
181,223,598 167,287,508 189,682,036
AerCap
Holdings N.V. Unaudited Consolidated Statements of Cash
Flows (U.S. Dollars in thousands)
Year ended December
31, 2017 2016 Net income $ 1,080,353 $
1,039,516
Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
1,727,296 1,791,336 Asset impairment 61,286 81,607 Amortization of
debt issuance costs and debt discount 65,420 55,768 Amortization of
lease premium intangibles 13,632 19,836 Amortization of fair value
adjustment on debt (194,728) (335,998) Accretion of fair value
adjustment on deposits and maintenance liabilities 31,360 55,210
Maintenance rights write off 539,772 652,111 Maintenance liability
release to income (302,408) (421,332) Net gain on sale of assets
(229,093) (138,522) Deferred income taxes 157,021 161,340
Restructuring related expenses 5,097 33,588 Other 120,489 121,700
Changes in operating assets and liabilities: Trade
receivables (10,567) 40,065 Other assets 55,309 257,190 Accounts
payable, accrued expenses and other liabilities 19,978 (32,183)
Net cash provided by operating activities 3,140,217
3,381,232 Purchase of flight equipment (3,956,671)
(2,892,731) Proceeds from sale or disposal of assets 1,779,321
2,366,242 Prepayments on flight equipment (1,268,585) (947,419)
Collections of finance and sales-type leases 91,918 74,207 Movement
in restricted cash (35,276) 90,267 Other (38,102) (21,678)
Net
cash used in investing activities (3,427,395)
(1,331,112) Issuance of debt 5,596,402 3,642,166
Repayment of debt (4,695,453) (5,213,724) Debt issuance costs paid
(81,396) (34,687) Maintenance payments received 756,314 794,711
Maintenance payments returned (523,403) (505,407) Security deposits
received 187,378 201,970 Security deposits returned (188,362)
(270,575) Dividend paid to non-controlling interest holders (266)
(10,501) Repurchase of shares and tax withholdings on share-based
compensation (1,138,782) (1,021,119)
Net cash used in financing
activities (87,568) (2,417,166) Net
decrease in cash and cash equivalents (374,746) (367,046) Effect of
exchange rate changes on cash and cash equivalents (1,032) (605)
Cash and cash equivalents at beginning of period 2,035,447
2,403,098
Cash and cash equivalents at end of period $
1,659,669 $ 2,035,447
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180214005665/en/
AerCap Holdings N.V.For Investors:Joseph McGinley, +353 1
418 0428Head of Investor Relationsjmcginley@aercap.comorFor
Media:Gillian Culhane, +353 1 636 0945Vice President Corporate
Communicationsgculhane@aercap.com
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