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AerCap HoldingsAerCap Holdings
November 2007November 2007
Klaus Heinemann, CEO
RoadshowRoadshow US and EuropeUS and Europe
2
Forward Looking Statements & Safe HarborForward Looking Statements & Safe Harbor
This presentation 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,” “will," “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 presentation 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 presentation 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 presentation 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.
3
AgendaAgenda
The Investment Story
Market Opportunities
AerCap Business Model and Strengths
Financial Overview
Reasons to Invest in AerCap
4
AerCap at a GlanceAerCap at a Glance
Global aviation company with proven track record and integrated business model providing aircraft, engines and parts to customers in every major region of the world
North America/Caribbean 20% of YTD Sept 2007
lease revenues
Latin America9% of YTD Sept 2007 lease revenues
Asia / Pacific33% of YTD Sept
2007 lease revenues
Total Assets $4.3Bnat September 30, 2007
Contracted Orders $4.9Bn_____
Total Assets $9.2Bn Including Purchase Commitments
325 Aircraft65 Engines
107 Customers in 46 CountriesAerCap Locations
Europe 38% of YTD Sept 2007
lease revenues
5
Investment HighlightsInvestment Highlights
Powerful, differentiated integrated business model, extracting value over entire asset life
+Attractive market with strong travel demand and tight aircraft supply
+Contracted orders of $4.9Bn creates strong pipeline of growth
+Experienced management team with proven track record and deep
industry and securitization experience
=Proven earnings and cash flow growth
6
What Makes AerCap Different?What Makes AerCap Different?
Our unique integrated platform allows us to create value throughout the life of aircraft and engines
ManufactureManufacture DisassemblyDisassembly
Buy new aircraft from the
manufacturer
Buy used aircraft from the market
Lease equipment to a global client base
Sell used aircraft to the market
Disassemble aircraft for engine
leasing and part sales
7
Robust Demand and Tight SupplyRobust Demand and Tight Supply
Demand for new and used commercial aircraft is driven by:― Aging world aircraft fleet ― Ongoing restructuring of U.S. “legacy” carriers― Rapid emergence of high-growth “Low Cost Carriers”― Rapid airline passenger growth in emerging markets― Higher fuel prices― More stringent environmental regulations of noise and emissions
Used aircraft availability in March 2007 is at lowest point since 5 years (1)
Strong aircraft demand driving large increase in orders and production backlog
Manufacturers cannot increase supply sufficiently to meet near term demand
Significant shift among airlines to lease rather than own aircraft
(1) Source: Ascend MarketI
Market Opportunities:Market Opportunities:
8
Ageing World Aircraft FleetAgeing World Aircraft Fleet
Commercial Jets – Average Fleet Age 2007Passenger Jets
2,9562,270
685 496
2,077
1,132
309
2,082
476
429
762 613
4,366
333
1,908
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
North America Europe Asia and PacificRim
Africa and MiddleEast
South America
Avg:11.2 Years
Avg:18.4 Years
Avg:10.4 Years
Avg:14.2 Years
Avg:19.1 Years
Less Than 11 Years 11 to 20 Years Greater Than 21 Years
21% of World Fleet >21 years creates significant refleeting need
Source: SH&E Analysis Sept 2007
9
LCC Share of Order Backlog by RegionLCC Share of Order Backlog by Region
2
21
30
36
48
0
10
20
30
40
50
60
Europe North America South America Asia Pacific Africa and Middle East
LCC Share of March 2007 Order Backlog, by RegionLCC Share (%)
Source: ACAS March 2007, SH&E Analysis
10
Emerging Markets A Key FocusEmerging Markets A Key Focus
30.4
13.0
3.7 3.1 2.7 1.3 1.2 0.60.0
7.0
14.0
21.0
28.0
35.0
NorthAmerica
WesternEurope
Asia Pacific(excl.
China)
SouthAmerica
(excl.Brazil)
Brazil China Russia India
Current Fleet Backlog
Ratio of Current Fleet and Order Backlog to Population(1)
(Aircraft / Million of Population)Aircraft / Population Ratio
(1) Source: AvSoft U.K. Aircraft Analytical System (“ACAS”)(April 2006) and IMF World Economic Outlook, April 2006.
AerCap 2007 Sept YTD Lease Revenues by Region (%)
Asia / Pacific
Europe
North America/Caribbean
Latin America
33
38
20
9
11
Supply Remains TightSupply Remains Tight
Notes:(1) 2007 projected deliveries (Source: Boeing, Airbus)(2) Current “in production aircraft” available for sale / lease (Source: BACK JetMart)(3) Average annual demand estimated for next 20 years as projected by Boeing (Source: SH&E)
(3)
at Boeing and Airbus
(2)
(1)
1,430
69920
0
200
400
600
800
1,000
1,200
1,400
1,600
Annual AircraftProduction
Stored Aircraft Estimated AnnualDemand
Long-haul network 3%
Freight 3%
Low cost / short haul 37%
Global network carriers 54%
Charter 3%
12
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX
XXX
XXXXX
XXXX
XX
XXXXXX
XXXXXX
ILFCPegasus AviationMacQuarieAviation CapitalCIT AerospaceBoeing CapitalRBS Aviation CapitalBabcock and BrownAWASPembroke GroupSingapore Aircraft LeasingORIXSumishoAircastleGenesis
AerCapGECAS
Integrated Business ModelIntegrated Business Model
MRO / Part-out
BusinessEngine Leasing
CapacityLarge Orders
in Place (in Excess of 50)
Experience in Securitization Market
Fleet Size in Excess of 100 Aircraft
Top Operating Lessors
Global Reach Capability and Risk Diversification: Financing: Growth:
Revenue Diversification:
13
High Quality and Well Diversified PortfolioHigh Quality and Well Diversified Portfolio
84% narrowbody – “Work Horses” of industry
High share of liquid / remarketable aircraft
Average age of owned aircraft fleet 7.3 years
65 engines in portfolio, as of September 30, 2007
― CFM56 engines, one of the most widely used engines in the commercial aviation industry, represented 80% of our portfolio
(1) Includes one A319 aircraft on order by us and 18 A319 aircraft on order by AerVenture.(2) Includes three A320 aircraft on order by us and 51 A320 aircraft on order by AerVenture.(3) Excludes the four aircraft which we intend to disassemble or sell when their leases expire, consisting of three DC-9
and one Boeing 767 aircraft.(4) Excluding 8 Aeroturbine aircraft and 2 aircraft under LOI / purchase contract.
Owned Portfolio
Managed Portfolio
Number of Aircraft
Owned (3)Number of
Aircraft
Airbus A300 Freighter 2 – – – 2
Total 133 79 103 0 315(4)
Airbus A319 11 – 19(1) – 30
Airbus A320 54 13 54(2) – 121
Airbus A321 21 1 _ – 22
Airbus A330 6 _ 30 – 36
Airbus A340 1 1 – – 2
Boeing 737 21 30 – _ 51
Boeing 767 1 2 – – 3
Boeing 757 2 3 – – 5
DHC Dash 8 1 – – – 1
Fokker 100 7 3 – – 10
Fokker 70 – 2 – – 2
MD 11 Freighter 1 1 – – 2
MD-83 1 7 – – 8
MD-82 4 6 – – 10
Fairchild Dornier 328 – 10 – – 10
Number of Aircraft
on Order
Number of Aircraft under
Purchase Contract
Total Owned, Managed
and Ordered Aircraft
Aircraft Portfolio as of September 30, 2007
14
Managing Our Aircraft PortfolioManaging Our Aircraft Portfolio
New Aircraft Leases Used Aircraft Leases
61.268.7
103.2 104.0
2004 2005 2006 3Q 2007
38.1
50.6
58.7
75.0
2004 2005 2006 3Q 2007
Lease Terms in Months Continue to Lengthen
(1) Based on 34 LOIs and 3 lease agreements signed in resspect of new aircraft for the 9 months ended Sept 2007
(1)
15
Funding StrategyFunding Strategy
Optimize Funding Costs
- Utilize Capital Markets, ECA Funding, Tax-Based Structures, etc.
- Overall Cost of Capital Competitive with Key Industry Leaders
Eliminate Liquidity Risk
- No Bullet Maturities
- Securitization Vehicles Allow Extension of Terms
- Available Lines of Credit in addition to Capital Markets
Minimize Risk to Equity (Recession Proofing)
- Key Investments and Funding Vehicles are “Ring-Fenced”
- Recourse to AER Significantly Reduced
16
Highlights Q3 2007Highlights Q3 2007
Net income was $58.1 million for third quarter 2007, exclusive of non-cash charges relating to mark-to-market of interest rate caps and share-based compensation
Earnings per share for third quarter 2007 was $0.68 excluding the above charges
Leasing revenue for third quarter 2007 was $137 million, up 23% from third quarter 2006 (Total revenues up 12% over 2006)
Total assets were $4.3 billion as of September 30, 2007, up 20% from September 30, 2006
Committed purchases for full year 2007 thus far, are $854 million
On October 10, 2007, a $182 million PDP funding facility was closed for eight new A330s under forward order
Contracted 2008 lease revenues already 108% of 2007 revenues
17
Strong Revenue and Earnings GrowthStrong Revenue and Earnings Growth(US$MM)
$28
$106
$177
$120
$177
2004 PF 2005 2006 YTD 3Q2006
YTD 3Q2007
Net Income
$892
$603
$814
$611
$391
2004 PF 2005 2006 YTD 3Q2006
YTD 3Q2007
Revenues
48%
Notes:(1) Excludes pre-tax impairment charges of $134.7MM in 2004.(2) Pro-forma for Cerberus Acquisition, AeroTurbine Acquisition and IPO (excludes share-based compensation; includes maintenance adjustment)(3) Excludes non-cash share-based compensation charge of $68.3MM after-tax.(4) Adjusted for : Mark to Market interest rate caps, share based compensation, and Q2 2007 refinancing charges
(2)(2)(1) (3)
* Before $ 24m after tax charge relating to debt refinancing
48%
(4)(4)
18
As of Sept 30, 2007
(US$ in millions)332.8
3,091.2
181.4
225.2
422.6
4,253.2
2,781.6
563.7
907.9
4,253.2
3.1
Cash and Cash Equivalents
Flight Equipment, Net
Notes Receivable, NetPrepayments onFlight EquipmentOther Assets
Total Assets
Term Debt
Other Liabilities
Shareholders’ EquityTotal Liabilities and Shareholders’ EquityDebt / Equity (x)
Strong Balance Sheet with Contracted GrowthStrong Balance Sheet with Contracted Growth
$3,604$3,061
$3,918$4,253
$4,926
2004 2005 2006 3Q 2007 2007 – 2012Estimated
CapEx
2012
Total Assets
Balance Sheet Positioned for Future Growth
$9,179
19
Reasons to invest in AerCapReasons to invest in AerCap
Powerful, differentiated integrated business model, extracting value over entire asset life
+Attractive market with strong travel demand and tight aircraft supply
+Contracted orders of $4.9Bn creates strong pipeline of growth
+Experienced management team with proven track record and deep
industry and securitization experience
=Proven earnings and cash flow growth