AerCap (AER) 1 May 242024 Q1 Earnings call transcript

Good day, and welcome to the AerCap Holdings Q1 2024 Financial Results. Today's conference is being recorded, and a transcript will be available following the call on the company's website. At this time, I'd like to turn the conference over to Joseph McGinley, Head of Investor Relations. Please go ahead, sir.

Thank you, operator, and hello, everyone. quarter call. first our to XXXX conference Welcome With Kelly; Pete and is our Juhas. Officer, Aengus Chief Executive our me today Chief Financial Officer,

you historical facts, Before like be forward-looking this call, today's may call, that remind conference not we during some are I which statements. statements begin to would

law, actual that undertakes those information publicly statements implied expressed reflect to Forward-looking cause in risks imposed no to any events such to arrive uncertainties and or involve AerCap obligation or after or than other differ by may statements. revise statements or that results materially that update call. circumstances from this forward-looking events, future

the could simultaneously for available is in information release is XXXX. open at dated our issues that can of conference being and webcast performance X, website and call replay. be AerCap's release presentation call aercap.com materially earnings Further on aercap.com. and are earnings to found be This archived May public will concerning copy at the affect A

shortly We time Q&A. run we'll end allow presentation at the and for will our earnings through

themselves a limit ask I X question would that analysts X reminder, and As follow-up. to

will Aengus turn the Kelly. I call to now over

that joining delivered and am first call. our us pleased for platform another profitability. AerCap quarter earnings to XXXX you Thank quarter for of earnings report the has I consistent

and quarter, net income $X.XX the share, million. of year generated over we last adjusted During up of first adjusted earnings XX% per $XXX

which value share book Importantly, in was XX% we year-on-year continued consistent our $XX.XX. per up to increases

per first year guidance outlook, are full we this XXXX As improving a $X.XX increasing approximately result quarter performance strong the and of to our share.

quarter, on to value AerCap for call, share the term. share the book earnings for not value an management on long you, our team of focus I individual shareholders, for last the just mentioned growth, and but per per our entire maximizing is As

XXX particularly in we travel the in China, in transactions first set to rise, platform records trips, people passenger Demand QX, continued almost where international for continues still the grew significant international well, for levels. quarter. in multiple underpins new China XX% XX million creates side, which have continues including aircraft. the were regularly On imbalance bidders is executing to operational tensions in pricing supply-demand million the available do, we Airlines everything behind work XXX the The XXXX quarter. which where

[ used On XXX we freighters signed the aircraft XXX. agreements X and Embraer lease AXXXceo, for side, ]

On new remains robust. the demand side,

Embraer most MAX slots trying actually [ manufacturers. We with out ], that month aircraft challenging EXs are even the with quarter We [ from deliver the sold on certainty these programs. new we Airbus on Frankly, issue face entirely or XXX will the and ] enviable XXX, AXXX. predict is AXXXneos and the AXXXneos to

to in look period, engine to with this the I to next subject you business. present discussing activity and healthy Turning the in opportunities It reflected continues week. forward

Finally, demand for first where the on agreements XX with new number helicopter the side, we quarter in up our we and signed saw operators. a extensions of good Sikorsky

by robust. Demand to well another over a benefit strong, per advantage of continues to to XX% backdrop generation is for earnings was summary, positioned In grew take the us quarter The are this and we industry AerCap. share macro remains strong and and year-on-year. years company for positive Cash from come.

I session. Q&A to that, you. have over Thank With hand the will we before Pete it

Thanks, Gus. Good morning, everyone.

million, expenses. rights $XX basic rents, lease lease reduced leasing which the share. million amortization The for $X.XX million, $XX or premium of amortization maintenance $XX and which maintenance first was million, which lease amortization That quarter. quarter accounting for maintenance and purchase reduced $XX revenue of per Our GAAP adjustments included $XXX premium impact of rights net million of was income the increased

conflict. Ukraine effect million. in included million quarter, $X the recoveries, recognized to to was During and net conflict related we of net is the purchase which accounting of Ukraine tax first recoveries The recoveries net the adjustments $XX the related

that into net the $X.XX all adjusted taking So or account, share. income was our of per for $XXX first million quarter

main the were $X.XXX through that last first affected the I'll of lease million briefly rents Basic for results our quarter. increase $XX quarter. drivers billion, go from an

I premium lease rents premium reflected basic basic as lease remaining $XX to are lease reduction amortized a As over rents. of assets mentioned, rents. which million lease basic the the is lease of amortization, Lease term

$XX Maintenance revenues quarter. that for the million revenue quarter amortized were to assets million of first rights reflects $XXX and maintenance during the were that maintenance

million $XXX was in during of of sold of on our the this $XXX sales for assets of or resulted collections We sale So due in and gain for revenue without normal ] quarter sale timing Net first owned the higher maintenance [ first on XX during words, That other $XX the million an quarter. million the of for been the maintenance Maintenance $XXX have quarter cash gain amortization. margin assets revenue total revenue quarter. would events. unlevered to XX% million.

had As March we sale. held of $XXX worth of million assets for XX,

income discrete quarter. which Other rate items. in the of Income and included million, quarter, $X consisted of the and million for Interest quarter was tax expenses. tax included onetime interest in primarily income benefit of That million for $X we the represented maintenance $XX first an quarter, expenses including effective losses on were which expense lease mark-to-market the XX.X%. recognized million million Leasing million tax that rate a rights $XX was which of derivatives. $XX $XXX interest was certain for expenses amortization $XXX premium million

Excluding our benefit, this tax was effective rate tax XX.X%.

position. maintain a to We continue liquidity strong

coverage coverage resulted of X.Xx. next which That our above liquidity XX billion, X.Xx sources-to-uses XX, excess March represents well ratio of $X of total our target and remains of coverage months the of billion. in were sources approximately cash $XX As around

the of X.XX:X Our from end leverage ratio the the quarter was a of X.X:X, end at at XXXX. decrease

cash approximately first quarter billion was cash continued driven flow operating strong Our $X.X the for by collections.

the at quarters. around end XX% was line of ratio assets March, debt-to-total with prior in secured Our

quarter Our at and of average the shares we repurchased cost X.X% the quarter, first total million for for $XX.XX of average X.X price of during debt an $XXX first was a million.

XX% XX months. adjusted any March In the $X.XX per share gains on $XX.XX, to over for before per sale. value full earnings projected of XX $X.XX increase was an of XXXX year share we February, of last book as the Our

performance strong including this revenues, our the higher range. managed top Given quarter, the that we're raising of end to guidance

in So had sale, XXXX. we quarter. on now on before first of full the the gains expect around any gains $X.XX year adjusted EPS approximately sale We for $X.XX

So those of the when any including XXXX to the that a us approximately for and full sales for estimate year. remainder the not of takes year we new EPS $X.XX of gains, add enzyme

performance the you had of XXXX we can in continued has in the first overall, that that strong quarter results. So see our in XXXX, and

leasing as as in for to see aircraft the was on margin sale reflected continue environment which a sales, We for this gain well strong quarter.

a significant excess ended We capital quarter with X.X:X. also of to the continue a ratio amount during and leverage of generate

these range. and going the With to forward, our top our of outlook results a strong raising previous positive end we're now guidance

operator, with for call that, we the open can up now And Q&A.

you. Thank

today's the to Instructions]. Markets their the ask Capital question Terry Given on [Operator go on next company focus Ma Barclays. is hosting first the quarter. we analysts with week, the call We'll Day

about think basis should remember XX down correctly, points a XX been PBH if have basis I impact. Your credit quarter-over-quarter. point was But I

just quarter of rest this outlook the maybe and for the maybe to the just through So walk spread the year? pieces net moving

Sure.

quarter to would mentioned spread that an it XX right. relative basis So last you're had PBH impact We quarter. have was and net down on points last

quarter in having So the more due than was than we we expected. little to that's a PBH some less had rents initially that had expected,

it's think it's look net that a we not a I something but mentioning we spread. to So that managing little that we -- drop that will next do manage aren't off is obviously, worthwhile it's quarter. though That at, specifically. bit to metric

helpful. end, feels on toward you guide And given guys onetime raised That's conservative pretty it. understand items. QX, just were me ex still the what I but you Got to in high it some then the did sale there gain just

walk to are. the And the So of in for rest guide the just areas conservatism contemplated through the you just maybe where speak of what's year? maybe can

the them during I'd the line year. that pretty We say you we're board, some at have if did Well, back presented I look for I'd across say full similar of Sure. most last quarter, items the on move around, can timing higher cash And That collections quarter. the be events. the times, first can to many as of well revenue quarter-to-quarter. as maintenance was about that maintenance due as higher lumpy we've talked

well. So higher first the little maintenance in first in quarter came a the stronger quarter. in a little as other had We income bit

a were So drivers the that mentioned. I some and small tax those of benefit

that quarter. the were in of helped those So the some things first

there in the we and last I'd the out I the that. do say, for we as for guidance like gave mentioned defaults of the rest call, earnings on some year, have and things this contingencies when we look

better them there, this are so in Sure. those. of year. for the we'll changed kept those in rest And haven't do But point, the than that. any we of still at we've and Hopefully,

JPMorgan. to We'll Baker go next Jamie with

could deals today's Gus, to results always deals XX and captured relative the late lag portion ago. coming were on early the XXXX when asked between I Obviously, expiring to even We're months of [ is what, sun us now example that in an you are where hoping was of rates lease in XXXX, give or economics today's it were in, being income time ] about statement. results. the a XX locked

apples-to-apples. a for nice hoping Just example, clean

for now next ] that XX-year [ leases going late know, until to don't coming in aren't are year. where I So hit pre-planning renewals

give the more that are week next it Anderson, make going Commercial line. And [ Jamie, to there will Investor main Well, than we're when he'll going the at into XXXs, the and encourage fleet. will to week. our XXXs, all examples you of Officer, revenue Day come increase aircraft Day, detail which news majority the you at next how our types in of -- of the to Investor We Chief ] it the show good our up is rate Peter is answer

I think it. think there. agree. That's most sure you of No, we'll to I that's trying are mean mean investors I'm way helpful. the least my about at I be

something forward So you've to given to. look us

follow-up. quick a So

On past geographic comment that sort a quarters, we quarter, sort of saw the American think emphasis. in can XX any of of I the aircraft a in skew, a you you sold bit on North

Just aircraft. wondering an of I realize enormous still if wasn't number case, that's it the

that would again, widespread. China-based been coming quarters, sales. was mentioned by in have exposure biggest sales been dollar component And our But value, it China have we've would into the is Well, of down. prior as

Okay. Helpful. week. next you See

you. Thank

Cacanando Bank. We'll go next Hillary to Deutsche with

your buy guidance? maybe outpacing any the seem the in second repurchases be any a far authorized wondering million shares perhaps ability well, last assuming in quarter? back that given repurchases will to buy in also, you shares? declines And as if I to consider dividend paying was your and other back you Could beyond that And guidance, are quarter you so $XXX of leverage

thanks. Hillary, Sure.

million So X.X we've quarter second bought back so around far. in shares the

about that's million shares X.X about million. for year-to-date, So $XXX

In that for terms of full the guidance assumed the that we would we've year. authorization we've so our provided, spend

got around as do amount also depend of year. much much we the perform, share -- million just So generate the And would generate Obviously, then we also, that other repurchases that opportunities for that how as excess left during would in as we that. well assume we and $XXX how capital, ultimately we've a lot how will we deploy capital on we well.

week is So I stands. about And in allocation, further. think, thinking that next talk well, I where that guess that we'll something about that's really terms then capital of as

aircraft thoughts to -- good and exploring of Journal XXX just plans for it. is is be Kind that narrow-body according in you Got think that your [ to in market the ] [ article to and an rival to likely have how would for network. the saying ] was And Boeing on XXXX if and wanted that think there in another good market be this get the sources. to come Okay. player Embraer that then that the would you introduce morning ultimately,

I mean, long the think may Hillary, be term, well I over helpful. it

have aircraft, that this to in to a we I have technology, you will delivering However, the the engine particularly XXXXs. impossible need side a develop anything doubt of be just new already to you well numbers before track of down material new if see It's XXXX. would the end

years. financial mid So to that's The off, do resources shot It honest. the it. it's capability are it and that bad not extraordinary [ even will a does XXXXs, with Boeing, And XX be happening. to to will think the required of ] compete come even that if be think they relevant be it Airbus long if I don't for next I do

Got it.

you Just think that quick Comac Where X going? China where of question. people's terms stand that follow-up like is does in like product perception and the of

of is sale They journey technology mind announcements in and player a the long, today shift MAX. to global Again, recent have Well, become to the aerospace you must the behind such Comac. this you've airplane though, in a long seen that a Chinese majors, that X bear the neo is manufacturing.

MAX, For yet. or neo within compete That's family. have same X even they them to would to the not the X in in have development aircraft

to the my mid-XXXXs before have the we it a maybe operation late Airbus, that's would again, hope but you late So global it's think have to will there well case. Boeing I and competition, in suspect they be to into would be -- point, before given an Brazil, and be all competitor XXXXs, and airplane honest, I like best in XXXXs,

Got so it. Thank Great. you much.

TD with Becker Cowen. Helane to next go We'll

increasing sale the those et Can to ] Pete, much, from you just just families what operator. are, was assets us at ]. some XXX assets XXX color of end on give in, [ very wondering Thanks [ about what they're for year the the cetera? held I

would just Well, are expect mean are we engines primarily and Sure. that included would -- And quarter. to completed. X we aircraft. that plan the what never I assets -- that sale. mainly would it's of would exactly aircraft Obviously, know It's those be expect through of those for timing of most it's held I be, some assets will next those most in come those sales the that quarters probably next over you but

X [ week. week. questions. my One that then and other you how you'll just And we question talk answered Jamie's better get earnings on that's the you as here. in maybe on speak Like of you in do next how addressed is this it first go another follow-up does think you'll And earnings you next the about which first talk capital from major the One you'll investors. number get better -- is it allocation, ] it But question about 'XX. that Okay. in gets quarter XXX we it from that question next to about already a maybe is quarter this on And from to how week.

of Helane, topics both Well, about week. we'll next those talk

tremendous a Of the Again, extensively the company, for outlook period and about you've week. course, always the seen would stability this history over the to our different long issues. we to of I business next of very of talk various look time earnings will

at I'd be So encourage once to again, you all The Pierre.

the time. Thanks, team. I appreciate

Sure. Thanks, Helane.

We'll Chris with Stathoulopoulos next to International Group. go Susquehanna

spoke I'm about, a not timetable sure I've you that. guess, I the remarks, prepared last, deliveries. before your for on the your In pretty addressed managing And question that's gotten if call but this recently, you've

So walk carriers risk defer or if risk look their that deliveries? you're And a kind potentially to out there order smooth of us books? you could that derisk as managing how could is orders cancel them through or they just around

close can you're The around delivery. more data the it. concern trust giving difficult example, it is is with is I far can can were challenge the for late airline, and airlines you you an when get for say summer. the an unknown for moving late that more to very to the the tend about be more expecting moving would in, When target even and delivery, The aircraft the if concern plan it's

wanted my money. And I summer. needed money The I you get it fourth the say, the challenge where in That's customer airline "I for in now make they're on don't to don't really I the to it base That's real November. November. wanted. when year will the that want lose quarter until out those quarter." of late first the smooth the and periods when from and fall our airline deliveries for they

second period they To ] aircraft, [ issues. time met. we work with have OEMs been Caline's conditions certain part the the a Now canceled and after the airline the yes, question, can of your around and those and of

with right However, we have a cancellation manufacturers. back-to-back the

that a aircraft happening. if global to So There would But come for the were demand we that certain don't is the and supply is moment, of well as pass be of situation how would and about the week see MRO to aircraft affecting aircraft. we what exposed. the next at talk our shortage that and we'll outlook on not and is extensively also side

just in the market then XQ, what are of doing if million the in quarter could And seeing in on certain better. through are perhaps gains secondary you Okay. that around $XXX walk pieces in sale be you're vintage us color Any various helpful. aircraft on there's the sales would that the the

next in happening aircraft engine to of different I'm explain try area things going bit value. that's to detail are are that quite to a to the and impacting the Well, all one in you values how market week different tell

to So that that are we'll again, have more come values and aircraft week the you I a where extensive encourage around discussion higher. along next driving would factors

Okay.

Looking forward you. to it. Thank

now At to I the will are call no this there for questions. Kelly Aengus further back time, remarks. turn closing

thank and you, May referenced, week AerCap another XXXX team. the see as the as of quarter next possible in hosting you'll produced event, the on as where Capital on selection flows. earnings many I management us excellent hope AerCap call. operator, we're we of you York Markets from chance you, hear and And a of to Thank New to also In at everyone, get X. cash And has joining a closing, for Day

very much. So thank you

This you today's your for concludes Thank conference. participation.

may You now disconnect.