AerCap Holdings N.V. Reports Fourth Quarter and Full Year 2006 Financial Results

    AMSTERDAM, Netherlands, Feb. 28 /PRNewswire-FirstCall/ --

    Highlights

    * Full year 2006 net income was $88.0 million.  Fourth quarter 2006 net
      income excluding charges for share-based compensation was $41.5 million
      and full year 2006 net income excluding charges for share-based
      compensation was $156.3 million.

    * Fourth quarter revenue was $211.6 million, up 78% over fourth quarter
      2005 and revenue for the full year 2006 was $814.4 million, up 65% over
      full year 2005.

    * Flight equipment held for lease was $3.0 billion as of December 31,
      2006, up 36% from December 31, 2005.

    * Purchases of aviation assets in the fourth quarter were $522.8 million
      and $973.2 million for the full year 2006.

    * An initial public offering of 26.1 million common shares was completed
      on November 21, 2006 at a price of $23 per share, with proceeds of
      $156.4 million retained by the Company, and used primarily to pay down
      indebtedness.

    * An agreement was signed on December 11, 2006 with Airbus for a firm
      order of 20 new A330-200 aircraft to be delivered 2008 through 2010.

    * A Chinese aircraft leasing joint venture was launched on October 26,
      2006 with China Aviation Supplies Import & Export Group Corporation and
      Calyon Airfinance.

    Summary of Financial Results

AerCap Holdings N.V. (the "Company" or "AerCap") (NYSE: AER) announced the results of its operations for the quarter ended December 31, 2006 and for the full year 2006.

The Company recorded net income excluding charges for share-based compensation for the fourth quarter 2006 of $41.5, or $0.51 per diluted common share. For the full year 2006, net income excluding charges for share-based compensation was $156.3 million, or $1.98 per diluted common share. Net income excluding charges for share-based compensation for the fourth quarter 2006 increased 55% over the similar measure in the fourth quarter 2005 and net income for the full year 2006 increased 88% over the full year 2005 net income.

In accordance with FAS 123(R), the Company recorded non-cash, share-based compensation charges of $58.7 million, net of tax, in the fourth quarter 2006 and $68.3 million, net of tax, for the full year 2006. The recognition of the majority of these charges was triggered in connection with the Company's IPO and relate to restricted shares and share options held by members of the Company's management team, independent directors and a consultant in entities which have controlling interest in the Company. An amount equal to the pre- tax charge for share-based compensation was recognized as an increase to additional paid-in capital and, as a result, there was no effect on the net equity of the Company, other than the positive impact of the related tax benefit.

After charges for share-based compensation, net loss for the fourth quarter of 2006 was $17.2 million, or a loss of $0.21 per diluted common share and net income for the full year 2006 was $88.0 million, or $1.11 per diluted common share.

Klaus Heinemann, CEO of AerCap, commented, "We are focused on investing for growth which is key to our business strategy. We completed the purchase of 28 aircraft during the fourth quarter, bringing the total aircraft purchased in 2006 to 41. In addition, our already contracted investment in new Airbus equipment provides a strong growth pipeline for the rest of the decade." AerCap's CFO, Keith Helming, added, "Our strong net income performance for 2006 was due in part, to our diversified sources of revenue which include leasing, service fees and sales of aircraft, engines and parts."


    Detailed Financial Data
    ($ in Millions)

    Operating results:

                                         % increase               % increase
                              Fourth     over Fourth     Full      over Full
                          Quarter 2006  Quarter 2005  Year 2006  Year 2005 (A)
    Revenues                   $211.6           78%     $814.4            65%
    Net income excluding
     charges for share-based
     compensation                41.5           55%      156.3            88%
    Net (loss)/income           (17.2)        (164%)      88.0             6%

    (A) - 2005 figures are combined results of the predecessor and successor
          companies

    Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization and charges for share-based compensation) was $451.5 million for
the full year 2006, up 39% over the 2005 combined results of the predecessor
and successor companies.


    Revenue breakdown:
                                            Fourth
                                         Quarter 2006      Full Year 2006
    Lease revenue                           $132.8             $443.9
    Sales revenue                             64.7              301.4
    Management fees, interest income
     and other revenue                        14.1               69.1


    Financial position:
                                                                  % Increase
                                                                     over
                                        December 31, December 31, December 31,
                                            2006         2005        2005
    Flight equipment held for lease        $2,966.8     $2,189.3      36%
    Total assets                            3,923.0      3,061.2      28%
    Total liabilities                       3,161.1      2,641.6      20%
    Total equity                              729.9        419.7      74%

As of December 31, 2006, our portfolio consisted of 344 aircraft and 57 engines that were either owned, on order, under contract or letter of intent, or managed. The number of aircraft and engines in our portfolio increased 64% since December 31, 2005 (241 aircraft and 4 engines).

Financings in Fourth Quarter 2006

AerCap completed several financings during the fourth quarter 2006. The net proceeds from the sale of shares by the Company in its initial public offering were used primarily to pay down debt relating to the acquisition of AeroTurbine. Additionally, a revolving line of credit for AeroTurbine was amended and increased to $220 million. AerCap also signed a $248 million financing with a bank syndicate to fund the purchase of an aircraft portfolio from GATX Corporation and established a pre-delivery payments facility for its AerVenture joint venture.

    Notes Regarding Financial Information Presented In This Press Release

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

Following are definitions of certain non-GAAP measures used in this press release and a reconciliation of such measures to the most closely related GAAP measure:

Net income excluding charges for share-based compensation. This measure is determined by adding charges for share-based compensation, net of related tax benefits to GAAP net income. The Company uses this measure to evaluate and communicate the results of its operations in periods where significant non-cash charges for share-based compensation have been recognized. The majority of these charges were recognized in connection with the Company's public offering and related to a series of share-based awards granted in the twelve months prior to the public offering. The Company does not expect share-based charges of a similar magnitude to occur in comparable periods in the future. The Company believes this measure provides investors with a more meaningful view on the Company's operational performance and allows investors to better understand the Company's operational performance in relation to past and future reporting periods. Following is a reconciliation of net income excluding charges for share-based compensation to net income:


    Reconciliation of net income excluding
     charges for share-based compensation         Fourth
     to net income ($ million)                 Quarter 2006     Full Year 2006

    Net (loss)/income                                ($17.2)            $88.0
    Plus: Charges for share-based compensation,
     net of taxes                                      58.7              68.3
    Equals: Net income excluding charges for
     share-based compensation                         $41.5            $156.3

Earnings per share excluding share-based compensation are determined by dividing the amount of net income excluding charges for share-based compensation by the average number of shares outstanding for that period. The average number of shares is based on a daily average.

Adjusted EBITDA. Adjusted EBITDA is determined by adding the amounts for charges relating to interest, depreciation and amortization, taxes and share- based compensation to the amount of net income. Adjusted EBITDA provides management with a useful measure of the Company's operating performance because it assists management in comparing the Company's operating performance in different periods without the impact of the Company's capital structure (primarily interest charges on our outstanding debt), non-cash expenses related to our long-lived asset base (primarily depreciation and amortization) and non-cash expenses related to share-based compensation. Following is a reconciliation of Adjusted EBITDA to net income:


    Reconciliation of Adjusted EBITDA to net income

                                              Full Year 2006   Full Year 2005
    Net income                                        $88.0            $83.4
    Plus: Interest charge                             166.2            114.6
          Income taxes                                 16.3             14.7
          Depreciation and amortization               102.4            112.3
          Share-based compensation                     78.6                -
    Equals: Adjusted EBITDA                          $451.5           $325.0

The non-GAAP measures used in this press release are not intended to be considered in isolation or as a substitute for the GAAP measures to which they most closely relate.

References to financial information for full year 2005 data include the six months ended June 30, 2005 for the predecessor company, AerCap B.V. (formerly known as debis AirFinance B.V.) and the six months ended December 31, 2005 for the successor company, AerCap Holdings N.V. This combined presentation is included because it is the way management analyzes the results of the Company and for the convenience of investors. The combination of these two periods is not in accordance with US GAAP and should be considered supplemental information only.

Conference Call

In connection with the earnings release, management will host an earnings conference call on Wednesday, February 28, 2007 at 9:30 A.M. eastern time. All interested parties are welcome to participate on the live call. The conference call can be accessed by (800) 218-9073 (U.S. domestic) or (303) 262-2211 (International); there is no passcode.

A webcast of the conference call will be available at http://www.aercap.com. For those who are not able to listen to the live call a replay will be available through March 7, 2007 and can be accessed by dialing toll-free (800) 405-2236 (U.S. domestic) or (303) 590-3000 (International), passcode 11083292.

About AerCap Holdings N.V.

AerCap is an integrated global aviation company with a leading market position in aircraft and engine leasing, trading and parts sales. AerCap also provides aircraft management services and performs aircraft and engine maintenance, repair and overhaul services and aircraft disassemblies through its certified repair stations. AerCap has a fleet of over 300 aircraft owned, managed or under contracted orders and a diversified commercial engine portfolio. AerCap is headquartered in The Netherlands and has offices in Ireland and the United States.

Forward Looking Statements

Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not necessarily limited to, statements relating to future operations. Words such as "expect(s)" and similar expressions are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements. AerCap can give no assurance that its expectations will be attained. There are important factors that could cause actual results, level of activity, performance or achievements to differ from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release may 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. Such forward-looking statements speak only as of the date of this press release. AerCap expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

For more information regarding AerCap and to be added to our email distribution list, please visit http://www.aercap.com.


                         Financial Statements Follow


    AerCap Holdings N.V.
    Consolidated Balance Sheets - Unaudited
    (In thousands of U.S. Dollars)

                                          December 31, 2006 December 31, 2005

    Assets
    Cash and cash equivalents                      $131,201          $183,554
    Restricted cash                                 112,277           157,730
    Trade receivables, net of provisions             25,058             6,575
    Flight equipment held for operating
     leases, net                                  2,966,779         2,189,267
    Net investment in direct finance leases             -               1,072
    Notes receivable, net of provisions             167,451           196,621
    Prepayments on flight equipment                 166,630           115,657
    Investments                                      18,001             3,000
    Goodwill                                          6,776               -
    Intangibles                                      34,229            38,571
    Inventory                                        82,811               -
    Derivative assets                                17,871            18,420
    Deferred income taxes                           101,477            99,346
    Other assets                                     92,416            51,421
    Total Assets                                 $3,922,977        $3,061,234


    Liabilities and Shareholders' Equity

    Accounts payable                                 $6,958            $2,574
    Accrued expenses and other liabilities           92,466            76,563
    Accrued maintenance liability                   285,788           150,322
    Lessee deposit liability                         77,686            56,386
    Term debt                                     2,555,139         2,172,996
    Accrual for onerous contracts                   111,333           152,634
    Deferred revenue                                 28,391            22,009
    Derivative liabilities                              -               8,087
    Deferred income taxes                             3,383               -
    Total liabilities                             3,161,144         2,641,571

    Minority interest                                31,938               -

    Shareholders' equity                            592,237           370,000
    Retained earnings                               137,659            49,663
    Total shareholders' equity                      729,896           419,663

    Total Liabilities and Shareholders' equity   $3,922,977        $3,061,234



    AerCap Holdings N.V.
    Consolidated Income Statements - Unaudited
    (In thousands of U.S. Dollars, except per share data)


                                              Three month       Three month
                                              period ended      period ended
                                           December 31, 2006 December 31, 2005
    Revenues
    Lease revenue                               $132,794          $92,243
    Sales revenue                                 64,740           12,489
    Management fee revenue                         3,742            3,630
    Interest revenue                               8,025            9,887
    Other revenue                                  2,322              832
      Total revenues                             211,623          119,081

    Expenses
    Depreciation and amortisation                 30,040           23,441
    Cost of goods sold                            37,013           10,574
    Interest on term debt                         54,787           19,874
    Operating lease in costs                       6,307            4,966
    Leasing expenses                              20,796            7,763
    Provision for doubtful notes and accounts
     receivable                                      661            3,219
    Selling, general and administrative expenses  19,151           16,012
    Shared-based compensation                     63,642              -
      Total expenses                             232,397           85,849

    (Loss) income from continuing operations
     before income taxes and minority interest   (20,774)          33,232

    Provision for income taxes                     3,770           (6,484)

    Net (loss) income before minority interest   (17,004)          26,748

    Minority interest, net of taxes                 (143)             -

    Net (loss) income                           $(17,146)         $26,748

    Basic and diluted (loss) earnings per share    (0.21)            0.34

    Weighted average shares outstanding
     basic and diluted                        81,259,179       78,236,957



    AerCap Holdings N.V.
    Consolidated Income Statements - Unaudited
    (In thousands of U.S. Dollars, except per share data)


                                     Combined       AerCap        AerCap
                       AerCap        Successor and  Holdings N.V. B.V.
                       Holdings N.V. Predecessor    (Successor)  (Predecessor)
                       Year Ended    Year Ended     June 27 to    Six Months
                       December 31,  December 31,   December 31,  Ended June
                          2006         2005           2005         30, 2005

    Revenues
    Lease revenue      $443,925       $348,901       $173,568      $175,333
    Sales revenue       301,405         92,063         12,489        79,574
    Management
     fee revenue         14,072         14,186          7,674         6,512
    Interest revenue     34,681         33,465         20,335        13,130
    Other revenue        20,336          4,465          1,006         3,459
    Total revenues      814,419        493,080        215,072       278,008

    Expenses
    Depreciation and
     amortisation       102,387        112,325         45,918        66,407
    Cost of goods sold  220,277         68,206         10,574        57,632
    Interest on
     term debt          166,219        114,599         44,742        69,857
    Operating lease
     in costs            25,232         25,318         11,441        13,877
    Leasing expenses     47,394         21,901         12,213         9,688
    Provision for
     doubtful notes
     and accounts
     receivable            (186)         6,163          3,002         3,161
    Selling, general and
     administrative
     expenses            70,729         46,508         26,949        19,559
    Share-based
     compensation        78,635              -              -             -
    Total expenses      710,687        395,020        154,839       240,181

    Income from continuing
     operations before
     income taxes and
     minority interest  103,732         98,060         60,233        37,827

    Provision for
     income taxes       (16,324)       (14,697)       (10,570)       (4,127)

    Net income before
     minority interest   87,408         83,363         49,663        33,700

    Minority interest,
     net of taxes           588              -              -             -

    Net income          $87,996        $83,363        $49,663       $33,700

    Basic and diluted
     earnings per share    1.11           1.07           0.63         45.78

    Weighted average shares
     outstanding -
     basic and
     diluted         78,992,513     78,236,957     78,236,957       736,203



    AerCap Holdings N.V.
    Condensed Consolidated Statements of Cash Flows - Unaudited
    (In thousands of U.S. Dollars)

                                     Combined       AerCap
                       AerCap        Successor and  Holdings N.V. AerCap B.V.
                       Holdings N.V. Predecessor    (Successor)  (Predecessor)
                       Year Ended    Year Ended     June 27 to    Six Months
                       December 31,  December 31,   December 31,  Ended June
                          2006         2005           2005        30, 2005

    Net cash provided
     by operating
     activities         $348,379       $216,513       $109,238     $107,275
    Net cash (used in)
     provided by
     investing
     activities         (843,289)    (1,540,402)(A) (1,431,259)      14,525
    Net cash provided
     by (used in)
     financing
     activities          443,558      1,363,467      1,505,472     (142,005)
    Net (decrease)
     increase in
     cash and cash
     equivalents        $(51,352)       $39,578       $183,451     $(20,205)

    (A) - Includes the elimination of cash acquired of 123,668 relating to the
          purchase of AerCap B.V. by AerCap Holdings N.V.

SOURCE AerCap Holdings N.V.