AER - Earnings call 4 2023 | AerCap Holdings N.V.

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Operator

Good day, and welcome to the AerCap Holdings N.V. Fourth Quarter 2023 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.

Joseph McGinley

Thank you, operator, and hello, everyone. today's quarter Officer, call.With Chief some Aengus Pete forward-looking we fourth our today Financial statements our like statements. historical Juhas.Before Executive would facts, conference Chief Kelly; begin are made to during XXXX you call, me conference is Officer, to this Welcome remind I which that not call, and be our may

implied performance results in affect is involve public to can XX, at and conference our and will any statements. imposed materially those uncertainties could or actual events that aercap.com.This be future be reflect dated risks cause from in call that to on statements is information statements earnings forward-looking no Forward-looking expressed earnings publicly that the simultaneously undertakes issues or arise A presentation open may concerning for or such AerCap XXXX. and than release AerCap's Further revise at replay. obligation February website circumstances materially archived aircraft.com being call of differ this that after webcast release copy to the events, update and other available or found law by are information to call.

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

reminder, call to Aengus over I limit themselves follow-up.I the turn to that a would As analysts one Kelly. ask now one question will and

Aengus Kelly

in EPS earnings and to for expect Adjusted a to leading demand in earnings flow capital call.I of of and $XX.XX, income Thank our trends you income $X.XX we AerCap. of $X.X net pleased for GAAP terms record EPS deployment and accretive to $X.X of of cash year and the $X.XX. for share billion we $XX.XX. that $X.X operating joining the generated of generated observed supply-demand am us per supportive an XXXX continued another to quarter last adjusted at range came a We at dynamic, year fourth see billion.We in XXXX for report continuation record our of assets net earnings billion

not does also the taking the $XXX continued gain of to last any cash I repurchase million XX $X am sale, announce to the has over this of However, impact share business another total authorizations which include and been generation, historically pleased the billion. consistent significant.Given strength on in months program,

for in and We beyond.As the continues and confidence for demand this value for stock engines authorization And said supply time, consistently continue we latest see to for underscores the helicopters. today. tremendous some outlook aircraft, for have in our outstrip to XXXX

concern this to is had years.The Unsurprisingly, to in main conference lift We event. persist to conversations many their we moment over that fleet. expect dynamic for aviation with sourcing largest the X,XXX and assets attracted hosted continues and the from clear demand people the airlines many was airlines, leasing the was the It grow. and around at global aircraft Dublin for traders financiers for of reliability just

trading it, So have demand offer the to reached in business, side, very time talking throughout see envious that most bid some for X expect a how spend The point.As been the I'd this continuing see dominates conversations we investors imbalance. today's of shortage. there we solutions, engine is aircraft multifaceted in assets aviation year. with And other we the substantial for to in tandem drivers to have putting lessors topic and us today healthy are supply-demand to position.On unique like our robust a a and see about continue leasing aircraft global we from position

Airbus. cuts were which in to XXX by production in production board XXXX, Boeing across in significant MAX The resulted XXXX, first back rates COVID where and rates, grounding the the the to narrow-body dates Boeing's of March cut followed by

rates levels. result, a clear in XXXX the XXXX's yet approximately XX% from that XXX represented chart the and output.Moving it below production remain fully XXXX, the still on delivered is left XX% XXXX forward only aircraft are to of to As recover

the for many chains is dynamic only will the reasons discussion deliver new promises many in OEMs revolves return Even aircraft about engine there 'XX pre-COVID during factor not if for their the Airbus the supply beginning.The been output simply to supply-demand expect new rates, one manage of their Boeing plenty to whilst years come. I to this and the is their of to issues overlook X,XXX on 'XX, is many second persist years. their X and do that have around when reliability seem really So facing last or the phase. favorable that resolve technology built to maturation main This why

the and into longer batch and the be engines to equipment. lead technology visits, natural production must new reliability is undergo then longer on between they time minor environment, any As allowed checks to following expected first delays any In would are If increasing a this initial some development. entry service. This and of new come ordinary testing times their in shop line, an do not cause rigorous result issues, part of checks engine wing. earliest off these the

XX is chart labor over XX impacting & supply result of MRO not the shortage other before to However, network, age the third the issue, outsized younger result engines. Amazingly, there times aircraft Whitney for under in right-hand stretching this as aircraft. this the Pratt happened rates and for a the from in powdered by storage recent is to factor in XXXX reduction can visit XXXX. major X-year-old years.Finally, engine X- both This came today shop are currently had a than last on the more Outside cases.As as you X to MAX grounding, and this the is further leading the activity metal compounded stored aircraft years. any group in see side, of and of turnaround and the stressed year already parts some

fast slots, to expenditure preserve meant, smaller and used visits and sustained do cash. X into to completed, visits stay to and engine future.Together, These by today This factors ground off there XXXX, business. in XXXX MRO a fleet in continue persist wing During shop aircraft of the that had on the engines. will of for on issues network. and times in Naturally, be demand to time so reduce period, and our returned shop these our new array and late a demand for their when a backlog turnaround reacted aircraft. and significant could has into to longer this network, MRO for the impact airlines That many create headcount on engines to did all led aircraft and significant causing was consistently capital they which a capacity wide

assets in these all of a position line, advantage is evident earnings.The the in demand. is to the of immediate market, provider on portfolio strong most leading is and AerCap most on combination on this capitalize driving the way in take to which across the As favorable returns heightened growth sale trend, these of today increasing gain conditions our this

in sold shareholders. of how engines helicopters. for are, our touch our for you, XX the operating and though, AerCap we XXXX, you in lease me We create were that, our those math rates, billion. recycle aircraft, support I'll through books In on These and XX strength XX to the held continued which take $X.XX let also later.Before margins. cash flows increasing value capital of assets course,

attaching equity generating share XX% them of we million. of to $X.XX However, debt those into to component gain those to importantly, sold a the our carrying the of for gain a equates to of XX% gain on $X.XX value neutral, an This billion, the assets after we repurchases. $XXX billion the keep have but deploy $X.X leverage assets.So repaying on assets, billion

trading X.Xx value, our discount to able back of As average the at book billion we $X.XX stock an were of stock. buy was

we equity from So of gain share the million million were the the of $XXX against starting had repurchases. $XXX able the generate from further position on of we $XXX discounted assets, and million through assets, to the a sale those

ended million. the we results helicopters in And equity X.XXx aircraft, the with in and sale total, period. up a adding gains demand, this million, million together: in X selling are multiple.Gains also $X.XX the to in limited not billion, $XXX engines $XXX the So for are $XXX on those book and

benefiting Our shortages trading side widespread be not advantage legacy the few that higher fleet take leasing pleasing surprise than the entire simply engines, time and businesses, passenger on our of from sale the in across GECAS on and off sale times This on the improved particular, turnaround assets. from was the was a the sale capacity notable year transaction. wing AerCap available.Another increased to yields of margin the engine in scramble that for this former you. It to or performance are outliers assets was GECAS was not from reflected strong should the gain airlines as gain year actually the of solely a aspect

for portfolio demonstrated than than $X.X on such billion platform this have a assets our variety value sale gains that in unique value management row our years values that the We a more dynamics assets market and AerCap of generated broad would the in consistent over book higher across as much our of inherent is reflects do market period.To and we imply by consistently created of strategy. XX the

back represent billion, mean, of consistently or is know, operating capital our billion not announcement, claims prudent cash we from this say is what on company demonstrate.While created and all our to AerCap is this focused billion $X.X form in delevered that returned gain December not time, on cash generated the with at while AerCap's billion so. and bedrock strong which the equal, $X.X to sustainable book flows, the will shareholders our $X same This flows of way. a billion continuing of insurance sale it proceeds values between of the we you, we of over in $X.X the today's leasing mind, Russian our to trend a sale. ever. flows value These strength billion. highest cash exceed the flow the are our you of portfolio, in we our and we so when $X.X earnings In maximize incredibly have a nearly do we buy or Since of gains strategy.As So of of we on how companies bear $X.X key operating Please we shareholders. doing are what XXXX, XXXX, does part and XXXX, for XX% And our sheet March deployment. to us of strong balance include is allowed and cash our see stock

have conflict in M&A billion not $XX taken cash XXXX deal capital We have AerCap.We generating the this. returned tremendous despite and in this to COVID between, of risk amount in and of the the a do unnecessary in completion impact resilience of Ukraine XXXX, power the of demonstrating

reality returns AerCap's and are we year. business. shortly, both confident recycling positive fact, We XX% will profile, selling XXXX ahead. world that to level of less And an AerCap's growing a In is where by assets our actually are the stronger company desirable up, at reference at risk clearly last discount, year assets even the and improving S&P share year the is and into capital that same to and alone, offer the rating, time. In wrap been delevered unrivaled it credit our our in AerCap we share to grow to per the S&P for remain value in XXX around Moody's.So services upward companies the balance best Pete have returns is so. further the ability sheet above percentile platform our repurchases. we execution. and more would trajectory AerCap's customers consistent This in with of outlook leading the with in $XX, ended in for yes, an AerCap's doing XXth as book products And we on shareholders the a while our by

year the over to continue demonstrating and and hand to financials right outlook you, XXXX. to the you. shareholders, look Thank Pete what's forward that, the do this will review the strategy our for in call results of ahead.With to We for the now I'll

Peter Juhas

a had quarter. everyone.AerCap performance Thanks, the fourth Gus. morning, for record Good

Ukraine GAAP of maintenance included amortization rents; of of $XX our and which insurance accounting which recoveries million which rights the included is tax increased was which million, the effect revenue; premium income amortization lease quarter. Our impact purchase million, maintenance items of settlement rights of amortization $XX included for the proceeds purchase expenses. per to related The conflict. $XX This adjustments $X.X aircraft, or share. $XX reduced to basic net and of This million, was The net was reduced these $X.XX million. maintenance $XX in lease million billion recoveries leasing our accounting $XXX Russian related

of were quarter the the adjusted share.I'll per So our $XXX for account, briefly that fourth main talk affected or rents net the taking $X.XX are continued continue fourth their on by drivers and lease strong was about million lessees our that leases. hour Basic the quarter. reflects for to income $X,XXX all benefit also we that results from collections, into PBH our million. rents in arrangements cash power That from

the a million, to rights reduction our and $XX quarter reduces rents. amortization, lease as Lease which the mentioned, lease million fourth assets remaining to the basic $XXX that revenue for over the that were of million amortized basic premium of I lease basic rents.Maintenance were of revenues during As are lease quarter. reflected maintenance rents premium lease reflects our maintenance assets amortized term $XX

million. revenue in higher for million amortization.Net the the million quarter. assets $XX of of during year, sale. XX% worth fourth total for quarter revenue the our sales words, at other fourth XX the assets We of owned million gain sale of or resulted margin sold on in for So a of gain $XXX had end for $XXX And on assets sale $XX was have That this been without million $XXX we would held the quarter. of maintenance

For worth million, gain a on recorded on mentioned billion the unlevered claims consisted million on for Ukraine to of million losses interest rate we year of $XX earlier, expense which Russian aircraft margin $XXX the insurance XX%.As and related of of the $XXX primarily nearly included $XXX sale I XXXX, which assets of were mark-to-market total which sale Russian recoveries average $X.X an net is lease million, gain airlines.Interest on full our recoveries X to was conflict quarter, derivatives. on sold of

a was rights were expense Our million. maintenance strong tax for We liquidity allowance including from go $XXX amortization $XX result these million for million items, quarter, expenses.Income continue the other and settlement as benefits Russian the of and tax valuation of that flow.We a leasing quarter expenses releases million cash recognized as investing include $XX insurance maintain [Audio Gap] through position. fourth to $XX

sources which Gap] the of $X XX, next coverage cash of liquidity represents [Audio in $XX of were months, of of As December excess well our our ratio target X.Xx around resulted XX around billion. X.Xx. coverage billion, and above total That's sources coverage

beginning last X.XXx. end quarter was ratio leverage than lower Our XXXX. the quarter at of of the and also That's lower the in than

strong quarter, earlier, flow over the And cash of continued cash for generated billion even $X.X of that during XX So that for AerCap past and by driven was taking capital really significant And the to XX were after year demonstrates for aircraft, able $X.X CapEx delever. share around we of XX the billion delivery full the was after flow total $X.X and engines helicopters, amount operating billion of the fourth the year.Our repurchases year, mentioned $X.X I cash year. cash billion still as collections. it and

of with which Our total in ratio is assets prior at quarters. XX% end the line basically was December, to secured around debt

was fourth quarter. average of debt the cost X.X% Our for

of at which an of shares Our an as $XX.XX beginning million. XX was share at our a XXXX.During $X.X at the book repurchased value $XXX a year, million over for of value total for for of per XX, XX% full price an million $XX.XX the we repurchased per shares represents fourth of of price December XX.X we And share average $XX.XX of quarter, book total the increase average billion.

we adjusted year was for So clearly, of into remain with we the $XX.XX.As look confident out outstanding future. an XXXX, XXXX EPS about AerCap

of before sale. on $X.XX EPS adjusted any gains projecting to we're XXXX, $X.XX For

XXXX from we In the to items. think it's useful XXXX, of gains million XXXX to some major out call tax. of walk $XXX after sale share had on or I per to $X.XX

the We received hour also the period $XXX that on a that the over had million end by PBH had lease. power of we at front rents leases of

PBH leases we have these fixed-rate leases from to cases, calls, earnings In cash rents than of most the expect we over this fixed-rate so the converted of both and the the on were higher average regular mentioned receiving, the rents $XX an move all Once recognize are increase rent. of to receipts fixed-rent. year.However, almost period, during previous recognize PBH entire lease million I've those is As straight-line straight-line the the fixed PBH from rents. term now standpoint, by out PBH fixed-rent, the of across rent we the we accounting the period, only we which a

these those XXXX, we'll XXXX, around we're mentioned, $X.XX recognized a have XXXX, revenues also tax.As effective I effect result, a lower in even the a tax number a of we a which expect though benefits leases record from receiving rate in of low only moment. In significant tax is we of I'll cash effective share about higher talk a rate, more X.X%. revenues as and after in led to So tax which to

that's around everything other share impact repurchases and items. items So higher of are a in call including a XXXX interest to compared to includes higher Those major costs, share else, the revenues, lease column other headwind of out.The the XXXX. $X.XX

a expect of the during XXXX, for takes about on XXXX, in line of not major an of to breakdown That projected will items. range positive you showing income effect gains the sale for the us next XXXX. the any net including We these again, slide, all of $X.XX year.On $X.XX $X.XX to EPS our can be see statement

for sales income million $X.X billion. around $X revenue revenue million; the year that assumed For the of revenues have we around asset year $XXX and total we XXXX, $X.X billion have of will of full cash around of of We've $XXX around other for billion. billion; expect maintenance lease to $X.X and CapEx around

on it and time the billion. deliveries is on figures can billion and demand for these assets CapEx OEM and sales volume expense $X.X significantly. takes largely dependent depreciation and know, close interest of $X.X depends around you projecting amortization to those sales.We're the As around vary

tax we're SG&A OECD's a a of for top-up under expenses, about leasing talk XX.X%, billion projected rate tax subject tax, directive, assumed XX.X%, Pillar own an generally why the I'll majority which we of company in to assets, taxes other Ireland, we have as minimum where The at a typically rate is for became and rate. year, assumed so tax we this tax a X Ireland, $X.X of that of total XX%. expenses other little countries, rates tax around of to we've beginning where rate expect corporate the resulted but to we Historically, assets global vast is our We on At moment. rate XX%. tax year.On around a the in the such corporate Irish the of than which above higher for less overall rate the in jurisdictions minimum effective paying tax an tax is subject

expect X rate increase by We to Pillar tax around our X.X%.

to to we're and the have earnings, income us of not from some $XXX which net of SES, engine year So terms including tax for to GAAP but adjustments billion. of purchase coming a of million adjusted that's flow is cash $X.XX equity for of a other venture, around also expect XXXX.In record AerCap an And that primarily EPS investments, $X.X adjusted overall, projected altogether, gains our after $X.XX leasing effective tax, on After rate include joint around year, earnings we've XXXX, range XX.X% again, revenues, smaller gives EPS, sale.So billion us $XXX assumed around why off $X.X shareholders. investments. our joint for we return any around recognize million accounting the of capital we operating And expect gives for of equity income in year. net that to

insurers shows forward signs strong insurance we own that soon. our pursue see of we As results into and no as we outperform, to to continue to settlements continue insurance supply-demand look a as ending produce well anytime claims. continue with strong we'll vigorously believe and the We XXXX, Russian imbalance can

call that, demonstrated our future business You million announced $XXX for open the can can operator, we the up with authorization this confidence see Q&A. of repurchase today.And in that share the by we new

Operator

[Operator Harvey with Instructions] Ross Davy. go to We'll first

Ross Harvey

Gus, from Two Pete, results. Joseph, strong very congrats on a questions me.

to address it guess spread XXXX. net Firstly, And in that secondly, tightened conservative the look your QX. depreciation Can appears less have relative quite XXXX from how you might I guide that? finished you may

can that So talk just you us through again?

Peter Juhas

Sure. Thanks, Ross.

net the less earning cash the refinancing the spread our cost the in eliminated quarter, interest the accelerated Similarly, spread, because maturities. earlier of through that interest at net we're also not but went condition spread. depreciation decreased down higher some aircraft because comes on forward brought we older some depreciation income we through net fourth the on noting the we also return in worth quarter net So our balances It's some other the moment, bond spread where the during through income, on leases. that

not to maintenance leads higher basis XX spread in we to on worth out spread. the to is to in spread. way, the points, EPS. spread net it's don't to it around after net business that XXXX.And that it we'd to net be stable expect effective the manage maximize which We while as net year depreciation we expense, just of maximize that which do leads keeping the revenue, mind PBH, also So higher part also look the by ahead, a I is just, think And

example, net XXXX Gus so of proceeds, for ended $X EPS was look, at EPS mentioned, and reinvesting our we $X.XX, This but that for to we're year, producing higher to to when next we for the $X.XX. spread, So down $X.XX the $XX.XX. maximize sell we're last guiding those older returns at to of initial we look brings EPS.As guidance guidance as year, year, assets, up

reason pursuing beat to to and gains numbers. that for sale. costs up. default excludes those It's all everything We're last changed there's of has it's did year. seeing the good the that year. The and for for same value We year. the like still basis new the the same assets and items same our assets, strategy team industry includes maximize still we end the could same supply-demand those when It last make to We're the our we're on entered as fundamentally, value where we the can hope estimates shareholders. we still same the of we'd saw course, projections think that on because estimate demand did you running strong issues to So company. guidance not of on an higher produce and management seeing we'll interest And we outperform rates,

Operator

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

Hillary Cacanando

First if talk extension wide-body the you the any wondering this in including narrow-body your especially guidance, with was is, the lease are talked extensioning between what's narrow the And any quarter are I rates the and could what you assumptions? you quarter, of including my then the rate, and you buyback about -- in about lease second question differences extension last is, ]. were strong wide-bodies, [ for -- terms very how

Peter Juhas

Sure. Thanks, Hillary.

So question. share I'll the look, repurchase take

$XXX existing new so our So, little over of a left far worth for bought And stock, million have back announced this we have a saw in and $XXX authorization. authorization million year, we've million. we around you $XXX

to we'd all this So deploy that year. of expect

additional CapEx course, Beyond also the we mention hope we have gets If deploy. out all count to that, do on But we we'll those assumptions excess any the repurchases capital. more lead excess assets in here. can earnings, that that and guess, are some more more share and in And have based have we delayed, of we've I of sales, before projections, more insurance And proceeds, can we'll recover likewise, that gains better or sell that's on. capital laid on can't additional to but the will CapEx sales excess if assumed capital. which would then we earnings, if produce those

of much all So ultimately would do it's to you function really we of touch... do.Gus, want how things, a those

Aengus Kelly

as And There's on have aircraft quarter. any going I rate, everything nearly the the in very They customers look, extends And last that is hardly strong think extremely have wide-bodies, market narrows, Sure. want on that extension, Pete they extend. the the well. pay to course. we said, to on But particularly don't it's of as with strong.

Operator

We'll go Baker JPMorgan. next Jamie to with

Jamie Baker

the that we during to follow-up Q&A. took a Pete, question So spread net already

year. You guided next trends to stable

And sequentially in, You having are answer still in sales metric. Mark might those I net spreads is not contributing. and talked fourth But particular first what in about question? on the to factors coming that impact articulated should the lease for asset you extensions the the factor quarter. down drivers are addition be response in the and they're we to maybe this really But also what curious

Peter Juhas

Sure. Yes.

So Jamie, it of that well. yields, I laid you're revenue, that are if out, those may as Both we that affect -- fundamentally, as mean, capital. selling we're spread. assets obviously, the right? right. can redeploying we higher lose you older So have we're can affect net that But

So sense. we think that makes

in the if advance, you in affects that then rents been new as an over you existing you're front, aircraft are impact you're the extension further that it essentially, particularly, straight-line On the can you we've to have advance than aircraft because doing, have further that lease on so -- if normally extending more and lease. would, because those extending are and you

equal. spread, that And an can else net impact have on so all

But too. do we see I to fundamentally, factors it. think contributing are expect those

based we it the next I stay flat what year. the will think -- on for for see

Aengus Kelly

I really on focus not would would Yes. focus, real the But fact If net the aircraft. any I Jamie, the have spread, sold is that older we there. managed

what's metric risk is, our what want And earnings we to Value fleet. the right per share. the of look profile focus and creation, we so at on?

a buybacks gain. I'm massive redeploying I'm into at gains. selling therefore, at the older them So massive aircraft

trades equity my from on we book the year, saw did example, of we last You turned X.XXx. Xx into

something wouldn't like about that. if have net done spread, So I was I worried

meantime, it. actually drive that's assets, we're for profile. to a way business make So was the we residual shareholders, risk here the lower money with those than the better we it in as and sell before And the is

Jamie Baker

us $X.XX, for quick average know, this. off? Russia. that you to the us things investors. some in as recovery initially been trying settled. on pushback then be don't No follow-up has been our And that? have of remind I'm That's accurate percentage what articulate I just from a to aircraft on at your $X.XX Is great, least on wrote aggregate a the Gus. just for on math Can looks It book the dollar, that around, you

Peter Juhas

XX% Jamie. own But full our right, remember is amount still insurance about that's Yes, for claims right, the retain that policy. we on the

it's as is so necessarily -- that's lost. not money though that So

Operator

to go next Ma Barclays. We'll Terry with

Terry Ma

So program. can you an if I your provide conversion wanted on update to cargo see

I think last out onetime costs some year. you guys called

guide? So factored actually of maybe and is opportunity into can I much how the 'XX hoping you quantify revenue the was that

Aengus Kelly

several Well, in as we the XXXs conversion. it currently relates are that to the have cargo development, program,

our of expect We second the the rolling expect we start there and on. -- year this in and of XXXs the from guidance, and program into the conversion in half first half to out

not XXXs So yes, the revenue our those include guidance part first does of in year. from this any

Terry Ma

Got sales sale helicopters? how what's then your And terms those? of should on in mix the assets assume of guide we and contribution $X we should billion, it. on think in the of about of engines gain And aircraft, each

Aengus Kelly

the Well, be a what as focus mean, in we've assets. generally assets, speaking, the with older to will it generally done of past it goes through I similar on mix

don't gain As sale. gain give to to on guidance on the it pertains sale, we

there very performance. but historical our gains our have we look forecast. significant you in can However, there, are you generated X see can that And at gains

Operator

Sachs. Goldman We'll with go O'Brien Catherine next to

Catherine O'Brien

Not your to lease expecting, impact was? the kicked we that but OEMs faster keep even environment And production supply targets strong rate from the years than not harping delivery signed with let's to tight off really it, to on next maybe, from were the even yields haven't yield, booked delivery market delivery start demand do to this how majority how the was the way lease hit lease many and point? 'XX seen Or through if all the year slots your accelerating, out taking later? years out when of we second half at slots? are aircraft, And many call half your X 'XX and are you how start being

Aengus Kelly

QX, would aircraft to XXXX You even right delivered that could signed think XXXX, Catherine, will 'XX XXXX, in be out, into in you were get into aircraft you're in of have XXXX half that the are have that years 'XX, half half about of X X in placements, signed et -- 'XX, would been cetera. of XXXX first back XXXX, 'XX to back XXXX

in saying in comment again, a basis about portfolio spread. this make I'd that that you're the lease correct yields, that is do net other the regard. I But there So lag same about

our of older of to because all and of years sell on higher you up where the they Of at is last lease lease. X they're course, assets, the the course, X the years than reduce that's the thing pick we, front at as EPS, yielding it yield the key at. But were lease look we the

Catherine O'Brien

wanted to totally thinking sense. that to I Right, terms we're sure I of when see... agree. about just incorrectly make going kind start wasn't in inflection of Makes to actually

Aengus Kelly

a your I risk-adjusted on and that's the improve return better think doing of higher-quality up has drive you far EPS, can lease the quality keep portfolio years. yield achieving flat, if AerCap And been you're business. a for what XX

Catherine O'Brien

GTF, couple And only the of it's last MAX you how the Totally as speak If even are have been since with seeing translate it it incremental but then and well? supply narrow-bodies months, fair tighter you a on lease over is realize wide-bodies given just sense. spoke? you're that to makes rates? to I yes, to gotten and issues lease Right. has the can spill just to or rates seeing that trended already is say you mostly

Aengus Kelly

move, fair, say, has it. been there been a upwards. dramatic in be about a Catherine, wouldn't but I no doubt move to there's There's XX days,

rates the happened probably And headline but So XX-day I'd rate?" lease of is sure, the what interesting, For interest has. in rates with falling a like we really rates bit say is days, a again "Okay, it lease say, really we've of is that underneath rates. there a but period, interest we XX to see and what but even interest rate fall rates what's happened similar, lease last what interested slightly to with the you're increasing with And not fell. lease And that's over lease course, important, seen in steady rates. what seen rates, in or is fall have very

didn't to pass we rates. on So in the have interest fall

Catherine O'Brien

in third guidance. one In had, in squeeze billion one I'll Maybe X-K for purchase on obligations. great. quarter really I think, That's Pete your just quick $X.X you the third

there's year. understand incremental Or for You're is Were lock of billion so in this you to $X.X guiding -- moving aircraft? a to pieces I able just function skyline. that the CapEx many in

out Just that what delta. drove trying to figure

Peter Juhas

Yes.

bunch as here. XXXX. engine that. purchases think Catherine; in look engines, about around questions is do things there out that of I move we a I we billion, mean that Some of $X.X are And at some the have significant

the issues. So today, OEM around it clearly lot, move that's could but estimate our given a

Aengus Kelly

that some right. going I move to Catherine, a I'd man, our is If the betting of inevitably was imagine to CapEx Yes.

Operator

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

Christopher Stathoulopoulos

thinking supply-demand Aengus, the for how the about you're walk thank you points. on dynamic through

X think the spoke outlined. visits. so But points points backlog X, on shop and of stressed X you I MRO you network, to

that of you resolution points end longer, think moving sort view the your those those Is perhaps X mid we both like of MRO into for hear how decade? to decade? would persist resolving we see -- and might we which of Or As pressure and about is into faster? or of I hear have that it to if think -- here, perhaps reasons love expect to on should about or of that end closer those, these this points number you extend them, are any

Aengus Kelly

Sure.

little MRO good cell, issue you're need MRO. a the expect have I workforce would to on It's It's that different. get highly conduct MRO. On MRO, you of airframe do do to big, On To right very engineers. airframe a it sooner. MRO, easier to than test engine bit resolved trained a is to -- engine

engines, production i.e., engines. under wing go supply a get build going or when it spare Airbus MRO instead So Those though, The engine aircraft solved aircraft. the can here's Boeing big number an repair engines. and X, I an Number think to issue. could engine manufactured, parts, of to of go, part go or parts is a will There's to first. part a the X, the is of finite made that, airframe to MRO,

on to get parts go many would engines to Now you need it as than have shop third, to if the then do. into go to currently And repaired. the was is, longer wing fleet staying spare engines, you which

are parts, way do the produced part.So going any up far every time the -- being back as of shops of decade to significantly And engine the I supply not that also today. that for manufacturers chain demand to as part castings, increase those the So shops X are sources need this MRO the there understand.

the But when to So I in an world, it of our aircraft gives as the us, bear which AerCap enviable engine cannot marginal engines because that through leasing. can pertains think is of the supplier advantage persist of course, our leasing, comes it it we all issues that see engine spare gives a in with mind they conjunction the offer position over we decade. unique to to the us And competitors largest will products aircraft. vital

Christopher Stathoulopoulos

as types with And up, had as some order in potential secondary we steady think aircraft change and as kind said earlier to news certain rates growing of I the and a about It XXXX, there's slight the carriers interest around a follow-up, think Okay. but you their in well a fall book. here we the concerns around lease been so question, response to like issues rates. market for sounds are an in as composition signaling of MAX recently have control quality here

point meaningfully as that not months have that, secondary few finer back? the since shift have residual aircraft So perhaps could color detail a perhaps put last a market? or sort in or around given what you you all or of updated values seeing you Any you're to types

Aengus Kelly

splitting Well, the just Sure. again it's family up. worth

XXX know family that the even family. AXXX time. The is the XXX, in is it's one particular XXX, all product a much aircraft. does not It's has we product. XXX XXX-seater in been product. not for the instances. outselling XXX-seater, product the and wins XXX Airbus say It But Airbus enough some as Boeing AXXX win Boeing on some is just the So outsells the to

MAX XXX many the our not though, when perspective, currently good, airplane. Where an very That is.So from better, will is And has operators X XX unlikely is competing and to competitor as AXXX from down, Airbus we So Boeing if is, X. airplane is the on certified, the as capable fall it capable it's than not an that aircraft. are aircraft. AXXX the say, Even Boeing. excellent yet as the as been MAX the not bullish be MAX it's it's

term. is the and Christmas superiority bought think them fact, of Boeing Boeing up. few over are versus of excellent we majority that Airbus to market the But we fact XXX In of an just that that aircraft. a a And the the line the heading the we popped around because it's so larger product product product, going towards market see long the early significant for to the

Operator

next America. go of Bank We'll with to Ron Epstein

Ronald Epstein

last that I a narrow-body I comment, of Boeing's at look airplanes, they're out reading me mean, like this the trying ]. like lose and Maybe through wrong, kind to offering. larger just to I'm Boeing's are going of mean, you Gus, are XX% here to that backlog carriers migrate -- are it sense sales something do does Airbus' larger tell isn't and on crushes kind backlog, their product narrow-body following overwhelming on have that it's of or up segment? words, of seem really And XX,XXX really if to it [ I approximately better -- of an majority lack AXXXs, mean when of them for

Aengus Kelly

Yes. X XXX-XXX a XXX just very of out, market a a out strong But is user good limited the XXX is But as large, MAX and sure very X very there, the there's the the rightly Boeing when By the changed in there's we MAX and you the MAX market. the market. because That's of up-gauging, see actually. for now, up-gauging. market, still are Ron, -- it's XXX-seater, point rightly supply demand the big, the for the and had Ron, as heart not base been for And many X in XXX, and target But were is still has airplane. the the where as clearly just that's XXX them. you dominant majority demand of customers point significant a

Ronald Epstein

there's guess demand I may it. And be they it. do to the what's sense speculation may there, XXX? were there not, XXX? And would which a XXX, the if Got for on Got there then they particularly your Is demand or that? much

Aengus Kelly

that troubles they and I OEMs delivering they've had issues, year have. service, should program, contemplate grounding and entry on them promises spec, think they focus with the I into Airbus' made of the on for new the what to on I Rolls-Royce with the new after the the months time. the XX delivering think honestly the Listen, think year given any the customers manufacturers delays they their now platform were XXX engines, focus XXXs, a have on engines, making MAX after should XXX

Ronald Epstein

maybe or with horizon given kind in of one you the on MAX's going -- general, given that's on? planning inspections own the everything MAX, your last follow-up all the the are with to delivery customers then your in How And that. uncertainty FAA and

Aengus Kelly

aircraft and as work will The clarity the moment, with the soon just 'XX accurate possible. not And 'XX time that's to we closely the profile delivery Boeing, be Ron, delivery can. they again. deliver want and the them, we'll the But for At dates we talk with what by them, hopefully, have and them. we We most can we as customers work as get Boeing. with try

Operator

Citi. Trent We'll Stephen to go next with

Stephen Trent

hear you me okay? Can

Aengus Kelly

Yes.

Peter Juhas

Yes.

Stephen Trent

I'm phone problems. because some Great, having terrible

the I like these view long credit you sort you an on if in Moody's over by rated I mind Gap] guys drop. call would of in I But of be the term? part Do could apologize S&P of sort missed issues. of to have of idea [Audio And just And where long-term if because I terms the So rating. understand and your

Peter Juhas

that's reason can outperforming rating that's get if single is look would to stretch, warrants competition we that, the I there's big credit and we're Stephen. the difference really, got by out of into if agencies, through net board, And companies us It's improved those right? hope there. to But on say, think typically you resilience that cash off look the metric, BBB+ the FFO BBB+. Moody's, that okay, a that of may a business at how And big operating that across when what any the we pushing the other flow, a get the through for.So COVID, debt, that things great. positive outlook of upgrades both operating it's And GECAS to from whether are them. board and that's case, has they think across We're be rated Sure. certainly, performed. also there with Thanks, at we're it's those But acquisition, I meaningful things, the for there, upgrade. think that if whether coming cut so to look, the and same, through an we function look a of the we you business of any get the we're category, mean we S&P in fact can know look, be any get I showed and yes, profile As? flat good now. don't I think a Russia, the those to And at that spread, I different all could but you think. we really,

Operator

[Operator Instructions] are time, this questions. And no there further at

Aengus Kelly

X, thank there. that May look you forward Thank us you Markets to and all York joining you the time. and like host know will call. on we all to for a you Day you, much let your in New seeing for for Capital operator, all we Thank I'd very

Operator

you participation. This does thank your conclude today's for conference. We

AerCap (AER) 23 Feb 242023 Q4 Earnings call transcript