Q1 2024 AerCap Holdings NV Earnings Call

Good day and welcome to the Aercap Holdings N V Q1, 'twenty 'twenty four.

Operator: Good day and welcome to the AerCap Holdings NV 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.

Adult ratio.

Today's conference is being recorded and a transcript will be available following the call on the company's website at this time I would 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 welcome to our first quarter 'twenty 'twenty four conference call with me today is our Chief Executive Officer, Angus Kelly, and our Chief Financial Officer P. U S.

Joseph McGinley: Thank you, operator. And hello, everyone.

Joseph McGinley: Welcome to our first quarter 2024 conference call. With me today is our Chief Executive Officer, Aengus Kelly, and our Chief Financial Officer, Pete Juhas. Before we begin today's call, I would like to remind you that some statements made during this conference call, which are not historical facts, may be forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements.

Joseph McGinley: AerCap undertakes no obligation, other than that imposed by law, to publicly update or revise any forward-looking statements to reflect future events, information, or circumstances that occur after this call. Further information concerning issues that could materially affect performance can be found in AerCap's earnings release dated May 1st, 2024. A copy of the earnings release and conference call presentation is available on our website at www.aercap.com. This call is open to the public and is being webcast simultaneously at www.aircap.com and will be archived for review.

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

Speaker Change: We're looking statements involve risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements.

Speaker Change: Undertakes no obligation other than that imposed by law to publicly update or revise any forward looking statements to reflect future events information or circumstances that arise after this call.

Speaker Change: Information concerning issues that could materially affect performance can be found in aircrafts earnings release dated may 1st 'twenty 'twenty four and a copy of the earnings release and conference call presentation are available on our website at Aercap dotcom.

Speaker Change: This call is open to the public and is being webcast simultaneously at Aercap com and will be archived for replay.

Joseph McGinley: We will shortly run through our earnings presentation and will allow time at the end for Q&A. As a reminder, I would ask that analysts limit themselves to one question and one follow-up. I will now turn the call over to Aengus Kelly.

Speaker Change: Shortly run through our earnings presentation I'm on a lot of time at the end for Q&A as a reminder, I would ask that analyst limit themselves to one question and one follow up.

Speaker Change: Now I'll turn the call over to Angus Kelly.

Aengus Kelly: Thank you for joining us for our first quarter 'twenty 'twenty four earnings call.

Aengus Kelly: Thank you for joining us for our first quarter 2024 earnings call. I am pleased to report that the AerCap platform has delivered another quarter of consistent earnings and profitability. During the first quarter, we generated $3.29 of adjusted earnings per share, up 40% over last year, and an adjusted net income of $658 million. Importantly, we continued our consistent increases in book value per share, which was up 27% year-on-year to $87.47. As a result of this strong first quarter performance and The Improving Outlook, we are increasing our full year 2024 guidance to approximately $9.20 per share.

Aengus Kelly: I am pleased to report that the Aercap platform has delivered another quarter of consistent earnings and profitability.

During the first quarter, we generated $3 and 29 of adjusted earnings per share.

Aengus Kelly: Up 40% over last year, and adjusted net income of $658 million.

Aengus Kelly: Importantly, we continued our consistent increases in book value per share, which was up 27% year on year.

Aengus Kelly: The $87.47.

Aengus Kelly: As a result of this strong first quarter performance and the improving outlook, we are increasing our full year 2024 guidance to approximately $9.20 per share.

Aengus Kelly: As I mentioned on our last call.

Aengus Kelly: As I mentioned on our last call, the focus of the entire AerCap management team is on maximizing value for you, our shareholders, through earnings per share and book value per share growth. Not just for an individual quarter but for the long term, on the operational side, which underpins everything we do. The platform continues to work well, executing 152 transactions in the quarter. Demand for travel continues to rise, particularly in China, where new passenger records were set in the first quarter. Airlines in China flew almost 180 million people in Q1, including 14 million international trips, which is still 22% behind the 2019 international level.

The focus of the entire Aercap management team is on maximizing value for you our shareholders.

Aengus Kelly: <unk> earnings per share and book value per share growth not just for an individual quarter, but for the long term.

Aengus Kelly: On the operational side, which underpins everything we do.

Aengus Kelly: The platform continues to work well.

Aengus Kelly: Executing 152 transactions in the quarter.

Aengus Kelly: Demand for travel continues to rise, particularly in China, where new passenger records were SaaS in the first quarter.

Aengus Kelly: Airlines in China through almost 180 million people in Q1, including $14 million International trips, which is still 22% behind the 2019 international levels.

Aengus Kelly: The continued supply demand imbalance creates significant pricing tensions wherever he regularly have multiple bidders for available aircraft.

Aengus Kelly: The continued supply-demand imbalance creates significant pricing tensions, where we regularly have multiple bidders for available aircraft. On the used aircraft side, we have signed lease agreements for A320COs, Embraer E1s, 737 Freighters, and 777s. On the new side, demand remains robust. We are sold out entirely of 787s and A330neos. Embraer E2s and Airbus A220s, with enviable slots on the 320 NEOs and 737 MAX programs. Frankly, the most challenging issue we face is trying to predict with certainty the month or even quarter that these new aircraft will actually be delivered from the manufacturer.

Aengus Kelly: On the used aircraft side, we signed lease agreements for <unk> hundred 20, Ceos Embry Aerie ones 737, freighters and Triple Sevens.

Aengus Kelly: On the new side demand remains robust.

Aengus Kelly: We are sold out entirely on 780 Sevens <unk> hundred 30 Neo <unk>.

Aengus Kelly: Embraer E twos, and Airbus <unk> hundred Twenty's.

Aengus Kelly: With enviable slots on the 300000 meals and 737 Max programs.

Aengus Kelly: Frankly, the most challenging issue we face is trying to predict with certainty the month or even quarter that these new aircraft will actually deliver from the manufacturers.

Turning to the engine business. It continues to present opportunities reflected in healthy activity in the period.

Aengus Kelly: Turning to the engine business, it continues to present opportunities reflected in healthy activity in the period, and I look forward to discussing this subject with you next week. Finally, on the helicopter side, we saw good demand in the first quarter for our Sikorsky 92, where we signed extension and new agreements with a number of operations. In summary, this was another strong quarter for AerCap, and demand remains robust. The past generation is strong, and earnings per share grew by over 40% year on year.

Speaker Change: And I look forward to discussing this subject with you next week.

Speaker Change: Finally on the helicopter side.

Speaker Change: We saw good demand in the first quarter for our Sikorsky 90 twos, where.

Speaker Change: Where are we signed up extensions and new agreements with a number of operators.

Speaker Change: In summary, this was another strong quarter for Aercap.

Speaker Change: Demand remains robust.

Speaker Change: Cash generation is strong and earnings per share grew by over 40% year on year.

Aengus Kelly: The company and industry continue to benefit from a positive macro environment, and we are well positioned to take advantage of it for the years to come. With that, I will hand it over to Peace before we have the Q&A session. Thank you.

Speaker Change: The company and industry continues to benefit from a positive macro backdrop.

Speaker Change: And we are well positioned to take advantage of us for the years to come.

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

Piece: Thanks, Gus good morning, everyone. Our GAAP net income for the first quarter was $604 million or $3 in two cents per share.

Peter L. Juhas: Thanks, Gus. Good morning, everyone.

Peter L. Juhas: Our gap net income for the first quarter was $604 million, or $3.02 per share. The impact of purchase accounting adjustments was $86 million for the quarter. That included lease premium amortization of $33 million, which reduced basic lease rents, maintenance rights amortization of $35 million, which reduced maintenance revenue, and maintenance rights and lease premium amortization of $17 million, which increased leasing expenses. During the first quarter, we recognized $23 million in net recoveries, which is included in net recoveries related to the Ukraine conflict.

Piece: The impact of purchase accounting adjustments was $86 million for the quarter that included these premium amortization of $33 million, which reduced basic lease rents maintenance rights amortization of $35 million, which reduce maintenance revenue and maintenance rights and lease premium amortization of $17 million, which increased leasing.

Piece: Yes.

Piece: During the first quarter, we recognized $23 million of net recoveries, which is included in net recoveries related to the Ukraine conflict.

Peter L. Juhas: The tax effect of the purchase accounting adjustments and net recoveries related to the Ukraine conflict was $9 million. So, taking all of that into account, our adjusted net income for the first quarter was $658 million, or $3.29 per share. I'll briefly go through the main drivers that affected our results for the first quarter.

Piece: The tax effect of the purchase accounting adjustments and net recoveries related to the Ukraine conflict was $9 million.

Piece: So taking all of that into account our adjusted net income for the first quarter with $658 million or $3.29 per share.

Speaker Change: I'll briefly go through the main drivers that affected our results for the first quarter.

Peter L. Juhas: Basic lease rents were $1,586,000,000, an increase of $10,000,000 from last quarter. As I mentioned, basic lease rents reflected $33 million of lease premium amortization, which reduces basic lease rents. Lease premium assets are amortized over the remaining term of the lease as a reduction to basic lease rents.

Speaker Change: Basic lease rents were $1.586 billion, an increase of $10 million from last quarter.

Speaker Change: As I mentioned basic lease rents reflected $33 million of lease premium amortization, which reduces basic lease rents lease premium assets are amortized over the remaining term of the lease as a reduction to basic lease rents.

Peter L. Juhas: Maintenance revenues for the first quarter were $179 million, and that reflects $35 million in maintenance rights assets that were amortized in maintenance revenue during the quarter. So in other words, maintenance revenue would have been $35 million higher or $214 million without this amortization. Maintenance revenues were higher than normal during the quarter due to cash collections and the timing of maintenance events.

Speaker Change: Maintenance revenues for the first quarter were $179 million and that reflects $35 million the maintenance rights assets that were amortized to maintenance revenue during the quarter. So in other words maintenance revenue would have been $35 million higher or $214 million without this amortization.

Speaker Change: Since revenues were higher than normal during the quarter due to cash collections and the timing of maintenance events.

Speaker Change: Net gain on sale of assets was $160 million for the quarter. We sold 43 of our owned assets during the first quarter for total sales.

Peter L. Juhas: The net gain on sale of assets was $160 million for the quarter. We sold 43 of our owned assets during the first quarter for total sales revenue of $920 million. That resulted in an unlevered gain on sale margin of 21% for the first quarter. As of March 31st, we had $459 million worth of assets held for sale. Other income was $93 million for the quarter, which consisted primarily of interest income and certain one-time items. Interest expense was $492 million, which included $3 million of mark-to-market losses on interest rate derivatives.

Speaker Change: <unk> of $920 million that resulted in unlevered gain on sale margin of 21% for the first quarter.

Speaker Change: As of March 31, we had $459 million worth of assets held for sale.

Speaker Change: Other income was $93 million for the quarter, which consisted primarily of interest income and certain one time items.

Speaker Change: Interest expense was $492 million, which included 3 million of mark to market losses on interest rate derivatives.

Peter L. Juhas: Leasing expenses were $149 million for the quarter, including $17 million in maintenance rights and lease premium amortization expenses. Income tax expense for the first quarter was $94 million, which represented an effective tax rate of 14.3%. That included a discrete tax benefit of $8 million that we recognized in the quarter. Excluding this tax benefit, our effective tax rate was 15.5%.

Speaker Change: Leasing expenses were $149 million for the quarter, including $17 million in maintenance rights and lease premium amortization expenses.

Speaker Change: Income tax expense for the first quarter was $94 million, which represented an effective tax rate of 14, 3%.

Speaker Change: That included a discrete tax benefit of $8 million that we recognized in the quarter. Excluding this tax benefit our effective tax rate was 15, 5%.

Speaker Change: We continue to maintain a strong liquidity position as of March 31st our total sources of liquidity were approximately $19 billion, which resulted in the next 12 months sources to uses coverage ratio of 1.7 times that remains well above our target of one two times coverage and.

Peter L. Juhas: We continue to maintain a strong liquidity position. As of March 31st, our total sources of liquidity were approximately $19 billion, which resulted in a next 12 months sources-to-use coverage ratio of 1.7 times. That remains well above our target of 1.2 times coverage and represents excess cash coverage of around $8 billion. Our leverage ratio at the end of the quarter was 2.4 to 1, a decrease from 2.47 to 1 at the end of 2023.

Speaker Change: Excess cash coverage of around $8 billion.

Speaker Change: Our leverage ratio at the end of the quarter was $2 41, a decrease from 2.47 to one at the end of 2023.

Peter L. Juhas: Our operating cash flow was approximately $1.4 billion for the first quarter, driven by continued strong cash collection. Our secured debt-to-total-assets ratio was around 14% at the end of March, in line with prior quarters. Our average cost of debt was 3.9% for the first quarter, and during the first quarter, we repurchased 4.3 million shares at an average price of $77.89 for a total of $336 million. Our book value per share as of March 31st was $87.47, an increase of 27% over the last 12 months.

Speaker Change: Our operating cash flow was approximately $1 $4 billion for the first quarter driven by continued strong cash collections.

Speaker Change: Our secured debt to total assets ratio was around 14% at the end of March in line with prior quarters.

Speaker Change: Average cost of debt was three 9% for the first quarter and.

Speaker Change: During the first quarter, we repurchased four 3 million shares at an average price of $77 89.

Speaker Change: For a total of $336 million.

Our book value per share as of March 31 was $87 47.

Speaker Change: An increase of 27% over the last 12 months.

Speaker Change: In February we projected adjusted earnings per share of $7 50 to $8 50 for the full year 2024 before any gains on sale.

Peter L. Juhas: In February, we projected adjusted earnings per share of $7.50 to $8.50 for the full year 2024 before any gains on sales. Given the strong performance this quarter, including higher maintenance revenues, we're raising our guidance to the top end of that range. So we now expect adjusted EPS before any gains on sale of approximately $8.50 for the full year 2024. We had around $0.70 of gains on sale in the first quarter, so when we add those gains, that takes us to a new estimate of approximately $9.20 of EPS for the full year 2024, not including any gains on sale for the remainder of the year.

Speaker Change: Given the strong performance this quarter, including higher maintenance revenues, we're raising our guidance to the top end of that range. So we now expect adjusted EPS before any gains on sale of approximately $8 50 for.

Speaker Change: For the full year of 2024.

We had around 70 cents of gains on sale in the first quarter. So when we add those gains that takes us to a new estimate of approximately $9.20 of EPS for the full year 2024, not including any gains on sale for the remainder of the year.

Peter L. Juhas: So overall, the strong performance that we had in 2023 has continued in the first quarter of 2024, and you can see that in our results. We continue to see a strong environment for leasing as well as for aircraft sales, which is reflected in the gain on sale margin this quarter. We also continued to generate a significant amount of excess capital during the quarter and ended with a leverage ratio of 2.4 to 1. With these strong results and a positive outlook going forward, we're now raising our guidance to the top end of our previous range. With that, Operator, we can now open up the call for Q&A.

Speaker Change: So overall the strong performance that we had in 2023 has continued in the first quarter of 2024 and you can see that in our results.

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

Speaker Change: We also continue to generate significant amount of excess capital during the quarter and ended with a leverage ratio of 2.421 with these strong results and a positive outlook going forward. We're now raising our guidance to the top end of our previous range and with that operator, we can now open up the call for Q&A.

Thank you given the company is hosting the capital markets Day next week, we assay analysts focused a question on today's call on the quarter, if you'd like to ask a question. Please signal by pressing star one on your telephone keypad.

Operator: Thank you. Given the company is hosting Capital Markets Day next week, we ask that analysts focus their questions on today's call on the quarter. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We'll go first to Terry Ma with Barclays.

If you are using a speaker phone. Please make sure your mute function is turned off to <unk>.

Speaker Change: Once again press star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Terry Ma: We'll go first to Terry MA with Barclays.

Terry Ma: Hey, Thank you good morning.

Terry Ma: Hey, thank you. Good morning. Your net spread was down about 10 basis points quarter over quarter, but if I remember correctly, I think PBH should have been a 30 basis point impact, so maybe just walk through the moving pieces to net spread this quarter and maybe just the outlook for the rest of the year.

Terry Ma: Your net spread was down about 10 basis points quarter over quarter, but if I remember correctly I think PVH should've been a 30 basis point impact. So maybe just walk through the moving pieces to net spread this quarter and maybe just the outlook for the rest of the year.

Peter L. Juhas: Sure. So, you're right. You're right. We mentioned last quarter that PBH would have an impact on net spread, and it was down 10 basis points relative to last quarter. So, that's a little less than we had expected, and that was due to having some more PBH rents in the quarter than we had initially expected. So, that will drop off a little bit next quarter. I do think it's worthwhile mentioning, though, that we aren't managing to net spread. You know, that is, obviously, it's a metric that we look at, but it's not saying that we are managing to specifically.

Speaker Change: Sure So you're right.

Speaker Change: We had mentioned last quarter that PVH would have an impact on net spread and it was down 10 basis points relative to last quarter. So that's a little less than we had expected.

That was due to having some more PVH rents in the quarter than we had initially expected.

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

Speaker Change: Got it that's helpful.

Peter L. Juhas: Got it. That's helpful. And then you guys raised the Guide X Cain on Sale toward the high end, but it just still feels pretty conservative to me, just given what you did in Q1. I understand there are some one-time items. So maybe can you just walk through what's contemplated in the Guide for the rest of the year and maybe just speak to where the areas of conservatism are?

Speaker Change: And then thank you.

Speaker Change: You guys raised the guide ex gain on sale towards the high end, but it just still she was pretty conservative to me just given what you did in Q1 and I understand there are some one time items. So maybe you can just walk through what's contemplated in the guide for the rest of the year and maybe just speak to what were the areas of conservatism or.

Speaker Change: Sure well I'd say across the board if you look back at the line items that I presented last quarter I'd say, we're pretty similar on most of them for the full year. We did have some higher maintenance revenue during the first quarter.

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

Speaker Change: It was due to higher cash collections as well as the timing of events and as we've talked about many times maintenance can move around that can be lumpy quarter to quarter. So so.

Peter L. Juhas: So maintenance came in a little stronger in the first quarter, and we had a little bit higher other income in the first quarter as well. So those were some of the drivers and the small tax benefit that I mentioned. So those were some of the things that helped in the first quarter. I'd say as we look out for the rest of the year, and I mentioned this when we gave the guidance on the last earnings call, we do have some contingencies in there for defaults and things like that. And so those are still in there, and we've kept them in for the rest of the year. Hopefully, we'll do better than those, but at this point, we haven't changed anything. Great

Speaker Change: So maintenance came in a little stronger in the first quarter, we had a little bit higher other income in the first quarter as well. So those were some of the drivers in a small tax benefit that I mentioned.

Peter L. Juhas: Great, thank you.

Speaker Change: So those were some of the things that that helped in the first quarter I'd say as we look out for the rest of the year and I mentioned this when we gave the guidance.

Speaker Change: On the last earnings call, we do have some contingencies in there for defaults and things like that and so those are still in there and we've kept them in for the rest of the year hopefully we will do better than those but at this point at this point, we haven't changed any of that.

Speaker Change: Okay, great. Thank you.

Speaker Change: Sure.

Speaker Change: We will go next to Jamie Baker with J P. Morgan.

Jamie Nathaniel Baker: We'll go next to Jamie Baker with J.P. Morgan.

Jamie Nathaniel Baker: Oh good afternoon, everybody. So I was hoping Gus I was hoping you could give us.

Jamie Nathaniel Baker: Oh, good afternoon, everybody. So I was hoping, Gus, you could give us an example of where lease rates are coming in now, on, you know, late 2025, expiring, you know, expiring deals, or even early 2026, relative to the economics that were captured in today's results. We're always being asked about the lag time, you know, between signing deals, and you know, when it hits the income statement, obviously, a portion of today' So I don't know, 10 year 320s where renewals are coming in now for leases that aren't going to hit until late next year.

Jamie Nathaniel Baker: An example of where lease rates are coming in now.

Jamie Nathaniel Baker: And you know late 2025 expert expiring deals or even early 2026 relative to the economics that were captured in today's results. You know, we're always being asked about the lag time between signing deals.

Jamie Nathaniel Baker: When it hits the income statement, obviously, a portion of today's results were locked in what 18 to 24 months ago, just hoping for a nice clean example, apples to apples. So I don't know 10 year three.

Twenties, where renewals are coming in now for leases that aren't going to hit until late next year.

Speaker Change: Well Jamie the good news is we're going to answer that in some detail next week at the Investor Day, Peter Anderson, Our Chief commercial officer is going to give examples of 320, 780 Sevens, which are our main aircraft types and make up more than the majority of our fleet and he will show you there the raise of inquiry.

Aengus Kelly: Well, Jamie, the good news is we're going to answer that in some detail next week at Investor Day. Peter Anderson, our Chief Commercial Officer, is going to give examples of 320s and 787s, which are our main aircraft types and make up more than the majority of our fleet. And he'll show you there the rate of increase and how it'll, when it'll come into the

Speaker Change: <unk> and how it'll when it'll come into the revenue line.

Jamie Nathaniel Baker: Okay, that's a bravo.

Speaker Change: Okay. That's all very helpful, which encourage you all.

Jamie Nathaniel Baker: See you at the PR next week. No, we'll, we'll be there. That's helpful. I mean, I'm sure you agree. I think that's the way at least most of my investors are trying to think about it. So you've given us something to look forward to.

Speaker Change: Peer to peer next week.

Aengus Kelly: So quick follow-up on the 35 aircraft that you sold in the quarter. Can you comment on any sort of geographic skew? I think in past quarters, we saw a bit of a North American emphasis. Just wondering if that's still the case. I realize it wasn't an enormous number of aircraft.

Speaker Change: We'll we'll be there that's helpful. I mean I'm sure you agree I mean I think.

Speaker Change: That's the way at least most of my investors are trying to think about it so you've given us something to look forward to so quick follow up on the 35 aircraft that you sold in the quarter can you comment on any sort of geographic skew I think it past quarters, we saw a bit of a sort of at north American emphasis just wondering if that's still the case.

Speaker Change: I realize it wasn't an enormous number of aircraft.

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

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

Jamie Nathaniel Baker: Okay, that was helpful. See you next week.

Jamie Nathaniel Baker: Okay, that was helpful. See you next

Speaker Change: Okay helpful See next week.

Speaker Change: <unk>.

Speaker Change: Thank you.

Speaker Change: We'll go next to Hillary.

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

Hillary: <unk> with Deutsche Bank.

Hillary Cacanando: Hi, thank you for taking my question. Did you buy back any shares so far in the second quarter? And in your guidance, are you assuming repurchases of 500 million authorized last quarter and perhaps any other repurchases beyond that in your guidance? And also, I was wondering if you will consider paying a dividend as well, given that Transcript by Transcription Outsourcing, LLC.

Hillary: Thank you for taking my question did you buyback any shares so far in the second quarter and in your guidance are you assuming repurchases of 500 million.

Hillary: Like last quarter, and perhaps any other repurchases beyond that in your guidance and also I was wondering if we will consider paying a dividend as well.

Speaker Change: Yeah, maybe.

Speaker Change: Sure.

Speaker Change: Sure Hillary. Thanks, So we've bought back around 1.2 million shares in the second quarter. So far so year to date, that's about five 5 million shares for about $435 million.

Peter L. Juhas: Sure, Hillary, thanks. So we've bought back around 1.2 million shares in the second quarter so far. So year to date, that's about five and a half million shares for about $435 million. In terms of the guidance that we've provided, we assumed that we would spend our full authorization for the year. So we've got around $350 million left in that. And then also, just as we generate excess capital, we would assume that we would deploy a lot of that as well for share repurchases during the year.

Speaker Change: In terms of the guidance that we've provided so we've assumed that we would spend our full authorization for the year. So we've got around three $350 million left in that and then also just as we generate excess capital we would assume that we would deploy a lot of that as well for share repurchases during the year obviously.

Peter L. Juhas: Obviously, the amount that we do ultimately will depend on how much, how we perform, how much capital we generate, and also other opportunities as well. So that's really where that stands. And then I guess in terms of thinking about capital allocations, that is something that we'll talk about next week as well, I think, more.

Speaker Change: The amount that we do ultimately will depend on how much how we perform how much excess capital, we generate and also other opportunities as well.

Speaker Change: So that's really where that stands and then I guess in terms of the in term in terms of in terms of thinking about capital allocation that is something that we'll talk about next week as well I think further.

Hillary Cacanando: Okay, got it. And then there was an article in the journal this morning, you know, saying that Embraer is exploring plans to introduce an aircraft to rival the Boeing 737 and A321 in the narrow-body market, according to sources. So, kind of, you know, just wanted to get your thoughts on how likely you think that is and if you think it would be good for the market to have another player come in, and ultimately, would that be good for the consumer.

Speaker Change: Okay got it and then.

Speaker Change: Article in the journal this morning, when I say that.

Speaker Change: Great.

Speaker Change: Thank you Keith that aircraft.

Speaker Change: Oh boy.

Speaker Change: 737 and opening.

Speaker Change: <unk> 21 in the narrow body market. According to selected so kind of.

Speaker Change: Just wanted to get your thoughts on how likely you think battle.

Speaker Change: You think that would be good for the market.

Speaker Change: Come on.

Speaker Change: And ultimately with that because that's a long way.

Speaker Change: I mean, Hillary I think over the long term it may well be helpful. However, I doubt, we will see anything in material numbers before the end of the 20 therapies.

Aengus Kelly: I mean, Hillary, I think over the long term, it may well be helpful. However, I doubt we'll see anything in material numbers before the end of the 2030s. It's just impossible to develop a new aircraft, particularly if you need new engine technology. You would have to be well down the track already to have that delivered this side of 2030. So that's not happening. It'll be the mid 2030s at best, if they even do it; the financial resources required to do that are extraordinary to compete with the capability of Airbus and Boeing. I think it's a long shot, to be honest. And even if it does come off, I don't think it'll be relevant for the next 15 years.

Speaker Change: It's just impossible.

Speaker Change: Two.

Speaker Change: Developed a new aircraft, particularly if you need a new engine technology, you would have to be well down the track already.

Speaker Change: To have that delivering decided 2030, so that's not happening.

Speaker Change: It'll be mid 2030 is at best if they even do it they have the financial resources required to do that are extraordinary to compete with the capability of Airbus and Boeing.

Speaker Change: It's a long shot to be honest then even if it does come off I don't think it will be relevant for the next 15 years.

Speaker Change: Got it just a one quick follow up question.

Hillary Cacanando: Got it. Just one quick follow-up question. Then where does China's COMAX stand in terms of people's perception of that and like where you think that product is going?

Speaker Change: And where does China call Matt.

Speaker Change: I like the people.

Speaker Change: Bob.

Speaker Change: That pilot.

Speaker Change: Well you've seen the announcements of recent sales to the Chinese majors.

Aengus Kelly: Well, you've seen the announcements of recent sales to the Chinese majors of COMAC. Again, though, you must bear in mind that this is such a long, long journey to become a global player in aerospace manufacturing. They have just one airplane today.

Speaker Change: The coal Mac again, though you must bear in mind that this is such a long long journey to become a global player in aerospace manufacturing.

Speaker Change: They have one airplane today.

Aengus Kelly: That is a technology shift behind the Neo and the Max. For them to compete with the NEO and the MAX, they would have to have three or four aircraft in the same family. That's not even in development. So again, to my point, we all hope there'll be competition, but I suspect it will be well into the late 2030s. I think it's the late 2030s, to be honest; before, like in Brazil, you would have a global competitor to Boeing and Airbus, and that's the best case.

Speaker Change: That is a technology shift behind the Neal on the Max.

Speaker Change: For them to compete within the year on the Max They would have to have three or four aircraft in the same family.

Hillary Cacanando: Got it. Great. Thank you so much.

Speaker Change: That's not even in development yes.

Speaker Change: So again to my point, we all hope there'll be competition, but I suspect it would be well into the late 'twenty therapies.

Speaker Change: It may be may 20th charities, given they have an airplane in operation before I think it is late 2000 <unk> to be honest before like in Brazil, you would have a global competitor to Boeing and Airbus and that best case.

Speaker Change: Great. Thank you so much.

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

Helane Renee Becker: We'll go next to Helane Becker with T.D. Cowan.

Helane Renee Becker: Operator, I was just wondering about the assets held for sale increasing from $296 at the end of the year to $459. Can you just give some color on what those assets are, what families they're in, etc.?

Helane Renee Becker: Thanks, very much operator.

Helane Renee Becker: Peter I was just wondering about the assets held for sale increasing from $2 96 at the end of the year to 459 can you just give some color on what that.

Speaker Change: Yes.

Helane Renee Becker: Or what families there and et cetera.

Peter Anderson: Sure well, it's just a it's mainly aircraft it's primarily aircraft in some engines that are included in those assets held for sale.

Peter L. Juhas: Sure, well, it's just mainly aircraft, primarily aircraft and some engines that are included in those assets held for sale. And those are assets that we would plan, we would expect most of those sales to come through next quarter. Obviously, you never know exactly what the timing of that will be. But I would expect, probably over the next two quarters, that most of those would be completed.

Helane Renee Becker: Those are assets that we would plan we'd expect most of those sales to come through next quarter. Obviously, you never know exactly what the timing of that will be but I would expect probably over the next two quarters that most of those wood wood would be completed.

Speaker Change: Okay and then my follow up question is just on the earnings as you think about it and maybe you'll talk about this next week.

Helane Renee Becker: Okay. And then my follow-up question is just on earnings as you think about it, and maybe you'll talk about that next week. We have two major questions. One's on capital allocation, which you already addressed, and you'll talk about it next week. And the other is how it gets better from here. And maybe you answered that in Jamie's question that you'll speak to that next week. But that's another question we get from investors. Like, how do you go from 320 in earnings this first quarter to a better number in the first quarter of next year?

Speaker Change: One we got two major questions. One is on capital allocation, which you already addressed that I'll talk about it next week and the other is on how it gets better from here and maybe you answered that and Jamie's question that Youll you Holger.

Speaker Change: Ill speak to it next week, but that's another question we get from investors like how does how do you go from $3 20 in earnings.

Speaker Change: First quarter to a better number in the first quarter of 'twenty five.

Speaker Change: Well.

Aengus Kelly: Well, Helane, we'll talk about both of those topics next week. Of course, I would always look to the history of this company. And you've seen the tremendous stability of our earnings over a very long period of time through various different issues. But we will talk about the outlook for the business extensively next week. So once again, I'd encourage you all to be at the Pierre.

Speaker Change: We will talk about both of those topics next.

Speaker Change: Next week.

Speaker Change: Of course, I would always look to the history of this company and you've seen the tremendous stability of our earnings over a very long period of time to various different issues, but we.

Speaker Change: We will and we will talk about.

Speaker Change: The outlook for the business at extensively next week. So once again I would encourage you all to get the Pierre.

Helane Renee Becker: All right. Thanks. Thanks, team. I appreciate the time.

Speaker Change: Alright, thanks, Thanks, Tim I appreciate the time.

Peter L. Juhas: Sure. Thanks, Helene.

Tim: Sure. Thanks Helene.

Tim: We'll go next to Chris.

Christopher Nicholas Stathoulopoulos: We'll go next to Chris Stathoulopoulos with the Susquehanna International Group.

Chris: Louis with Susquehanna International Group.

Christopher Nicholas Stathoulopoulos: Good morning, Thanks for taking my questions.

Christopher Nicholas Stathoulopoulos: Morning, thanks for taking my question. So, Aengus, in your prepared remarks, you spoke about, I guess, managing the timetable for deliveries. And it's a question I've gotten recently, but I'm pretty sure you've addressed this, uh you know on your last if not the call before that so if you could just kind of walk us through um how you're managing that risk around uh deliveries and you know is there a risk that carriers could potentially could potentially cancel orders or or defer them as they look to smooth out or de-risk their order books thanks

Speaker Change: And just in your prepared remarks.

Chris: You spoke about I guess managing the timetable for deliveries. That's a question I've gotten recently, but I'm pretty sure you addressed this.

Chris: On your last but not the call before that so if you could just kind of walk us through.

Speaker Change: How you're managing that risk around deliveries.

Speaker Change: There are risks that carriers could potentially could potentially cancel orders or defer them as they look to smooth out or de risk their order books. Thank you.

Speaker Change: Thanks.

Aengus Kelly: The concern with late delivery. I would say the concern is more about the unknown delivery. When it's late, and you can trust the date that you're given, airlines can tend to plan around it. The challenge is when the target is moving, and even moving very close to it, it can be far more difficult for an airline, for example, if you were expecting to get an aircraft for the summer, and now you don't get it till November. The airline will say, I don't really want it in November. I needed it for the summer. That's when I make my money. I lose money in the fourth quarter and in the first quarter.

Speaker Change: The concern with the late delivery.

Speaker Change: I would say more the concern is more about the unknown delivery when it lays and you can trust the date that you're given airlines contend to plan around us.

Speaker Change: The challenge is when the target is moving and even moving very close and it can be far more difficult for an airline for example, if you were expecting to get an aircraft for the summer.

Speaker Change: I know you don't get it till November the airline will say well I don't really want it in November I needed. It for the summer that's when I make my money I lose money in the fourth quarter and the first quarter, that's the real challenge and for our airline customer base and to smooth out those late deliveries that fall from the periods of the year, where they wanted to when they are unwanted.

Aengus Kelly: That's the real challenge for our airline customer base and to smooth out those late deliveries that fall from the periods of the year when they're wanted to when they're unwanted now, and we work with the airline and the OEMs around those issues. To the second part of your question, can the airlines cancel the aircraft? Yes, they can after a period of time and certain conditions have been met. However, we have a back-to-back cancellation right with the manufacturer.

Speaker Change: Now.

Speaker Change: And we work with the airlines and the Oems around those issues to the second part of your question can the airlines canceled the aircraft yes. They can after a period of time in certain conditions have been mess. However, we have a back to back cancellation right with the manufacturers. So if that were to come to pass.

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

Speaker Change: And we would not be exposed but.

Speaker Change: But we've had certain at the moment, we don't see that happening there is a global shortage of aircraft.

Speaker Change: Talk about that extensively next next week as well and what our outlook is.

Speaker Change: On the supply side of aircraft and also how the MRO situation is affecting.

Speaker Change: The demand for aircraft.

Speaker Change: Okay. Thank you and then on the $160 million in gains on sale of <unk> could you just walk us through what youre seeing in the secondary market or perhaps certain aircraft that are in vintage that are doing better any color around the various pieces.

Christopher Nicholas Stathoulopoulos: Okay, thank you. And then on the $160 million in gains on sale in 1Q, could you just walk us through what you're seeing in the secondary market, if there are perhaps certain aircraft that are in vintage that are doing better? Any color around the various pieces of the sales in the quarter would be helpful. Thank you.

Speaker Change: <unk>.

Speaker Change: Sales in the quarter would be helpful. Thank you well, that's one area I'm going to tackle and quite a bit of detail next week to try to explain to you all how the different things that are happening in the market are impacting different aircraft values and engine values. So.

Aengus Kelly: Well, that's one area I'm going to tackle in quite a bit of detail next week, trying to explain to you all how the different things that are happening in the market are impacting different aircraft values and engine values. So again, I would encourage you to come along next week, where we'll have a more extensive discussion around that and the factors that are driving aircraft values higher. OK.

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

Speaker Change: Okay looking forward to it thank you.

Christopher Nicholas Stathoulopoulos: Okay, I'm looking forward to it. Thank you.

Speaker Change: At this time there are no further questions I will now turn the call back to Angus Kelly for closing remarks.

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

Aengus Kelly: Thank you operator.

Aengus Kelly: And thank you everyone for joining us on the call. In closing, AerCap has produced another excellent quarter of earnings and cash. And, as I referenced, we're hosting our 2024 Capital Markets Day in New York next week in May, and we hope to see as many of you as possible at the event, where you'll also get a chance to hear from a broad selection of the AerCap management team.

Aengus Kelly: And thank you everybody for joining us on the call.

Aengus Kelly: In closing Aercap has produced another excellent quarter of earnings and cash flows and as I referenced we're hosting our 2024 capital markets day in New York next week on May eight and we hope to see as many of you as possible at the event, where you'll also get a chance to hear from a broad selection of the aircraft at the Aercap.

Speaker Change: Management team. So thank you very much.

Operator: So thank you very much. This concludes today's conference. Thank you for your participation. You may now disconnect. Unknown Executive, Hillary Cacanando, Ross Harvey, Stephen Trent, Aengus Kelly, Joseph McGinley, Terry Ma, AerCap Holdings NV

Speaker Change: This concludes today's conference. Thank you for your participation you may now disconnect.

Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Operator: Unknown Executive, Hillary Cacanando, Ross Harvey, Terry Ma, AerCap Holdings NV