• GAAP Net Income: $2.1 billion for the year, $671 million for Q4.
• Adjusted Net Income: $2.3 billion for the year, $624 million for Q4.
• Earnings Per Share (EPS): $10.79 GAAP EPS for the year, $3.56 for Q4; $12.01 adjusted EPS for the year, $3.31 for Q4.
• Operating Cash Flow: $5.4 billion for the year.
• Gain on Sale Margin: 43% for Q4, with a record $260 million gain on sale.
• Lease Revenue: $1.619 billion for Q4.
• Maintenance Revenue: $106 million for Q4.
• Interest Expense: $505 million for Q4.
• Leverage Ratio: 2.35 to 1 at the end of Q4.
• Book Value Per Share: $94.57 as of December 31.
• Share Repurchase: $1 billion new authorization, $297 million spent in Q4.
• Dividend: Increased to $0.27 per share.
• Projected 2025 Adjusted EPS: $8.50 to $9.50, excluding gains on sale.
• Projected 2025 Lease Revenue: Approximately $6.6 billion.
• Projected 2025 Total Revenue: Approximately $7.5 billion.

• Warning! GuruFocus has detected 6 Warning Signs with AER.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AerCap Holdings NV (NYSE:AER) reported a strong year with GAAP net income of $2.1 billion and adjusted net income of $2.3 billion.
• The company announced a new $1 billion share repurchase program, highlighting confidence in its stock value and future outlook.
• AerCap executed 812 transactions in the fourth quarter, providing significant insights into the global aviation market.
• The company has $45 billion in contracted future lease cash flows, offering substantial visibility into future financial performance.
• AerCap's leverage ratio is well below its target, and its credit ratings have reached the highest level ever at BBB+.

Negative Points

• The projected adjusted EPS for 2025 is lower than 2024, ranging from $8.50 to $9.50, not including gains on sale.
• The company faces ongoing OEM delays and engine reliability challenges, which could impact future operations.
• Leasing expenses were slightly elevated in the fourth quarter, which may indicate a new higher run rate moving forward.
• The effective tax rate increased due to the global minimum tax under Pillar 2, impacting net income.
• AerCap's net recoveries related to the Ukraine conflict were limited, with only $200 million recovered in 2024.

Q & A Highlights

Q: What is your view on the sales environment when OEMs start producing aircraft on time? Will the mix of buyers change? A: Aengus Kelly, CEO: I believe there will be a shortage of aircraft for years to come. Even when OEMs start producing more, it will take several years to reach targets. Current aircraft are more fragile and spend more time in the shop, so I expect continued strength in used aircraft values. Our portfolio is 75% new tech, which will increase over the next few years.

Q: Leasing expenses seemed elevated in the fourth quarter. Is this a new run rate going forward? A: Peter Juhas, CFO: Leasing expenses were slightly higher, running about $20 million more than other quarters. This is a reasonable run rate now, but leasing expenses can vary depending on the timing of events. I expect it to stay roughly around these levels in 2025.

Q: Of the aircraft not being extended, how many are transitioning? Does this affect net margin? A: Aengus Kelly, CEO: Very few aircraft transition, maybe a handful throughout the year. We manage the business to EPS and ROE, not net spread. Our ROE was 14% after tax, which is industry-leading. We allocate every dollar to drive ROE and EPS for shareholders.

Q: What percentage of the original book value has been recovered from Russia-related write-downs? A: Peter Juhas, CFO: The write-down was about $2.7 billion pretax. We've recovered $1.3 billion in 2023 and another $200 million in 2024, giving an idea of recovery relative to the initial book value.

Q: Do you see any benefit from pushing your credit rating higher? A: Peter Juhas, CFO: We're BBB+ with two rating agencies and on positive outlook with Fitch. Higher ratings could be beneficial, but our current spreads are historically tight. We'd welcome higher ratings, but the exact benefit is hard to quantify.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.