AerCap Holdings N.V.

Good day, and welcome to AirCap's fourth quarter 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 would like to turn the conference over to Joseph McGinley, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator, and hello, everyone. Welcome to our fourth quarter 2024 conference call. With me today is our Chief Executive Officer, Ingus Kelly. and our Chief Financial Officer, Pete Ugas. 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. AirCap 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. Further information concerning issues that could materially affect performance can be found in AirCap's earnings release dated February 26, 2025. A copy of the earnings release and conference call presentation are available on our website at aircap.com. This call is open to the public and is being webcast simultaneously at aircap.com and will be archived for replay. 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 Angus Kelly.

Thank you for joining us for our fourth quarter 2024 earnings call. We are pleased to report another strong year of earnings for AirCap. generating gap net income of $2.1 billion and earnings per share of $10.79, adjusted net income of $2.3 billion and adjusted EPS of $12.01. We expect to see a continuation of the trends that we saw last year in 2025. This includes the supportive supply-demand dynamic, continued accretive capital deployment opportunities, and robust demand for R-ASIN. leading to an adjusted 2025 EPS range of $8.50 to $9.50, not including the contribution of gains and sale of assets, which historically have been material. As we have discussed in prior quarters, the positive environment for aircraft leasing continues, and we are seeing this reflected in strong operational performance of the business. Last year, we generated $5.4 billion of operating cash flow, which of course excludes $651 million of gains on sale. During the fourth quarter, we generated a gain on sale margin of 43% or 260% of the associated book equity. We executed 812 transactions across our various businesses, equivalent to more than two per day. This level of activity gives AirCap unrivaled insights into the global aviation market. This in turn allows for a better understanding of our customers' needs and how to support their growth. Looking ahead, we have $45 billion of contracted future lease cash flows in place on our existing fleet, over 40% of which will be received in the next three years. This gives us tremendous visibility into our future cash flows, allowing us to allocate capital effectively and thoughtfully, creating continued value for our shareholders. With this in mind, we are pleased to announce a new $1 billion share repurchase program, our largest single authorization to date. This takes the total amount of buyback spent and authorized in the last two years alone to $5 billion, further underlining the significant value we see in air cap stock today and our confidence in the outlook for 2025 and beyond. Turning to the market, it is clear that the industry continues to plan for a lower for longer supply environment, evidenced by continued increases in lease rates, lease extension demand, and strong gain on sale. 2024 was the third year in a row of increased extension activity, reflective of this ongoing demand for aircraft. This is also driving strong sales activity, resulting in a $260 million gain on sale in Q4, our highest in a single quarter, and also a record full year gain on sale of $651 million. The largest global aircraft leasing conference was hosted in Dublin last month, attracting thousands of stakeholders to the event. And it was clear from the many conversations we had with airlines, aircraft traders, and financiers, the demand for aviation assets continues to grow. As you can see from the slide, we are selling a wide mix of assets to a wide mix of buyers, each with a different focus on asset type, age, or counterparty. In the first category, airlines tend to focus on the older part of the curve, typically buying out aircraft at the end of a lease to secure certainty of capacity. Given their knowledge of the aircraft and its maintenance condition, they are well placed to understand the value of the aircraft. To generate strong gains in sale with this buyer base reflects well on two things. Firstly, It shows the critical benefit of having in-house engine and technical teams who control the lifecycle spend and condition of the aircraft engines, translating into higher residual values. Secondly, it points to the premium our assets command in the market over our carrying values. In light of the continued OEM delays and engine reliability challenges, this is a theme that we expect to continue into 2025 and beyond. Financial investors, on the other hand, tend to buy young to midlife aircraft and engines, ideally with long lease terms remaining, where predictability of income is highly valuable. These buyers were more prevalent before COVID, but we see early signs of strength returning here again based on some of the recent conversations we are having in this space. The other category contains aircraft sold for part-out finance leases and sales to other leasing companies, the combination of which run the full gamut of age and aircraft types. In summary, this shows that aircraft's gains on sale are not limited to a select few assets or credits, but broad-based across our aircraft, engines, and helicopter portfolios. Gains on sale have been a feature of our business for almost 20 years as a public company and reflect the deep embedded value created by the AirCap platform every single day. Turning to capital allocation, we mentioned earlier that we have excellent visibility of future cash flows, which is key to our capital deployment strategy. We will continue to utilize these strong cash flows to return capital to you, our shareholders, while also leaning into today's very strong sales environment. In doing this, we will continue to sell our lower priority assets for strong gains on sale and reinvest the proceeds into organic growth and share repurchases, resulting in a more efficient, more profitable company. Over the last two years alone, we have invested over $12 billion into new assets, returned over $4 billion to shareholders, and delevered. This shareholder-friendly approach to capital return has not come at the cost of financial flexibility. In fact, quite the opposite, as our leverage ratio remains well below our stated target of 2.7 times to 1, and our credit ratings stand at the highest ever level at BBB+. I am sure it's not unique to return significant capital to shareholders, but it is extremely rare that it can be achieved at this scale while de-levering the balance sheet and increasing your investment-grade credit ratings. What should also stand out to investors is the stability and consistency of this approach over many years. On the left-hand side of the slide, you'll see our organic investment in the business. This organic growth comes from three sources. One, direct aircraft purchases from the OEMs made in more favorable environments. Two, opportunistic sale leasebacks with new and existing airline customers that need air caps help. And three, our recently announced engine deals. On shareholder returns, as we mentioned earlier, today's record $1 billion share repurchase authorizations takes total announcements to $5 billion in the last two years. In that time, we have deployed $4 billion and reduced the share count by 25%, with more to come from this latest authorization. These returns come from a position of strength built on industry-leading cash flows, knowledge, and profitability, making them both attractive and sustainable. So as we look back on 2024, This was another great year for AirCap with broad-based demand for our aircraft. We completed 150 asset purchases, executed just under 500 lease agreements, and generated $5.4 billion of operating cash flow. In addition, we repurchased 16.8 million shares for $1.5 billion, reduced our leverage to 2.35 times, and were upgraded to BBB Plus by both S&P and Moody's. Looking forward to 2025, our confidence in the company's outlook remains strong, and we look forward to demonstrating this to you in the quarters and years to come. With that, I'll hand the call over to Peace to review the financials and the outlook for 2025. Thank you. Thanks, Gus. Good morning, everyone.