AMSTERDAM, Netherlands, August 7 /PRNewswire/ --

AerCap Holdings N.V. (the "Company" or "AerCap") (NYSE: AER) today announced the results of its operations for the second quarter ended June 30, 2008.

Second Quarter 2008 Highlights

-- Second quarter 2008 net income was US$68.6 million, compared with US$34.2 million for the same period in 2007. Second quarter 2008 net income excluding the impact of mark-to-market of interest rate caps and share-based compensation was US$58.2 million, compared with US$28.7 million in second quarter 2007 on the same basis.

-- Second quarter 2008 basic and diluted earnings per share were US$0.81. Second quarter 2008 basic and diluted earnings per share excluding the impact of mark-to-market of interest rate caps and share-based compensation were US$0.68.

-- Net spread, the difference between basic lease rents and interest expense excluding the impact from the mark-to-market of interest rate caps and non-recurring charges, was US$93.1 million in second quarter 2008 compared to US$74.9 million in second quarter 2007, an increase of 24%. This measure reflects the increase in leasing income.

-- Sales revenue for the second quarter 2008 was US$180.7 million, compared to US$84.3 million for the same period in 2007, and was generated from the sale of ten aircraft, two engines and the sale of parts inventory.

-- Total revenue for the second quarter 2008 was US$333.4 million, compared to US$246.6 million for the same period in 2007.

-- Total assets were US$5.2 billion at June 30, 2008, an increase of 18% over total assets of US$4.4 billion at June 30, 2007.

-- Committed purchases of aviation assets delivered or scheduled for delivery in 2008 are US$1.3 billion, of which US$933 million closed in the first half year of 2008.

-- AerCap acquired a 19-aircraft portfolio from TUI Travel in a joint venture with Deucalion Aviation Funds. This portfolio contains eleven Next Generation Boeing 737-800s, six Boeing B757-200s and two Boeing B767-300ERs. The portfolio was financed through a US$425.7 million debt facility and US$62.8 million of subordinated debt.

-- AerCap closed a US$1.0 billion aircraft securitization through Aircraft Lease Securitisation II Limited ("ALS II") that provides long-term, non-recourse funding for 30 new A320 family aircraft. The aircraft are part of a 70-aircraft order placed by AerVenture Limited, AerCap's consolidated joint venture.

-- In addition to the debt related to the TUI Travel acquisition and the securitization debt on ALS II, AerCap closed a US$100 million engine acquisition facility and increased committed pre-delivery payment funding for forward purchase commitments by US$337.6 million.

Klaus Heinemann, CEO of AerCap, commented: "While we are certainly observing areas of weakness in the aviation industry due to rising fuel costs and slowing economic growth, we see strength and growth in some markets and continuing demand for state of the art fuel efficient aircraft in those markets. Our aim to take advantage of counter-cyclical investment opportunities was evidenced by our purchase and leaseback of a 19-aircraft portfolio from TUI Travel during our second quarter 2008."

AerCap's CFO, Keith Helming, added: "During the second quarter of 2008, AerCap achieved all of its financial goals despite the challenging credit market conditions. In particular, AerCap was able to close several significant debt financing transactions which totalled nearly US$2 billion, demonstrating that debt financing for recognized borrowers and quality aviation assets is still available. In addition, AerCap was able to sell all aircraft that were earmarked for disposal in second quarter. Of particular significance during the quarter was the closing of a US$1 billion securitization facility which will provide financing for 30 of our A320-family aircraft in AerVenture. The financing transactions we closed in the second quarter of 2008 and our previously-existing committed facilities provide AerCap with over US$3 billion of committed financing to support our contracted growth."

Summary of Financial Results

AerCap recorded second quarter 2008 net income of US$68.6 million or US$0.81 per basic and diluted share. Included in the second quarter 2008 net income amount were mark-to-market of interest rate caps and share-based compensation of US$10.4 million or US$0.12 per basic and diluted share, net of tax. The after-tax gain relating to the mark-to-market of our interest rate caps was US$11.9 million and the after-tax charge from share-based compensation was US$1.5 million.

    
    Detailed Financial Data
    (US$ in Millions)

    Operating results


                     Three months ended                 Six months ended  
                          June 30,                          June 30, 
                                   % increase/                    % increase/
                     2008     2007   (decrease)      2008    2007  (decrease) 
                                                                  
    Revenues      $ 333.4  $ 246.6      35%       $ 627.9   $ 556.1     13% 
    Net income       68.6     34.2     101%         119.5      94.7     26% 

Total revenue in second quarter 2008 increased 35% compared with second quarter 2007. This increase was largely driven by a higher amount of sales revenue in the second quarter 2008.

    
    Revenue breakdown


                     Three months ended               Six months ended  
                          June 30,                         June 30, 
                                     % increase/                  % increase/
                       2008     2007  (decrease)    2008     2007  (decrease)

    Lease Revenue
     Basic rents    $ 126.6  $ 124.5      2%     $ 253.1  $ 243.1      4% 
     Maintenance 
      rents            13.8      8.6     60%        23.0     20.5     12% 
     End-of-lease 
      compensation      4.0      7.6    -47%        12.1     16.8    -28% 
    Lease revenue   $ 144.4  $ 140.7      3%     $ 288.2  $ 280.4      3% 
    Sales revenue     180.7     84.3    114%       323.2    233.2     39% 
    Management fees 
     and interest 
     income             7.9     12.5    -37%        15.9     22.8    -30% 
    Other revenue       0.4      9.1    -96%         0.6     19.7    -97% 
    Total revenue   $ 333.4  $ 246.6     35%     $ 627.9  $ 556.1     13%

Basic lease rents continue to increase when compared to prior periods as a result of our growing asset base. This increase is partially offset by the impact from decreasing interest rates on floating rate lease rentals between the periods. However, the decrease in basic rents on floating rate leases is completely offset by lower interest costs on the debt associated with the floating rate leases. While basic lease rents for the second quarter 2008 increased 2% compared to second quarter 2007 to US$126.6 million, interest expense excluding the impact of mark-to-market of interest rate caps and non-recurring charges decreased 32% compared with second quarter 2007 to US$33.5 million, as shown in the table below. The difference in these amounts of US$93.1 million is referred to as net spread, and increased 24% in second quarter 2008 over the same period in 2007.

    
                        Three months ended                Six months ended  
                             June 30,                          June 30, 
                                      % increase/                 % increase/
                        2008    2007   (decrease)    2008    2007  (decrease)

    Basic rents      $ 126.6  $ 124.5       2%    $ 253.1  $ 243.1      4% 
     
    Interest on debt $  19.6    $68.4     -71%    $  69.2  $ 118.8    -42% 
    Plus: 
     mark-to-market 
     of interest rate 
     caps               13.9      8.6      62%        5.3      4.0     33% 
    Less: Non-recurring
     charges to interest 
     expense from 
     refinancing of 
     securitized bonds     -    (27.4)   -100%          -    (27.4)  -100% 
     
    Interest on debt 
     excluding the 
     impact of 
     mark-to-market of 
     interest rate caps 
     and non-recurring 
     charges to interest 
     expense from refinancing 
     of securitized 
     bonds           $  33.5  $  49.6    -32%     $  74.5  $  95.4    -22% 
     
     
    Net spread       $  93.1  $  74.9     24%     $ 178.6  $ 147.7     21% 

Effective tax rate

AerCap's effective tax rate during the first half year of 2008 was 8.7%, consisting of 7.6% for AerCap's aircraft business and 27.5% for AerCap's engine and parts business. The effective tax rate in 2007 was 11.8%.

    
    Financial position
                                                                 % Increase
                                                                    over
                              June 30, 2008    June 30, 2007    June 30, 2007 
     
    Flight equipment held 
     for lease                   $3,765.4        $3,030.2            24% 
    Total assets                  5,217.7         4,411.3            18% 
    Total liabilities             4,111.9         3,521.9            17% 
    Total equity                  1,073.3           856.0            25%

As of June 30, 2008, AerCap's portfolio consisted of 314 aircraft and 76 engines that were either owned, on order, under contract or letter of intent, or managed.

Notes Regarding Financial Information Presented In This Press Release

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

The following is a definition of non-GAAP measures used in this press release and a reconciliation of such measure to the most closely related GAAP measure:

Net income excluding the impact of mark-to-market of interest rate caps and share-based compensation. This measure is determined by adding the mark-to-market on our interest rate caps and share-based compensation during the applicable period, net of related tax benefits, to GAAP net income. AerCap believes this measure provides investors with a more meaningful view on AerCap's operational performance and allows investors to better understand its operational performance in relation to past and future reporting periods. AerCap uses interest rate caps to allow the Company to benefit from decreasing interest rates and protect against the negative impact of rising interest rates on its floating rate debt. Management determines the appropriate level of caps in any period with reference to the mix of floating and fixed cash inflows from the Company's lease and other contracts. AerCap does not apply hedge accounting to its interest rate caps. As a result, AerCap is required to recognize the change in fair value of the interest rate caps in AerCap's income statement during each period. Following is a reconciliation of net income excluding the impact of mark-to-market of interest rate caps and share-based compensation to net income for the three month and six month periods ended June 30, 2008 and 2007:

    
                    Three months ended                 Six months ended  
                        June 30,                            June 30, 
                                    % increase/                   % increase/
                     2008    2007    (decrease)     2008     2007  (decrease)


    Net income      $68.6   $34.2 *     101%      $ 119.5    $94.7 *    26% 
    Plus: 
     mark-to-market 
     of interest 
     rate caps, 
     net of tax     (11.9)   (7.5)      59%          (4.3)    (3.5)     23% 
       share-based 
       compensation, 
       net of tax     1.5     2.0      -25%           2.9      4.2     -31% 
    Net income 
     excluding the 
     impact of 
     mark-to-market 
     of interest rate 
     caps and 
     share-based 
     compensation   $58.2   $28.7      103%       $ 118.1    $95.4     24% 


    *- Includes a charge to interest expense from refinancing of securitized
       bonds of $24.0 million, net of tax.

Earnings per share excluding the impact of mark-to-market of interest rate caps and share-based compensation are determined by dividing the amount of net income excluding such impact by the average number of shares outstanding for that period. The average number of shares is based on a daily average.

Net spread. This measure is the difference between basic lease rents and interest expense excluding the impact from the mark-to-market of interest rate caps and non-recurring charges. AerCap believes this measure provides investors a better way to understand the changes and trends related to the earnings of its leasing activities. This measure reflects the impact from changes in the number of aircraft leased, lease rates, utilization rates, as well as the impact from the use of interest rate caps for hedging purposes. The reconciliation of net spread to basic rents for the three months and six month periods ended June 30, 2008 and 2007 is included above.

Conference Call

In connection with the earnings release, management will host an earnings conference call today, Thursday, August 7, 2008 at 9:30 am Eastern Time / 3:30 pm Central European Time. The call can be accessed live by dialing (U.S./Canada) +1-800-676-6978 or (International) +1-706-634 5464 and referencing code 54829902 at least 5 minutes before start time, or by visiting AerCap's website at http://www.aercap.com under 'Investor Relations'.

The presentation slides for the conference call will be posted on AerCap's website in advance of the call. A replay of the call will be available beginning at 10:30 am Eastern Time / 4:30 pm Central European Time on August 7, 2008 and continuing through September 7, 2008. To access the recording, call +1-800-642-1687 (U.S./Canada) or +1-706-645-9291 (International) and enter passcode 54829902. The replay will be archived in the "Investor Relations" section of the Company's website for one year.

In addition, a New York Group Lunch Presentation for investors and analysts will be hosted by senior management today, Thursday, August 7, 2008, at 12:30 pm Eastern Time at The St. Regis Hotel. Doors will open at 12:00 pm.

To participate in either event, please register at: www.sharedvalue.net/aercap/q208results

For further information, contact Peter Wortel: +31-20-655-9658 (pwortel@aercap.com) or Mark Walter (Shared Value): +44-(0)20-7321-5039 (aercap@sharedvalue.net).

About AerCap Holdings N.V.

AerCap is an integrated global aviation company with a leading market position in aircraft and engine leasing, trading and parts sales. AerCap also provides aircraft management services and performs aircraft and engine maintenance, repair and overhaul services and aircraft disassemblies through its certified repair stations. AerCap is headquartered in The Netherlands and has offices in Ireland, the United States, Singapore, China and the United Kingdom.

Forward Looking Statements

This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "will," "should," "expect," "plan," "intend," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements. As a result, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate or correct. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. We do not undertake any obligation to, and will not, update any forward-looking statements, whether as a result of new information, future events or otherwise.

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

    
                           Financial Statements Follow
    
    AerCap Holdings N.V.
    Consolidated Balance Sheets - Unaudited
    (In thousands of U.S. Dollars)
    
    
                                           June 30,   December 31,  June 30,  
                                             2008        2007        2007
    
      Assets
      Cash and cash equivalents            $175,870    $241,736    $250,124
      Restricted cash                       183,808      95,072     178,116
      Trade receivables, net of         
       provisions                            40,642      35,591      29,470
      Flight equipment held for         
       operating leases, net              3,765,378   3,050,160   3,030,170
      Flight equipment held for sale         48,390     136,135     157,981
      Notes receivables, net of         
       provisions                           199,485     184,820     173,207
      Prepayments on flight equipment       328,172     247,839     186,179
      Investments                            11,678      11,678      16,091
      Goodwill                                6,776       6,776       6,776
      Intangibles, net                       54,788      41,855      46,100
      Inventory                              88,627      90,726      83,064
      Derivative assets                      59,677      21,763      20,355
      Deferred income taxes                  78,617      85,253      92,132
      Other assets                          175,818     144,823     141,522
      Total Assets                       $5,217,726  $4,394,227  $4%2