World Financial Symposium - IATA

1 World Financial Symposium 2017 World Financial Symposium 2014 World Financial Symposium 27 28 September 2017 Convention Center Dublin (CCD) Ireland World Financial Symposium 2017 World Financial Symposium 2014 Aircraft Financing -The Future Looks Bright, or Does it? World Financial Symposium 2017 World Financial Symposium 2014 The Continued Evolution of Commercial Operating Leasing Edward (Ted) O Byrne, CIO, AercapSeptember 27, 2017 The Continued Evolution of Commercial Operating LeasingEdward O'Byrne, Chief Investment Officer, AerCapEvolution of Operating Leasing 3 AerCap The Global Leader (1)As of June 30, 2017. Quick Facts1:Leading Lessor AerCap has deployed capital/assets to facilitate the growth of aviation in all regions of the worldOver 40 Year Legacy AerCap s legacy stems from the two founders of aircraft leasing: GPA (1975) and ILFC (1973)Today AerCap is the global leader in aircraft leasing and aviation finance ~200 customers in ~80 countries 10 offices across the globe Listed on the NYSE since 2006 Only independent lessor to hold Investment Grade Rating with S&P, Fitch and Moody s ~$41 billion in total assets 1,110 owned and managed aircraft Order book of 429 new technology aircraft World s largest A320neo family lessor World slargest 787 overall customer World s2nd largest A350 lessorAerCap buys, sells, or leases over one aircraft per day 4 1,539 owned, managed or committed aircraft fleet1(1)As of June 30, 2017 Attractive Portfolio 5 Leasing Market s 10-Year Evolution(1)FlightGlobalAirline Business.

2 Finance & Leasing 2009; FlightGlobalLessor Portfolio Tracker, June 2017. (2)FlightGlobalAirline Business: Finance & Leasing 2009; FlightGlobalFleet Analyzer, as of September 14, INDUSTRY GROWTH1 (Number of Operating Lessors)TOP 5 LESSORS SHARE OF LEASING FLEET2 Despite recent consolidations among major lessors, the market is less concentrated than it was almost a decade ago38%201746%2008% of Leasing FleetTOP 5 LESSORS13521146482008200820172017 ALL LESSORS$1B+ LESSORS 6 Lessor Competitive Landscape(1)Flightglobal sPortfolio Tracker, June 2017 - Owned and managed aircraft of top 40 lessors (ranked by fleet value, excluding Boeing Capital).This is only a selected group of lessors37%23%40%LEASING MARKET SHARE by fleet size1 AerCap s scale and order book continues to provide a key competitive advantage 7 Increasing Demand for Operating LeaseOver the past 20 years, the World fleet DOUBLED while the operating lease fleet QUADRUPLED(1)Ascend Fleets database as of September 14 for each respective year - Airbus, Boeing, McDonnell-Douglas in service passenger jets.

3 (2) Financial Reports used where available, otherwise Ascend as of September - Airbus, Boeing, McDonnell-Douglas in service passenger jets, leased summary Leasing? 9 Key Drivers of Continued GrowthRESIDUAL VALUE MANAGEMENTCAPEX & CASH FLOW MANAGEMENTOPERATIONAL OPTIONALITYFRONT END: Delivery slots availability shorter than OEMsBACK END: Ability to right-size fleet to match capacity to actual passenger demandContinued Growth of the Aircraft Leasing Market 10 Residual Value Risk Management Lessors are better equipped to manage residual values(1)Avitas Blue Books. 11 Avoid Risk of Ordering from OEMsOEM ORDERING RISKSLESSOR SUPPLY BENEFITSS ourcing new aircraft through lessors avoids any Financial pressure, optimizes return on capital to shareholders and lowers operational risksHeavy capital burden, without matching revenues Impacts ROIC, creates funding risk, deteriorates creditworthinessCompetitive pricing is only achieved through big orders that don t necessarily match fleet requirements Financial pressure of over commitmentCompetitive pricing can be achieved matching exact capacity requirements No Financial pressureTypical lessor availability for new aircraft: ~2 years Easier fleet decisions managementCash flow matches revenue, no capital expenditure Cash flow benefit Typical OEM availability.

4 ~5 years More difficult to foresee market demand and fleet requirementsAIRCRAFT PRICING RISKPDP OBLIGATION RISKLONG LEAD TIME RISKTAILORED FLEET SUPPORTNO UPFRONT INVESTMENTEARLIER DELIVERY SLOTS 12 Value of OptionalityOperating lease gives the flexibility to right-size the fleet according to traffic growth and competitive environment, improving load factors and gaining access to new technology aircraft LEASEA320-200145 seatsA320-200145seatsNO FLEXIBILITYNo ability to increase capacityOver capacityHigh operating costsAbility to up-gauge & match demandDown-gauge & maintain market shareAvail of new technologyA321-200 161 seatsA319-100 138 seatsContext:Traffic3%Context:Traffic3%C ontext:New TechnologyBUY 13 Lessor Scale Enables Fleet-Wide SolutionsAerCap offers unparalleled access to the most-in-demand new and used aircraft to meet airlines fleet needsAccess to Modern, Fuel-Efficient AircraftAccess to a Diverse Portfolio of Used AircraftChina Southern United AirlinesPLACEMENT OF 25 USED AIRBUS A319sPLACEMENT OF 24 NEW AIRBUS A320neo FAMILY AIRCRAFT Access to the industry s leading order bookwith 441modern, fuel-efficient aircraft1 Attractive delivery positions to match capacity with forecasted demand Faster implementation of new technologies World s largest lessor customer of Airbus A320neo family, Boeing 787.

5 Embraer E-Jet E2 and 3rdlargest lessor customer of 737 MAX1 Operating flexibility to incrementally match capacity to actual passenger demand Opportunistically add used aircraft on existing routes when the economics are attractive Access to a diverse group of mid-life aircraft at attractive lease rates Greater flexibility in long-term capital management (1)As of June 30, 15 Key Drivers of Continued GrowthOperating & Financial rationale for leasingNew capital driving pricing downY-on-Y deliveries show 50%+ going to lessors 16 Thispresentationcontainscertainstatement s,estimatesandforecastswithrespecttofutu reperformanceandevents. Thesestatements,estimatesandforecastsare forward-lookingstatements . Insomecases,forward-lookingstatementscan beidentifiedbytheuseofforward-lookingter minologysuchas may, might, should, expect, plan, intend, estimate, anticipate, believe, predict, potential or continue orthenegativesthereoforvariationsthereon orsimilarterminology.

6 Allstatementsotherthanstatementsofhistor icalfactincludedinthispresentationarefor ward-lookingstatementsandarebasedonvario usunderlyingassumptionsandexpectationsan daresubjecttoknownandunknownrisks,uncert aintiesandassumptions,mayincludeprojecti onsofourfuturefinancialperformancebasedo nourgrowthstrategiesandanticipatedtrends inourbusiness. Thesestatementsareonlypredictionsbasedon ourcurrentexpectationsandprojectionsabou tfutureevents. Thereareimportantfactorsthatcouldcauseou ractualresults,levelofactivityperformanc eorachievementstodiffermateriallyfromthe results,levelofactivity,performanceorach ievementsexpressedorimpliedintheforward- lookingstatements. Asa result,therecanbenoassurancethattheforwa rd-lookingstatementsincludedinthispresen tationwillprovetobeaccurateorcorrect. Inlightoftheserisks,uncertaintiesandassu mptions,thefutureperformanceoreventsdesc ribedintheforward-lookingstatementsinthi spresentationmightnotoccur.

7 Accordingly,youshouldnotrelyuponforward- lookingstatementsasa predictionofactualresultsandwedonotassum eanyresponsibilityfortheaccuracyorcomple tenessofanyoftheseforward-lookingstateme nts. Wedonotundertakeanyobligationto,andwilln ot,updateanyforward-lookingstatements,wh etherasa resultofnewinformation, thisdocumentis anditssubsidiariesandmaynotbecopiedorcom municatedtoa fourthparty,orusedforanypurposeotherthan thatforwhichit issuppliedwithouttheexpresswrittenconsen tof , Incl. Forward Looking Statements & Safe Harbor 2 AerCap Holdings House65 St. Stephen s GreenDublin 2, Ireland+353 1 819 us onWorld Financial Symposium 2017 World Financial Symposium 2014 The Impact of Today s Multifaceted Financing and Uncertainties MunawarNoorani, Head of Aviation EMEA & APAC, CitiFinancing for GrowthMunawar Noorani, Managing Director, Head of Aviation Banking EMEA & APACIATA 4thWorld Financial Symposium : 27 September 2017 Air Travel Continues to be Supported by Global GDP GrowthAir Travel has Proved to be Resilient to External ShocksAir Traffic and Global GDP Growth; 1990 = 100 Growth Driven by Emerging Markets2016 2036 Annual GDP Growth (%)Source: Ascend, Boeing Current Market Outlook, Airbus Global Market Forecast, World Bank, for air transport has historically grown at ~ global GDP growth with only three periods at negative growth since 1970.

8 Growth will continue to be driven by the Emerging MarketsAPAC Lead in World Traffic will Increase by 2035 RPK Traffic by Airline Domicile (Bn)Global Air Traffic Demand Growth is a Multiplier of Underlying GDP Growth02,0004,0006,000 AfricaCISLatAmMiddle EastNorth AmericaEuropeAsia-Pacific2015 Traffic2016 2035 Traffic9/11 andSecondGulf WarFirst Gulf War 2016 2034E CAGR: 2034E CAGR: 2016 CAGR: AmericaWorldLatAmAfricaMiddle EastAsia01002003004005006007008009001,00 0199019921994199619982000200220042006200 8201020122014201620182020202220242026202 8203020322034 Global Real GDPP assenger Traffic (RPK) per CapitaReal GDP per Capita (2010 US$ in 000s at Purchasing Power Parity) 43%38%Global Demographics to Underpin Future Demand for Air Travel Propensity to Travel ..Source: Airbus Global Market Forecast, Oxford Economics1. Households with yearly income between US$20,000 and US$150,000 at PPP in constant 2015 prices; 2.

9 Estimate for 1995 [split] by region; 3. Including Restaurants and propensity increases more than proportionally with income. Currently, the Emerging Markets have ~80% of the World population but only 25% of passenger trips. Europeans and North Americans are currently the most willing to fly given higher GDP. By 2035, trips per capita for China will quadruple from to Trips per CapitaChina 2015 Trips per Capita Europe Trips per CapitaNorth America Trips per CapitaNorth America Trips per CapitaEurope Trips per CapitaChina 2035E Trips per Capita India Trips per Is Driven by the Growing Global Middle Class and Increased Discretionary Spending Middle Class1 Forecast (Millions of People) and Emerging Economies Spending on Recreational Goods and Services3(2010 $US, PPP)776 826 848 864 861 66 130 206 310 441 455 911 1,738 2,602 3,528 01,0002,0003,0004,0005,0001995E 2005201520252035 Mature CountriesDeveloping CountriesEmerging Countries23% of World Population55% of World Population4,8303,7762,7921,8671,2972015: $ trillion2025: $ trillion$ trillion$ trillionRest of the WorldEmergingEconomiesLong-term Air Traffic Growth Drives Demand for AircraftSource.

10 Boeing Capital Current Aircraft Finance Market Outlook 2017 2036 Global aircraft fleet expected to double over the course of the next 20 years with 41,030 deliveries ($ trillion market value). A significant proportion of the aircraft requirements are for growth North AmericaEuropeCISAsia PacificAfricaMiddle EastLatin America201623,480 Aircraft2036E46,950 AircraftRetained: 5,510 Replaced: 17,560 Growth: 23,470 Total:23,48041,030 Aircraft RequirementSingle-AisleRegional JetsWidebodyFreighters64%17%11%8%69%19%6 %6%7,060 10,130 201620364,800 8,160 201620361,090 1,980 201620361,430 3,900 20162036720 1,600 201620361,550 3,660 201620366,380 17,520 20162036 Exogenous Events Remain a Risk to AirlinesBrexitRecent DevelopmentsPotential Models for UK-EU Cooperation Post-BrexitSource: Citi Research, State Airports Authority (DHMI). All figures include transit/transfer passenger traffic, geopolitical events such as Brexit and terrorists attacks have become key focus areas for airlines.