World Financial Symposium - International Air Transport ...

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.

2 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)

3 As of June 30, 2017 Attractive Portfolio 5 Leasing Market s 10-Year Evolution(1)FlightGlobalAirline Business: 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).

4 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.(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.

5 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.

6 ~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.

7 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, 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)

8 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.

9 Allstatementsotherthanstatementsofhistor icalfactincludedinthispresentationarefor ward-lookingstatementsandarebasedonvario usunderlyingassumptionsandexpectationsan daresubjecttoknownandunknownrisks,uncert aintiesandassumptions,mayincludeprojecti onsofourfuturefinancialperformancebasedo nourgrowthstrategiesandanticipatedtrends inourbusiness. Thesestatementsareonlypredictionsbasedon ourcurrentexpectationsandprojectionsabou tfutureevents. Thereareimportantfactorsthatcouldcauseou ractualresults,levelofactivityperformanc eorachievementstodiffermateriallyfromthe results,levelofactivity,performanceorach ievementsexpressedorimpliedintheforward- lookingstatements.

10 Asa result,therecanbenoassurancethattheforwa rd-lookingstatementsincludedinthispresen tationwillprovetobeaccurateorcorrect. Inlightoftheserisks,uncertaintiesandassu mptions,thefutureperformanceoreventsdesc ribedintheforward-lookingstatementsinthi spresentationmightnotoccur. 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.