AER

In recent weeks, AerCap Holdings has drawn attention as Baron Capital added the company to its Baron Financials ETF and other commentary highlighted its history of earnings surprises and upward revisions to earnings estimates. These developments emphasize AerCap’s appeal to institutional investors, who view its global aircraft leasing scale and earnings track record as key strengths in a constrained supply market. Against this backdrop of fresh institutional interest and confidence in AerCap’s earnings outlook, we’ll explore how this shapes the existing investment narrative. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. To own AerCap, you need to believe that global air travel and tight aircraft supply will keep high utilization and lease rates resilient, supporting the company’s large fleet and earnings base. Recent attention from Baron Capital and commentary around earnings surprises add to the story of institutional confidence, but do not materially change the near term focus on managing OEM delivery ramp up as a key catalyst and customer credit quality as a central risk. Among recent announcements, AerCap’s increased full year 2026 net income guidance to US$2.4 billion stands out alongside its ongoing US$1,000 million share repurchase program. Together, these updates sit directly in the path of the core catalysts around tight supply, lease economics and disciplined capital deployment, and they help frame how the company is positioned if aircraft deliveries and asset values start to shift. However, investors should be aware that if OEM aircraft deliveries accelerate faster than expected, AerCap could face... Read the full narrative on AerCap Holdings (it's free!) AerCap Holdings’ narrative projects $8.3 billion revenue and $2.4 billion earnings by 2029. This implies revenues declining by 2.6% per year and an earnings decrease of $1.0 billion from $3.4 billion today. Uncover how AerCap Holdings' forecasts yield a $178.90 fair value, a 21% upside to its current price. Simply Wall St Community members offer only two fair value estimates for AerCap, spanning roughly US$178.90 to US$344.52, underlining how far apart individual views can be. Against that backdrop, the risk of future oversupply from higher OEM deliveries gives you a concrete issue to compare across these perspectives and encourages you to weigh several different assumptions about the company’s resilience. Explore 2 other fair value estimates on AerCap Holdings - why the stock might be worth just $178.90! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your AerCap Holdings research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision. Our free AerCap Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AerCap Holdings' overall financial health at a glance. Our daily scans reveal stocks with breakout potential. Don't miss this chance: The future of work is here. Discover the 38 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. AI is about to change healthcare. These 39 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Invest in the nuclear renaissance through our list of 92 elite nuclear energy infrastructure plays powering the global AI revolution. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AER. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:30 a.m. ET Head of Investor Relations - Joseph McGinley Chief Executive Officer - Aengus Kelly Chief Financial Officer - Peter L. Juhas Operator: Please stand by. Good day, and welcome to the AerCap Q2 2026 Financial Results Call. 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. Joseph McGinley: Thank you, operator, and hello, everyone. Welcome to AerCap's Second Quarter 2026 Conference Call. With me today are our Chief Executive Officer, Aengus Kelly and chief financial officer, Pete Juhas. Before we begin today's call, I would like to remind you that some statements that are 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 our statements. AerCap undertakes no obligation other than that imposed by law to publicly update or revise any forward-looking statements to future events information, or circumstances that arise after this call. Further information concerning issues that could materially affect performance can be found in AerCap's earnings release dated July 29, 2026. A copy of the earnings release and conference call presentation are available on our website at aercap.com. This call is open to the public and being webcast simultaneously at aercap.com and will be archived for replay. We will shortly run through our earnings presentation and allow time at the end for Q&A. As a reminder, I will ask that analysts limit themselves to one question and one follow-up. I will now turn the call over to our CEO, Aengus Kelly. Aengus Kelly: Thank you for joining us for our second quarter 2026 earnings call. This was another strong quarter for AerCap as reflected in our financial results. Disciplined capital deployment and increased full-year guidance. AerCap's business maintained its momentum in the second quarter. As highlighted by our transaction activity. The lease extension rate on passenger aircraft was 85% well above the long-term average. We also completed $1.4 billion of asset sales during the quarter, generating a gain-on-sale margin of 20%. These operational highlights reflect both the resilience of our business model and the continued benefit of the supply-demand imbalance across our industry. Turning to our financial results. We delivered adjusted earnings per share of $5.14 in the second quarter. Representing an adjusted return on equity of 18%. We also generated $1.5 billion of cash flow from operations. This strong cash generation continues to create significant financial flexibility enabling us to invest in long-term accretive opportunities while also returning substantial capital to our shareholders. During the quarter, we repurchased more than $690 million of our shares and over $1.4 billion in the first half of the year. In addition, we recently ordered 15 new Boeing 787 aircraft. This is a key highlight, which we will discuss in more detail later in the call. Reflecting our strong first half performance, and positive outlook for the business, we are raising our full-year earnings guidance to $16.80 per share, not including any additional gains on asset sales. Our outlook is underpinned by a supportive industry backdrop. Let me spend a few minutes discussing the broader market environment. Recent geopolitical challenges have led to higher input costs for airlines and will no doubt put further pressure on airline margins this year. That said, it is expected that the global airline industry will remain healthy in 2026 in aggregate supported by good travel demand, strong load factors and disciplined capacity growth. While global traffic growth has moderated year-over-year, trends vary by region. The Middle East, Asia Pacific and North America have experienced some weakness in daily flight activity. But Europe, Africa and Latin America have continued to see growth. Overall, the trends we are seeing highlight the resilience of travel demand and the industry's ability to adapt to changing market conditions. For AerCap, this backdrop remains highly supportive. Aircraft and engine availability remain constrained. While airline demand continues to exceed supply. We see this reflected in our leasing activity lease extensions and asset values. As a result, we remain confident in the long-term outlook for AerCap and the aviation industry more broadly. The supply-demand imbalance is particularly pronounced in the widebody market. Years of production shortages and delivery delays have constrained the availability of new widebody aircraft globally. This is clear from the left-hand side chart on Slide 4. Over the past five years, airlines have extended service lives of older widebody aircraft. Resulting in over 200 fewer widebody retirements than in the comparable pre-COVID period. As you can see on the right-hand side of this slide. More recently, widebody production rates have begun to recover. And we expect to see an increase in retirement activity among the oldest and least fuel-efficient aircraft. This trend will likely continue as more new-technology aircraft enter service. With a large number of aging widebodies still in operation, this replacement cycle should support strong demand for widebody leasing for many years to come. Against this backdrop, our order for 15 Boeing 787 aircraft reflects our conviction in the long-term fundamentals of the widebody market. We believe the 787 is one of the most attractive widebody assets combining favorable economics with a broad global customer base and strong secondary market liquidity. Importantly, delivery positions for new Boeing 787 aircraft remain extremely limited. AerCap's longstanding relationship with Boeing combined with our scale and ability to execute quickly, gives us a competitive advantage in securing scarce delivery positions. Our Boeing 787s will start delivering in 2030 and run through 2033 at economics that support our long-term return objectives. Today, we not only have the largest Boeing 787 fleets, but also the largest Boeing 787 order book of any lessor. And therefore, we are uniquely positioned to meet growing airline demand for next-generation widebody aircraft. This strategic investment allows us to capitalize on a prolonged fleet renewal cycle. While providing our customers with access to one of the most efficient and sought-after aircraft types in the market. Turning to Slide 5. This investment is also a good example of the capital allocation framework that guides every decision we make. We continue to deploy capital with discipline and flexibility. Directing it toward opportunities that we believe offer the most attractive long-term risk-adjusted returns while maintaining capacity to return capital to shareholders. So far this year, we have added 131 aircraft to our order book, returned more than $1.5 billion to our shareholders through share repurchases and dividends and still hold approximately $3.5 billion of excess capital available to deploy. In closing, AerCap delivered another strong quarter. Our global platform, consistent execution, disciplined capital allocation, and active portfolio management continue to position us to capitalize on opportunities across the market. And with that, I will now hand the call over to Peter to review our financials. Peter L. Juhas: Thanks, Gus. Good morning, everyone. We delivered another strong quarter and I will start reviewing our financial results on Slide 6. Our GAAP net income for the second quarter was $726 million or $4.59 per share. The impact of purchase accounting adjustments was $129 million for the quarter or $0.82 per share. That included lease premium amortization of $26 million maintenance rights amortization of $36 million related to maintenance revenue and maintenance rights amortization $67 million related to leasing expenses. During the second quarter, we had $28 million of recoveries related to the Ukraine conflict, or $0.18 per share. The net tax effect of all these items was $15 million or $0.10 per share. As a result, our adjusted net income for the second quarter was $811 million or $5.14 per share. That represents an adjusted ROE of 18% for the second quarter. Turning to Slide 7. I will briefly go through the main drivers that affected our results. Basic lease rents were $1.677 billion. Maintenance revenues remained elevated this quarter at $177 million. Our net maintenance contribution which is maintenance revenue less leasing expenses, after taking into account purchase accounting adjustments, was $131 million this quarter. that is higher than usual due to the timing of maintenance revenue transition expenses, and claims. As I mentioned last quarter, net maintenance contribution has been higher than normal for the first half of this year but we expect it to return to more normal levels in the second half of the year. Net gain-on-sale of assets was $223 million for the second quarter. The sales environment continued to be strong, and we sold 38 of our owned assets for total sales revenue of $1.4 billion. That resulted in an unlevered gain-on-sale margin of 20% for the quarter which is equivalent to a multiple of 1.7 times book value on an equity basis. As of June 30, we had just over $400 million worth of assets held-for-sale. Interest expense was $468 million for the second quarter and income tax expense was $123 million reflecting an effective tax rate of 15.5%. Turning to Slide 8. Our liquidity position continues to be very strong. As of June 30, our total sources of liquidity were approximately $22 billion. That includes just under $1.7 billion of cash, $10 billion of revolvers, and $3 billion of other committed facilities. as well as estimated sales and operating cash flow. Our sources to uses coverage ratio was 1.9x which reflects excess cash coverage of around $10 billion. Our leverage ratio at the end of June was 2.05 to 1, which is about the same as last quarter. Our operating cash flow was $1.5 billion for the quarter. And our secured debt to total assets ratio was 9%, which is in line with the record low level reported last quarter. Our average cost of debt was 4.2%. During the second quarter, we bought back 4.9 million shares for a total of $691 million. Together with our repurchases in the first quarter, we repurchased over 6% of our shares outstanding at the beginning of this year. Since 2023, we have bought back 93 million shares or almost 40% of our outstanding shares for a total of $8 billion. Turning to Slide 9. On our last earnings call in February, we projected adjusted earnings per share of $14.50 which included $1.50 of gains on sale from the first quarter. As Gus mentioned, today we are raising our full-year 2026 adjusted EPS guidance to approximately $16.80. We are increasing our estimated EPS excluding gains on sale to approximately $14 and we are also including the $2.80 of gains on sale from the first half of the year. However, we have not included any gains on sale for the second half of the year. In the first half, the drivers of the outperformance relative to guidance were gains on asset sales of $514 million, higher net maintenance contribution and other income. We have completed $2.8 billion of asset sales in the first six months of this year, and as a result, we currently expect asset sales for the full-year 2026 to be in the range of $4 billion to $5 billion. In closing, AerCap has continued its strong performance this quarter. We generated adjusted EPS of $5.14 and adjusted ROE of 18%. So far this year, we have returned over $1 billion to shareholders and we have made significant additions to our forward orders with Airbus and Boeing. We continue to grow our fleet with new-technology, fuel-efficient aircraft. And today, we have once again raised our EPS guidance. All of this indicates our confidence in the value of AerCap today and into the future. And with that, operator, we can open up the call for Q&A. Operator: Thank you. If you would like to ask a question, please signal by pressing star 1. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Again, press star 1 to ask a question, and we will pause for just a moment to assemble the queue. We will take our first question from Jamie Baker with JPMorgan. Jamie Baker: Good afternoon, everybody. So Gus, question on the 85% extension rate. So what takes place with the other 15%? Is that mostly made up of, I do not know, end of lease sales? Is it part outs? Is it customer purchases? I am I am just wondering, we all know how strong the environment is, but when a lease does not get extended in this market, just kind of wondering what the outcome is. You know, how common is it that you take the asset back, paint it, and release it? That sort of thing. Just concentrating on the 15%. Aengus Kelly: Yeah. You are right, Jamie. Peter L. Juhas: It is generally quite rare that the aircraft would come back and be released. The odd time it will. So for the most part, they end up getting parted out. Jamie Baker: Okay. Aengus Kelly: Just to be clear on that percentage, Jamie, so the way we calculate that is that is 85%. So of everything that is either going out on lease again to a new customer or being extended, that is the denominator. So 85% extended, 15% released, and we have excluded aircraft that are being sold. Jamie Baker: Okay. Alright. I appreciate the clarification. I did not realize that. And then, on the follow-up, just the leverage of 2x or 2.05 clearly, you know, lots of firepower at you know, BBB+ to do. I guess, you know, kind of whatever you want here. But Mark and I were wondering, have you thought about lowering the target a touch, shooting for upgrades into, you know, the low A range? Or in this environment, does that even make sense in terms of the marginal savings? Maybe you are just better off buying more stock or maybe another platform. Thoughts on that? Aengus Kelly: Well, look. Certainly, Jamie, with the history of the business, over the last 20 years generating the returns we have, where we are, you know, the best part of a thousand over treasury every year after tax GAAP ROE with the tremendous operating cash flows we certainly feel that a move into the A category is deserved and warranted. Jamie Baker: Okay. That is perfect. And just back to my first question quickly. Anything in those numbers, the 85% and the 15% as it relates to engine cores going into data centers? Aengus Kelly: Look, of course, what we will sell assets into those who want to put them into data centers. But as it relates to data centers, Jamie, what I would say is we have done extensive work evaluating the aeroderivative opportunity. And we began serious discussions in this area at the start of the year with commercial aerospace OEMs multiple supply chain participants, and some of the largest owners and operators of OEM produced aeroderivative turbines. Now the work we have done includes assessing channel partners, understanding engine to power generation conversion processes, quantifying the associated upfront costs, evaluating lifecycle maintenance requirements, reliability, and analyzing the addressable market opportunity for this form of power. Now we have held numerous diligence sessions and site visits. We were able to observe the operation and maintenance of these turbines firsthand, the aeroderivative turbines. And that gave us tremendous insight into how this market has evolved and strengthened in recent years. Aengus Kelly: It is clear that there is strong demand for gas-powered turbines today. Every aspect of this opportunity from conversion and installation to operation and long-term maintenance require specialized expertise and substantial operational experience. From AerCap's perspective, pursuing this opportunity would require strong strategic partners and access to the full suite of capabilities needed to convert install, operate and maintain these assets on a long-term basis. The risks we are assessing include operational performance, future costs and alternative power supply solutions. While the technology to convert aerospace into gas-powered turbines is already established. There is a perception in the market that converted units may, in the long-term, be less efficient than the OEM produced aeroderivatives. Whether this proves to be the case over the long-term remains to be seen. It was also evident in our research that both data center operators and hyperscalers would strongly prefer to be connected to the grid over time. If and when that becomes possible, remains a key uncertainty. Should grid capacity expand materially, or alternative technologies improve, demand for aeroderivatives could be adversely affected. Taking all this into account, any opportunity in this area must be evaluated against the industry-leading returns that AerCap generates in our core business. While we continue to see encouraging signs in the aeroderivative market, we will remain prudent and will only pursue opportunities where we believe we have the right partners sufficient operational capabilities and a clear path to generating shareholder value over the long-term. And we will continue to update you as our assessment evolves. Jamie Baker: I should have made that my first question. Thank you so much, Gus. That is very helpful. Appreciate it. Aengus Kelly: No problem, Jamie. Operator: We will take our next question from Catherine O'Brien with Goldman Sachs. Catherine O'Brien: Hey, good morning, Thanks for the time. Maybe just a bit of a follow-up on the leverage question. Jamie, it was going down that path. Leverage remains well below target and has been for several years. And as I know, the team will not deploy capital to growth just for growth's sake. What does it take to see leverage get back closer to target? Do you need OEM deliveries to start to pick up? Because, you know, you guys have been quite active on finding incremental opportunities to pull capital, like, in the Frontier and Airbus deal last quarter. But levered leverage continues to decline. You know, should we expect to see a potential step up in capital deployment to shareholders? I guess I am mainly just trying to get a sense of how much of a priority making the balance sheet more efficient is because it feels like something in the mid-2s would still get you give you dry powder for larger opportunistic deal came up, but maybe you disagree there. Anyways, bit of a long-winded question. We are just trying to figure out, you know, the urgency, or lack thereof to take leverage back up and what the potential path to get there could Peter L. Juhas: Sure, Catherine. Peter L. Juhas: Thanks. Look. So the main the main reason why Leverage has remained so low has really been just the performance of the business and how much cash and capital we have been generating. As you can see, it is it is been very strong. And so know, despite the fact that we bought back 6% of the shares in the first half of this year and all of the, all of the commitments we have made in terms of new orders and that type of thing, nonetheless, the leverage ratio has remained the same. And so think that is really what has been the driver of it. So we are committing capital. Now you are right. We have a lot of dry powder available which is good. We will continue to deploy that. Look. We have got we have got amounts remaining in our existing share repurchase program. We obviously see that as attractive, and so I think you can expect that to continue. But also looking for other opportunities too, and there may be larger opportunities. I mean, some of these things that we have done the delivery slots are relatively close in, but it did not result in a lot of capital deployment today. But that will be in future years. Right? So That is one of the things that we have been doing. I think over time, obviously, we would expect it to get back to those mid-2s levels. But it will take some time to get there, I think. Catherine O'Brien: Okay. High-class problem. Maybe just one more. The aircraft returned from Spirit pre-liquidation. I think they were originally expected to return to service towards year-end. Is that still on track? And when will the incremental 10 aircraft return to service to service? And how should we think about these aircraft plus the returning freighter conversions impacting that spread over the next couple of quarters? Thanks for all the time, guys. Peter L. Juhas: Yeah. So that is still our expectation that we will see. Some returning in the fourth quarter. And on the other 10 aircraft, those should go out later this year as well. So that should be a positive, for lease yields, positive for net spread. Some of those freighters coming in as well. I mean, just to just to look at net spread and lease yields, So, year-over-year, lease yield is up about 30 basis points. Net spread's up 50 basis points. And net spread has been flat for the last few quarters as you have seen. That is despite all those Spirit aircraft the downtime associated with those. So we should see it coming up somewhat. Over the next couple of quarters, and that is going to depend obviously, on those redeliveries of those aircraft. But overall, the trend should be upward for lease yield and slightly upward for net spread as well. Catherine O'Brien: Thank you so much, Peter. Peter L. Juhas: Sure. Operator: We will take our next question from Ronald Epstein with Bank of America. Ronald Epstein: Hey, good morning guys. Maybe just following up on the question that was just asked. How far through are we now? I am assuming pretty far of the, I guess, the less favorable leases that were signed kind of COVID and a little bit post COVID You know, there is a lot of that kind of worked through already. Peter L. Juhas: Yeah. So more than half, Ronald. We are more than halfway through that. You know, it is a long roll-off period for those because some of those were quite long leases. I mean, essentially, essentially, we replaced the existing lease terms when we restructured those for the most part. And so That is a pretty long roll-off. I think I mentioned last year, it was about six more years, that would take to roll-off. So maybe over the over the next five years, you will see that. So it is kind of a long-term positive trend that you see. And that should be coming in. That is one of the things that is contributing to that growth in that portfolio yield and the improvement in that spread. Ronald Epstein: Yeah. I was going to say, right, the portfolio yields should just get a natural lift off of that or next several years. Peter L. Juhas: Exactly. Ronald Epstein: And then a quick question for you guys. I am back to the last question that Jamie asked. On the aeroderivative stuff. What would be the right partner? Like, you know, what kind of what expertise what are you looking for to feel comfortable that okay, this is something we might wanna invest in. Aengus Kelly: You got to remember, Ronald, it is a very significant investment every engine. So you need a long-term demand. And you need the right partner. Now our focus is on in ensuring we approach this, as I said, with the right strategic partner, one that can bring the operational expertise and the capabilities needed to drive long-term value from the opportunity. We have had constructive discussions with a number of potential partners but have not yet identified one with a long-term conviction regarding the longevity and durability of the opportunity. Ronald Epstein: Got it. Got it. Got it. Then maybe just one last one, if I can. If, you know, for the engine leasing business itself, and, you know, supporting those engines, are you guys having any problems, you know, getting parts in the supply chain? What you need to keep those engines flying. Aengus Kelly: Terry. Could you just repeat the last bit, Ronald? You just broke up. Have we had any problems with-- yeah. Sorry about that. Any problems with the supply chain getting the components you need? To support the engines, particularly the CFM56s that you have on those? Well, Ronald, as you know, one of our businesses supports CFM product globally. And at any given time, we are probably moving 50 engines around the world any given day for GE and CFM. And we have been able to do that. That takes a lot of planning. We have a number of facilities around the world where we know which parts of an engine will be scarce years in advance from our knowledge. And we tend to have pre-bought a lot of the expendable parts that airlines tend to I will not say but use the word pilfer. But when you are in that business moving as quickly from A to B to C to D to E to F, you need to really understand what happens to certain consumables on the engines, on the top case, etcetera. And to plan for that years in advance. We have various facilities around the world with stockpiles of those critical parts and we have our own infrastructure that can move these assets around faster and at a greater scale than anyone else in the world. Ronald Epstein: Got it. Got it. Cool. Alright. Thank you, guys. Aengus Kelly: Yeah. Yeah. Thanks. Operator: We will take our next from John Godyn with Citigroup. John Godyn: Hey, guys. Gus, you spent a bit of time talking about the supply-demand in widebodies, which is there is a wide gap there. I was hoping that you could talk a bit more about what is going on in narrow bodies where delivery rates have tracked back up and, in particular, kind of retirement rates and anything of note on modern versus old older engine types. Aengus Kelly: Look, we still see very strong demand. I mean, I suppose, to be fair, the prime aircraft of all is the A321neo. If you have A321neo, I mean, you are you are you are going to you are going to place that. No problem. And they would be very scarce. And that is the clear market leader, and that is where it is so vital for Boeing to get the MAX 10 certified. And then it will help Once Boeing does that, it will actually help the MAX 8. The MAX 8 is a very good airplane. Airlines that operate the MAX 8 and the A320neo would argue that the MAX 8 may be even a slightly superior aircraft. But commonality and operating leverage of having a one-family type aircraft is vital. And so that is what is held back, I would say. The placement activity on the MAX 8 versus the A320neo family, but I think that will reverse when the MAX 10 comes into, when it gets certified and starts delivering. So no, we would certainly see very strong demand out there still for the narrowbody new aircraft. And then on the older tech aircraft, you can see as well that particularly, that is what a lot of our sales are focused on. There is tremendous demand A lot of that is supported, of course, by the demand for engine overhauls, the cost of an engine overhaul shop visit is relatively high. So people will be inclined just to buy engines off us to avoid shop visits, and then we might give the airframe to our own parts business in Memphis, AerCap Materials where we will tear down the airframe ourselves. after having sold the engines. John Godyn: And if I could just ask about your take on NextGen narrowbody, Obviously, it was in the headlines quite a bit last week on the back of Farnborough. And I am just curious, what you think the customer reception would be for a new narrowbody. Aengus Kelly: Well, I do not think anyone's bringing one out today. If it were to come today, the customer reception would be very cool. I think over time, as the existing technology improves, matures, and starts to deliver the on-wing time that was originally envisaged and that goes for all, be it Airbus, Boeing, Pratt, CFM, etcetera. I think I do believe that will happen over the course of the next four or five odd years. And at that point in time, I think it may be more sensible than for the launch of a new narrowbody, but I cannot see any significant numbers being delivered before the back end of the next decade. So launch, you know, it is one thing. Delivery of significant numbers of aircraft is what is relevant to us. And I just do not see that happening before the end of the next decade. So we are a long, long way off there. John Godyn: Thank you for the thoughts. Operator: We will take our next question from Shannon Dougherty with Deutsche Bank. Shannon Dougherty: Thanks for taking my question and congrats on the great results. Gus, this is your first direct widebody order in many years and you have previously expressed some hesitancy in placing direct OEM orders So why now? Do you think that widebody supply will get worse before moving into the next decade? And if I may, if you were any other customer of Boeing's when would your 15 widebody start delivering? Aengus Kelly: Well, I can only talk about when AerCap starts delivering. Well, we know the slots are very rare. And I think it was a combination, as I said in my prepared comments, of the longstanding relationship with Boeing being the biggest owner of Boeing 787s in the world. And being able to place close-in slots quickly. Certainly, if you are Boeing, you do not want to be dealing with someone who does not have, huge knowledge and capability in moving widebodies. Narrow bodies are easier to move, but widebodies are far more challenging. And so you really want to have confidence if you got near-term slots available that the entity that you are dealing with can definitely move them and move them very efficiently. I think that is our track record there. Was very important as part of the deal, our ability to move quickly, etcetera. I cannot speak for when Boeing would offer widebody slots to anyone else, but I would imagine they would be materially later. Now my hesitancy in dealing with the OEMs directly, I do not have any hesitancy. I never have. I deal with them. I just do not like rolling up at Farnborough at the Boeing tent and waiting in line for them taking an order. So you want to make sure you do it on your terms and the terms are right. And when that happens, of course, we will do as many as we think are economically viable for our shareholders. Shannon Dougherty: Great. Thanks. And separately, how big are your LEAP and CFM56 portfolios today at SES? How many engines are off lease? And can you give us any color on lease rates that you are seeing for the two types? Peter L. Juhas: Thanks for the question. Could you just repeat that? Terry. Could you just repeat that question? Shannon Dougherty: Oh, yeah. How big are your LEAP and CFM56 portfolios today at SES? And how many engines are off lease? If you have any color on lease rates, too, that would be great. Aengus Kelly: The numbers-- de minimis. I mean, there is a shortage of CFM56 and LEAP engines globally around the world. So anything that is on the ground is either there is a home for the next couple of weeks or it is in transition. I would not think there would be, as I said, a de minimis amount. Shannon Dougherty: Okay. Operator: We will take our next question from Moshe Orenbuch with TD Cowen. Moshe Orenbuch: Great. Thanks. I guess, Peter, when you talked about the full-year kind of gain-on-sale, you mentioned $4 billion to $5 billion I think you did nearly $3 billion in the first half. Can you talk a little bit about kind of what is left to do in the second half and what the demand from the buyer community looks like? Peter L. Juhas: Sure. So demand continues to be very strong. We have about $400 million of held-for-sale at the moment, but we have a number of other sales that are in the pipeline. And so you know, while the first half of the year was high, right, I do not expect us to replicate that first half of the year. I still think know, in the billion to billion range, I mean, that would be a record number for us for the full-year. So we do feel pretty confident that we will be in that range. And that is indicative of the demand that we see, you know, globally. That is holding up very well and seeing that pretty much across the board and at high margins as you have seen. So I think, that is really just, you know, the first half of the year was extremely high. Second half of year, I think, will still be high, but not as high. Moshe Orenbuch: Got it. I think, you know, one of the other, you know, kind of aspects of that high level of sales is that it kind of reduces your existing fleet. And this quarter, you actually had, on a period-end basis, growth in the net fleet for the first time in a few quarters. Can you talk a little bit about the outlook for the second half there given what you have got in orders? And maybe discuss how kind of the Spirit aircraft fit into that. I guess they are technically in the fleet, but will start to generate revenue. So can you talk about the outlook for growth in the fleet and second half and into 2027? Peter L. Juhas: Sure. Yeah, Moshe. I mean, they will so the Spirit aircraft are in the fleet. they are still flight equipment. I would expect the fleet to grow slightly during the latter half of the year. Obviously, these high sales volumes are impacting that as well. So I think we will see it maybe go up a little bit, but not a huge increase this year. Moshe Orenbuch: Got it. Alright. Thanks very much. Peter L. Juhas: Sure. Operator: We will take our next question from Kristine Liwag with Morgan Stanley. Gabby: Hi, good morning. This is Gabby on for Kristine. Thanks for taking the question. So going back to Shannon's question here a little, I mean, March, you placed your largest ever direct Airbus order for 100 A320neo family aircraft. And then in July, you added 15 Boeing 787s. That is a pretty meaningful acceleration in direct OEM commitments after several years of a pretty selective ordering. Is there anything that has changed in your assessment of OEM pricing and delivery economics? And are we entering a period where lessors can once again negotiate attractive terms on new aircraft, or do you still view the market as Boeing and Airbus retain most of the bargaining power? Aengus Kelly: Well, I think if we look at the recent Airbus orders, we clocked up almost 200 aircraft with Airbus in the last two years. They are order books to all intents and purposes that we have taken over from airlines. So that made it far more attractive Of course, the contracting party ultimately is Airbus, but the entity that had the order book were entities that we helped. Be it Spirit, be it Frontier. And in return for that assistance, we were able to step into those delivery slots which otherwise would not be available. As you saw, those delivery slots begin I think, as early as late 2027, 2028, 2029, 2030, 2031, 2032. As opposed if we would have gone to Airbus and Boeing on the narrow bodies and ordered large numbers of aircraft. your order stream would probably start towards the end of that order stream. And that has tremendous impact on economics. Because if you think of paying escalation every year, say escalation is 4%. And you can take delivery of your equipment, you know, you order at the same time, give or take, you can get delivery four years earlier than a competitor. Then your purchase price is probably 16% to 17% less at the end of the day. And that is an enormous advantage. And the ability to execute transactions like that comes back to AerCap's unique capabilities. Scale gives you the ability to interact on these opportunities but it is unique capabilities to take engines out to move them into our leasing pools that enable us to take AOG aircraft out of customers like Frontier, and create revenue right away. In the case of Spirit, our confidence in being able to re-lease the aircraft, and to work with the airline, etcetera, these are things that, to move very quickly, gave us the advantages that we had there in getting those order books. They just would not be available in any circumstance, if you were to go to Airbus or Boeing directly. Gabby: Great. Thanks so much. Operator: We will take our next question from Cordelia Dang with Barclays. Cordelia Dang: Hi, this is Cordelia on for Terry Ma with Barclays. Thanks for taking my question. Just talking about gain-on-sale margins for a second. They continue to remain attractive in the current environment at 20%. I guess, what is the durability of these elevated, call it, high-teens to low-20s gain-on-sale margins? Aengus Kelly: Look, what I would say when it comes to selling aircraft, Cordelia, the gain-on-sale is never a driver. The decision to sell the assets is what do we think the value of the asset is on our books and what do we think we can get for it. Whether that generates a 5% gain, 10% gain, or 50% gain, I do not care. What I care about is after the sale of that asset, is the company a better company? Did I sell an asset that was better than our average asset? Our average asset has 200 seats. Probably seven years old, and it is probably on lease for seven years. After I sell this asset, is that average asset improved or worse? That is the key question because that is what protects long-term shareholder value. Then once we decide to sell, of course, use the huge network we have to maximize the gain-on-sale. And that is where you see there that we have always printed strong gain-on-sale for 20 years, year in, year out. But Pete, maybe you want to comment on how they fluctuate quarter in, quarter out. Peter L. Juhas: Sure. Sure. So, Cordelia, I mean, I think it is just worth looking. If you look at kind of quarterly, you see a fair amount of variation in these. So just to give you an example, last year, first quarter was 35%. Second quarter, 18%, third quarter 28%, fourth quarter 24%. And then, the first quarter this year is 24%, and now it is 20%. So they move around a lot. There is not really a discernible trend there. I mean, I cannot discern it anyway. In terms of how that works. It just depends on what happens to close in that quarter. And the volumes that you have. And so, but I think there are a number of factors that are contributing to these high margins, which we would expect to continue. And one has been the strong environment that we have talked about a lot. Another is higher maintenance costs, right, which translate into if you have life left on an engine, you know, if it costs more to replace that. That contributes to higher values for these. You have higher inflation over the last several years. which does not show any signs of decreasing. These are hard assets. And so inflation tends to push those residual values and sale prices up. So all of those things together, I think, are contributing to it. And we would expect those, that to continue for a while. Cordelia Dang: Super helpful. Thank you. And then just a follow-up to the aeroderivatives. I am trying to think about if you can help me dimensionalize potentially the return profile you have to see with the aeroderivative opportunity. Cordelia Dang: Relative to your existing engine business. Aengus Kelly: Well, we know what our existing business does, and it is very strong returns. And as we said, there is a significant investment in the aeroderivatives that requires a very long-term durable demand to be there and have the right partners to make sure that the product delivers the efficiency that the ultimate customer expects and above all else reliability. In the data center business, one thing that has become clear to us is if there is any concern about reliability, no one will take your product. It has to be 100% reliable. Because when these things fire up, if they do not fire up, the data's lost. It is no longer a data center then. Cordelia Dang: Got it. Thank you. Operator: We will take our next question from Erin Cyganovich with Truist Securities. Erin Cyganovich: Thanks. Just following up on prior questions around increasing leverage. I think Peter mentioned that there are opportunities sometimes to put big, chunky pieces to work. I am just wondering what you are seeing on that front. Are you seeing portfolios? I mean, consolidation is kind of largely at least from the larger players seemingly played out. Do you see other consolidation opportunities out there as well? Aengus Kelly: Well, I mean, first of all, I think the leverage is a function, as-- as Peter mentioned, of the strong results of the business over a very long period of time. Just this quarter gone, with $1.5 billion of operating cash flow. And of course, operating cash flow excludes any gain-on-sale. And the business, I think, the last 12 months, Peter, is about close to $6 billion of operating cash flow, which is a tremendous amount. it speaks to the underlying core leasing business that we have of engines, aircraft, helicopters. And so, as it pertains to opportunities, certainly in regard to M&A, as you know, from the past, we will always be looking at all opportunities in the sector. But it has to be something that is accretive to our shareholders. And you can see from our beliefs and our activity over the course of the last four or five years, and we have seen in the last six months, that we believe the cheapest aircraft are still available, as I said before, every day down on the New York Stock Exchange under the ticker AER, and that is where we buy very significant amounts of aircraft. I mean, as Peter said, we returned $1.4 billion to shareholders. That is the same as going out and buying about $5.5 billion of aircraft in a sale and leaseback transaction. at economics we could not match. So that is why we continue to do that in large scale. But of course, we have to be cognizant too that we do have a large order book that will deliver. And so some of that capital over time will be needed too. Of course, we will generate capital. But we want to make sure that AerCap is always able and ready to go whenever a significant opportunity presents itself. Erin Cyganovich: Thanks, Gus. My follow-up question would be on conversations you are having with airlines. You know, you mentioned some input costs, obviously, with oil rising, putting some pressure on margins, but everybody seems to be doing, I guess, fairly well. Has that changed any of your conversations with airlines in terms of you know, maybe opportunities for more sale leasebacks, etcetera? Aengus Kelly: Not as yet, but there is no doubt, of course. Look, at these oil prices and if they are to last, of course, some airlines will feel that, and we will definitely see impaired profitability. But on an overall basis globally, at the moment, we do not see any material impact as yet. Of course, that could change, but at the moment, we do not. And I would say, of course, over the last 20 years as a public company, every quarter, we reported credit costs and they have never been a material driver of performance of AerCap. That is down to the ability of the company to move assets rapidly around the world from underperforming to performing airlines and regions. But I would say that at the moment, as we look out towards the rest of the year, the airline industry is still on a global basis healthy. Erin Cyganovich: Thank you. Operator: There are no further questions at this time. I will turn the conference back to Aengus Kelly for any additional or closing remarks. Aengus Kelly: Thank you, operator, and thank you all for joining us. Look, AerCap has still significant financial flexibility. We have a strong pipeline of opportunities, and a business that continues to perform exceptionally well. I want to thank you for your continued interest and support, and we look forward to speaking with you again in the next quarter. Thank you. Operator: This concludes today's call. Thank you for your participation. You may now disconnect. Before you buy stock in AerCap, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AerCap wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends AerCap. The Motley Fool recommends the following options: long January 2027 $60 calls on AerCap. The Motley Fool has a disclosure policy. AerCap (AER) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. AerCap Holdings has delivered a 190.0% return over the past 5 years, and the current valuation work suggests the stock may still trade at a discount, with both the Discounted Cash Flow (DCF) intrinsic value estimate and market multiples pointing in the same direction. A 190.0% 5 year return highlights how strongly AerCap Holdings has rewarded shareholders over a longer horizon. This makes the current valuation signals especially important to watch. The planned LEAP engine leasing joint venture with Air France Industries KLM Engineering & Maintenance can support long term cash flow potential. Execution risk around regulatory approvals and delivery timing may affect how quickly that value shows up. AerCap Holdings screens as undervalued on the broader checks, with the company passing 5 out of 6 valuation tests according to the value score. For investors, the debate is whether the current discount implied by the intrinsic value work and multiples still offers enough upside after such a strong multi year run. AerCap Holdings delivered 43.9% returns over the last year. See how this stacks up to the rest of the Trade Distributors industry. The Discounted Cash Flow (DCF) model used here is built on future cash flow projections for AerCap Holdings and then discounts them back to today. AerCap currently shows latest twelve-month free cash flow of about $1.2b in outflows, so the model is effectively treating this as a recovery story that moves from near-term pressure to positive and growing cash generation over time. On that basis, the 2 Stage Free Cash Flow to Equity approach points to an intrinsic value of about $228 per share. That implies AerCap trades at roughly a 33% discount to the DCF estimate. The recently announced LEAP engine leasing joint venture with Air France Industries KLM Engineering & Maintenance helps explain why cash flows in the model extend well beyond the current aircraft cycle, even though the first engines are not expected to be placed until 2027. On this cash flow view, AerCap Holdings stock appears undervalued relative to the intrinsic value implied by the DCF model. Our Discounted Cash Flow (DCF) analysis suggests AerCap Holdings is undervalued by 33.0%. Track this in your watchlist or portfolio, or discover 57 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for AerCap Holdings. P/E can be a useful check for AerCap Holdings because earnings are a key way investors judge leasing businesses that rely on long term contracts and asset returns. The stock currently trades on a P/E of about 7.0x. That level is well below both the Trade Distributors industry average of roughly 25.2x and a peer group average of about 25.2x. The fair P/E ratio implied by the model is about 18.3x, which reflects what investors might typically pay for AerCap given its size, profitability profile and risk characteristics. Compared with that fair ratio, AerCap’s current multiple suggests the stock trades at a wide discount on earnings. Even after a strong share price run in recent years, the P/E still prices AerCap as cheaper than both the tailored fair value and broad peer benchmarks. On the P/E multiple, AerCap Holdings stock appears undervalued compared with what investors might usually pay for its earnings profile. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for AerCap Holdings pick up where this valuation puzzle leaves off and explain what future paths for growth, margins and earnings would need to look like for the stock to be worth meaningfully more or less than today's price. Each one links its number to a clear view of where AerCap Holdings' growth, profitability and risks might head next, giving you a reference point to revisit on the Community page as new information becomes available. Share a number driven Narrative on AerCap Holdings in the Simply Wall St community and set out your view on whether the LEAP engine joint venture really supports the current share price. Add your voice now and see how your thesis holds up as new results and updates arrive. Do you think there's more to the story for AerCap Holdings? Head over to our Community to see what others are saying! For AerCap Holdings, both the Discounted Cash Flow (DCF) intrinsic value estimate and the earnings multiple view currently point to an undervalued stock, with the DCF implying a sizeable discount to intrinsic value. The broader valuation checks also look supportive, which gives the current discount more weight than a single metric on its own. From here, the key question is whether cash flows from AerCap’s leasing portfolio and engine joint venture evolve in a way that eventually narrows that gap, or whether the discount remains a reflection of execution and industry risks. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AER. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:30 a.m. ET Head of Investor Relations - Joseph McGinley Chief Executive Officer - Aengus Kelly Chief Financial Officer - Peter L. Juhas Operator: Please stand by. Good day, and welcome to the AerCap Q2 2026 Financial Results Call. 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. Joseph McGinley: Thank you, operator, and hello, everyone. Welcome to AerCap's Second Quarter 2026 Conference Call. With me today are our Chief Executive Officer, Aengus Kelly and chief financial officer, Pete Juhas. Before we begin today's call, I would like to remind you that some statements that are 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 our statements. AerCap undertakes no obligation other than that imposed by law to publicly update or revise any forward-looking statements to future events information, or circumstances that arise after this call. Further information concerning issues that could materially affect performance can be found in AerCap's earnings release dated July 29, 2026. A copy of the earnings release and conference call presentation are available on our website at aercap.com. This call is open to the public and being webcast simultaneously at aercap.com and will be archived for replay. We will shortly run through our earnings presentation and allow time at the end for Q&A. As a reminder, I will ask that analysts limit themselves to one question and one follow-up. I will now turn the call over to our CEO, Aengus Kelly. Aengus Kelly: Thank you for joining us for our second quarter 2026 earnings call. This was another strong quarter for AerCap as reflected in our financial results. Disciplined capital deployment and increased full-year guidance. AerCap's business maintained its momentum in the second quarter. As highlighted by our transaction activity. The lease extension rate on passenger aircraft was 85% well above the long-term average. We also completed $1.4 billion of asset sales during the quarter, generating a gain-on-sale margin of 20%. These operational highlights reflect both the resilience of our business model and the continued benefit of the supply-demand imbalance across our industry. Turning to our financial results. We delivered adjusted earnings per share of $5.14 in the second quarter. Representing an adjusted return on equity of 18%. We also generated $1.5 billion of cash flow from operations. This strong cash generation continues to create significant financial flexibility enabling us to invest in long-term accretive opportunities while also returning substantial capital to our shareholders. During the quarter, we repurchased more than $690 million of our shares and over $1.4 billion in the first half of the year. In addition, we recently ordered 15 new Boeing 787 aircraft. This is a key highlight, which we will discuss in more detail later in the call. Reflecting our strong first half performance, and positive outlook for the business, we are raising our full-year earnings guidance to $16.80 per share, not including any additional gains on asset sales. Our outlook is underpinned by a supportive industry backdrop. Let me spend a few minutes discussing the broader market environment. Recent geopolitical challenges have led to higher input costs for airlines and will no doubt put further pressure on airline margins this year. That said, it is expected that the global airline industry will remain healthy in 2026 in aggregate supported by good travel demand, strong load factors and disciplined capacity growth. While global traffic growth has moderated year-over-year, trends vary by region. The Middle East, Asia Pacific and North America have experienced some weakness in daily flight activity. But Europe, Africa and Latin America have continued to see growth. Overall, the trends we are seeing highlight the resilience of travel demand and the industry's ability to adapt to changing market conditions. For AerCap, this backdrop remains highly supportive. Aircraft and engine availability remain constrained. While airline demand continues to exceed supply. We see this reflected in our leasing activity lease extensions and asset values. As a result, we remain confident in the long-term outlook for AerCap and the aviation industry more broadly. The supply-demand imbalance is particularly pronounced in the widebody market. Years of production shortages and delivery delays have constrained the availability of new widebody aircraft globally. This is clear from the left-hand side chart on Slide 4. Over the past five years, airlines have extended service lives of older widebody aircraft. Resulting in over 200 fewer widebody retirements than in the comparable pre-COVID period. As you can see on the right-hand side of this slide. More recently, widebody production rates have begun to recover. And we expect to see an increase in retirement activity among the oldest and least fuel-efficient aircraft. This trend will likely continue as more new-technology aircraft enter service. With a large number of aging widebodies still in operation, this replacement cycle should support strong demand for widebody leasing for many years to come. Against this backdrop, our order for 15 Boeing 787 aircraft reflects our conviction in the long-term fundamentals of the widebody market. We believe the 787 is one of the most attractive widebody assets combining favorable economics with a broad global customer base and strong secondary market liquidity. Importantly, delivery positions for new Boeing 787 aircraft remain extremely limited. AerCap's longstanding relationship with Boeing combined with our scale and ability to execute quickly, gives us a competitive advantage in securing scarce delivery positions. Our Boeing 787s will start delivering in 2030 and run through 2033 at economics that support our long-term return objectives. Today, we not only have the largest Boeing 787 fleets, but also the largest Boeing 787 order book of any lessor. And therefore, we are uniquely positioned to meet growing airline demand for next-generation widebody aircraft. This strategic investment allows us to capitalize on a prolonged fleet renewal cycle. While providing our customers with access to one of the most efficient and sought-after aircraft types in the market. Turning to Slide 5. This investment is also a good example of the capital allocation framework that guides every decision we make. We continue to deploy capital with discipline and flexibility. Directing it toward opportunities that we believe offer the most attractive long-term risk-adjusted returns while maintaining capacity to return capital to shareholders. So far this year, we have added 131 aircraft to our order book, returned more than $1.5 billion to our shareholders through share repurchases and dividends and still hold approximately $3.5 billion of excess capital available to deploy. In closing, AerCap delivered another strong quarter. Our global platform, consistent execution, disciplined capital allocation, and active portfolio management continue to position us to capitalize on opportunities across the market. And with that, I will now hand the call over to Peter to review our financials. Peter L. Juhas: Thanks, Gus. Good morning, everyone. We delivered another strong quarter and I will start reviewing our financial results on Slide 6. Our GAAP net income for the second quarter was $726 million or $4.59 per share. The impact of purchase accounting adjustments was $129 million for the quarter or $0.82 per share. That included lease premium amortization of $26 million maintenance rights amortization of $36 million related to maintenance revenue and maintenance rights amortization $67 million related to leasing expenses. During the second quarter, we had $28 million of recoveries related to the Ukraine conflict, or $0.18 per share. The net tax effect of all these items was $15 million or $0.10 per share. As a result, our adjusted net income for the second quarter was $811 million or $5.14 per share. That represents an adjusted ROE of 18% for the second quarter. Turning to Slide 7. I will briefly go through the main drivers that affected our results. Basic lease rents were $1.677 billion. Maintenance revenues remained elevated this quarter at $177 million. Our net maintenance contribution which is maintenance revenue less leasing expenses, after taking into account purchase accounting adjustments, was $131 million this quarter. that is higher than usual due to the timing of maintenance revenue transition expenses, and claims. As I mentioned last quarter, net maintenance contribution has been higher than normal for the first half of this year but we expect it to return to more normal levels in the second half of the year. Net gain-on-sale of assets was $223 million for the second quarter. The sales environment continued to be strong, and we sold 38 of our owned assets for total sales revenue of $1.4 billion. That resulted in an unlevered gain-on-sale margin of 20% for the quarter which is equivalent to a multiple of 1.7 times book value on an equity basis. As of June 30, we had just over $400 million worth of assets held-for-sale. Interest expense was $468 million for the second quarter and income tax expense was $123 million reflecting an effective tax rate of 15.5%. Turning to Slide 8. Our liquidity position continues to be very strong. As of June 30, our total sources of liquidity were approximately $22 billion. That includes just under $1.7 billion of cash, $10 billion of revolvers, and $3 billion of other committed facilities. as well as estimated sales and operating cash flow. Our sources to uses coverage ratio was 1.9x which reflects excess cash coverage of around $10 billion. Our leverage ratio at the end of June was 2.05 to 1, which is about the same as last quarter. Our operating cash flow was $1.5 billion for the quarter. And our secured debt to total assets ratio was 9%, which is in line with the record low level reported last quarter. Our average cost of debt was 4.2%. During the second quarter, we bought back 4.9 million shares for a total of $691 million. Together with our repurchases in the first quarter, we repurchased over 6% of our shares outstanding at the beginning of this year. Since 2023, we have bought back 93 million shares or almost 40% of our outstanding shares for a total of $8 billion. Turning to Slide 9. On our last earnings call in February, we projected adjusted earnings per share of $14.50 which included $1.50 of gains on sale from the first quarter. As Gus mentioned, today we are raising our full-year 2026 adjusted EPS guidance to approximately $16.80. We are increasing our estimated EPS excluding gains on sale to approximately $14 and we are also including the $2.80 of gains on sale from the first half of the year. However, we have not included any gains on sale for the second half of the year. In the first half, the drivers of the outperformance relative to guidance were gains on asset sales of $514 million, higher net maintenance contribution and other income. We have completed $2.8 billion of asset sales in the first six months of this year, and as a result, we currently expect asset sales for the full-year 2026 to be in the range of $4 billion to $5 billion. In closing, AerCap has continued its strong performance this quarter. We generated adjusted EPS of $5.14 and adjusted ROE of 18%. So far this year, we have returned over $1 billion to shareholders and we have made significant additions to our forward orders with Airbus and Boeing. We continue to grow our fleet with new-technology, fuel-efficient aircraft. And today, we have once again raised our EPS guidance. All of this indicates our confidence in the value of AerCap today and into the future. And with that, operator, we can open up the call for Q&A. Operator: Thank you. If you would like to ask a question, please signal by pressing star 1. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Again, press star 1 to ask a question, and we will pause for just a moment to assemble the queue. We will take our first question from Jamie Baker with JPMorgan. Jamie Baker: Good afternoon, everybody. So Gus, question on the 85% extension rate. So what takes place with the other 15%? Is that mostly made up of, I do not know, end of lease sales? Is it part outs? Is it customer purchases? I am I am just wondering, we all know how strong the environment is, but when a lease does not get extended in this market, just kind of wondering what the outcome is. You know, how common is it that you take the asset back, paint it, and release it? That sort of thing. Just concentrating on the 15%. Aengus Kelly: Yeah. You are right, Jamie. Peter L. Juhas: It is generally quite rare that the aircraft would come back and be released. The odd time it will. So for the most part, they end up getting parted out. Jamie Baker: Okay. Aengus Kelly: Just to be clear on that percentage, Jamie, so the way we calculate that is that is 85%. So of everything that is either going out on lease again to a new customer or being extended, that is the denominator. So 85% extended, 15% released, and we have excluded aircraft that are being sold. Jamie Baker: Okay. Alright. I appreciate the clarification. I did not realize that. And then, on the follow-up, just the leverage of 2x or 2.05 clearly, you know, lots of firepower at you know, BBB+ to do. I guess, you know, kind of whatever you want here. But Mark and I were wondering, have you thought about lowering the target a touch, shooting for upgrades into, you know, the low A range? Or in this environment, does that even make sense in terms of the marginal savings? Maybe you are just better off buying more stock or maybe another platform. Thoughts on that? Aengus Kelly: Well, look. Certainly, Jamie, with the history of the business, over the last 20 years generating the returns we have, where we are, you know, the best part of a thousand over treasury every year after tax GAAP ROE with the tremendous operating cash flows we certainly feel that a move into the A category is deserved and warranted. Jamie Baker: Okay. That is perfect. And just back to my first question quickly. Anything in those numbers, the 85% and the 15% as it relates to engine cores going into data centers? Aengus Kelly: Look, of course, what we will sell assets into those who want to put them into data centers. But as it relates to data centers, Jamie, what I would say is we have done extensive work evaluating the aeroderivative opportunity. And we began serious discussions in this area at the start of the year with commercial aerospace OEMs multiple supply chain participants, and some of the largest owners and operators of OEM produced aeroderivative turbines. Now the work we have done includes assessing channel partners, understanding engine to power generation conversion processes, quantifying the associated upfront costs, evaluating lifecycle maintenance requirements, reliability, and analyzing the addressable market opportunity for this form of power. Now we have held numerous diligence sessions and site visits. We were able to observe the operation and maintenance of these turbines firsthand, the aeroderivative turbines. And that gave us tremendous insight into how this market has evolved and strengthened in recent years. Aengus Kelly: It is clear that there is strong demand for gas-powered turbines today. Every aspect of this opportunity from conversion and installation to operation and long-term maintenance require specialized expertise and substantial operational experience. From AerCap's perspective, pursuing this opportunity would require strong strategic partners and access to the full suite of capabilities needed to convert install, operate and maintain these assets on a long-term basis. The risks we are assessing include operational performance, future costs and alternative power supply solutions. While the technology to convert aerospace into gas-powered turbines is already established. There is a perception in the market that converted units may, in the long-term, be less efficient than the OEM produced aeroderivatives. Whether this proves to be the case over the long-term remains to be seen. It was also evident in our research that both data center operators and hyperscalers would strongly prefer to be connected to the grid over time. If and when that becomes possible, remains a key uncertainty. Should grid capacity expand materially, or alternative technologies improve, demand for aeroderivatives could be adversely affected. Taking all this into account, any opportunity in this area must be evaluated against the industry-leading returns that AerCap generates in our core business. While we continue to see encouraging signs in the aeroderivative market, we will remain prudent and will only pursue opportunities where we believe we have the right partners sufficient operational capabilities and a clear path to generating shareholder value over the long-term. And we will continue to update you as our assessment evolves. Jamie Baker: I should have made that my first question. Thank you so much, Gus. That is very helpful. Appreciate it. Aengus Kelly: No problem, Jamie. Operator: We will take our next question from Catherine O'Brien with Goldman Sachs. Catherine O'Brien: Hey, good morning, Thanks for the time. Maybe just a bit of a follow-up on the leverage question. Jamie, it was going down that path. Leverage remains well below target and has been for several years. And as I know, the team will not deploy capital to growth just for growth's sake. What does it take to see leverage get back closer to target? Do you need OEM deliveries to start to pick up? Because, you know, you guys have been quite active on finding incremental opportunities to pull capital, like, in the Frontier and Airbus deal last quarter. But levered leverage continues to decline. You know, should we expect to see a potential step up in capital deployment to shareholders? I guess I am mainly just trying to get a sense of how much of a priority making the balance sheet more efficient is because it feels like something in the mid-2s would still get you give you dry powder for larger opportunistic deal came up, but maybe you disagree there. Anyways, bit of a long-winded question. We are just trying to figure out, you know, the urgency, or lack thereof to take leverage back up and what the potential path to get there could Peter L. Juhas: Sure, Catherine. Peter L. Juhas: Thanks. Look. So the main the main reason why Leverage has remained so low has really been just the performance of the business and how much cash and capital we have been generating. As you can see, it is it is been very strong. And so know, despite the fact that we bought back 6% of the shares in the first half of this year and all of the, all of the commitments we have made in terms of new orders and that type of thing, nonetheless, the leverage ratio has remained the same. And so think that is really what has been the driver of it. So we are committing capital. Now you are right. We have a lot of dry powder available which is good. We will continue to deploy that. Look. We have got we have got amounts remaining in our existing share repurchase program. We obviously see that as attractive, and so I think you can expect that to continue. But also looking for other opportunities too, and there may be larger opportunities. I mean, some of these things that we have done the delivery slots are relatively close in, but it did not result in a lot of capital deployment today. But that will be in future years. Right? So That is one of the things that we have been doing. I think over time, obviously, we would expect it to get back to those mid-2s levels. But it will take some time to get there, I think. Catherine O'Brien: Okay. High-class problem. Maybe just one more. The aircraft returned from Spirit pre-liquidation. I think they were originally expected to return to service towards year-end. Is that still on track? And when will the incremental 10 aircraft return to service to service? And how should we think about these aircraft plus the returning freighter conversions impacting that spread over the next couple of quarters? Thanks for all the time, guys. Peter L. Juhas: Yeah. So that is still our expectation that we will see. Some returning in the fourth quarter. And on the other 10 aircraft, those should go out later this year as well. So that should be a positive, for lease yields, positive for net spread. Some of those freighters coming in as well. I mean, just to just to look at net spread and lease yields, So, year-over-year, lease yield is up about 30 basis points. Net spread's up 50 basis points. And net spread has been flat for the last few quarters as you have seen. That is despite all those Spirit aircraft the downtime associated with those. So we should see it coming up somewhat. Over the next couple of quarters, and that is going to depend obviously, on those redeliveries of those aircraft. But overall, the trend should be upward for lease yield and slightly upward for net spread as well. Catherine O'Brien: Thank you so much, Peter. Peter L. Juhas: Sure. Operator: We will take our next question from Ronald Epstein with Bank of America. Ronald Epstein: Hey, good morning guys. Maybe just following up on the question that was just asked. How far through are we now? I am assuming pretty far of the, I guess, the less favorable leases that were signed kind of COVID and a little bit post COVID You know, there is a lot of that kind of worked through already. Peter L. Juhas: Yeah. So more than half, Ronald. We are more than halfway through that. You know, it is a long roll-off period for those because some of those were quite long leases. I mean, essentially, essentially, we replaced the existing lease terms when we restructured those for the most part. And so That is a pretty long roll-off. I think I mentioned last year, it was about six more years, that would take to roll-off. So maybe over the over the next five years, you will see that. So it is kind of a long-term positive trend that you see. And that should be coming in. That is one of the things that is contributing to that growth in that portfolio yield and the improvement in that spread. Ronald Epstein: Yeah. I was going to say, right, the portfolio yields should just get a natural lift off of that or next several years. Peter L. Juhas: Exactly. Ronald Epstein: And then a quick question for you guys. I am back to the last question that Jamie asked. On the aeroderivative stuff. What would be the right partner? Like, you know, what kind of what expertise what are you looking for to feel comfortable that okay, this is something we might wanna invest in. Aengus Kelly: You got to remember, Ronald, it is a very significant investment every engine. So you need a long-term demand. And you need the right partner. Now our focus is on in ensuring we approach this, as I said, with the right strategic partner, one that can bring the operational expertise and the capabilities needed to drive long-term value from the opportunity. We have had constructive discussions with a number of potential partners but have not yet identified one with a long-term conviction regarding the longevity and durability of the opportunity. Ronald Epstein: Got it. Got it. Got it. Then maybe just one last one, if I can. If, you know, for the engine leasing business itself, and, you know, supporting those engines, are you guys having any problems, you know, getting parts in the supply chain? What you need to keep those engines flying. Aengus Kelly: Terry. Could you just repeat the last bit, Ronald? You just broke up. Have we had any problems with-- yeah. Sorry about that. Any problems with the supply chain getting the components you need? To support the engines, particularly the CFM56s that you have on those? Well, Ronald, as you know, one of our businesses supports CFM product globally. And at any given time, we are probably moving 50 engines around the world any given day for GE and CFM. And we have been able to do that. That takes a lot of planning. We have a number of facilities around the world where we know which parts of an engine will be scarce years in advance from our knowledge. And we tend to have pre-bought a lot of the expendable parts that airlines tend to I will not say but use the word pilfer. But when you are in that business moving as quickly from A to B to C to D to E to F, you need to really understand what happens to certain consumables on the engines, on the top case, etcetera. And to plan for that years in advance. We have various facilities around the world with stockpiles of those critical parts and we have our own infrastructure that can move these assets around faster and at a greater scale than anyone else in the world. Ronald Epstein: Got it. Got it. Cool. Alright. Thank you, guys. Aengus Kelly: Yeah. Yeah. Thanks. Operator: We will take our next from John Godyn with Citigroup. John Godyn: Hey, guys. Gus, you spent a bit of time talking about the supply-demand in widebodies, which is there is a wide gap there. I was hoping that you could talk a bit more about what is going on in narrow bodies where delivery rates have tracked back up and, in particular, kind of retirement rates and anything of note on modern versus old older engine types. Aengus Kelly: Look, we still see very strong demand. I mean, I suppose, to be fair, the prime aircraft of all is the A321neo. If you have A321neo, I mean, you are you are you are going to you are going to place that. No problem. And they would be very scarce. And that is the clear market leader, and that is where it is so vital for Boeing to get the MAX 10 certified. And then it will help Once Boeing does that, it will actually help the MAX 8. The MAX 8 is a very good airplane. Airlines that operate the MAX 8 and the A320neo would argue that the MAX 8 may be even a slightly superior aircraft. But commonality and operating leverage of having a one-family type aircraft is vital. And so that is what is held back, I would say. The placement activity on the MAX 8 versus the A320neo family, but I think that will reverse when the MAX 10 comes into, when it gets certified and starts delivering. So no, we would certainly see very strong demand out there still for the narrowbody new aircraft. And then on the older tech aircraft, you can see as well that particularly, that is what a lot of our sales are focused on. There is tremendous demand A lot of that is supported, of course, by the demand for engine overhauls, the cost of an engine overhaul shop visit is relatively high. So people will be inclined just to buy engines off us to avoid shop visits, and then we might give the airframe to our own parts business in Memphis, AerCap Materials where we will tear down the airframe ourselves. after having sold the engines. John Godyn: And if I could just ask about your take on NextGen narrowbody, Obviously, it was in the headlines quite a bit last week on the back of Farnborough. And I am just curious, what you think the customer reception would be for a new narrowbody. Aengus Kelly: Well, I do not think anyone's bringing one out today. If it were to come today, the customer reception would be very cool. I think over time, as the existing technology improves, matures, and starts to deliver the on-wing time that was originally envisaged and that goes for all, be it Airbus, Boeing, Pratt, CFM, etcetera. I think I do believe that will happen over the course of the next four or five odd years. And at that point in time, I think it may be more sensible than for the launch of a new narrowbody, but I cannot see any significant numbers being delivered before the back end of the next decade. So launch, you know, it is one thing. Delivery of significant numbers of aircraft is what is relevant to us. And I just do not see that happening before the end of the next decade. So we are a long, long way off there. John Godyn: Thank you for the thoughts. Operator: We will take our next question from Shannon Dougherty with Deutsche Bank. Shannon Dougherty: Thanks for taking my question and congrats on the great results. Gus, this is your first direct widebody order in many years and you have previously expressed some hesitancy in placing direct OEM orders So why now? Do you think that widebody supply will get worse before moving into the next decade? And if I may, if you were any other customer of Boeing's when would your 15 widebody start delivering? Aengus Kelly: Well, I can only talk about when AerCap starts delivering. Well, we know the slots are very rare. And I think it was a combination, as I said in my prepared comments, of the longstanding relationship with Boeing being the biggest owner of Boeing 787s in the world. And being able to place close-in slots quickly. Certainly, if you are Boeing, you do not want to be dealing with someone who does not have, huge knowledge and capability in moving widebodies. Narrow bodies are easier to move, but widebodies are far more challenging. And so you really want to have confidence if you got near-term slots available that the entity that you are dealing with can definitely move them and move them very efficiently. I think that is our track record there. Was very important as part of the deal, our ability to move quickly, etcetera. I cannot speak for when Boeing would offer widebody slots to anyone else, but I would imagine they would be materially later. Now my hesitancy in dealing with the OEMs directly, I do not have any hesitancy. I never have. I deal with them. I just do not like rolling up at Farnborough at the Boeing tent and waiting in line for them taking an order. So you want to make sure you do it on your terms and the terms are right. And when that happens, of course, we will do as many as we think are economically viable for our shareholders. Shannon Dougherty: Great. Thanks. And separately, how big are your LEAP and CFM56 portfolios today at SES? How many engines are off lease? And can you give us any color on lease rates that you are seeing for the two types? Peter L. Juhas: Thanks for the question. Could you just repeat that? Terry. Could you just repeat that question? Shannon Dougherty: Oh, yeah. How big are your LEAP and CFM56 portfolios today at SES? And how many engines are off lease? If you have any color on lease rates, too, that would be great. Aengus Kelly: The numbers-- de minimis. I mean, there is a shortage of CFM56 and LEAP engines globally around the world. So anything that is on the ground is either there is a home for the next couple of weeks or it is in transition. I would not think there would be, as I said, a de minimis amount. Shannon Dougherty: Okay. Operator: We will take our next question from Moshe Orenbuch with TD Cowen. Moshe Orenbuch: Great. Thanks. I guess, Peter, when you talked about the full-year kind of gain-on-sale, you mentioned $4 billion to $5 billion I think you did nearly $3 billion in the first half. Can you talk a little bit about kind of what is left to do in the second half and what the demand from the buyer community looks like? Peter L. Juhas: Sure. So demand continues to be very strong. We have about $400 million of held-for-sale at the moment, but we have a number of other sales that are in the pipeline. And so you know, while the first half of the year was high, right, I do not expect us to replicate that first half of the year. I still think know, in the billion to billion range, I mean, that would be a record number for us for the full-year. So we do feel pretty confident that we will be in that range. And that is indicative of the demand that we see, you know, globally. That is holding up very well and seeing that pretty much across the board and at high margins as you have seen. So I think, that is really just, you know, the first half of the year was extremely high. Second half of year, I think, will still be high, but not as high. Moshe Orenbuch: Got it. I think, you know, one of the other, you know, kind of aspects of that high level of sales is that it kind of reduces your existing fleet. And this quarter, you actually had, on a period-end basis, growth in the net fleet for the first time in a few quarters. Can you talk a little bit about the outlook for the second half there given what you have got in orders? And maybe discuss how kind of the Spirit aircraft fit into that. I guess they are technically in the fleet, but will start to generate revenue. So can you talk about the outlook for growth in the fleet and second half and into 2027? Peter L. Juhas: Sure. Yeah, Moshe. I mean, they will so the Spirit aircraft are in the fleet. they are still flight equipment. I would expect the fleet to grow slightly during the latter half of the year. Obviously, these high sales volumes are impacting that as well. So I think we will see it maybe go up a little bit, but not a huge increase this year. Moshe Orenbuch: Got it. Alright. Thanks very much. Peter L. Juhas: Sure. Operator: We will take our next question from Kristine Liwag with Morgan Stanley. Gabby: Hi, good morning. This is Gabby on for Kristine. Thanks for taking the question. So going back to Shannon's question here a little, I mean, March, you placed your largest ever direct Airbus order for 100 A320neo family aircraft. And then in July, you added 15 Boeing 787s. That is a pretty meaningful acceleration in direct OEM commitments after several years of a pretty selective ordering. Is there anything that has changed in your assessment of OEM pricing and delivery economics? And are we entering a period where lessors can once again negotiate attractive terms on new aircraft, or do you still view the market as Boeing and Airbus retain most of the bargaining power? Aengus Kelly: Well, I think if we look at the recent Airbus orders, we clocked up almost 200 aircraft with Airbus in the last two years. They are order books to all intents and purposes that we have taken over from airlines. So that made it far more attractive Of course, the contracting party ultimately is Airbus, but the entity that had the order book were entities that we helped. Be it Spirit, be it Frontier. And in return for that assistance, we were able to step into those delivery slots which otherwise would not be available. As you saw, those delivery slots begin I think, as early as late 2027, 2028, 2029, 2030, 2031, 2032. As opposed if we would have gone to Airbus and Boeing on the narrow bodies and ordered large numbers of aircraft. your order stream would probably start towards the end of that order stream. And that has tremendous impact on economics. Because if you think of paying escalation every year, say escalation is 4%. And you can take delivery of your equipment, you know, you order at the same time, give or take, you can get delivery four years earlier than a competitor. Then your purchase price is probably 16% to 17% less at the end of the day. And that is an enormous advantage. And the ability to execute transactions like that comes back to AerCap's unique capabilities. Scale gives you the ability to interact on these opportunities but it is unique capabilities to take engines out to move them into our leasing pools that enable us to take AOG aircraft out of customers like Frontier, and create revenue right away. In the case of Spirit, our confidence in being able to re-lease the aircraft, and to work with the airline, etcetera, these are things that, to move very quickly, gave us the advantages that we had there in getting those order books. They just would not be available in any circumstance, if you were to go to Airbus or Boeing directly. Gabby: Great. Thanks so much. Operator: We will take our next question from Cordelia Dang with Barclays. Cordelia Dang: Hi, this is Cordelia on for Terry Ma with Barclays. Thanks for taking my question. Just talking about gain-on-sale margins for a second. They continue to remain attractive in the current environment at 20%. I guess, what is the durability of these elevated, call it, high-teens to low-20s gain-on-sale margins? Aengus Kelly: Look, what I would say when it comes to selling aircraft, Cordelia, the gain-on-sale is never a driver. The decision to sell the assets is what do we think the value of the asset is on our books and what do we think we can get for it. Whether that generates a 5% gain, 10% gain, or 50% gain, I do not care. What I care about is after the sale of that asset, is the company a better company? Did I sell an asset that was better than our average asset? Our average asset has 200 seats. Probably seven years old, and it is probably on lease for seven years. After I sell this asset, is that average asset improved or worse? That is the key question because that is what protects long-term shareholder value. Then once we decide to sell, of course, use the huge network we have to maximize the gain-on-sale. And that is where you see there that we have always printed strong gain-on-sale for 20 years, year in, year out. But Pete, maybe you want to comment on how they fluctuate quarter in, quarter out. Peter L. Juhas: Sure. Sure. So, Cordelia, I mean, I think it is just worth looking. If you look at kind of quarterly, you see a fair amount of variation in these. So just to give you an example, last year, first quarter was 35%. Second quarter, 18%, third quarter 28%, fourth quarter 24%. And then, the first quarter this year is 24%, and now it is 20%. So they move around a lot. There is not really a discernible trend there. I mean, I cannot discern it anyway. In terms of how that works. It just depends on what happens to close in that quarter. And the volumes that you have. And so, but I think there are a number of factors that are contributing to these high margins, which we would expect to continue. And one has been the strong environment that we have talked about a lot. Another is higher maintenance costs, right, which translate into if you have life left on an engine, you know, if it costs more to replace that. That contributes to higher values for these. You have higher inflation over the last several years. which does not show any signs of decreasing. These are hard assets. And so inflation tends to push those residual values and sale prices up. So all of those things together, I think, are contributing to it. And we would expect those, that to continue for a while. Cordelia Dang: Super helpful. Thank you. And then just a follow-up to the aeroderivatives. I am trying to think about if you can help me dimensionalize potentially the return profile you have to see with the aeroderivative opportunity. Cordelia Dang: Relative to your existing engine business. Aengus Kelly: Well, we know what our existing business does, and it is very strong returns. And as we said, there is a significant investment in the aeroderivatives that requires a very long-term durable demand to be there and have the right partners to make sure that the product delivers the efficiency that the ultimate customer expects and above all else reliability. In the data center business, one thing that has become clear to us is if there is any concern about reliability, no one will take your product. It has to be 100% reliable. Because when these things fire up, if they do not fire up, the data's lost. It is no longer a data center then. Cordelia Dang: Got it. Thank you. Operator: We will take our next question from Erin Cyganovich with Truist Securities. Erin Cyganovich: Thanks. Just following up on prior questions around increasing leverage. I think Peter mentioned that there are opportunities sometimes to put big, chunky pieces to work. I am just wondering what you are seeing on that front. Are you seeing portfolios? I mean, consolidation is kind of largely at least from the larger players seemingly played out. Do you see other consolidation opportunities out there as well? Aengus Kelly: Well, I mean, first of all, I think the leverage is a function, as-- as Peter mentioned, of the strong results of the business over a very long period of time. Just this quarter gone, with $1.5 billion of operating cash flow. And of course, operating cash flow excludes any gain-on-sale. And the business, I think, the last 12 months, Peter, is about close to $6 billion of operating cash flow, which is a tremendous amount. it speaks to the underlying core leasing business that we have of engines, aircraft, helicopters. And so, as it pertains to opportunities, certainly in regard to M&A, as you know, from the past, we will always be looking at all opportunities in the sector. But it has to be something that is accretive to our shareholders. And you can see from our beliefs and our activity over the course of the last four or five years, and we have seen in the last six months, that we believe the cheapest aircraft are still available, as I said before, every day down on the New York Stock Exchange under the ticker AER, and that is where we buy very significant amounts of aircraft. I mean, as Peter said, we returned $1.4 billion to shareholders. That is the same as going out and buying about $5.5 billion of aircraft in a sale and leaseback transaction. at economics we could not match. So that is why we continue to do that in large scale. But of course, we have to be cognizant too that we do have a large order book that will deliver. And so some of that capital over time will be needed too. Of course, we will generate capital. But we want to make sure that AerCap is always able and ready to go whenever a significant opportunity presents itself. Erin Cyganovich: Thanks, Gus. My follow-up question would be on conversations you are having with airlines. You know, you mentioned some input costs, obviously, with oil rising, putting some pressure on margins, but everybody seems to be doing, I guess, fairly well. Has that changed any of your conversations with airlines in terms of you know, maybe opportunities for more sale leasebacks, etcetera? Aengus Kelly: Not as yet, but there is no doubt, of course. Look, at these oil prices and if they are to last, of course, some airlines will feel that, and we will definitely see impaired profitability. But on an overall basis globally, at the moment, we do not see any material impact as yet. Of course, that could change, but at the moment, we do not. And I would say, of course, over the last 20 years as a public company, every quarter, we reported credit costs and they have never been a material driver of performance of AerCap. That is down to the ability of the company to move assets rapidly around the world from underperforming to performing airlines and regions. But I would say that at the moment, as we look out towards the rest of the year, the airline industry is still on a global basis healthy. Erin Cyganovich: Thank you. Operator: There are no further questions at this time. I will turn the conference back to Aengus Kelly for any additional or closing remarks. Aengus Kelly: Thank you, operator, and thank you all for joining us. Look, AerCap has still significant financial flexibility. We have a strong pipeline of opportunities, and a business that continues to perform exceptionally well. I want to thank you for your continued interest and support, and we look forward to speaking with you again in the next quarter. Thank you. Operator: This concludes today's call. Thank you for your participation. You may now disconnect. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends AerCap. The Motley Fool recommends the following options: long January 2027 $60 calls on AerCap. The Motley Fool has a disclosure policy. AerCap (AER) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Adjusted Earnings Per Share (EPS): $5.14 for Q2 2026, representing an adjusted return on equity of 18%. GAAP Net Income: $726 million, or $4.59 per share for Q2 2026. Adjusted Net Income: $811 million, or $5.14 per share for Q2 2026. Cash Flow from Operations: $1.5 billion generated in Q2 2026. Basic Lease Rents: $1.677 billion for Q2 2026. Maintenance Revenues: $177 million for Q2 2026. Net Gain on Sale of Assets: $223 million for Q2 2026, with an unlevered gain on sale margin of 20%. Asset Sales: Completed $1.4 billion in asset sales during Q2 2026, selling 38 owned assets. Interest Expense: $468 million for Q2 2026. Income Tax Expense: $123 million for Q2 2026, reflecting an effective tax rate of 15.5%. Share Repurchases: $691 million in Q2 2026; over $1.4 billion in the first half of 2026. Leverage Ratio: 2.05 to 1 as of June 30, 2026. Average Cost of Debt: 4.2%. Full-Year 2026 Adjusted EPS Guidance: Raised to approximately $16.80. Full-Year 2026 Asset Sales Guidance: Expected to be in the range of $4 billion to $5 billion. Warning! GuruFocus has detected 7 Warning Signs with AER. Is AER fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. AerCap delivered strong Q2 2026 results with adjusted EPS of $5.14 and an adjusted ROE of 18%, reflecting robust business momentum. The company raised its full-year 2026 adjusted EPS guidance to approximately $16.80, driven by strong first-half performance and a positive outlook. AerCap completed $1.4 billion in asset sales during the quarter with a 20% gain on sale margin, highlighting strong asset demand and portfolio management. The lease extension rate on passenger aircraft was 85%, well above the long-term average, indicating high customer retention and asset utilization. AerCap ordered 15 new Boeing 787 aircraft, capitalizing on scarce widebody delivery positions and reinforcing its leadership in the widebody market. The company generated $1.5 billion in cash flow from operations and returned over $1.4 billion to shareholders through share repurchases in the first half of 2026. AerCap maintains strong liquidity of approximately $22 billion and a low leverage ratio of 2.05 to 1, providing significant financial flexibility. The supply-demand imbalance in aircraft, especially widebodies, continues to support strong leasing activity and asset values, benefiting AerCap's core business. Recent geopolitical challenges have led to higher input costs for airlines, potentially pressuring airline margins and impacting AerCap's customer base. Global traffic growth has moderated year over year, with weakness in daily flight activity in the Middle East, Asia Pacific, and North America. The company faces uncertainty in the aeroderivative market for data centers, with risks including operational performance, future costs, and competition from grid power. AerCap's net spread has remained flat for several quarters, partly due to downtime associated with Spirit aircraft, though improvement is expected. The company has not yet identified a strategic partner with long-term conviction for the aeroderivative opportunity, delaying potential diversification. Higher oil prices could impair airline profitability, potentially leading to increased credit risks or reduced demand for aircraft leasing. The roll-off of less favorable leases signed during COVID-19 will take several more years, limiting near-term portfolio yield improvements. Here are the key highlights from AerCap Holdings NV (NYSE:AER)'s Q2 2026 earnings call. Q: (Jamie Baker, JPMorgan) On the 85% lease extension rate, what happens to the other 15%? Is it mostly end-of-lease sales, part-outs, or customer purchases?A: (Aengus Kelly, CEO) It is generally quite rare that the aircraft would come back and be re-leased. For the most part, they end up getting parted out. (Peter Juhas, CFO) To clarify, the 85% is the extension rate. Of the remaining 15%, those are re-leased to a new customer. This calculation excludes aircraft that are being sold. Q: (Catherine O'Brien, Goldman Sachs) Leverage remains well below the 2.5x target. What would it take to get it back up, and how much of a priority is making the balance sheet more efficient?A: (Peter Juhas, CFO) The main reason leverage has remained low is the strong cash and capital generation from the business. Despite buying back 6% of shares in the first half and making new order commitments, the ratio stayed the same. We have a lot of dry powder and will continue to deploy it, including through share repurchases and looking for larger opportunities. We expect leverage to get back to the mid-2s over time. Q: (Shannon Doherty, Deutsche Bank) This is your first direct widebody order in years. Why now, and if you were any other Boeing customer, when would your 15 787s start delivering?A: (Aengus Kelly, CEO) The slots are very rare. Our long-standing relationship with Boeing and our track record as the largest 787 owner, with the capability to move widebodies quickly, were key. Boeing needs confidence that the buyer can move the aircraft efficiently. I can't speak for other customers, but I imagine their slots would be materially later. My hesitancy is not about dealing with OEMs, but about doing it on our terms when the economics are right. Q: (Ronald Epstein, Bank of America) For the aeroderivative opportunity, what kind of partner and expertise are you looking for to feel comfortable investing?A: (Aengus Kelly, CEO) It's a very significant investment per engine, so we need a long-term demand outlook and the right strategic partner that can bring operational expertise and capabilities. We've had constructive discussions but have not yet identified a partner with the long-term conviction regarding the opportunity's longevity and durability. Q: (John Godyn, Citi) You discussed the widebody supply-demand gap. Can you talk about what's happening in narrowbodies, where delivery rates have tracked back up?A: (Aengus Kelly, CEO) Demand is still very strong. The prime aircraft is the A321neo, which is scarce. It's vital for Boeing to get the MAX 10 certified, which would also help the MAX 8. On older tech aircraft, there is tremendous demand, often supported by the high cost of engine overhauls, leading customers to buy engines from us to avoid shop visits. Q: (Moshe Orenbuch, TD Cowen) You mentioned full-year asset sales of $4 billion to $5 billion after nearly $3 billion in the first half. What does the buyer demand look like for the second half?A: (Peter Juhas, CFO) Demand continues to be very strong. We have about $400 million in held-for-sale assets and a number of other sales in the pipeline. While the first half was very high, we feel confident we will be in the $4 billion to $5 billion range for the full year, which would be a record. Q: (Unidentified Participant, Morgan Stanley) After several years of selective ordering, you placed large direct orders with Airbus and Boeing. Has your assessment of OEM pricing changed? Are we entering a period where lessors can negotiate attractive terms?A: (Aengus Kelly, CEO) The recent orders were for order books we took over from airlines (Spirit, Frontier). This allowed us to step into delivery slots that would otherwise be unavailable, starting as early as late 2027. This provides a huge economic advantage, as taking delivery four years earlier than a competitor means a purchase price that is roughly 16-17% less due to escalation. Q: (Cordelia Deng, Barclays) Gain on sale margins remain attractive at 20%. What is the durability of these high-teens to low-20s margins?A: (Aengus Kelly, CEO) The gain on sale is never the driver of a sale decision. The key is whether the company is better after the sale. (Peter Juhas, CFO) The margins move around a lot quarter to quarter. Several factors contribute to the high margins we expect to continue: the strong environment, higher maintenance costs, and inflation pushing up residual values and sale prices. Q: (Arren Cyganovich, Truist Securities) Are you seeing other consolidation opportunities, or has that largely played out?A: (Aengus Kelly, CEO) We will always look at M&A opportunities, but they must be accretive. Our activity shows we believe the cheapest aircraft are still available under the ticker AER. Returning $1.4 billion to shareholders is the same as buying $5.5 billion of aircraft in a sale-leaseback at economics we couldn't match. We must also be cognizant of our large order book, but we want to ensure AerCap is always ready for a significant opportunity. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Net income for the second quarter of 2026 of $726 million, or $4.59 per share. Adjusted net income for the second quarter of 2026 of $811 million, or $5.14 per share. Raising full-year 2026 adjusted earnings per share guidance to approximately $16.80, not including any additional gains on sale for the remainder of the year. DUBLIN, July 29, 2026 /PRNewswire/ -- AerCap Holdings N.V. (NYSE: AER), the industry leader across all areas of aviation leasing, today reported strong financial results for the second quarter and raised guidance for full-year 2026. "AerCap delivered another quarter of strong results, reflecting the power of our business model and the continued demand for high-quality aviation assets. Our global platform, consistent execution, disciplined capital allocation and active portfolio management continue to position us to capitalize on opportunities across the market. As a result, we are raising our full-year 2026 adjusted EPS guidance to $16.80. Looking ahead, we remain confident that the combination of sustained demand for air travel, ongoing aircraft supply constraints and our disciplined approach to capital deployment will continue to drive long-term value for our shareholders," said Aengus Kelly, Chief Executive Officer of AerCap. Highlights: Return on equity of 16% and adjusted return on equity of 18% for the second quarter of 2026. $1.4 billion of asset sales in the second quarter with $223 million of gains on sale, representing an unlevered gain-on-sale margin of 20%, or 1.7x book value on an equity basis. Cash flow from operating activities of $1.5 billion for the second quarter of 2026. Capex of $1.9 billion in the second quarter of 2026, including the purchase of 25 aircraft, five engines and three helicopters. Repurchased 4.9 million shares for a total of $691 million during the second quarter of 2026, taking total share repurchases to over $1.4 billion for 2026 year-to-date. Adjusted debt/equity ratio of 2.05 to 1 as of June 30, 2026. Book value per share of $119.21 as of June 30, 2026, an increase of approximately 16% from June 30, 2025. Placed an order in July 2026 for 15 Boeing 787 aircraft, with deliveries from 2030 to 2033. Revenue and Net Spread Basic lease rents were $1,677 million for the second quarter of 2026, compared with $1,653 million for the same period in 2025. Basic lease rents for the second quarter of 2026 reflected $26 million of lease premium amortization. Maintenance rents and other receipts were $177 million for the second quarter of 2026, compared with $115 million for the same period in 2025. Maintenance rents for the second quarter of 2026 reflected $36 million of maintenance rights asset amortization. Net gain on sale of assets for the second quarter of 2026 was $223 million, relating to 38 owned assets sold for $1.4 billion, compared with $57 million for the same period in 2025, relating to 18 owned assets sold for $374 million. Other income for the second quarter of 2026 was $90 million, compared with $62 million for the same period in 2025. Interest expense excluding mark-to-market of interest rate derivatives was $471 million for the second quarter of 2026, compared with $508 million for the same period in 2025. AerCap's average cost of debt was 4.2% for the second quarter of 2026 and 4.1% for the same period in 2025, in each case excluding debt issuance costs, upfront fees and other impacts. Recoveries Related to Ukraine Conflict During the second quarter of 2026, we recognized recoveries related to the Ukraine Conflict of $28 million, consisting of cash insurance settlement proceeds received from a Russian airline and its Russian insurer in respect of two aircraft lost in Russia. Selling, General and Administrative Expenses Selling, general and administrative expenses were $129 million for the second quarter of 2026, compared with $171 million for the same period in 2025. Other Expenses Leasing expenses were $150 million for the second quarter of 2026, compared with $95 million for the same period in 2025. Leasing expenses for the second quarter of 2026 included $67 million of maintenance rights amortization. Effective Tax Rate AerCap's effective tax rate for the second quarter of 2026 was 15.5%, compared to an effective tax rate of 12.2% for the second quarter of 2025. The effective tax rate is impacted by the source and amount of earnings among our different tax jurisdictions as well as the amount of permanent tax differences relative to pre-tax income or loss, and certain other discrete items. Book Value Per Share Financial Position Flight Equipment As of June 30, 2026, AerCap's portfolio consisted of 3,567 aircraft, engines and helicopters that were owned, on order or managed. The average age of the company's owned passenger aircraft fleet as of June 30, 2026 was 7.4 years (5.5 years for new technology aircraft and 15.6 years for current technology aircraft) and the average remaining contracted lease term was 7.2 years. Dividend In July 2026, AerCap's Board of Directors declared a quarterly cash dividend of $0.40 per share, with a payment date of September 3, 2026, to shareholders of record of AerCap ordinary shares as of the close of business on August 12, 2026. Notes Regarding Financial Information Presented in This Press Release The financial information presented in this press release is not audited. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. The following are definitions of non-GAAP measures and metrics used in this press release. We believe these measures and metrics may further assist investors in their understanding of our performance. These measures and metrics should not be viewed in isolation and should only be used in conjunction with and as a supplement to our U.S. GAAP financial measures. Non-GAAP measures and metrics are not uniformly defined by all companies, including those in our industry, and so this additional information may not be comparable with similarly-titled measures and metrics and disclosures by other companies. Adjusted net income / earnings per share, adjusted return on equity and adjusted earnings per share guidance Adjusted net income is calculated as net income excluding the after-tax impact of the amortization of maintenance rights and lease premium assets recognized under purchase accounting and net recoveries related to the Ukraine Conflict. Adjusted earnings per share is calculated by dividing adjusted net income by the weighted average of our diluted ordinary shares outstanding. Adjusted return on equity is calculated by dividing adjusted net income by average shareholders' equity. Given the relative significance of these items during 2026, we have chosen to present this measure in order to assist investors in their understanding of the changes and trends related to our earnings. Adjusted earnings per share guidance for full-year 2026 is calculated as projected net income (including gains on sale in the first half of 2026, but not including any gains on sale in the second half of 2026) excluding the after-tax impact of the amortization of maintenance rights and lease premium assets recognized under purchase accounting and net recoveries related to the Ukraine Conflict, divided by the weighted average of our projected diluted ordinary shares outstanding. Adjusted debt/equity ratio This measure is the ratio obtained by dividing adjusted debt by adjusted equity. Adjusted debt means consolidated total debt less cash and cash equivalents, and less a 50% equity credit with respect to certain long-term subordinated debt. Adjusted equity means total equity, plus the 50% equity credit relating to the long-term subordinated debt. Adjusted debt and adjusted equity are adjusted by the 50% equity credit to reflect the equity nature of those financing arrangements and to provide information that is consistent with definitions under certain of our debt covenants. We believe this measure may further assist investors in their understanding of our capital structure and leverage. Adjusted net interest margin, annualized net spread, annualized net spread less depreciation and amortization and average cost of debt Adjusted net interest margin is calculated as the difference between basic lease rents, excluding the impact of the amortization of lease premium/deficiency recognized under purchase accounting, and interest expense, excluding the impact of the mark-to-market of interest rate derivatives. Annualized net spread is adjusted net interest margin expressed as a percentage of average lease assets. Annualized net spread less depreciation and amortization is adjusted net interest margin less depreciation and amortization, expressed as a percentage of average lease assets. Average cost of debt is calculated as interest expense, excluding mark-to-market on interest rate derivatives, debt issuance costs, upfront fees and other impacts, divided by average debt balance. Lease assets Lease assets include flight equipment held for operating leases, flight equipment held for sale, net investment in finance leases and maintenance rights assets. Aviation assets Aviation assets include aircraft, engines and helicopters. Conference Call In connection with its report of second quarter 2026 results, management will host a conference call with members of the investment community today, Wednesday July 29, 2026, at 8:30 am Eastern Time. The call can be accessed live via webcast by AerCap's website at www.aercap.com under "Investors," or by dialing (U.S./Canada) +1 646 769 9200 or (International) +353 1 553 8798 and referencing code 9720931 at least 5 minutes before start time. The webcast replay will be archived in the "Investors" section of the company's website for one year. For further information, contact Adi Padva: [email protected]. About AerCap AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is headquartered in Dublin with offices in Miami, Shannon, Memphis, Singapore, London, Dubai, Shanghai, Amsterdam and other locations around the world. 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," "should," "expect," "plan," "intend," "will," "aim," "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, and 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, including but not limited to the availability of capital to us and to our customers and changes in interest rates; the ability of our lessees and potential lessees to make lease payments to us; our ability to successfully negotiate flight equipment (which includes aircraft, engines and helicopters) purchases, sales and leases, to collect outstanding amounts due and to repossess flight equipment under defaulted leases, and to control costs and expenses; changes in the overall demand for commercial aviation leasing and aviation asset management services; the impact of the conflict in the Middle East, including the Iran conflict, or any escalation thereof, on the aviation industry or our business; the continued impacts of the Ukraine Conflict, including the resulting sanctions by the United States, the European Union, the United Kingdom and other countries, on our business and results of operations, financial condition and cash flows; the effects of terrorist attacks on the aviation industry and on our operations; the economic condition of the global airline and cargo industry and economic and political conditions; trade tensions, including actual or threatened U.S. tariffs and retaliatory measures by some countries, and the resulting geopolitical uncertainty; development of increased government regulation, including travel restrictions, sanctions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers; a downgrade in any of our credit ratings; competitive pressures within the industry; regulatory changes affecting commercial flight equipment operators, flight equipment maintenance, engine standards, accounting standards and taxes; and disruptions and security breaches affecting our information systems or the information systems of our third-party providers. As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. These and other important factors and risks are discussed in AerCap's annual report on Form 20-F and other filings with the United States Securities and Exchange Commission. 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. Except as required by applicable law, 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 www.aercap.com. View original content to download multimedia:https://www.prnewswire.com/news-releases/aercap-holdings-nv-reports-strong-financial-results-for-the-second-quarter-2026-and-raises-2026-guidance-302836992.html

DUBLIN, July 29, 2026 /PRNewswire/ --AerCap Holdings N.V. ("AerCap" or the "Company") (NYSE: AER) today announced it has filed an interim financial report including its unaudited condensed consolidated financial statements and notes for the second quarter ended June 30, 2026, with the U.S. Securities and Exchange Commission (the "SEC"). AerCap's Form 6-K can be accessed on the "Investors" section of the Company's website at www.aercap.com, as well as on the SEC's website at www.sec.gov. About AerCap AerCap is the global leader in aviation leasing with one of the most attractive order books in the industry. AerCap serves approximately 300 customers around the world with comprehensive fleet solutions. AerCap is listed on the New York Stock Exchange (AER) and is headquartered in Dublin with offices in Miami, Shannon, Memphis, Singapore, London, Dubai, Shanghai, Amsterdam and other locations around the world. 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," "should," "expect," "plan," "intend," "will," "aim," "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, and 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, including but not limited to the availability of capital to us and to our customers and changes in interest rates; the ability of our lessees and potential lessees to make lease payments to us; our ability to successfully negotiate flight equipment (which includes aircraft, engines and helicopters) purchases, sales and leases, to collect outstanding amounts due and to repossess flight equipment under defaulted leases, and to control costs and expenses; changes in the overall demand for commercial aviation leasing and aviation asset management services; the continued impacts of the Ukraine Conflict, including the resulting sanctions by the United States, the European Union, the United Kingdom and other countries, on our business and results of operations, financial condition and cash flows; the effects of terrorist attacks on the aviation industry and on our operations; the economic condition of the global airline and cargo industry and economic and political conditions; the impact of hostilities in the Middle East, or any escalation thereof, on the aviation industry or our business; trade tensions, including U.S. tariffs and retaliatory measures by the European Union, China and other countries, and the resulting geopolitical uncertainty; development of increased government regulation, including travel restrictions, sanctions, regulation of trade and the imposition of import and export controls, tariffs and other trade barriers; a downgrade in any of our credit ratings; competitive pressures within the industry; regulatory changes affecting commercial flight equipment operators, flight equipment maintenance, engine standards, accounting standards and taxes; and disruptions and security breaches affecting our information systems or the information systems of our third-party providers. As a result, we cannot assure you that the forward-looking statements included in this press release will prove to be accurate or correct. These and other important factors and risks are discussed in AerCap's annual report on Form 20-F and other filings with the United States Securities and Exchange Commission. 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. Except as required by applicable law, 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 www.aercap.com. View original content to download multimedia:https://www.prnewswire.com/news-releases/aercap-holdings-nv-announces-filing-of-interim-financial-report-for-the-second-quarter-of-2026-302837969.html

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a persistent supply-demand imbalance in the aircraft and engine markets, resulting in an 85% lease extension rate for passenger aircraft. The widebody market is experiencing a prolonged replacement cycle due to over 200 fewer retirements than pre-COVID levels, supporting long-term demand for AerCap's fleet. Strategic asset sales of $1.4 billion achieved a 20% gain-on-sale margin, reflecting strong secondary market liquidity and the impact of higher inflation on hard asset values. Management attributes their competitive advantage in securing scarce Boeing 787 delivery positions to their scale and ability to execute complex widebody transitions quickly. The company maintains a disciplined capital allocation framework, balancing $1.5 billion in shareholder returns with strategic investments in next-generation technology. Operational outperformance was bolstered by elevated net maintenance contributions, though management expects these to normalize in the second half of the year. Full-year 2026 adjusted EPS guidance was raised to $16.80, assuming $14.00 from core operations and $2.80 from realized first-half gains, with no gains projected for the second half. Management expects asset sales for the full year to reach a record range of $4 billion to $5 billion based on current pipeline visibility and buyer demand. The new order of 15 Boeing 787 aircraft is scheduled for delivery between 2030 and 2033, targeting economics that support long-term return objectives. Guidance assumes the global airline industry remains healthy despite higher input costs, supported by disciplined capacity growth and resilient travel demand. Portfolio yields and net spreads are expected to trend upward as older, less favorable leases signed during the COVID-19 era continue to roll off over the next five years. Geopolitical challenges and rising oil prices are identified as headwinds that will likely put pressure on airline margins throughout 2026. The company is cautiously evaluating the aeroderivative power market for data centers, citing risks regarding long-term engine efficiency and potential grid expansion. Leverage remains below the target mid-2s range at 2.05 to 1, primarily due to high operating cash flow generation outpacing capital deployment. Supply chain constraints for engine parts require advanced planning and stockpiling of critical consumables to maintain global engine leasing operations. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that widebody slots are extremely rare and their ability to secure near-term positions was due to their status as the world's largest 787 owner. The order was placed on AerCap's specific terms rather than standard OEM cycles, focusing on economically viable delivery slots that competitors cannot access. Gus Kelly detailed extensive diligence on converting aerospace engines to gas turbines, noting strong demand but high operational complexity. Management is hesitant to commit without a partner that has long-term conviction, citing uncertainties about whether data centers will eventually prefer grid connectivity. While margins fluctuate quarterly, management expects them to remain elevated due to high replacement costs for engines and the inflation-protected nature of hard assets. The primary driver for sales remains portfolio optimization rather than chasing specific gain percentages. The A321neo remains the clear market leader; management believes the Boeing MAX 8 will see improved placement once the MAX 10 is certified. Management dismissed the near-term viability of a completely new narrowbody aircraft, stating significant deliveries are unlikely before the end of the next decade.

Interested in Aercap Holdings N.V.? Here are five stocks we like better. AerCap raised its 2026 adjusted earnings guidance to approximately $16.80 per share after reporting second-quarter adjusted earnings of $5.14 per share, $1.5 billion in operating cash flow and an 18% adjusted return on equity. The company completed $2.8 billion of asset sales in the first half and now expects full-year sales of $4 billion to $5 billion. AerCap also repurchased 4.9 million shares in the quarter and has returned more than $1.5 billion to shareholders year to date. AerCap ordered 15 Boeing 787s for delivery from 2030 through 2033, citing constrained wide-body supply and strong long-term replacement demand. Lease trends also remained favorable, with an 85% passenger-aircraft extension rate and year-over-year increases in lease yield and net spread. These 3 Little-Known Stocks Are Analyst Favorites Aercap (NYSE:AER) reported second-quarter adjusted earnings of $5.14 per share and raised its full-year 2026 adjusted earnings guidance to approximately $16.80 per share, excluding any additional gains on asset sales in the second half. Chief Executive Officer Aengus Kelly said the aircraft lessor’s results reflected continued transaction activity, constrained aircraft and engine availability, and demand that remains above supply across the aviation market. The company generated $1.5 billion in operating cash flow during the quarter and reported an adjusted return on equity of 18%. → This Tiny AI Supplier Could Be More Important Than the Chipmakers 2 aerospace stocks are ready to take flight on the next leg up “This was another strong quarter for AerCap, as reflected in our financial results, disciplined capital deployment, and increased full-year guidance,” Kelly said. Chief Financial Officer Peter Juhas said second-quarter GAAP net income was $726 million, or $4.59 per share. After accounting for purchase accounting adjustments, Ukraine-related recoveries and related tax effects, adjusted net income totaled $811 million, or $5.14 per share. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Basic lease rents were $1.677 billion, while maintenance revenue totaled $177 million. Net maintenance contribution was $131 million, which Juhas said was above typical levels because of the timing of maintenance revenue, transition expenses and claims. He said the company expects net maintenance contribution to return to more normal levels in the second half of the year. AerCap sold 38 owned assets during the quarter for $1.4 billion in sales revenue, producing a $223 million net gain on asset sales. The company reported an unlevered gain-on-sale margin of 20%, equivalent to 1.7 times book value on an equity basis. As of June 30, it held just over $400 million of assets for sale. → Innovative ETF Strategies That Are Paying Off This Summer The company completed $2.8 billion of asset sales during the first half and now expects full-year asset sales of $4 billion to $5 billion. Juhas said demand from buyers remained strong, although he does not expect second-half sales to match the unusually high level recorded in the first half. Kelly said gains on sale are not the primary factor in deciding whether to sell aircraft. Instead, the company assesses whether a sale improves the overall quality of its portfolio, including the average age, seating capacity and remaining lease term of its assets. AerCap repurchased 4.9 million shares for $691 million in the second quarter. Through the first half, the company repurchased more than 6% of shares outstanding at the start of the year and returned more than $1.5 billion to shareholders through buybacks and dividends. Since 2023, AerCap has bought back 93 million shares, or nearly 40% of its outstanding shares, for a total of $8 billion, according to Juhas. At June 30, the company had approximately $22 billion in total liquidity sources, including nearly $1.7 billion in cash, $10 billion of revolvers, $3 billion of other committed facilities, and estimated asset sales and operating cash flow. Its sources-to-uses coverage ratio was 1.9 times, representing about $10 billion of excess cash coverage. AerCap’s leverage ratio was 2.05 to 1 at quarter-end, roughly unchanged from the prior quarter. Secured debt represented 9% of total assets, while the average cost of debt was 4.2%. Juhas said low leverage has largely reflected the cash generation of the business. He said AerCap expects leverage to move over time toward the mid-2-times range, but that process may take time. The company continues to view share repurchases as attractive while also evaluating larger investment opportunities. AerCap ordered 15 Boeing 787 wide-body aircraft, with deliveries scheduled to begin in 2030 and continue through 2033. Kelly said the company believes the 787 offers favorable economics, broad global airline appeal and strong secondary-market liquidity. The order expands AerCap’s position in the aircraft type. Kelly said AerCap has both the largest 787 fleet and the largest 787 order book among lessors. Kelly said wide-body supply has been constrained by production shortages and delivery delays. Airlines have also kept older wide-body aircraft in service longer, resulting in more than 200 fewer retirements over the past five years than in a comparable pre-pandemic period, according to the company. While wide-body production rates have begun recovering, Kelly said a large number of aging aircraft remain in service, supporting a long-term replacement cycle and demand for newer wide-body equipment. On narrow-body aircraft, Kelly said demand remains strong, particularly for the Airbus A321neo. He said the Boeing 737 MAX 10 certification would be important for Boeing and could improve placement activity for the MAX 8 by giving airlines greater flexibility to operate a single aircraft family. AerCap reported an 85% passenger-aircraft lease extension rate during the quarter. Juhas clarified that the figure excludes aircraft being sold: among aircraft either extended or placed with a new customer, 85% were extensions and 15% were re-leased. Kelly said it is relatively uncommon for aircraft that are not extended to return and be re-leased, though it occurs occasionally. He said such assets are more often parted out. The company expects certain aircraft returning from Spirit Airlines and an additional 10 aircraft to be placed later in 2026, which Juhas said should support lease yields and net spread. Lease yield was up about 30 basis points year over year, while net spread increased about 50 basis points. Juhas also said more than half of the less favorable leases entered into during and shortly after the pandemic have rolled off. He expects the remaining leases to provide a gradual lift to portfolio yield and net spread over approximately the next five years. Kelly said AerCap continues to evaluate potential opportunities for aerospace engines converted into gas-powered aeroderivative turbines for data centers. However, he said the company would need the right strategic partners, operational expertise and a clear path to returns that exceed those available in AerCap’s core leasing business before pursuing the market. AerCap Holdings N.V. (NYSE: AER) is a global aircraft leasing and aviation finance company that acquires, leases, sells and manages commercial aircraft and engines. Its core services include operating leases, finance leases, sale-and-leaseback transactions, aircraft trading and remarketing, and asset management for airline customers. The company also provides related commercial and technical support services designed to optimize fleet utilization and residual values over the life cycle of aircraft and engines. Operating with a broad global footprint, AerCap serves airlines and other aviation customers across North America, Europe, Asia-Pacific, Latin America, the Middle East and Africa. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Aercap Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.