Slides
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Aviation Capital Group Investor Meeting
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The information contained in the following slides and the accompanying presentation is presented without any liability whatsoever to Aviation Capital Group LLC or any of its related entities (collectively “ACG”, the “Company”, “we” or “our”) or their respective directors or officers. If any information contained in these slides or the accompanying presentation has been obtained or compiled from outside sources, such information has not been independently verified by ACG. The use of registered trademarks, commercial trademarks and logos or photographic materials within this presentation are exclusively for illustrative purposes and are not meant to violate the rights of the creators and/or applicable intellectual property laws. ACG makes no representation or warranty, expressed or implied, as to the accuracy, completeness or thoroughness of the content of the information or the accompanying presentation , and ACG disclaims any responsibility for any errors or omissions in such information, including any financial calculations, projections and forecasts. In particular, ACG makes no representation or warranty that any projection, forecast, calculation, forward- looking statement, assumption or estimate contained in the following slides or the accompanying presentation should or will be achieved. These slides and the accompanying presentation include forward-looking statements relating to ACG’s business, industry and financial performance including, but not limited to, statements regarding ACG’s orderbook and expected industry growth. These statements may be identified by words such as “expect”, “belief”, “estimate”, “plan”, “anticipate”, “target”, or “forecast” and similar expressions or the negative thereof; or by the forward-looking nature of discussions of strategy, plans or intentions; or by their context. Actual results are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. The information contained in the following slides and the accompanying presentation refers to ACG and its owned portfolio of aircraft (unless aircraft managed by ACG are noted as included) and does not include aircraft financed or guaranteed through ACG’s Aircraft Financing Solutions product. All information is as of December 31, 2024, unless otherwise indicated. ACG does not undertake any obligation to update the information contained herein. Please note that in providing this information, ACG has not considered the objectives, financial position or needs of any reader.The reader should not construe this information as investment, legal, accounting or tax advice, and should obtain and rely on the reader’s own professional advice from its tax, legal, accounting and other professional advisers. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities. This presentation includes references to certain non-GAAP financial measures. Management believes that, in addition to using GAAP results to evaluate ACG’s business, these non-GAAP financial measures can be useful to evaluate our financial condition and compare results across periods. Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP. The non-GAAP measures used by ACG may differ from the non-GAAP measures used by other companies. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure set forth in the Appendix. Important Notice 2
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3 Investor Meeting Agenda 1 2 3 4 5 Aviation Capital Group Introduction ACG’s Strategic Advantages Performance Highlights Wrap-Up / Q&A Aircraft Leasing Industry Overview
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Aviation Capital Group Introduction 4 Founded Investment Grade Ratings Number of Airline Customers1 Ownership Number of Employees Headquarters Total Assets Company Name Fleet Size1 Aviation Capital Group LLC 1989 Baa2 & BBB- Moody’s S&P 85 Tokyo Century Corporation ~130 Newport Beach, CA, USA $12.1 billion 496 Mahoko Hara Executive Chair Thomas G. Baker Chief Executive Officer & President Craig Segor Executive Vice President & Chief Financial Officer
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Consistent RPK Growth 24,000 6,000 18,000 24,000 24,000 48,000 2023 Fleet 2043 Fleet Growth Replacement Growing air travel demand drives growing aircraft market… Resilient Load Factors %ASK, Passenger Load Factor Return to Profitability Airline operating profit, USD Billion 65% 83% ($111) $61 2020 2024 Source: IATA Air Passenger Market Analysis, December 2020/2024 Source: IATA Industry Statistics, December 2024 Estimated COVID Financial Crisis9/11 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 Source: Boeing Commercial Market Outlook – July 2024, rounded Source: Airbus Global Market Forecast 2024, rounded 27,000 6,000 21,000 23,000 27,000 50,000 2023 Fleet 2043 Fleet Growth Replacement 94% Demand in ACG’s core focus 98% Demand in ACG’s core focus 3.6% Forecast Future CAGR Airbus 20-Year ForecastBoeing 20-Year Forecast 5 Source: IATA, Airbus GMF 5
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Lessors Increasing Share by Being a Reliable Source of Funding 6 Leased 58% Owned 42% 2023 Leased 40% Owned 60% 2015 Increasing Share of Growing Market Source: KPMG, Aviation Leaders Report, 2024 0 10 20 30 40 50 Source: Fitch Ratings, IATA Sustainability and Economics 2024 Reliable Source of Aircraft Funding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Leasing Satisfactory Cautionary Major Concern Source: Boeing Commercial Aircraft Finance Market Outlook 2024 Top Lessors by Portfolio Size ($B)
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Global aircraft lessor with a scale portfolio of liquid aircraft New technology aircraft investment via multiple channels Active in trading and sale-leaseback markets Long-term committed cash flows and contracted growth Investment grade issuer, disciplined funding strategy Proven performance in 2024 ACG’s Strategic Advantages 7
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8 Global Operations, Diversified Customer Base 7% 4% Top Lessees1 Avianca 3% Europe 25% Central America, South America & Mexico 22% Asia Pacific 19% Middle East & Africa 9% China 7% United States & Canada 18% United States China Colombia Mexico South Korea Top Countries1 >10% 5-10% <5% LOT Polish Airlines COPA Airlines Volaris SAS American Airlines Spirit Airlines Greece Vietnam Germany Sweden Frontier Airlines Canada Condor Vietnam Airlines ~85 Lessees2 ~45 Countries2
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Scale Portfolio of Liquid Aircraft Narrowbody by Count 97% Total Assets $12.1B Fleet Age3 6.2 Years Aircraft Family Owned Aircraft % NBV1 Managed Aircraft Committed Aircraft Total Aircraft Airbus A320neo 108 49% 6 53 167 Boeing 737 MAX 15 6% - 96 111 Airbus A220 2 1% - 20 22 Boeing 787 6 6% 2 - 8 Airbus A350 3 4% - 2 5 Airbus A320ceo 70 19% 24 - 94 Boeing 737 NG 67 15% 18 - 85 Other2 - - 4 - 4 Total 271 100% 54 171 496 New Technology 9
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Liquid High Demand Low Transition Costs Large Production Runs Primarily Narrowbody Selective Widebody New Technology Focused Growth A320neo Family 737 MAX Family A220-300 787 Family A350-900 Multiple Investment Channels Direct from OEM Sale-Leaseback Secondary Market Opportunistic M&A New Technology Aircraft 10 Investment Strategy
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1.0 0.9 0.8 0.8 0.7 2.1 2025 2026 2027 2028 2029 Beyond 5% 5% 7% 4% 5% 15% 12% 8% 13% 26% 2025 2026 2027 2028 2029 2030 2031 2032 2033 Beyond Long-Term Committed Cash Flows… Committed Lease Rentals ($B)1 Portfolio Concentration by Lease Maturity2 Committed Lease Rentals 6.3 Billion Weighted-Average Remaining Lease Term 6.7 Years 11
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$4.9 $9.7 2023 FYE 2024 FYE 2025+ OEM Commitments 2025+ SLB Commitments 13 10 15 15 18 30 13 4 31 5 5 6 4 2 38 45 34 23 31 2025 2026 2027 2028 2029 + Airbus A350 Airbus A220 Boeing 737 MAX Airbus A320neo Family ..and Contracted Growth Future Aircraft Deliveries 12 $4.8B Increase Aircraft Commitments ($B)
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Investment Grade Issuer, Disciplined Funding Strategy Robust Liquidity Baa2 Stable Investment Grade Ratings BBB- Stable 4.1x 1.4x 13 Unsecured Funding Model Net Fixed Rate Debt4 96% 93% Strong Asset Coverage Well Positioned for Strategic Growth Conservative Leverage 2.1x Net Debt to Equity1 Unsecured Debt Debt Maturities Coverage2 Sources to Uses2 Unencumbered Asset Coverage31.6x
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Volume of Higher Cost Debt Diminishes Over Time 14 Aug 500 Jan 750 Nov 750 Apr 600 Jul 600 Jul 500 Oct 300 Sep 750 Oct 500 Oct 550 Feb 350 Oct 500 267 155 155 55 55$1,067 $1,655 $1,455 $1,505 $1,155 $500 2025 2026 2027 2028 2029 2030 Senior Notes Term Loans Unsecured Debt Maturities ($M) Existing Unsecured Debt Roll-Off 5,250 4,450 2,950 2,200 1,100 2,087 1,818 1,663 959 554 $7,337 $6,268 $4,613 $3,159 $1,654 $500 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% (500) 500 1,500 2,500 3,500 4,500 5,500 6,500 7,500 8,500 YE 2024 YE 2025 YE 2026 YE 2027 YE 2028 YE 2029 Remaining Unsecured Bonds ($M) Remaining Term Loans ($M) Remaining Weighted Average Cost Most recent bond: 5.375% Floating: 10% 17% 23% 19% 34% 0% Floating rate debt net of floating-to-fixed swaps
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Global Access to Diverse Sources of Capital 15 Strong relationships with leading banks across Asia, the US and Europe $2.9 billion raised globally in 2024 JAN DECNOVOCTSEPAUGJULJUNMAYAPRMARFEB $104M ECA Financing Strategic funding diversification, supported deliveries of new technology aircraft to Chilean airline $350M Japan Term Loan ACG’s 6th term loan in Japanese regional bank market $2.6B Revolving Credit Facility $300M new commitments; 22 lenders $1B APAC Term Loan/RCF 23 lenders across 9 countries, $500M additional liquidity $600M 144A Bond Significant investor demand, delivered coupon 1.375% lower than October 2023 issuance $550M SLL 2024 Aviation 100 Sustainable Finance Deal of the Year KPIs for new technology and carbon intensity
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16 Proven Performance in 2024 $1.24B Record Annual Revenues 28% Higher Earnings ~$1B Reduced Debt Buying Strategically Selling Into Demand 65 assets sold Sold 61 Aircraft, 2 Engines and 2 Airframes in 2024 Positioned for growth Leverage Reduced to 2.1x 25 aircraft delivered 100% New Technology Aircraft Added in 2024 76 commitments1 OEM, Sale-Leaseback and Secondary Market 2024 Total Revenues YoY Increase in Pre-Tax Net Income YoY Debt Reduction
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ROA Increasing Through Macro Headwinds 17 0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2019 2020 2021 2022 2023 2024 Robust aircraft demand Record ACG revenues, supply in favor of lessors Strong airline performance YoY growth, high utilization, low delinquency High velocity business Trading gains, debt reduction, dynamic management Future growth channels OEM, Sale-Leaseback, Secondary Market, M&A Pre-Tax Return on Assets Negativ e COVID-19 Russia Losses Debt Cost Tailwinds Driving Future Performance Headwinds:
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Q&A 18
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Appendices 19
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($ in Thousands) Carrying Amount Maturity Date Interest Rate Type Unsecured Debt Obligations: Senior Notes $5,250,000 Aug 2025 – Jul 2030 2.0% - 6.8% Fixed Term Loans 2,085,227 Sep 2025 – Dec 2029 4.7% - 6.3% Floating1 Secured Debt Obligations: Secured Loans 266,573 Sep 2032 – Apr 2036 4.1% - 5.8% Fixed & Floating Debt Acquisition Costs (52,037) Original Issuance Discounts (20,999) Debt Financings, Net $7,528,764 Debt Financing Summary 20 Appendix
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($ in Millions, Except Multiples) Debt Financings, Net $7,529 Less: Cash and Restricted Cash 168 Net Debt $7,361 Total Equity $3,570 Net Debt to Equity 2.1x Appendix Non-GAAP Reconciliation 21
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Appendix Lessee and Country Concentrations 22 Top Lessees Avianca 7% Frontier Airlines 4% Spirit Airlines 4% Volaris 4% Condor Airlines 4% SAS 4% LOT Polish Airlines 3% American Airlines 3% COPA Airlines 3% Vietnam Airlines 3% Top Countries United States 14% Colombia 7% China 7% Mexico 6% Germany 4% South Korea 4% Sweden 4% Greece 4% Vietnam 4% Canada 4% ~85 Lessees1 ~45 Countries1
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Slide 4 1 – Owned, managed and committed aircraft. Slide 8 1 – All percentage calculations are based on net book value of owned aircraft and exclude aircraft off-lease and investments in finance leases. “Asia Pacific” excludes China. 2 – Counts include owned, managed and committed aircraft. Slide 9 1 – Excludes investments in finance leases. 2 – Includes 3 managed Airbus A330s and 1 managed Boeing 777. 3 – Weighted average age of owned aircraft based on net book value. Slide 11 1 – Committed minimum lease rentals (inclusive of executed deferral and restructuring agreements) we are due under operating leases as of December 31, 2024. 2 – Weighted average remaining lease term figure excludes aircraft off-lease and investments in finance leases. Slide 13 1 – Calculated as Net Debt divided by Total Equity. Net Debt is calculated as debt financings net of cash and restricted cash. Net Debt is a non‐GAAP financial measure. See Appendix for reconciliation to the most directly comparable GAAP measure. 2 – Liquidity metrics are for the next twelve months as of December 31, 2024. Detailed sources and uses are included in ACG’s Q4 2024 Investor Presentation. 3 – Debt covenant to maintain 1.25x unencumbered assets to unsecured debt. 4 – “Net Fixed Rate Debt” includes floating rate debt that (1) has been swapped to a fixed rate, or (2) has natural hedges to AFS loan receivables or floating rate leases. Slide 16 1 – Includes 13 aircraft purchased in 2024. Slide 20 1 – We have entered into interest rate swaps that exchange a portion of this floating rate interest to fixed interest rates to manage exposure to changes in SOFR. The interest rate swaps have amortizing notional values and mature in July 2025, December 2027, February 2028 and April 2030. As of December 31, 2024, our interest rate swaps had a notional value of $1.45 billion. Slide 22 1 – Counts include owned, managed and committed aircraft. All percentage calculations are based on net book value of owned aircraft and exclude aircraft off-lease and investments in finance leases. Appendix: Footnotes 23