Good day, and welcome to AerCap's fourth quarter, 2022 financial results. 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, sir. Thank you, operator. Hello, everyone. Welcome to our fourth quarter 2022 conference call. With me today is our Chief Executive Officer, Aengus Kelly, and our Chief Financial Officer, Pete Juhas. Before we begin today's call, I would like to remind you that some statements 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 such statements. AerCap undertakes no obligation other than that imposed by law to publicly update or revise any forward-looking statements to reflect 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 March 2nd, 2023. A copy of our earnings release and conference call presentation are available on our website at aercap.com. This call is open to the public and is being webcast simultaneously at aercap.com and will be archived for replay. We will shortly run through our earnings presentation and will allow time at the end for Q&A. As a reminder, I would ask that analysts limit themselves to one question and one follow-up. I will now turn the call over to Aengus Kelly. Thank you for joining us for our full year 2022 earnings call. I am pleased to report another quarter of strong earnings for AerCap. We generated adjusted net income of $645 million and adjusted earnings per share of $2.66 in the fourth quarter. On a full year basis, this amounted to adjusted net income of $2.2 billion and adjusted earnings per share of $9.01, surpassing our previous estimate of $8-$8.50, which we updated in November 2022. This strong performance across all our business lines reflects how well our teams are working together to execute an extraordinary number of transactions. This level of transaction activity clearly demonstrates the success of the GECAS acquisition, the integration of the two companies, and the recovery in aviation. Cash generation also remains high, exceeding $5 billion of operating cash flow for the year, despite the impact of Russia, which helped us achieve a debt-to-equity ratio of 2.5x December 31, 2022. Given these strong earnings and cash flows, I am pleased to announce a new $500 million share repurchase program today. Continuing the theme of prior quarters, the environment for aircraft leasing continues to strengthen and will be further supported by the ongoing reopening of China. AerCap's level of activity in 2022 is unparalleled in the industry, completing 895 transactions over the course of the year. In the fourth quarter alone, the AerCap team completed a record 299 transactions across 159 lease agreements, 43 purchases, and 97 sales. Without the flawless integration of the two companies, this level of transaction activity simply would not have been possible, nor would it have been possible to take full advantage of the recovery in the aviation market. One area where the power of the platform was particularly pronounced was on the aircraft sales side, where we generated $229 million in gains or a 12% margin across aircraft, engines, and helicopters. We continue to see further evidence of the travel recovery as Europe, the Americas, and Asia all now exceed 80% of 2019 levels, with China being the latest driver. In particular, the growth in domestic flight activity in China since the zero-COVID policy was lifted has been significant, surpassing 12,000 flights per day recently, compared to a low of approximately 3,000 flights per day at the end of November. Having spent the last two weeks seeing all our customers in China, it is clear from speaking to the leaders of these airlines that they are also optimistic about the future. As we have said time and again, when the consumer is allowed to travel, they do so and in large numbers. What we are seeing around the world is that consumers continue to prioritize travel well after restrictions are lifted, and this will be no different in China. As a result, the Chinese airlines are all planning to ramp up capacity. We believe this will further exacerbate the supply-demand imbalance for aircraft and engines, pushing lease rates higher. I believe this will be particularly acute on the wide-body side as the combination of severely restricted new aircraft production, continued traffic growth, and the retirement and cargo conversion of many wide-body aircraft that took place during COVID puts a premium on aircraft that are available today. AerCap is well-positioned to address this opportunity. We have spoken before about the shortages on the narrow-body side, where production cuts due to groundings, COVID, and supply chain issues have had a significant impact. As you will see from the slide, this means there are approximately 1,800 fewer narrow body aircraft built today compared to the production run rate in 2018. This is equivalent to approximately 11% of the 16,000 or so narrow body aircraft in operation at that time. On the wide body side, these reductions have been even more acute. Production rates for new technology aircraft such as the 787, the A330neo, and the A350 are also well below expectations. Airbus was targeting five A330neos per month in 2019, and delivered less than three per month in 2022. They were targeting 10 A350s per month in 2019, and delivered only five per month in 2022. Boeing were targeting 14 787s per month in 2019, and delivered less than three a month in 2022, with more than 80% of these coming from storage. This has resulted in approximately 740 fewer wide-body aircraft built since 2019. A 15% reduction relative to the 5,000 or so wide-body aircraft that were in service at the time. That's equivalent to almost two full years of normal production. How are we capitalizing on this opportunity? The best example I can give you is that since the start of 2022, AerCap has completed nearly 100 wide body transactions, which I suspect is possibly more than the rest of the aircraft leasing industry combined. We are seeing broad-based demand, we expect this to be sustained by continued traffic growth and low production rates for wide body aircraft. We believe that the issues affecting aircraft production are likely to persist for several years, resulting in strong demand and upward pressure on lease rates and values for the foreseeable future. One further topic I'd like to address is the impact of interest rates and inflation on aircraft lease rates and our business more generally. On our prior call, we outlined the way new aircraft leases are adjusted for changes in interest rates and escalation, which provides protection to AerCap from interest rate volatility. This is the same exposure an airline would face if it were to purchase aircraft directly from the manufacturers and finance it with debt. It's widely accepted that this should be reflected in lease rates. However, it's important to put these kinds of increases into context. As you can see on this slide, leasing costs make up approximately 5% of an airline's cost base on average. Changes here are much more palatable to pass through than fuel or labor costs may be. Of course, every airline looks to minimize whatever level of cost they can, but this should illustrate that even large percentage increases in interest ex-expenses and leasing costs are less material to our airline customers than many investors may realize. In summary, this was another great quarter for AerCap, with record earnings and cash flows throughout the business. The market environment continues to improve. This is reflected in our financial results. The company has successfully navigated an extraordinary period over the last three years. Now we are well-positioned and on an upward trajectory for 2023 and beyond. Our confidence in the future is evidenced by today's announcement of our new share repurchase program. With that, I will hand the call over to Pete for a detailed review of our financial performance and outlook for 2023. Thanks, Gus. Good morning, everyone. We had a very strong performance for the fourth quarter. Our adjusted net income was $645 million or $2.66 per share. The impact of purchase accounting adjustments was $215 million in the quarter. This included lease premium amortization of $47 million, which reduced our basic lease rents, $111 million of maintenance rights amortization that reduced our maintenance revenue, and $57 million of amortization that was reflected in higher leasing expenses. In the fourth quarter, we received $47 million of letter of credit proceeds related to our Russian lessees, which was reflected in our net claims and recoveries related to the Ukraine conflict line item. We had transaction and integration-related expenses of $3 million in the quarter. Taking all of those into account, our GAAP net income for the fourth quarter was $495 million or $2.04 per share. I'll talk briefly about the main drivers that affected our results for the fourth quarter. Basic lease rents were $1,494 million for the quarter, an increase of around $20 million from last quarter. As I mentioned, our basic lease rents reflected $47 million of lease premium amortization. Lease premium assets are amortized over the remaining term of the lease and reduce basic lease rents. Maintenance revenues for the fourth quarter were $140 million, that reflects $111 million in maintenance rights assets that were amortized to maintenance revenue during the quarter. In other words, maintenance revenue would have been $111 million higher or $251 million without this amortization. Net gain on sale of assets was $121 million for the quarter. During the fourth quarter, we completed a record 97 asset sales, including sales of 83 of our owned assets. The total volume of assets sold in the fourth quarter was around $965 million, that represents a very strong gain on sale margin of 14% for the quarter. Our other income was $74 million for the quarter, which included proceeds from unsecured claims related to Garuda Indonesia, as well as insurance proceeds related to one of our helicopters. Those two items were a total of $36 million of other income in the quarter. As I mentioned earlier, net recoveries related to the Ukraine conflict were $47 million in the fourth quarter, which represents proceeds from letters of credit that we received during the quarter. As we've mentioned previously, we submitted claims for our letters of credit related to Russian lessees during the first quarter of 2022. We received most of those proceeds shortly thereafter, but there were certain amounts that were disputed by the banks. We've now received virtually all of those amounts. Leasing expenses were $261 million for the quarter, including $57 million of amortization expenses. Equity and net earnings of investments under the equity method was $38 million for the quarter. That primarily reflects continued strong earnings from Shannon Engine Support, which is our engine leasing joint venture with Safran and is our largest equity investment. SES has been generating strong performance this year, driven by the ongoing engine supply and demand factors that Gus mentioned in his remarks. For the full year of 2022, our adjusted net income was $2.185 billion, and our adjusted EPS was $9.01. That's after purchase accounting adjustments for the full year of $629 million, transaction and integration-related expenses of $33 million, and net charges related to the Ukraine conflict of approximately $2.7 billion. Our full year EPS of $9.01 reflects a strong outperformance relative both to our original guidance of $6.50-$7.00, as well as our revised guidance that we provided on the third quarter earnings call of $8.00-$8.50. That outperformance has been driven by a number of factors. We've seen a positive impact on revenue from higher cash collections as well as higher maintenance revenue. We've also seen strong performances from our engine leasing and helicopter leasing businesses, and we've had higher income from our joint venture SES, which has performed well ahead of expectations. We sold just under $2.2 billion worth of assets in 2022, and had gains on sale of $229 million for a 12% gain on sale margin for the full year. We also received significant proceeds from unsecured claims and other items during the year of around $100 million in total. We also had $69 million of mark-to-market gains on our interest rate caps and swaps in 2022. We continue to maintain a strong liquidity position. As of December 31st, our total sources of liquidity were approximately $18 billion, which resulted in a next 12-month sources to uses coverage ratio of 1.4x, which is above our target of 1.2x coverage and represents an excess cash coverage of around $5 billion. Our total operating cash flow was approximately $1.6 billion for the quarter. That's a very strong number, which was driven by continued strong cash collections and operating performance, as well as sales proceeds from some aircraft that were on finance leases that were sold in the quarter, along with the letter of credit proceeds related to our Russian lessees. As a result of the strong earnings and cash flow generation, we saw a significant decrease in our leverage ratio. We ended the year with net debt to equity of 2.5 x, which is well below our target ratio of 2.7 x. Our secure debt to total assets ratio was approximately 14% at the end of the year, which is in line with the third quarter. Our average cost of debt for the fourth quarter was 3.3%. Earlier this week, Moody's upgraded our senior unsecured ratings to Baa2. We remain on positive outlook with Fitch. That continues our positive ratings trajectory. Now I'll spend a few minutes telling you about our financial outlook for 2023. As Gus mentioned, we're seeing a strong recovery in aircraft demand and significant supply constraints, both of which we expect to persist. The environment for leasing continues to be positive, and we expect to see lease rates continue to climb higher during the course of 2023. Our EPS guidance for full year 2023 is $7.00-$7.50 of adjusted EPS, excluding any gains on sale, as well as other items like recoveries of unsecured claims. If we look at our 2022 EPS of $9.01, you can see that was comprised of a number of items that we haven't included in the 2023 forecast. For example, we haven't assumed any gains on sale, which were $0.83 after taxes in 2022. In 2022, we also had mark-to-market gains and interest rate caps and swaps as interest rates rose and the value of those derivatives increased. That's a $0.41 impact. Up until the invasion of Ukraine at the end of February last year, we were still receiving rent from our Russian airline customers. Obviously, that's no longer the case. The $0.14 reflects the removal of this rent, as well as the depreciation related to those assets, which we wrote off in full in the first quarter of last year. We also had $0.39 of unsecured claims and other items in 2022. We haven't forecasted anything for those items in 2023. We'll also have some higher costs associated with our cargo conversion program in 2023 as that ramps up this year, as well as higher insurance costs. Those are both reflected in the $0.41 impact shown here. Finally, we expect higher lease revenue and other items in 2023, which we project will increase our EPS in 2023 to $7.00-$7.50, excluding any gain on sale or other income items. If we take a look at our projected income statement for 2023, you can see that we expect to have total revenue of approximately $6.8 billion, interest expense around $1.8 billion, depreciation of approximately $2.5 billion, and leasing expenses, SG&A, and other expenses of around $1.2 billion. That gives us total pre-tax income of $1.3 billion. The next line, tax expense and income from equity method investments, includes our income from SES. We expect that our effective tax rate will be around 14% for 2023, and we expect to have around $100 million of income from our equity investments. That gives us GAAP net income of approximately $1.2 billion. We expect to have purchase accounting impacts, that is, from lease premium amortization and maintenance rights amortization of around $500 million-$600 million for the year. That results in adjusted net income of around $1.7 billion and adjusted EPS of $7.00-$7.50, which as I've said, doesn't include any gains on sale. We expect to have asset sales of two and a half billion dollars for the year, which is an increase over the $2.2 billion of sales that we had in 2022. We expect to have cash CapEx of $6.8 billion for the year. Of course, the volume of sales will depend on the market for aircraft during the year, and the amount of CapEx will depend on the ability of the OEMs to deliver aircraft. For now, those are our best estimates. Overall, this was another strong quarter for AerCap. After the invasion of Ukraine last February and the write-off of our Russian assets, we've rebounded strongly, which you can see in the level of our transactions activity, our financial performance well above guidance, and the fact that we've delevered to a level that's well below our target. We also see this confirmed by the ratings upgrade to Baa2 from Moody's that we received earlier this week. We expect the trends that are driving these results to continue, which should be positive for our business in 2023 and beyond. That gives us confidence to announce a new share repurchase program and confidence about our outlook for 2023. With that operator, we can open up the call for Q&A. Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please signal by pressing star one on your telephone. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Jamie Baker from JP Morgan Chase & Co. Please go ahead. Hello, this is James on for Jamie. Thanks, operator. First question. There was a recent article speculating that you guys were in discussion with a Russian airline to purchase planes at discount price. To the extent that you can comment on that, you know, any color you can provide there, but also is that even possible just given the sanctions in place? Thanks, James. As you know, we are pursuing insurance claims against our own insurers and against the Russian airlines insurers and reinsurers. We have been approached by some Russian airlines and their insurers about potential insurance settlements involving some of our aircraft lost in Russia. However, it is too early to know whether anything will come out of it, and we have nothing further to say on it at this stage. Got it. Understand. Just thought I would try the question there. Second question, just on the cadence of the cargo business revenues through the year, it seems like the $0.41 impact for 2023, just how should we think about that as the year goes on? Sure. Well, that's, James, that's really an impact of a couple things. You've got cargo expenses as those conversions happen throughout the year. I'd say they're pretty, gonna be pretty balanced throughout the year. We do have higher insurance expenses in there as well. It's both of those factors that are contributing to that. Got it. Okay, that's it for me. I appreciate the question. Sure. Thank you. We will take our next question from Helane Becker from TD Cowen. Please go ahead. Thanks very much, operator. It's Helane Becker. Hi, team. Thanks for the time. Pete, do you always not forecast sales for the year and then take them as they come? Or how should we think about the forecast for zero sales in 2023? Well, Helane, we're expecting, we're projecting $2.5 billion of sales for the year. That is in our forecast. What we haven't done, which is consistent with how we've done it previously, we haven't made any forecasts for what gains on sale will be, because that's really going to depend on what assets we sell and, you know, what the market is like during the course of the year. We are expecting to sell $2.5 billion. Last year, in 2022, we sold $2.2 billion worth and we would expect to do a little more than that during the course of the year. Okay, that's helpful. Yeah, I meant gains, not sales. Sorry about that. My other follow-up question is on CapEx, the $6.8 billion. How are you thinking about two things: one, financing it, and two, flipping it to the right. Given what you said about delivery delays and what we're seeing about delivery delays and the slide that Aengus referred to earlier in his remarks, it looks like you may not get all the aircraft that you're contracted to get. How should we actually think about what CapEx will look like and how it will be financed? Thanks. CapEx has been a moving feast, Helane, you're right, over the course of the last few years, and I expect that to continue. These are our best estimates at the moment, but even yesterday, as you'll have seen, Airbus made some announcements about the A321XLR delays again. This is a dynamic situation, but it's our best estimate as of now. Okay, thanks. Financing them? we'll generate operating cash flow of $5 billion, as we said we expect in the coming year. In addition, there will be $2.5 billion of sales. Relative to the size of the balance sheet and the cash flow generating power of the business, these are very manageable CapEx numbers, even if they were to all deliver, which I doubt. Right. Got it. Okay, thanks very much. Have a great day. Thank you. We will take our next question from Moshe Orenbuch from Credit Suisse. Please go ahead. Great. Pete or Gus, actually, I'm hoping you could kinda talk a little bit about how. Obviously, we'll see the benefit of the strong, you know, value market in aircraft in the sales numbers. We saw them in the fourth quarter and likely see them in 2023. Can you talk about how that's going to be manifested in lease rates and whether you've assumed any of that in your 2023 guide? Sure, Moshe. Overall, we're seeing lease rates going up. We've seen that for more than the past year. That has been accelerating, and we've factored some of that in. Obviously, you know, we're leasing well in advance. If we're signing a lease today, that's likely to be for 12 months time from now, right? You don't see there's a lag in terms of that effect, but obviously it does affect future years. We've reflected that in. I mean, in terms of basic lease rents, I think the fourth quarter run rate is a pretty good starting point if you're thinking of it that way, and you should see those growing somewhat each quarter as the fleet grows somewhat throughout the year. That's what I would expect. Great, thanks. You know, I think we've had this discussion about your guidance in the past as being conservative, as excluding some of the items that are in there. I, you know, in talking with investors, this morning already, I think there's been, you know, some confusion, I guess. You know, the fact that you kind of on the slide on page 13, kind of exclude the mark-to-market of interest rate caps and swaps, that doesn't mean that you expect that to be necessarily zero in 2023. Is that, you know, and some of those other items that are, that are on there, some, you know, they don't, they won't necessarily be zero in 2023, correct? Correct. Maybe I'll take a moment, Moshe, just to talk about those. The mark-to-market of interest rate caps and swaps, during 2022, we had a benefit from that because interest rates rose, and the value of those derivatives, of those caps and swaps rose. We had to mark that to market. We're not projecting, we're not making assumption about that in 2023 that that's going to happen again, right? That's that item. You know, some of the other ones, like the lower income as a result of the Ukraine conflict. That reflects the rent that we got on our Russian aircraft during the first quarter, less the depreciation on that. That's obviously gone, right? I would not include anything for that. Then we've reflected the cargo conversion program. In terms of the other items, though, you know, the gains on sales. I think you could take a look at our projection of $2.5 billion of sales and make an evaluation of whether you think that's high or low or accurate. Historically, we've had gain on sale margins of 8%-10%. Last year it was 12%. I mean, obviously, that's market dependent, but that's what we've had. In terms of other items, you know, in 2022, we had about $100 million of unsecured claims that came through, and those are not something that we project. That's not in these numbers of the $7-$7.50. You know, I'd say in a, in a balance sheet of this size, in a business of this size, it's not unusual for us to have things come in in that other income line item. That's how I would think about it is, you know, you've got $7-$ 750 is what's r.eally forecastable, but then there are other things that could come on top of that. Thanks so much. Sure. We will take our next question from Hillary Cacanando from Deutsche Bank. Please go ahead. Thank you. Thank you for the time. I was wondering, did you buy back any stock year to date? I know you just announced it, but wondering if you bought any. Do you have a full year repurchase target? We have not bought any back. We just announced it today. We haven't bought any shares yet. In terms of full year, look, we're gonna generate excess capital during the course of the year. What we've always done historically is look, as we generate excess capital, we look at how to deploy that. Obviously we've done a lot of share repurchases in the past. I don't wanna speculate about how many we will do this year, but obviously, you know, as we look at it, that's a natural way for us to deploy capital effectively. Got it. Thank you. just regarding y our cargo conversion program, you know, what is the timing of revenue coming on from that program? You'll start to see the first cargo conversions done, or on the 777 program anyway, during this year, we'll start to see some delivering. Really it's over the course of the next few years that those come in and our percentage of revenues from cargo will go up as a result of that. It's a multi-year program. Okay. Got it. Great. Thank you so much for the color. Sure. We will take our next question from Vincent Caintic from Stephens. Please go ahead. Thank you for taking my questions. First question, going back to net spread. Appreciate the comments about lease rate expansion and kind of building off of the fourth quarter result. Maybe if you could talk about the funding side, you know, how we should think about funding costs and how much of an offset that would be, particularly with the purchases of the $6.8 billion this year. Thank you. Sure, Vincent. In terms of net spread for the year, I think it's gonna be pretty flat from where it was for the fourth quarter, 7.6% or so. I think that's a reasonable estimate. In terms of funding, we have about $6 billion-$7 billion worth of funding that we would expect to do. That obviously depends on the, on, you know, getting all of these deliveries, 79 aircraft during the course of the year, as well as the level of sales that we ultimately end up doing. Based on the $2.5 billion of sales and based on that just under $7 billion of CapEx, we would expect to do about $6 billion-$7 billion, which is, that would be in unsecured bonds, it would be in some secured deals, unsecured bank deals as well, so it'll be a combination. That probably means two to three trips to the market during the course of the year. Okay, great. That's very helpful. Second question. Glad to hear the strength in the valuations of aircraft as well as lease rates expanding. How do you balance between selling aircraft and realizing the gain since valuation's moving higher on aircraft versus keeping the aircraft and taking advantage of the lease rates expanding since you're such high demand there? Thank you. Right. Vincent, when we think about selling assets, it's the first objective is to improve the quality of the residual portfolio. Gain and sale and driving the price that we get for the assets comes second to that. What we do when we compose a sale, a portfolio of assets for sale, is we'll say, okay, this is a particular portfolio of assets where we feel for various reasons that the average aircraft in the portfolio, post the sale, would be a slightly better asset than it was before the sale of this portfolio of assets. That's the key driver, that you're always trying to make sure that the portfolio is built for the long term. That's the primary driver of all our decision making, and that's underpinned the success of the company for many, many years. Holding on to assets and clipping near term coupons when you know there's an issue with the... Say in the bond world, if you're clipping a coupon of 12%, 13% a year in a very low rate environment, and the bond is trading at $0.80 on the dollar, you know there's an issue somewhere there. It's recognizing that and trying, of course, to be ahead of the market. We do have an information advantage over the rest of the market. We do see things before anyone else in the world. We do see more data than anyone else too, and it's employing all of that to try and make the best decision for the long-term shape of the portfolio. An example of that would be we were the only major lessor not to be buying end of line aircraft like 737s, A320s, A330s, 777s over the last 10 years. We didn't buy any, but all of the competitors were. We knew that while there are going to be teething issues with the introduction of new technology, we could see before others that the trend for airlines was to move faster than many realized into the newer technology when they could. So that's one example of many, Vincent. Okay, that's very helpful. Thanks very much. We will take our next question from Chris Stathoulopoulos from Susquehanna. Please go ahead. Thank you for taking my question. Aengus, in your prepared remarks, you spent a good deal of time talking about China, the reopening there. I think you spent time on the last call, but could you speak to what you're seeing in the Americas and other regions and how you would describe, I guess, the pace of recovery there? Then also curious within that, if you mentioned that you have a lot of data that you're privy to within those markets. If you're looking at the segments of travel and how leisure and business might be shaping up as well. Thanks. Well, if you start, say, with the Americas, the market has been very strong there. The domestic market is extremely strong. We expect a very strong summer there with good yields. You can see that there was a tightness of supply of narrow body aircraft in the U.S. market. The North Atlantic market is booming. The North Atlantic is by far the biggest long-haul market in the world. That affects both the American and the European sides there. I would show the American domestic market has been extremely strong. I would show the Western European market also has been extremely strong. I think Ryanair had their biggest week of sales ever, Ryanair being the biggest airline in Europe. What you'll see around the world is a similar trend where give or take, with 80% of 2019 capacity, they're generating at or above 2019 revenue. We see that type of trend being repeated. Of course, the input costs for the airlines through higher fuel and to some extent higher labor costs, they need that rise. The good news is that it's there. With regard to China, I spent two weeks myself in China. I'm just back. I got back on the weekend from spending two weeks there. I met all of the major airlines, be it the flag carriers, the three majors, low-cost carriers throughout China. Again, we're seeing the same pattern of recovery there, where the domestic market was extremely strong for the Spring Festival or as we call it, the Chinese New Year, that occurred in January. The airlines were in profitability pretty much across the board for the first time, heavily focused on the domestic market and into Southeast Asia. We'd expect that that is the same that we saw in the Americas and in Europe. Then that expanded over time into the international market. I think we'll see the same over the next 12 to 18 months in China. Okay. My second question, there's clearly you speak to it and what we're seeing here in the data, a lot of upward pressure on lease rates as a whole. Could you speak to the cargo side where perhaps we're not seeing as constructive a supply demand backdrop, if you will, with volumes consistently moving lower here and the return of belly capacity to the market as these long-haul international flights come back online. Curious what you're seeing on the cargo side, and if within that, if there are any sort of aircraft types that are performing better or worse. Thank you. It should be no surprise that cargo yields are down. They were stratospherically high during COVID, and it got to the situation where for some low-value products, like a pair of sneakers, the cost of transporting them from Vietnam to the States or Europe was getting close to the cost of the sneakers. That was an unsustainable situation. There's no surprise there that it's come down. A lot of demand was pulled forward, of course, in COVID when people were at home buying stuff online. That being said, however, what we do believe that the cargo market is a lot more stable now than it has been in the past. If you wind back 10, 12 years, the cargo business was dominated by the major carriers like the FedEx, the UPS, the DHL, and a few large Asian airlines that had big freighter fleets. It was focused on moving food, flowers, fish, drill bits around the world. Now, of course, the e-commerce has supplanted that, and we have a much more stable demand and wider and broader demand for cargo. I would say that demand is still pretty good. Relative to where it was before COVID, it's very good. Relative to where it was in COVID, of course, it's down, and that should be no surprise. It's to specific aircraft types, you know, the 737-800 freighter is the workhorse of the narrow body side. The 767s, they're just running out of feedstock. That is just an aging platform, so we're going to see that being retired. That will be re-replaced over time by a combination of the A330 converted freighter. Importantly, I would say the triple seven three hundred ERF, we've seen very strong demand for that product. We had 20 slots. We've already leased 18 of them, which is a very, very strong uptake because that aircraft has got so much volume, which is what you need for e-commerce, where the weight is not as important as the volume, the space on the aircraft, the volume of it. You know, look, I don't think anyone should be in any surprise that freight rates came down, and the amount of tonnage being moved came down. That doesn't surprise us at all, and something we fully expected. Okay. Thank you. We will take our next question from Ron Epstein from Bank of America Corporation. Please go ahead. Hey, good morning, guys. Just a quick one, guys. We, you know, when you look at other leasing businesses, you know, cars, other equipment, as assets have become more scarce, it's causing them to retain more value. Given the tightness of the aircraft market, are you guys contemplating at all changing your depreciation rates on aircraft, or are they just too long-lived assets to consider doing that? Yeah, that's just an accounting policy, Ron, that, you know, we set, and it's over a 25-year period, and it's served us well, to be honest. Yeah, I don't see us changing it. There's never been a concept of marking to market the depreciation or the values. Ron, I would say, you know, it's Pete here. Certainly, we should see with higher inflation, that should have a positive impact on the residual values of our fleet, because they are hard assets, as you say. I think, l onger term, you know, obviously, we'll have to see how persistent that is. You know, we're strong believers, obviously, in our book values today, but I think this even should give people more confidence as time progresses. Yeah, for sure, Pete. Got it. Got it. Maybe a follow on. Are you guys getting any kind of inflationary adjustments in the maintenance reserves that you get from your customers? Well, to the extent that you have maintenance reserve paying leases, what happens is they get adjusted each year in the contract with whatever the OEM increases the reserve rates by for parts, et cetera, LLPs. If you have an end of lease deal, if the engine has to come back overhaul, then the risk is with the customer. For the most part, Ron, that's passed on. There'll be instances, of course, where you have to take an airplane back prematurely, and if there's some inflation there that wasn't covered, you'll have to deal with it. That's nothing unusual. I wouldn't see it as having any material impact one way or the other. Okay, great. Thank you very much. Thank you. We will take our next question from Mark DeVries from Barclays. Please go ahead. Yeah, thank you. The new $500 million repurchase authorization looks relatively conservative to us. Even if you bought back all of that tomorrow, I think you'd still be at 2.6x levered below your target. As you mentioned, it's gonna be very strong cash flows, you know, where you'll generate additional excess capital even if you realize the full $6.8 billion of CapEx for the year. How are you guys thinking about alternative uses of excess capital generation outside of the repurchase authorization? Well, Mark, I mean, we always look at all different alternatives out there, whether that's buying aircraft, whether that's M&A, although I think that's unlikely at the moment, but M&A or returning capital to shareholders. You know, as we thought about sizing this now, we thought, well, we do have excess capital available. It makes sense to deploy it. This is a good way of doing it. We'll continue to look at that over time. As you say, I expect we will generate a lot of excess capital. We'll generate north of $1 billion during the course of this year. We'll look to deploy that. I mean, historically, if you go back, right, most of our share repurchase authorizations were in the range of $250 million-$400 million. It's not as though we came out with big splashy announcements, and then it took us two years to do that. We looked at it kind of every on a quarter-by-quarter basis and made those decisions. I don't see any reason for us to change that strategy. That's how we're thinking about it. Okay, fair enough. Thank you. Sure. It appears we have no further questions at this time. I would now like to hand the call back over to today's speaker for any additional or closing remarks. Thank you very much, operator. Thank you all for joining us for the call, and we look forward to talking to you in a few months time. This concludes today's call. Thank you for your participation. You may now disconnect.