John Wikoff - Head, Investor Relations Aengus Kelly - Chief Executive Officer Keith Helming - Chief Financial Officer.

Mark Streeter - JP Morgan Helane Becker - Cowen and Company Gary Liebowitz - Wells Fargo Christopher Nolan - FBR Nathan Hong - Morgan Stanley Michael Linenberg - Deutsche Bank Andrew Light - Citigroup Arren Cyganovich - D.A. Davidson Kristine Liwag - Merrill Lynch Vincent Caintic - Macquarie.

Welcome to today's AerCap Holdings Third Quarter 2015 Results Conference Call. At this time, all participants are in listen-only mode. This call is being webcast and an audio version of the call will be available on the company's website. The call is also being recorded for replay purposes.

I’ll now hand the call over to John Wikoff, Head of Investor Relations..

Thank you, [Tana] [ph], and hello, everyone. Welcome to our 2015 third quarter results conference call. With me today is our Chief Executive Officer, Aengus Kelly; and our Chief Financial Officer, Keith Helming.

Before we begin today's call, I would like to remind you that some statements made during this conference call that are not historical facts maybe 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 November 10, 2015. 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 is being webcast simultaneously at aercap.com and will be archive for replay. I’ll now turn the call over now to Aengus Kelly..

Thank you, John. Good morning, everybody. And thank you for joining us for our 2015 third quarter earnings call. We are delighted to be reporting industry-leading earnings for the third quarter, which highlights AerCap’s strong growth profile, as well as the efficiency and scalability of our platform.

We generated adjusted net income of $328 million for the third quarter and adjusted earnings per share of $1.66, which equates to an EPS of $4.82 for the first nine months of 2015. It is also worth noting that reported i.e. on adjusted net income for the last 12 months was $1.2 billion.

We ended the third quarter with total assets of $43 billion and our net spread, which is a crucial measure of the company's operational performance, reached $892 million in the third quarter.

This represents a healthy annual net interest margin of 9.8%, which was achieved, thanks to the attractive financing terms we secured to our scale and the relatively high lease rates achieved by having one of the most attractive portfolios in the industry and dynamic platforms.

As the largest and most active lessor in the world, our daily interaction with the marketplace provides us with a unique perspective of global demand for aircraft. During the first nine months of the year, AerCap completed 306 aircraft transactions, more than one every 24 hours.

This includes the signing of 216 lease agreements, the purchase of 35 aircrafts and sales transactions for 55 aircraft. This level of insight into the market gives us a high degree of visibility into end-user sentiment, general market conditions, as well as specific values and lease rates.

I would like to comment on the recent market commentary devoted to widebody capacity over the past few weeks. Based on our transaction volumes and AerCap leases or sells on average two widebody aircraft every week. We are not seeing any unusual softness, neither in terms of demand nor in terms of value for widebody aircraft.

Indeed, as said on slide five of this presentation, through the nine months to September 30, AerCap had leased or sold 47 used Airbus A330 and Boeing 777 aircraft alone.

On the back of strong growth in long-haul travel, we continue to see good demand for used widebodies of all type, including the Airbus A330 and Boeing 777, and in particular, the Boeing 767.

Furthermore, one only has to look at the $600 million transaction we completed in late September for 10 aircraft portfolio consisting primarily of Boeing 777 and Airbus A330 aircraft to realize that widebody bodies are not depressed.

Transaction such as this will continue to be executed by AerCap at the right terms, in order to lower the average age of our portfolio and maintain the most liquid portfolio of in-demand aircraft. This brings me to the tremendous long-term growth potential we see globally and especially in Asia.

Despite short to medium-term microeconomic shocks as recently experienced in China, our customers in the region and in China specifically, continue to lift lease with the long-term in mind, as a middle class in key Asian markets continues to grow rapidly.

I would like to remind our listeners today that 100 million Asian passengers are flying for the first time in their lives each and every year. With such opportunity comes need to finance growth not just profitably but also responsibly.

Since the announcement of the ILFC acquisition in December 2013, AerCap has raised over $17 billion, which includes the proceeds from our offering of $1 billion of five-year unsecured notes a couple of weeks ago.

The demand for this offering was so large that we were able to upside the transaction by two and half times from its initial launch size of $$400 million. As of September 30, 2015, AerCap had $6.4 billion of available liquidity and we maintain a conservative approach towards the management of our balance sheet.

We remained highly cash generative and are very close to achieving our debt equity target ratio of 3 to 1. During the third quarter, our debt equity ratio was reduced further and currently stands at 3.1 to 1. We remained extremely nimble despite our scale and our operational capability is delivering virtually full fleet utilization rates of 99.7%.

Couple this with an average remaining contracted lease term of 5.9 years and an order book or 80% of committed purchases through December 2018 have been placed either under lease contract or letter of intent, and we have tremendous earnings visibility. To conclude, we're delighted with our performance thus far in 2015.

We continue to see strong market demand driven by passenger growth, which continues to grow by over 5.5% per annum. We are operating in an industry with very strong and resilient fundamentals. We also have an efficient and scalable platform, which benefits from the industry's most attractive order book.

This is underpinned by the growing demand for operating leases, which finances the needs of airlines globally, and only a platform the size of AerCap’s can provide airline the holistic solutions they’ve require for fleet management.

Finally, and on a far more somber note, let me say that we are deeply saddened by the horrific and tragic events regarding Metrojet flight 9268 in the Sinai Province. As many of you already know, the aircraft was part of our leasing portfolio.

On behalf of all of us at AerCap, I would like to extend my sincere condolences to the family and friends and loved ones of all the passengers and crewmembers who perished onboard this aircraft. Our sympathies are also with the stuff at Metrojet who have lost colleagues during a most terrible time.

With that, I will hand the call over to Keith for a detail review of our financial performance.

Keith?.

Thanks, Gus. Good morning, everyone. I will start on page six of the presentation. Our reported net income for the quarter was $293.9 million and adjusted net income was $328 million.

The adjustments made to derive adjusted net income include the elimination of costs relating to the mark-to-market of interest rate caps and swaps, transaction and integration expenses and maintenance rights expense. The most significant adjustment was $22.5 million for maintenance rights expense.

For the first nine months of 2015 adjusted net income was $993.7 million. Page seven, reported earnings per share were $1.49 in the third quarter. Adjusted earnings per share were $1.66 during the same period.

The averaged shares outstanding in the third quarter were 212 million and for the first nine months of 2015 adjusted earnings per share were $4.82.

Page eight, as a result of purchase accounting, a portion of the acquired ILFC aircraft value was classified as an intangible asset, the amortization cost for this portion of the aircraft value is recorded as lease expense instead of depreciation expense.

Prior to the acquisition, this asset was part of the aircraft book value and subject to normal depreciation. Now the amortization of the intangible asset is expense more quickly over the remaining lease term instead of remaining economic life of the aircraft.

This difference in cost is effectively accelerated depreciation and was $26 million pretax and $23 million after-tax in third quarter. Page nine. Total revenue in the quarter was $1.323 billion. Maintenance related revenue was $81 million. Net gain on sale of assets was $52 million and other income was $25 million.

Total revenue increased 6% over the same period in 2014. Page 10. Net interest margin or net spread was $892 million in third quarter. The annualized margin as percent of average leased assets was 9.8% and the average lease assets were $36.4 million in the quarter. Page 11.

The impact from asset sales in the third quarter was a pretax gain of $51.6 million. During third quarter, we sold our parted-out 13 aircraft from our owned aircraft portfolio. In addition, seven aircrafts were purchased during the third quarter. Page 12. Leasing expenses were $133 million and SG&A was $91 million in the quarter.

Leasing cost include $94 million related to the expensing of the maintenance rights assets and $11 million relating to aircraft that terminated early or defaulted. During third quarter, we incurred $3 million of transaction related expense. And also in third quarter, we incurred $8 million of impairment charges related to two aircrafts.

For the same aircraft, we also recognized maintenance revenue of $18.6 million as a result of the termination. So the net impact was a positive $10.6 million. Year-to-date tax rate for 2015 is 13.5%. Page 13. AerCap's unrestricted cash balance at the end of the third quarter was $1.3 billion.

And our total cash balance including restricted cash was $1.7 billion. Operating cash flows were $796 million in the quarter. Page 14. Our available liquidity sources over the next 12 months is $9.8 billion and contracted debt maturities and CapEx for the same period is $7.9 billion.

This results in excess liquidity coverage of $1.9 billion and a ratio of sources to use of 1.2 times. These sources of course do not include additional capital, we expect to generate from financing of our new aircraft purchases. Page 15. At the end of the third quarter, our debt-to-equity ratio was 3.1 to 1, down from 3.5 to 1 of the same period 2014.

The average cost of our debt for the third quarter was 3.6%. At the end of third quarter, the adjusted debt balance was $27.3 million and the adjusted equity balance was $8.9 billion. Page 17. With regard to the financial outlook for 2015, we’ve updated our previous guidance for the full-year adjusted net income.

The update to the previous guidance includes an increase for the after-tax impact for the gain on sale generated during the third quarter. This outlook does not reflect gains or losses that might occur in the fourth quarter. So those are the financial highlights for third quarter. I’d like to now open the call to Q&A.

So operator, can we have our first question?.

Thank you. [Operator Instructions] We’ll now take our first question from Mark Streeter of JP Morgan. Please go ahead..

Good morning everyone. Thanks for taking my question. I want to dig in a little bit more on your comments about no unusual activity in widebody aircraft. Because what we've seen at the appraiser certainly seem to be adjusting their values count. On October 12th, a $0.01 for example took value downs 13% on 9 and 10-year-old triple 777-200ERs.

So can you back the Delta’s comments in Richard Anderson and so forth. It seems like if everything plugged to the appraiser or we listen to Delta that there is weakness in specific older widebody in certain situations that maybe you’re immune to.

But I’m just wondering if you can add some more color to what we’re seeing from the appraisers?.

Mark, we can only speak to our AerCap absorbs in the marker. And we’re the biggest participant in the widebody marketing world. And what we observe is that we’re able to place two airplanes every single week. We would not be able to do that if there was unusual levels of softness in that market, just wouldn’t exist. So that's really how we see it.

And you see the sale of airplane that we just completed, no one in the world obviously had sold this many widebodies. Appraisers don’t deal in actual transaction data, we do. You are right of course that there is weakness in various aircraft types. That is always the case.

If we go back a few years, it was 747 and A340 with high fuel that put these airplanes under significant pressure with little fuel that’s changed a little bit of course but there are still aircraft that are going out of service.

Specifically on certain aircraft, of course, you can pick an airplane that’s coming out our bankrupt airline such as Malaysian. And that the aircraft has runout engines and a runout airframe. And you can look at that saying well that is a distressed value and it certainly is. We also part out airplanes as you know Mark.

And in those instances, however, you have an aircraft that could return to service, you would have to invest $30 million to $40 million to put that airplane back into service. So they are outliers in that regard. All those aircraft types, they are Rolls-Royce powered airplane.

We do have forward them on lease at the moment but they represent a significantly less than 1% of our total portfolio of asset..

Great. And would it be fair to say that maybe part of disconnected confusion is that some of the appraised values in appraisers, have they been just lagging the developments in the marketplace or how do you feel about when you look at blue book values for your airplane.

And some people like to go back and do any of these in your portfolio and so forth. You have a very low basis on lot of your aircraft that you bought. All the while I have seen so forth.

But how in general, do you look at just the appraised values that are out there versus the way you value aircraft or does it not matter to you?.

Well, of course, it matters. I think it’s certainly the appraised values are most definitely are very good sign for us as to where aircraft values are? You have to recall of course, aircraft appraised values and exclude the value of any lease. It’s the bare metal. So that makes a big difference.

So if you are looking at aircraft without a lease or with the lease, there is a tremendous difference in value. Again we would point to the carrying value of air custody is what we’re most familiar with. And if you look at the trading activity of our fleet, we’ve sold over 400 airplanes and we’ve on average booked again on every one of them.

So we are very comfortable with our own carrying values, Mark..

Okay. Great. Thanks very much..

You’re welcome..

We will now take our next question from Helane Becker of Cowen and Company. Please go ahead..

Thanks very much, Operator. Hi guys. Thank you very much for the time.

I just have a couple of questions with respect to the aircraft that you have in -- where do you stand with aircraft still in Russia as an example and are you seeing any more, I guess, I don’t know the right word to use, negative issues coming out of that market?.

Well, Helane, as you know we took a lot of aircraft out of Russia last winter. Of course, it was a significant investor concern of what would happen in that jurisdiction. Would we be able to do that? We knew of course from experience. There’s never been a jurisdiction in the world every where we could not take an airplane out.

And in Russia, that prove to be the case again of course last year. Now most recently, TransAero has been the airline that’s in the news, which is, was, I should say the second largest carrier in Russia, big airline with 100 airplanes mainly focused on 747s, 777s and 767s. So big units with a bunch of 777s.

Now AerCap, we repossessed all 10 of the aircraft we had in TransAero four weeks ago. We helped them out in 72 hours and every one of those airplanes has now been placed or sold. I will say this there is a very big difference between the aircraft platform and many others.

While we were repossessing aircraft, another lessor was actually putting in brand new airplanes. So there is a difference. It comes from having obviously the global reach to scale and so much market intelligence is what’s happening with various airlines around the world. That differentiates AerCap from others.

But in general, as we see weakness in Russia, we act quickly. We do believe that the fact that so much capacity we have left the market will enable yields to stabilize to more normal levels. And we hope that as we go forward over the next year or so that we will see a more balanced market in Russia..

Okay.

And then are there any other markets that we should be thinking about that are problematic this winter?.

Well, there is always somewhere in the world that’s under pressure. So at the moment, we mentioned Russia, of course, which is of course not growing. Brazil is not growing tremendously either.

However, on the flip side of that, India which was a very tough market for a quite number of years has shown significant growth and we are looking at putting additional aircraft into India for the first time in quite some time.

The success of the India market is evidenced, of course by the tremendously successful IPO of Indigo, the low-cost carrier in India. Mexico also, we see doing a bit better. But overall does your question to be clear, the markets where there is lower growth is of course in Russia where it is distressed and in Brazil as well..

Okay.

And then just as we think about 2016 now with aircraft sales and rebalancing the fleet or adjusting the fleet, how should we think about that because I don’t think you'll be able to keep selling 300 or 400 aircrafts a year or maybe you can and I just kind of wonder how we should think about this aircraft sales going forward maybe as a percent of revenue they are up quite a while as you readjust the portfolio? But how are we -- how should we really think about what happens next year?.

Maybe in my earlier comments, we have sold 400 aircraft over the last several years and what we sold this year to date is 55 airplanes. I expect that will probably be over 60 by the time we get to the end of year. And we do believe as we gave guidance originally to the street of asset sales of a $1 billion, we certainly do at least that.

Last year, we did close to $2 billion. This year we will probably be somewhere between $1.5 billion one and close to $2 billion. Next year, we will see happens. There is robust demand out there. There were plenty of people who want to buy aircraft..

Okay. So…..

Go ahead..

So, we just think about a $1 billion a year..

In the last two years, we significantly exceeded that. I would say that at the minimum. Of course, when we sell airplanes we need to get paid for it. We are not in the business of giving away $10 bills for $9. So if we get paid, we will certainly sell more. If we don't, we will hold on to them. We have the biggest platform in the world to manage them..

Okay. Thank you..

We will now take our next question from Gary Liebowitz of Wells Fargo. Please go ahead..

Thank you, Operator. Good morning, gentlemen..

Good morning, Gary..

Aengus, I was wondering if you can give us an update on your deployment plans for excess capital given where asset prices are and where your stock price is, which way are you leaning, is it even close? And also given where your net leverage ended the quarter, should we think of a new share buyback authorization as imminent?.

Well, Gary, allocation of capital is always at the forefront of the lines of management and the Board. As we allocate our shareholders money, we must make sure that we achieved the optimum return.

Now, of course there are various outlets for that money, paying down desk, acquiring airplanes, acquiring other companies and of course distributing capital to our shareholders. We have done all four in the past. As we look at the situation today, we do believe there is a compelling bid for assets from the market, aircraft assets.

And we believe that our share price is trading at attractive levels. This is something that we will look carefully at over the coming months with the Board. We have made it clear that before we start distributing additional capital that we need to get the debt equity ratio down to the target levels of that 3 to 1 area.

This is something that we're close to and we expect to get to in the first quarter. And at that point then, we will be in a position to determine what amount of capital is available for distribution or other investments.

Keith, would you like to add anything?.

No, I think those are the main points. We will be generating excess capital beginning in first quarter. So, we will obviously be considering what to do with that capital very, very quickly..

Okay. Thanks. And then just want to follow-up on the 777, not to nitpickbut you still have two that need to be placed for next year.

Given the reconfiguration schedule, how soon do you need to have those placed before you might be looking at a 777 or two that are grounded?.

We’d expect to get those placed, Gary. I mean, look, we delivered a 777-200 last month to a customer. We delivered one the previous month to another customer. We will be delivering another one next month. We would expect to have -- we are obviously in discussions with a number of carriers at the moment. We would expect a normal.

Whenever we transition an airplane, you always have a period of downtime, be it a couple of months as you transition the airplanes. We wouldn't see anything unusual here, that’s our expectation at the moment as we see things..

Okay. Thank you very much..

We will now take our next question from Christopher Nolan of FBR. Please go ahead..

Hi.

In your guidance for depreciation expenses for 2015 of $2.1 billion, should we expect a bump up in depreciation expenses in the fourth quarter?.

No. I mean, it’s running at the same rate quarter-in, quarter out. So, $2.1 billion is the economic deprecation after the adjustment for maintenance right expense. So perhaps, as the assets increase, obviously the depreciation will increase as well..

Great.

And are you guys still guiding for or expecting a 13% ROE in 2016?.

We are going to provide more guidance on 2016 when we release our earnings in February. So, we'll provide more in that later..

And strategically, are you looking at -- as we move into 2016, 2017, you’ve given very good guidance in terms of growing the fleet and so forth. I’m thinking about fee income opportunities.

Is that an area of focus of management right now?.

Sure. I mean, we have quite a number of aircraft under fee management ranges over a 100 airplanes and we’ve been delivering it for long time. However, the platform is very valuable and if you look at the margins we generate, renting out the platform is generally not an optimal use of something of his value.

We would prefer to use the skill set in how’s to manage our own assets. We do of course provide fee management serves of course to quite a number of different institutions and we are well over 100 airplanes in there. But if I look overall, it's not a great use of the platform.

In terms of profit generation, it is a very good use when you need to alleviate CapEx. And that’s generally why people do it in the past..

So you're not evaluating off balance sheet structures where some of the structures sold at the private equity type of arrangement..

We do plenty of them. We have them with the Chinese government. We have them with German banks. We have them with hedge firms. We have them with private equity shops. We've been doing it -- we started doing it 14 years ago. And at one point, we are over 300 airplanes on a managed basis. So it’s something we do look at.

But at the moment, the platform is extremely valuable and I want to focus in on maximizing the returns for our shareholders by using it on our all fleet..

Great. Thank you for taking my questions..

No problem..

We will now take our next question from Nathan Hong of Morgan Stanley. Please go ahead..

Hi. Thanks for taking the question.

I just want to ask you very quickly on the impairment charges of about $8 million and it’s not much, but wondering if could provide some color as to which aircraft we are impaired?.

Yeah. Again, as we indicated, it’s related to two aircraft that terminated and again, we had excess maintenance reserves on those aircraft. So there was $18.6 million of maintenance revenue recorded at the same. So, obviously, there was a charge in impairment line but it was more than offset by the revenue on the maintenance side.

So a net impact of just over $10 million for the quarter..

Any specific as to which aircraft type?.

One of them was in A321-100, which was the less popular variant because only a few were made of the A321 family. And the other aircraft, Keith was….

747..

747..

Okay. That’s helpful. And I kind of just want to get your opinion on I guess CIG, obviously they might be in the market sometime in terms of selling their portfolio.

So I am just kind of curious how you guys think about what their view across industry when a portfolio of that size that gets bump into the market , do asset prices generally go up or down, just wondering if I could get your thoughts there?.

It’s very hard to say. Clearly the way the whole portfolios have traded be it from public to private or private to private, we can see significant premium over where the public stocks are trading. So what will happen to CIT, we don’t know.

We do feel, however, that the more participants that are listed, the better it will be as we do believe there will be sold in the debt markets, where initially the debt market was similar to the equity market and that they charge very widespread.

But as more and more volume get into the debt market, then spreads align with comparable credits in other industries and that was due to the volume that came into the market. So we would be very supportive of any additional public equity company, particularly a reasonable size to one like CIT..

Got it. That’s helpful. Thanks for the time..

We will now take our next question from Michael Linenberg of Deutsche Bank. Please go ahead..

Hey, good morning, everybody. I guess two questions here across. I just want to go back to the comment that you made about the Transaero aircraft, I think you said that what was it that 10 that you took out and there has been, there is a place to sold. And I think you said about maybe four weeks ago.

So does that show up in the third quarter, is that going to show up in the fourth quarter?.

It’s going to show -- there is -- most of it’s going to record in the fourth quarter..

Okay.

So the current quarter and then with respect to the leasing of those airplanes, can you talk about maybe the terms that you’re able to achieve versus maybe the terms that those aircraft were originally under similar terms, better, worse, any color would be great?.

I would say so if we look at what we moved out of there where you had four 767 there on long waited leases with the strong credits, the 737s went on very long leases with an exceptionally credits and then we have 737-500 which we just sold.

So overall, lot much long terms in terms of an revenue not much of an impact, but this is what we do Mike, that’s the difference of having a platform like aircraft where we could take 10 airplanes out in 72 hours, while we observe someone else taking a brand new airplane in there at the same time..

Got it. Good to hear. And then just about last question, I recently had a conversation with the underlying management team and they were talking about the fact that fuel prices have come down a bit.

I would say look Boeing and Airbus they are going to have to start accounting for that in the pricing of new airplane and I said all right, well, how should we think about it? I said, well, if you look at the new airplanes versus an older aircraft like the PEO versus NEO, the NEO probably gives us $800,000 of savings in the year.

So that’s lease where it was when oil was over $100 a barrel. That’s now being cut in half and so the savings are more like $400,000 a year versus the differential, we guys are afraid. And then I went to say that over time they should probably see that in the lease rate as well.

And I was just curious about whether or not, is that accurate, is that how it plays out? And if it does, does it ultimately find its way into the lease rate, the lag, can you talk about that?.

Sure. We are placing NEOs 787-350s all the time. We observed still really good re-lease rates for the NEOs. As I said before when the airlines are looking out 12, 14 years which is what they do when they take new aircraft, where fuel is today, it’s not something they look us.

The events of July 2008 are in marked on their minds where when fuel went to $148 and airlines can’t hedge themselves, of course no banks will write derivative for the long term for an airline to hedge fuel. The only way to do it ultimately is have the most fuel efficient assets out there.

So we don’t see deterioration in demand for the NEOs, now it is true of course that fuel is a lot less.

So the benefit of the NEO, it’s not $800,000, it was about the benefit is closer to a $1 million a year, of course it’s arbitrary at what point the fuel you use, but it around the $100 level, north of a $1 million a year to the airlines fund as it worked.

And in any event we do see continued strong demand for the NEOs, the lease rate that we are putting amount at, we don’t see much change, it’s more influenced by interest rates to be fair than where oil has been on the NEOs at this point.

They bounce around depending a few very strong credit of course, weak credits or what you have, but fundamentally it’s more interest rate at the moment that have impacted us..

We will now take our next question from Andrew Light of Citigroup. Please go ahead..

Good morning.

Sorry to back to the Transaero issue, I know you placed your aircraft, so there are another 96 Transaero half so they go around 40 odd new aircraft on order, are you comfortable with the market gong to absorb back without any kind of temporary dislocations to values obviously?.

What will happen as many of those aircraft we suspect will not fly again, many of them are not owned by leasing companies, they are owned by financial institutions and it will be a challenge to move for those airplanes, for those owners of those aircraft types. We would be surprised too much if that came back into the market.

We would assume that the capacity that goes back into the market of those large wide-body airplanes will be only those once assumed by Aeroflash and we would be surprised. We have never seen a financial institution in the past actually lease a wide-body airplane successfully.

So I should say an old wide-body airplane successfully, which is what these airplanes are, they are quite old. So the comments I made are more in reference to the number of seats and leading the market. The types of airplanes they had were quite old aircraft at the very old average rate..

But they did have outstanding new aircraft orders I understand, the A321?.

Yeah, that’s already disposed back to Boeing and Airbus, always owning an Airbus has no idea how their Skyline will evolve over the long run, but they take an order in. They do not know for sure whether that airline will be there or not in the long run to take airplane.

They know that on average 85% of them will show up, they just don’t know with 15% won’t. So I think that this type of weakness in the Skyline was built into Boeing and Airbus.

We may not have been targeted specifically at Transaero, but they always over book and that goes back to why we shouldn’t get too excited about orders or announcements of future production from the OEMs. It’s about deliveries is what really counts and as they themselves will tell you, 15% of what they take it as orders won’t be built..

Okay.

And just a final question on, do you have any specific significant exposure to Malaysia Airlines getting what on Aircastle?.

We don’t -- we did have a 39% stake in one 777, we took that airplane out sometime ago and there was no real impact, just the impact in the financial statements there. You didn’t see anything there material, and so those -- that airplane is actually now in our [future] [ph] facility..

Thank you very much..

We will now take our next question from Arren Cyganovich of D.A. Davidson. Please go ahead..

Thanks. The basic lease revenues for the quarter were a little bit higher than we’re anticipating.

Is there anything unusual in that number driving it higher, or is it just your run rate base revenue?.

No, I mean, it’s the annual yield for the quarter was pretty comparable to what you saw in the last two quarters. That was just under 12.76% was the annual yield and that was the same as it was in Q2 as well and I think in Q1 as well. So, nothing unusual there..

Okay. Great.

And then, just provide a breakdown of the commitments that you have for the 45 aircrafts delivering in 2016 and 73 in 2017?.

Yeah. I mean, for '16, there is eight aircraft in the first quarter, 11 in the second and 13 in each of the third and fourth quarters. I don’t have'17 in front of me..

Do you have the dollar value?.

No, I don’t know with me..

Okay. Thank you..

We will now take our next question from Kristine Liwag of Merrill Lynch. Please go ahead..

Hi. Good morning, everyone. Gus, going back to the wide-body aircraft, you’ve discussed the market qualitatively, but I was wondering if I could get some numbers in order to quantify the strength of the market you’re seeing.

For the aircraft that you’re leasing this year, can you discuss what kind of lease rate factors from widebody? How they trended this year versus last year? And for the airplanes that you’re placing in from '16, how do those compare?.

There has been much of a change. Kristine, it’s a short answer year-on-year.

On the wide-body side, you see movement around each one; the 767 has picked up an awful lot; 330-300 has been very robust; 330-200, we keep moving them more or less the same; 777-200s, small falloff; if its Rolls-Royce powered, if you don't have any better time to lease then I would imagine there would be more of a fall-off in those assets because of proliferation of them coming from the Transaero and Malaysian Air bankruptcies..

Great. And some airlines in Latin America, particularly Brazil with significant cost-based in U.S. dollars are seeing a lot of financial pressure.

Can you discuss how much negotiating room troubled airlines have with regard to negotiating a lease? And then also if you start seeing restructuring of the fleet, what are the things that you could do in advance so that you’re not left with the bankruptcy proceedings?.

Well, we just gave you a case study in Transaero. We were gone before anything happened with 10 airplanes and that is something you’ve always seen from us, Kristine, being with Kingfisher, Mexicana or any of the other cases in between is what we do.

Now when airlines do face distress, the point is that it’s the speed of your response to the problem of the ultimate magnitude of your response that will determine success or failure. And that means that you have to have information at hand, you need to be working with the airline well in advance and you have to make a decision.

Do I think this airline has a viable business model, has it just got too much capacity on its hands, has it fallen for the sirens tune from Boeing or Airbus and taking too many aircraft. And all they need to do is go back there and have a discussion with Boeing, Airbus and defers to be at a significant cost to them all years.

But if that is the case, we think the business model is viable. But they just got over their skis on orders and the market is ultimately there then, we will tend to support the airline. If we feel that the business model is not viable as we have done in the past, we will just take the airplanes out and move along.

But there is no contractual -- go ahead..

Thank you..

No problem..

We will now take our next question from Vincent Caintic of Macquarie. Please go ahead..

Hey. Thank you. I just want to put a final point on that widebody side, which I think is pretty powerful and also just differentiating your platform versus the other guys out there. So, you sold two 777-200s and two 300s and if we put it together those 777s had near-term expirations of 2018 and I think that’s in another slide.

I’m just wondering if you could highlight how you're able to get significant gains on sale of that aircraft. I think some people were worried that the $8 million impairment was on the 777s but that’s not the case. How you’re able to sustain those gains versus other guys and you highlighted Malaysian Aircastle an example.

But what differentiates your platform versus maybe other guys?.

Well, I don’t know, I didn’t mentioned Aircastle and AMS, I don’t know the circumstances around that only what we’re doing ourselves. I mean, it is a very powerful platform the AerCap won. There isn’t a more powerful one in the world to move airplanes around.

Of course, that differentiates you significantly, because you are generally there with the airlines that they look to re-fleet and the different options that are available to them in terms of selling aircraft that gains, of course, a lot of that comes from your carrying value of the assets.

The $8 million you referred to there, of course, that was more than offset by the maintenance counting. So, I think, the way it’s presented, of course, it should be netted off because that the essence of what we do. We could reinvest the maintenance into the asset and then put the airplane back out of lease.

We don’t think that’s the economics in right thing to do for certain owner assets. But, overall, there’s a -- as a very clear focus on risk management in the business and trying to alleviate risk at all opportunity..

Got it. Thank you..

[Operator Instructions] We will now take our next question from Christopher Nolan of FBR. Please go ahead..

Gus, can you give a little detail in terms of how you guys decide whether or not to reinvest or release a plane or do a partout.

Meaning, given that older planes are having extended life just because of lower fuel prices, I imagine the case of parting out would be improving? Do you have sort of IRR threshold that you sort of look at?.

Each plane is different. So we look at it more on the cash -- on a net present value basis adjusted for risk. So any airplane can get released and we can release any airplane.

The question is how much will it cost us to reconfigure the airplane to what the customer wants? How long is the lease term? And how strong is the credit quality of the airline? Frankly, do you want to spend $20 million of an aircraft is going to go to a startup carrier.

You better off just say and look, I’m not going to border putting $20 million into the airplane. I’ll just take the airplane back parted out. I’ll move on with license and get on to those. The narrowbody is much more straightforward because the narrowbody side that airbus is really -- you don’t have to put that much into them to put them back out.

It’s more of the engines, whether the engines of all the airplanes will fly full overhaul. If they don’t then it’s pretty straightforward. You’ll always release the airplane. So each one is looked out individually to see what is the optimal outcome.

And as I said, you look at the reconfiguration cost, the status of the engines and the credit quality of account party that will get the assets..

So looking ahead, you really can’t really predict whether or not AeroTurbine will see a significant growth there or not?.

I mean, there is certainly, AeroTurbine, I mean is growing at a significant tip at the moment. Mainly, as we give the airplanes that we decided that we don't want to release that we wished upon. I think you’ll see that in the Investor Day when we gave quite some detail on the number of airplanes we put down there.

But it’s a case-by-case decision of what to do with these aircrafts..

Okay. Thank you..

[Operator Instructions] If there are no further questions in the queue then we’ll conclude today’s Q&A session. I would now like to turn the call back to Mr. Wikoff for any additional or closing remarks..

Thank you, Operator. And thank you all for joining us for the third quarter. We’ll talk to you again, hopefully later today at the New York Palace for the investor luncheon. Well failing that, we will talk to you in February for the full-year results. Thank you, all..

That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect..