Welcome to today’s AerCap Holdings’ 2016 Fourth Quarter and Full-Year Results Conference Call. At this time, all participants are in a 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 will now hand over the call to Brian Canniffe, Head of Investor Relations.

Thank you, operator, and hello everyone. Welcome to our 2016 fourth quarter and full-year results conference call. With me today is our Chief Executive Officer, Aengus Kelly; our Chief Financial Officer, Keith Helming; and our Deputy 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 that 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 February 21, 2017. 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 archived for replay. I’ll now turn the call over to Aengus Kelly.

Thank you, Brian. Good morning, everybody. And thank you for joining us for our 2016 fourth quarter and full-year earnings call. I’m delighted to report another quarter of strong earnings and profitability. We had a record fourth quarter with net after-tax income of 365 million and 1.047 billion for the full year net after-tax income. This equates to reported earnings per share of $2.01 for the quarter and $5.52 for the full year. You will have noticed that we are no longer reporting adjusted net income and adjusted earnings per share numbers. Keith and Pete will provide more information on this. The strong performance of the AerCap platform which drove a fleet utilization rate of 99.5% for the full year, reflects the continuing resilience of air travel and its ability to withstand the numerous challenges faced by the industry in recent years. In 2016, the breadth and depth of our platform enabled us to capture increasing demand for aircraft by executing a record 458 transactions, which includes the signing of 279 lease agreements. This is almost two aircraft transactions every working day. During the fourth quarter alone, we completed 116 aircraft transactions, including 56 new lease agreements, 19 new aircraft purchases, and 41 aircraft sales. Notable deliveries included the first Airbus A320neo to Spirit Airlines making the airline the first in the United States to receive this aircraft type. We also delivered the first Boeing 787 Dreamliner to Air France. We now have 78% of new aircraft deliveries to 2019 leased. This level of activity provides the business with a high level of visibility into future earnings. We continue to actively manage our portfolio during the fourth quarter, resulting in over $3 billion of sales for the full year, 44% of which were widebodies. Based on Ascend market data, we…

Thank guys, good morning. I’ll on Slide 5 of the presentation. Our reported net income for the fourth quarter was $364.7 million and was $1.0466 billion for full-year 2016. Our return on equity for the full year was approximately 12.5% on a reported basis. Fourth quarter 2016 reported net income was up 38% over the fourth quarter of 2015, driven in part by higher gains on sales and other non-recurring items as well as lower AeroTurbine losses. The decrease in year-over-year net income was due to a few items including sales of older aircraft during 2015 and ’16, which reduced average lease assets by approximately $1.6 billion. The proceeds from these sales were used to repurchase shares. As you can see, we have just provided reported net income on this slide. Going forward, we have decided to eliminate adjusted net income and earnings per share and focus on our GAAP results only. Instead, we will provide the required information in order to understand our results by showing the key components of net income as we have done on this slide. We believe this will help simplify our financial disclosures and make it easier to understand our financial results. With this transitional period, we have provided the same reconciliation from reported net income and earnings per share, the adjusted numbers on Slides 15 and 16 of this presentation. The components of net income that we have provided include those that have the most significant impact to the result. Gains on the sale of aircraft and other non-recurring items provided $115.4 million of net income in the fourth quarter of 2016. The non-recurring items in fourth quarter included income from lease terminations and a gain related to the repayment of a note receivable earlier than expected. We incurred a loss of $13.6…

Thanks Keith. Good morning everyone. Starting on Slide 8, our total revenue for the fourth quarter was $1.3686 billion, an increase of 30.6 million from the fourth quarter of 2015. As Keith mentioned, our aircraft sales during 2015 and 2016 reduced our average lease assets by about $1.6 billion, this led to a reduction in basic lease rents from $1.1488 billion in the fourth quarter of 2015 to $1.0618 billion in 2016. Our maintenance revenues for the fourth quarter were $159.1 million, an increase of 22.4 million from the prior-year period, primarily due to lease terminations and amendments along with a higher amount of end of lease payments during the fourth quarter of 2016. Our net gain on sales was $58.7 million for the quarter compared to 43.4 million a year ago. The increase was primarily due to the higher volume of sales that closed in the fourth quarter of 2016 as we completed the sales of a number of larger portfolios that were signed earlier in the year. Our other income was $89 million for the quarter which included 73 million of nonrecurring income from a combination of lease terminations and a gain related to the repayment of our note receivable earlier than we had expected. Turning to Slide 9, the reduction on average lease assets due to asset sales resulted in lower basic lease rents and a net interest margin of $790.5 million in the fourth quarter compared to $874.3 million in the prior-year period. Our annualized net spread for the fourth quarter was 9.3% compared to 9.8% in the fourth quarter of 2015. The two main drivers of this were an increase in our average cost of debt and a reduction in the average age of our fleet. Our average cost of debt increased from 3.7% in…

[Operator Instructions] We will take our first question from Helane Becker of Cowen and Company. Please go ahead, your line is open.

Hey guys, it's actually Conor Cunningham in for Helane. So it seems like AerCap has been very active with the aircraft sales over the last seven years. Can you talk about like the expected trends in 2017, 2018, so would you expect the sales to slow as we get a new uptick - as you have an uptick in new technology entering the fleet? Thanks.

Conor, as you know we expect to sell at least $1 billion of assets each year. In the last two years, we have significantly exceeded that. Now the key to selling assets is to sell assets that you want to sell. And we tend to target the mid-life assets of 10 to 16 years of age, average age is around 13 years as we want to try and drive the average age of the portfolio down a bit and focus the portfolio more on the newer technology assets. If we still observe a strong bid in the market, I think we'll continue to sell the levels in excess of the billion dollars, and for the assets we want to sell, so far the market this year seems to be reasonably strong and that could change of course, but at the moment I would say it's likely that we will probably exceed the billion dollars by how much though is uncertain.

Great and just a follow up, there's been some airlines that talked about delays of the A320neo , have you incorporated that into your outlook or do you expect them to be a major change to any of your delivery schedules in the near term?

It may lead to a slide of several months for sure on the Pratt & Whitney powered A320neo, I think it's likely that we will see three months but that has been incorporated into the guidance we've given, if there are any further delays we'll update on the next call.

And then I just have one maintenance question, in terms of how you guys calculate your utilization rate, do you include assets held for sale. I assume you do if there's a lease attached to it in the near term.

Yeah, we do include those in it.

We will take our next question from Gary Liebowitz of Wells Fargo Securities. Please go ahead, your line is open.

Guys, back in November, you talked about the sort of medium term sale leaseback addressable market opportunity. Are you seeing prices in that market get anywhere close to attractive or share buybacks still far more additive?

To-date, share buybacks have been more attractive, we bid every week, in fact we put out three bids yesterday but that's nothing unusual, Gary. We will put out several bids every week. We want to make sure you know where the market is. In November, we did say that we expected the addressable market to increase in size as more of the new technology begins to deliver. Now that is definitely happening that there is more activity. Pricing though I think still remains tilted in a wrong direction for us, we don't feel there's a fair reward for the risk. But we continue to bid at levels that we think do make sense but as we sit here today, the share buyback is a more attractive alternative that may well change though during the year as the addressable market gets bigger.

And for Keith or Peter, it looks you’ve accelerated some 2018 deliveries into ’17, at least relative to where we were back on September 30. What is the right CapEx number to be using for this year?

So Gary, that's correct. We’ve moved some forward actually from 2018 based on notifications that we've gotten from Airbus. So just to recall, we had assumed basically a six-month delay in terms of 2017 approximately A320neos and we're still assuming that but when we’ve gotten a notification from Airbus we've moved those up to whatever the notification date was. In terms of CapEx, contracted CapEx for 2017 will be about just over $6 billion.

Just one last one since you're moving to GAAP instead of adjusted EPS, what should we be assuming for 2017, the MRA adjustment, is it about flat like you thought it might be going or how much should we be adjusting for that?

The maintenance rights adjustment for 2017 should be around what we talked about $150 million that's what we've given out in the first quarter of last year and that's still probably the best estimate.

And then going down in 2018?

In 2018, I think $30 million number that we gave is still about right.

We will take our take question from Moshe Orenbuch of Credit Suisse. Please go ahead, your line is open.

I mean most of my questions actually have been asked and answered already, but could you maybe just talk a little bit about the decision to go to eliminate the other forms of reporting and go just to GAAP?

So as Pete just pointed out, 2017 should actually really be the last year where the maintenance rights impact is significant and the other items including AeroTurbine in 2017 is not expected to be significant. So we think that going forward providing just one net income number, the GAAP number, and providing this component analysis would be a better way to kind of explain what's going on with the business result. That way we don't have to sit here and always debate as to what goes into or is excluded from adjusted net income or a non-GAAP measure. So we're going to focus on GAAP results and we'll provide whatever analytical information we need to explain the results.

And I guess you know given that you've got the expectation of 6 billion of CapEx and then the 350 million of the buyback over the first half. How does that do you think will that impact the debt to equity ratio. I mean you're kind of a few ticks below your target. How would that likely evolve over that period?

So right now we're at 2.7 to 1 that's where we ended the year, we'll continue to stay within the 2.7 to 3 to 1 range during the course of the year and we'll always want to maintain within that level. So I think you should just expect us to be well within that range for the year.

We will take our met question from Rajeev Lalwani of Morgan Stanley. Please go ahead, your line is open.

Can you walk us through the implications of rising interest rates to borrowing costs and then also how you think that's going to impact yields as we look forward and then a follow up.

The first thing is that we run a hedged book, so we are not exposed to rising rates on the book of business that's written and the vast - and any least that's placed on forward order has an automatic adjustment for any increase in interest rates. Now as we go forward, rises in rates have historically being accompanied by rises in lease rates. On the used aircraft there's generally a lag period, it could be six months give or take. But it only applies to those aircraft that are re-pricing at that point in time as rates are rising. And having said that also a rising rate environment generally correlate to a better global growth environment and what we've always observed in the past, the rising rate environment generally leads to asset insulation. So as long as you’re hedged, right and you’re operating in a decent global economy, rising rates should not be a threat to the business. And as I said this company does run a hedged book. Pete anything you would add?

No I think that’s it.

What about the debt side as far as borrowing costs?

My point is that if - so obviously if swap rate - the yield curve goes up by 50 points across the curve and your underlying cost of funding has risen by 50 basis points, the lease rate should move with that and certainly our new aircraft they move immediately day by day on the new aircraft with the movement in the swap rates.

I got your point now, another question, you previously talked about asset values being marked below market, it is hard to spend on your books. Can you talk about how that takes into account just SG&A and lease expense levels and just thoughts going forward as far as overall SG&A levels and what we should be modeling.

So on the SG&A front, I would expect quarterly average should be around 75 million a quarter that's probably the best run rate to be using for that. After the first half of 2017 we don't expect to have really any [indiscernible] AeroTurbine, so that would be really just core leasing business.

When you talk about your asset values, does not take into account SG&A levels or is that just a separate line item?

No, it does not - no it does not take into consideration SG&A, it’s just looking at the aircraft value itself, all components of the aircraft value.

We will take our next question from Jamie Baker of JP Morgan. Please go ahead, your line is open.

Hey, good afternoon guys, this is actually Nish Mani on for Jamie Baker. I want to ask you a quick question about how you guys are thinking about potential tax reform in the United States and how that would impact US airline decisions to lease versus own, I mean obviously there are other economic and private considerations there, but have you started to engage your US customers on this topic?

So Nish, at this point it’s a little early to predict how US tax reform will play out. From our standpoint, we're obviously not a US company and we have very few assets in the US so there would be very little direct impact we think. In terms of the impact on our customers and on the OEMs, it's very preliminary at this stage and it's hard to predict how any of the provisions including the border adjustment mechanism could actually -- whether it will actually happen and if so how exactly would that play out. Obviously, we're monitoring developments in this area, but I think it's a little early to tell at this point.

Yeah. Okay. That's helpful. And a quick question on 787 pricing, just want to see if you guys could provide any color on 787 pricing, specifically by model today relative to maybe a year ago or so and see if any of the market has changed at all?

Well, we have moved, I mean in total, between what we've taken and what we've bought on sale leaseback and still on order. We had over 90 787s, we were over 10% of the market. We’ve sold some of those assets. The 787-9, we think is a tremendous airplane. We see good demand for that. We have only three units left out of our entire position and they're coming in 2019-ish. And we can put them away if we want to. I think, you'll see that the 787 has been fairly durable over the last year. We haven't seen any material move one way or the other in the last 12 months in the lease rates. Obviously, interest rates impacted as interest rates fell significantly last year. The absolute rate went down with that. But overall, it's still a very good airplane and it's the heart of the family. We don't have any 787-10s and on the 787-8, a few years ago, we converted all of our open positions into -9. So I think that gives you a good indication of where we think the heart of the market is and where there's a fair risk and reward for the owners.

We will take our next question from Jason Arnold of RBC Capital Markets. Please go ahead. Your line is open. Jason Arnold, please go ahead. Your line is open.

Operator, we’ll take the next question.

We will take our next question from Justine Fischerof Goldman Sachs. Please go ahead. Your line is open.

Good morning. Okay. The first question I have is just on the message for financing your CapEx this year and on the balance sheet. I know that you guys have the secured debt to unsecured debt ratio of 45, 55 right now. And you guys have said that you want to maintain it around that level in order to maintain access to various parts of capital, but with an investment grade rating, I would think that that access should remain more open overtime to various positive capital, even if you didn't use one of them for a couple of years, let's say, if the unsecured market was very good. And also it probably creates more consistent access to the unsecured market. So does the rating change now that [indiscernible] all three agencies change the way you're viewing your secured to unsecured debt ratio?

Justine, thanks for the question. No. It doesn't really change it in our minds. I mean, as you said, we want to make sure that we maintain access to all types of funding. So we cap our secured debt to total assets ratio at 30%. We’re just below that at this point and that will move around. Right. It will move around somewhat below that 30% from time to time. But we think that being at that level gives us, we have good access to the unsecured markets as we've seen, right. We have good access to the secured markets as well. We're bringing in new lenders and we think that that's an appropriate place to be.

Okay. Yeah. So the 45 was the percent of your total debt outstanding. So your target is 30% debt to assets. I was talking about a different number. And then the other question is just on the widebody deferrals for Gus. I know that there are definitely deferrals all the time and we saw that with some Latin American Airlines, the lessor has played a huge role in helping to figure out some of the delivery problems there despite the difficulties in demand that we saw, but I think that what's concerning investors is that with Gulf carriers now, they represent a huge percentage of the widebody backlog. And I think in people's recent memories, we can think of a region that represents such a huge percent of the backlog that is going to see deferrals. So can you tell us your view on how to lay investor concerns, given the size of the Gulf carriers in the order book?

Justine, I would say that we have certainly seen a region having a much bigger share of the backlog having gone through significant stress for a long period of time, which would be the North American market. As you know, most North American airlines have filed multiple times with massive backlogs and massive amounts of airplanes in the system, far greater than what’s in the Gulf. I would go back to what I have said in my prepared comments, the OEMs know that there will be growth in air travel. The OEMs know they've a non-investment grade customer base and they've a massive fixed cost base they have to cover. In that regard, I think the OEMs knew when they were taking those orders from several airlines with the same business model that it was likely not all of those aircraft would be delivered in a timeframe order. But they didn't know which one would make it or which one will take more of them in the nearer term. So they needed to take them from all of them, it’s similar to what happened in India, where they overcommitted to everyone and Kingfisher was the one that everyone thought would make it at the start, but didn't. So it's just -- it's nothing really new in the scheme of things and I think we will see the Middle Eastern carriers have revolutionized air travel. They've been tremendous for the consumer, absolutely tremendous. You can now fly for less in absolute dollar amounts almost anywhere in the world than you could do 20 years ago. That's inflation -- and that's without adjusting for inflation. So these carriers have been a massive boon for the consumers and I do think that as we go forward, they'll work their way through their issues, but this is nothing that we haven't seen before and the OEMs are not going to put the national carriers of these countries into bankruptcy. That will not happen. They will work with them. They will defer what needs to be done. As always for any airline in the world, it is an expensive discussion to go [indiscernible] and that's how the OEMs make a lot of money, Justine, is by deferrals. They know the day the airlines signs the order, there is a high likelihood that they'll have to come back and look for help. And when they do that, the price goes up significantly. And so it's part of the OEM business model and their profit margin to expect deferrals.

We will take our next question from Michael Linenberg of Deutsche Bank. Please go ahead. Your line is open.

Yeah. Hey. Good morning. Good afternoon, everybody. Peter, I think, you had mentioned the sales margin was about 5% for the full year on the assets sold. What was it for the fourth quarter? Did you say that?

I didn't say that. It was actually higher for the fourth quarter, it was around 9% for the fourth quarter. And that's really -- that moves around -- it moves around depending on what happens to close during that quarter. As I mentioned before, we had a number of big portfolios that comprised a big percentage of the sales during last year. And so, some of those closed in the second quarter, some in the third, some in the fourth. And so I think it's probably best to look at the full year margin. I think that's more reflective of what we would expect going forward as well.

Okay. Great. That's helpful. And then just my second question, Keith, you had presented this, focusing on this GAAP number. And I get that although there is that element of non-recurring and that is something that is notoriously difficult to forecast. I'm not sure in subsequent quarters, are you going to put out a like an 8-K in advance about what those potential non-recurring numbers are, so that we have a forecast that can sync up with what you’re thinking about on a GAAP basis and then just a follow on what was that non-recurring in that 115 million, just so I have the right numbers here. What was the non-recurring number in the fourth quarter? If you could provide that. Thank you.

Yeah. Well, the gain on sale, you can see that in the slide, it was about 40% of that total number. The non-recurring items would fall into the other income category and it consisted of primarily lease terminations, so effectively payments we received as a result of lease terminations as well as effectively income on notes receivable that was paid off early. So these are two, as we referred to, non-recurring items and we don't expect to see those significantly in future periods. Now in terms of going forward, I mean whenever we have this thing, we will break out those items and make sure that people understand what's in the numbers, what's recurring, what isn’t recurring? And to the extent obviously that we know in advance what the numbers will be in the forecast, we would provide that as well so even though we're going to a different way of reporting here, the information we will be as transparent with it as we always have been.

We will take our next question from Andrew Light of Citi. Please go ahead. Your line is open.

Yeah. Hi, there. Got a question on European airlines. You've got fairly significant exposure to the three airlines in Europe. I mean, somewhat distressed situation. Do you expect in general in Europe to see more defaults and/or restructured initiatives to there?

Andrew, Europe is doing fine for us and has done so for the last couple of years actually. We've moved a lot of aircraft in Europe. There's always, Europe is a highly fragmented market. And so that leads itself naturally to some weaker players. But will we have some restructuring defaults, possibly, but I don't see anything out of the ordinary. I think the area where there is obviously concern at the moment is more around Turkey than anywhere else, given the events there during last summer and the decline in traffic in Turkey due to the tragic events recently. But having said that then, we have seen a turn in Russia. Two years ago, Russia was in a really tough spot and we were taking lots of airplanes out of Russia, far greater than anything that's going on in Europe at the moment and those did not have a material impact on the result of this company during that period of time. And now with the stronger ruble and people just have -- once people travel, they want to travel again. That's why it's so resilient and people have adjusted their budgets. And we still -- we see tremendous demand from the Russian traveler, again to go abroad. They experienced it for the first time over the last decade and people adjust their budgets so that this is one of the last things that gets caught in a household and we're stressing the resilience of that in the Russian market. But I would say at the moment on a global basis, Turkey is somewhere where there are definite stresses there for sure in parts of Mediterranean Africa. But these are not anything beyond the norm that we experience every year. There's unfortunately some part of the world that always has an issue.

Thanks. And can I ask a follow-up on your forward order book, you’ve got a fairly healthy pipeline of deliveries through to 20211 and then it drops down quite considerably. At what point will you need to think about an order placement through say 2022 onwards.

Only when we feel that there is a fair risk and reward from the manufacturers, we certainly are not here to fill their backlogs. We're here to make money for our shareholders. And if there is an attractive transaction with the manufacturers, then that's fine. If not, I’ve no problem not buying a single airplane from them ever again. But, it has to be something that makes money for our shareholders and if there are deals are there tomorrow that make that happen, great. And if they never come, I don't care.

We will take our next question from Arren Cyganovich of D.A. Davidson. Please go ahead. Your line is open.

Thanks. Gus, how is the strong dollar impacting your customer base? Is there any discussion about changes in US trade policy, et cetera that would make you a little worried about stressing some of your customer base, strengthening dollar?

I think it's too early to tell if there will be protectionism around the world. All I can say is that the benefits of liberalization of air travel have been extraordinary boosts for the consumer globally. As I just mentioned, it is cheaper now to fly anywhere in the world in absolute dollar terms than it was 20 years ago, even without adjusting for inflation. That's a tremendous boon for the customer and that's the result of liberalization. Protectionism will, I can assure you the customer will pay an awful lot more for air travel once there is protectionism. That's what created Southwest, created Ryanair, created Emirates, all of these airlines have changed the face of air travel or Air Asia in Asia. So I think that if that were to happen, it would really hurt the average guy in the street. Now, the strong dollar itself that has happened, certainly in some jurisdictions in, particularly in Mexico of course, we have seen the impact there. The airlines are so far coping with it. It may well -- if there's two sides to it, of course, look if an airline is weak, this may push it over the edge. We don't see anything unusual there in that level of activity beyond the norm with airline stress. However, it does of course mean that airlines in those jurisdictions are so much less likely to buy the assets themselves, as the large dollar expenditure may not be as financeable as it was and therefore, the leaseback may be a more attractive alternative.

Thanks. And then looking at your maintenance rents for the quarter, they were elevated. Were there any defaults or lease terminations that were unexpected that generated this quarter?

Yeah. We had a higher level of lease terminations that we essentially due to negotiated terminations with the airlines and so that led to what happens in those cases is we tend to sweep the maintenance reserves, because the maintenance didn't perform in the air craft. So the aircrafts returned to us and we recognized those revenues. So that's why you saw both the higher level of maintenance revenues in the quarter and also a higher level of leasing expenses.

Got it. And then just lastly for modeling purposes, what's the dollar amount of CapEx looking like on a quarterly basis for the next two quarters?

Well, it moves around quarter-to-quarter, but as I said for the full year, that will be about 6 billion for 2017.

Of which probably about 40% is in the first half.

We will take our next question from Scott Valentin of Compass Point. Please go ahead. Your line is open.

Thanks for taking my question. Just with regard to the Moody's upgrade. Does that impact your outlook at all for your cost of funds outlook? I know you've given guidance in November for a net spread. I’m just wondering if the upgrade has any positive impact or no impact at all.

Well, we have factored in a little improvement relative to where we were, back in November when we gave the forecast. So we expected to see some improvements there. I'd say we have seen spreads come in a little, obviously since we did our deal, our bond deal and since we had the Moody's upgrade, in the other hand, we've also seen some higher interest rates -- higher rates in the meantime. So those probably offset each other in terms of where we are. So in terms of our forecast overall, we're pretty much still within the range that we gave you in November.

Okay. Thanks. And then just a follow-up on that point. The decision to move away from the adjusted earnings, just GAAP earnings. How should we think about the previous guidance? I think it was 560 to 580 was a core number before the gain on sale of any aircraft. Just wondering is that a number to use going forward for and add an assumption on gain on sale to get the GAAP number. Is that the way we should think about it?

Yeah. I would still use that number. So I'd say we're still within the range that we gave you then. If you think about the adjustment items that we had included, those were really two. One was the maintenance rates, amortization impact that we talked about earlier of $150 million. So I'd factor that and the other was AeroTurbine losses of around 25 million. So if you add those back, those would -- or adjust for those, that would give you the core on a reported basis. And then yeah, I would add gains to that whatever your expectation is on gain.

We will take our next question from Christopher Nolan of FBR and Company. Please go ahead. Your line is open.

Hey, thanks. Gus, for your earlier comments, in terms of people travelling one to one ago again, put the exception of anyone have gone a long trip in the back of an MD 80, I think they'll put you off travelling for a little while? Another point, the CapEx for 6 billion, the slide deck on page 12 shows 5 billion for 2017. What’s the difference there?

5 billion of cash is what we expect in terms of contracted CapEx, it’s a little over 6 billion. You've got the PDPs to be added on.

Got you. And then also the $350 million share repurchase program, is this just a upscale of the 250 that was previously announced to go through 331 or was this a separate announcement?

This is a new program in addition to that one.

Okay. So we’ve got 250 through 331 and 350 on top of that?

That's correct.

Finally on the lease sale margins, which are up, are you seeing the value or are these aircraft being sold with leases I presume and that is driving prices now than just the metal?

All aircraft that we sell are with leases attached.

And so what's driving up the margins? I think you addressed this earlier, but it wasn’t quite clear?

Yeah. So we had a higher margin in the fourth quarter, but again, I think it's really due to, we just had some aircraft. Most of these were part of big sales, big portfolio sales and so we had lower margins in the third quarter, higher in the fourth quarter. They tend to even out and so that's why I say I think if you look at -- the reason why we gave or we provided the margin for the full year is I think that's more representative of what you would see rather than any particular quarter.

Okay. Final question on the order book again and I know you answered this a little bit earlier. It seems like the order book is running down by 25% or running off by 17 by value. Is the strategy here, does it start capitalizing on contention deferrals or airlines that might have over ordered, because it looks like the early order slots for the A320Neo and MAX are pretty much taken up?

Yeah. It's about 20% give or take. I suppose, the total CapEx will go through it in 2017. But that's plan D. Look as I said earlier, if there is a deal there to be done with the OEMs at the track, then that's fine. If there isn't, I couldn't care less. There will be plenty of opportunity for the company. We've always demonstrated that in the past. So I'm not particularly bothered about the OEMs.

We will take our next question from Jason Arnold of RBC Capital Markets. Please go ahead.

Hi, guys. Sorry for the telecom issue there. Just curious any aircraft types in particular that you're seeing stronger appeal for perhaps lack of interest from your airline customers at present?

I think on the new technology stuff, the A320neo is certainly extremely liquid assets and is proving itself to be a very liquid airplane. We're moving in fact this week just earlier on Sunday of this week, we agreed to do it for another five airplanes in 2021. That's I suppose the most liquid asset out there. Then you have 737 MAX 8 is doing well and we don't have any MAX 9s. We don't have any MAX 7s. We think the MAX 8 is a very good airplane. On the 787s, you heard my commentary earlier, we think that the -9 is a liquid machine. And on the A350 side, we think the 900 is a liquid machine and that's evidence by our own actions in that. All of our 350s are 900s and on the 787 side, everything we could, we put in to -9 and have no -10s.

Okay. Super thanks. And then I guess the other one I was curious on is any updated thoughts on Iran as an opportunity set or is complications from geopolitical factor there problematic?

Once we have more clarity on Iran, it is a market that we will carefully look at, but under no circumstances will we violate any sanctions and the issue is that while you could say sanctions are lifted, it's day one risk has been eliminated or we release. However, we are entering into a transaction for a multi-year period. And when we put an airplane in, there are other parties as part of that transaction, there's the financiers and there's the insurers and ourselves, the owners are you guys, the owners. And what we have to look at is what has happened in the event if there were to be a snap back of sanctions, how would that impact your insurance policy or your financing structure and you need to have clarity over that. So it's multiple parties have to get comfortable with that potential and that process is ongoing and once there's clarity around that, we'll know what action to take.

We will take our next question from Kristine Liwag of Bank of American Merrill Lynch. Please go ahead. Your line is open.

Hi. Good morning, everyone. Can you quantify if any late payments from your airline customers today and how they compared to last year and are there particular regions of the world where that may be in your watch list this year that you didn't have last year?

Well, Kristine, there has been no great movement in receivables and you can see that when we file the quarterly reports one way or the other. The jurisdictions have moved each year. Unfortunately, some part of the world is always in trouble. It's a big world and things happen. So at the moment, Turkey, as I mentioned earlier on, is under pressure. We are starting to see a turn in Brazil. It's a slow turn, but it's coming we feel and we are also seeing a real turn in Russia. And it generally takes these markets a couple of years to turn. But on a global basis, there's no absolute change and in terms of regions, shifted more as I said to Turkey in some parts of the Mediterranean Africa.

And earlier you mentioned how protectionism is a key risk to global airline industry. So when you discuss this with your airline customers, to what degree are they thinking about the risk of possible renegotiations of US Open Skies Agreement and how much flexibility are they building into their fleet planning?

Well, I think, look, no one is willing to change their fleet plan at the moment. It’s too uncertain. Every action has a reaction though I think many of them would hope in their heart of hearts for the status quo, even though some may be tempted by an oligopoly. I think in their heart of hearts, they would be afraid of what would happen if there was to be a return to protectionism across the world. It certainly wouldn't do any favors for the traveling public, that's for sure.

Great. And maybe one last question for me, with the $1 billion placeholder for aircraft sales this year, can you discuss the expected profile of this fleet compared to your existing fleet. And also is that 5% gain on sales still a reasonable expectation in 2017?

Well, the gain on sale is driven by the type of airplanes we sell. I would just look back, Kristine, over the last decade and you can see a consistent gain on sale in the business. In terms of the type of assets we’ll sell, I would expect it to be more of the same of what we sold last year with the focus on the midlife asset between 10 and 16, 17 years of age.

We will take our final question from Gary Liebowitz of Wells Fargo Securities. Please go ahead. Your line is open.

Yes. Thanks, operator. Pete, not to beat the dead horse here, but going back to the guidance of 560 to 580 for this year that was on a core EPS basis, are you saying we should reduce that by about $1 of share or the items that are included in GAAP, you had excluded that on top of that and our estimate of trading gains?

Yeah. Gary, what I’m saying is, if you were to, we gave that out on kind of an adjusted basis obviously, right. So if you were to convert that to reported, really there are two main items in that. One is the maintenance rates amortization impact, which is $150 million. So depending on your assumption about share count, right, that’s -- you would factor that in. And then the other one is the AeroTurbine results which we gave was 25 million. So if you’re going from adjusted to reported, you would deduct both of those I think. And then obviously you have to think about what you would expect in terms of gains on sale. I think those are the three items.

Okay. And then just one, Gus, you stopped disclosing the average duration of new leases and re-leases, what kind of trends are you seeing there, especially with respect to widebody aircraft?

Nothing different, Gary. To be fair, we're still seeing the new stuff. As I said, we just signed a handful of them on Sunday for 12 years and the used stuff bounces around four, five year category, nothing different there.

Were those widebody placements for 12 years?

They were narrow body.

Well, thank you all very much for joining us on the call and we look forward to seeing a number of you tomorrow in New York and on Thursday and speaking again in May. Thank you very much. Thank you, operator.

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