Thank you. Good day, everyone. Welcome to the 2011 fourth quarter and full year results conference call. With me today are Aengus Kelly, AerCap CEO; and Keith Helming, AerCap CFO. In today's call, we will discuss the fourth quarter and 2011 full year earnings. In addition to this earnings call, AerCap will host a lunch for analysts and investors today at the New York Palace. The lunch presentation will not be webcasted, but a copy of the presentation will be made available on the website. Before we begin, I want 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. In addition, this conference call contains time-sensitive information that reflects management's best judgment only as of the date of the live call. AerCap does not undertake any ongoing 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 the performance related to forward-looking statements can be found in AerCap's earnings release dated February 22, 2012. A copy of the earnings release and conference call presentation are available on the website at www.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 Gus.

Thank you, Peter. Good morning to everyone in the U.S. and good afternoon to those of you in Asia, the Middle East and Europe. Thank you for joining us today for our fourth quarter and full year earnings call. Adjusted net income for the full year 2011 was $303 million or $2.07 per share. This record profit is testament to the success of our leasing strategy, the excellence of our platform, the quality of our aircraft portfolio and the efficiency and robustness of our funding structures. We had a strong fourth quarter with an adjusted net income of $80 million or $0.57. On an unadjusted basis, full year net income was a healthy net profit of $172 million or $1.17 per share, and Q4 unadjusted net income was $76 million or $0.54 a share. This level of profitability not only demonstrate the earnings power of the AerCap platform but is also further evidence of the resilience of the earnings profile of the aircraft leasing sector as a whole. As some of you will have seen from our investor presentations, we often show you the 5-year historic profitability of 11 aircraft leasing companies. This provides you with the results of 55 years, and in those 55 years, 49 of them were profitable, despite the fact that the period under review included the worst downturn we have ever seen in aviation and a virtual closure of the funding markets in 2009. The principal reasons for the historic and current strength of the aircraft leasing industry are: one, the growth of emerging markets; two, the growth of operating leasing; three, the replacement requirement for new aircraft from developed markets; and four, the finance ability of modern technology aircraft throughout the aviation cycle. These trends are extremely resilient and have proven time and again…

Thanks, Gus. Good morning, everyone. Like Gus said, I'll take you through the details on the fourth quarter financials and full year results. I'll start on Page 6 of the presentation. Our reported net income for fourth quarter 2011 was $76.4 million. Additionally, our adjusted net income was $79.8 million in the fourth quarter 2011 as compared to $56.6 million in the same period of 2010. Adjusted net income excludes non-cash charges relating to the mark-to-market of our interest rate caps and share-based compensation, and excludes discontinued operations and a one-time charge relating to the buyout of the Genesis portfolio servicing rights. For the full year 2011, adjusted net income was $303.1 million as compared to $223.9 million for the full year 2010, an increase of 35%. Page 7. Reported earnings per share were $0.54 in the fourth quarter 2011. Adjusted earnings per share were $0.57 during the same period, but full year 2011 adjusted earnings per share was $2.07. The average shares outstanding during fourth quarter 2011 was 140.6 million. After completion of our share repurchase program during the fourth quarter, the number of shares outstanding is 139.8 million. Page 8. Total revenue in fourth quarter 2011 was $276 million. For full year 2011, total revenue was $1,094,000,000, an increase of 14% over 2010. Beginning again in fourth quarter, our sale results are now being reported on a net basis in revenue, which is the amount of sales proceeds less cost of goods sold. This is how our sales results reported prior to the acquisition of AeroTurbine and will be the way we report going forward now after the disposition of AeroTurbine. Page 9. Net interest margin or net spread was $178 million in fourth quarter 2011. The annualized margin as a percent average of leased assets was 8.97%…

[Operator Instructions] And your first question comes from the line of Gary Liebowitz with Wells Fargo Securities.

Guys, I wonder if you can talk about what borrowing costs have done since you struck your -- the October deal or the financing of the 12 737s. If you were to pursue a similar type of transaction today, I mean, have you priced out where your borrowing costs would be?

Yes, Gary, obviously we closed that transaction in the midst of the issues surrounding the French banks, the eurozone, and one of our strengths is being our diversified funding structures and the fact that money for this one came from Europe, Asia, Australia and as we said, it priced at less than 300 basis points with an LTV level over 80%. So we believe given the quality of the asset, our purchase price, we could replicate that today. And to give you another example, we're in the market right now for a much smaller ticket in Asia, and the deal is 3x oversubscribed. So I think there's a huge difference. There's certainly stress in the funding market, don't get me wrong, Gary. But I think there's always a bid for quality. And the banks are the entities who have dealt with the aircraft leasing companies for the longest period of time. They are not subject to any insider information restrictions. They see everything that all the companies do before they lend. And our ability to attract debt capital is unrivaled, I believe.

Okay. And then -- and for Keith, you had a significant other income item in the quarter, $8 million. What was that?

That was effectively compensation for the termination -- for the termination of the freighter program. So that particular revenue item was obviously offset by some impairments and such on the aircraft and other costs.

Okay. And then finally, it looked like your average borrowing cost ticked up a little bit from the third quarter. Is this just a function of some of your very low rate debt getting paid off quickly?

No, we continue to put in fixed rate debt as much as possible. So we're quite interested obviously in locking in the low rates for 10 years and such. So fixed rate debt is slightly more expensive than the others.

I mean, Gary, as you've heard us say before, there's a low tolerance for risk in this company. So we make very strong profits and we decided that given the yield curve where it is, that we will continue to fix that now so that we ensure the long-term profitability of the business, and that's why you see the uptick in the fixed rate debt. And our fixed rate debt includes all the costs, fees, undrawn fees, upfront fees, et cetera.

And as I mentioned, the range -- the cost for our debt next year is supposed to be in the range of 3.5% to 4%, so it's not going to move much.

Okay. And then just one last one, how much of your debt now is fixed versus floating?

We have, I think, $2.6 billion out of the $6.1 billion. $2.7 billion of the $6.1 billion is fixed.

And then there's a further $2.6 billion covered by interest rate caps, Gary, and there's $800 million that is matched with floating rate leases where the lease rent to payment moves with 6-month LIBOR. So when you put that all together, that's how we account for the $6.1 billion. We're not running a naked book here.

And our next question comes from the line of Arren Cyganovich with Evercore.

Your committed aircraft amount of around $1 billion, do you have capacity to make additional purchases above that, if you have any plans to do that? It sounds like the financing environment is decent for you, so now do you have additional ability to raise debt to fund new purchases?

We certainly do. Our debt/equity ratio at 2.7x, I believe, if it's not the lowest in the industry, it's very close to it. So we have paid down a substantial amount of debt over the course of the last couple of years. And as we look forward now to 2012, we see a situation where there's probably some good buying opportunities, and with our strong balance sheet, our access to funds and the fact that we don't have a huge spec order book that requires massive PDPs, we believe we're well situated to take advantage of any opportunities that will arise in 2012.

Okay. So do you anticipate that you'd be seeking to add to the $1 billion, or are you kind of comfortable with that amount for the foreseeable...

No, we will certainly seek to add to it. Given the strength of the balance sheet, we will seek to add to it.

Okay. And then also, maybe you could talk a little bit about the impact on some of your customers of the higher oil prices that we're seeing in the environment right now, and maybe how that's impacting the lease rate on the newer, narrow-body aircraft.

Sure. Clearly, there's been a recent spike in oil, and that may be driven by geopolitical issues rather than the supply and demand equation. However, if I look back to post-9/11 environment or the Q4 '08, 2009 environment what we're seeing now in the customer base is nothing like that. And during that period, the impact of customer defaults for the last 5 years for AerCap has averaged less than 60 basis points of revenue. That's the net impact. So I am sure we will see customer defaults, but what you have seen in the past time and again from AerCap, is that the collateral package we have, the global reach of our platform has enabled us to come out of these situations with a minimal impact and move the aircraft rapidly to the follow-on lessee. So I'm sure we'll see some issues with the airlines over the course of the next year, but will it have a material impact on the profitability of AerCap? I don't believe so, and I think history has shown that that's the case.

And our next question comes from the line of John Godyn with Morgan Stanley.

I was hoping you could just clarify some of the 2012 financial outlook. You listed a few overhangs, just the maintenance contribution. There's no forecast for gains, at least as of now. And now with the benefit in 2011, ROE and tax rates don't imply sort of meaningful upside to 2011. But the commentary suggests that, that you guys feel strongly about EPS growth in 2012 versus 2011. Can you just help me kind of bridge those issues? And is there a piece that I'm missing?

Yes, I think in terms of the core leasing business, I mean, there you'll see an increase in earnings per share. The things like this maintenance activity, that's effectively just how the accounting works. When a lease is terminated, when a restructuring is completed, when we have an early termination, we're required to record it as revenue right away, and then obviously, all the cost activity happens months later. So we had a lot of this activity toward the end of 2011, so 2011 is somewhat overstated to be -- well, or effectively, a windfall in terms of income, as a result of the maintenance reserves. And again, the costs, then, will come later. So that's just the timing issue relative to the way the accounting works on this activity. So when you levelize that, effectively, you will see earnings per share growth in the core leasing business.

And as I said, the business is well positioned with the strength of the balance sheet to take advantage of opportunity in 2012.

Okay. And then could you just elaborate on the no forecast for gains in 2012? I mean, is that intended to reflect the less optimistic view on aircraft values, or is that just reading into it too much?

No, I mean, at this point, obviously, it's early in the year, so there's always typically transactions that happen throughout the year. We're focused primarily on sales that are helping us manage our portfolio, so some of the older aircraft, we will continue to sell down. So we're not selling for gains, but at this point, we just -- we don't have anything identified, but you could see things later.

Okay. And you guys were pretty successful in the buyback program just recently. Could you update us on your plans for returning capital to shareholders, and specifically, do you think that adopting a more consistent shareholder return strategy, whether it's buybacks -- I know that you don't have a history of dividends but just theoretically dividends, could doing something more consistently reduce your cost of equity? Is that something you've given thought to?

The board is continually analyzing how we deploy our capital, whether we give it back to our shareholders or whether we reinvest in the business. Now we took the first step in returning capital to shareholders last year with $100 million program. And of course, we have the capacity to do more. But what we didn't want to do was exhaust the company of its resources, and then it would not be in a position to take advantage of opportunity on the asset side in 2012. So the only asset acquisition we did in 2011 was the American transaction, and that -- because that was the only one where we could see a risk reward that was superior to returning capital to the shareholders. And as we go through 2012, any capital that we deploy on the asset side of the business will have to meet that threshold as well.

And our next question comes from the line of Greg Lewis with Crédit Suisse.

Real quick, you mentioned that the 3 aircraft that were reprocessed from Kingfisher and Global, could you talk a little bit about where lease rates were trending for those assets versus where they were previously contracted at?

Sure, sure. On the 2 Kingfisher aircraft, we had a small amount of time left to run on the leases. Actually, it was only 6 or 7 months, so -- and there was a decline in the lease rate for 6 or 7 months, but again that's not a material number. We're talking about a few hundred thousand dollars over the period, so it doesn't have any meaningful impact on how we would've forecasted the income of the company. And in the case of the MD-11 that we took back from Global prior to the bankruptcy, we didn't wait for the bankruptcy, we took it out in advance, and that is actually being returned to its original owner, which is CIT. We had that airplane for 20 years leased in from CIT and now we return it to them. So that's what happened there. The key with the restructurings, when you have airline difficulty, as you've seen from AerCap time and again, be it in the case of Mexicana, Kingfisher, Global, Zoom Airlines, when there is an issue, you've got to go in there and fix it and fix it quickly. It's the speed of your response to the problem, not the ultimate magnitude of your response that really determines how you do. And we've demonstrated, as I said earlier on, that the net impact of default, even going through '08, '09, '10 is less than 60 basis points of our lease revenue, because of how we act quickly. And that's why, as I said, a well-managed and disciplined aircraft leasing business will generate consistent returns on investment for its investors throughout the aviation cycle.

And to that point, I mean, just given the fact that, I mean, clearly you guys are keeping -- well, good tabs on your customers, are there any clouds out there where you're thinking about getting aggressive and maybe sort of offering to take back aircraft from any of your existing customers at this point?

No, I mean, like I said, if I compare this environment to post 9/11 or the post-Lehman situation, we're not there at all. And you saw the results of this company in 2009, the worst you have ever seen in aviation, we made net income after tax with no -- with everything in there, of $165 million.

Okay, great. And then just really quick one last question on the fleet, I mean, right now, it looks like you have fleet equipment of about, I guess, close to $8 billion. What do you think is sort of the sweet spot in terms of how big AerCap would like to be? In other words, what I mean by that is, is that a $15 billion fleet, or is it a $10 billion fleet, or are you sort of comfortable where you are?

Well, we're not here to grow for the sake of growth. We're here to be the most profitable aircraft leasing business on a risk-adjusted basis. That's our target. Now you certainly need some minimal scale to have diversification, to have buying power, and that's probably above the $7 billion range. And I think operationally, you could probably get up to around close to $20 billion if you wanted to. You'd be subject to financing issues there, but I think we're a long way off the maximum. I think, however, it's crucial, we are not here for growth. We are here for the shareholders to increase shareholder value.

And our next question comes from the line of Gary Chase with Barclays Capital.

Isaac Husseini for Gary. Couple of questions. The guidance that you gave for 2012, I guess, basically starting it[ph] came in a bit light of our expectations, and I realize that some of that could be the timing of when the aircraft come on the books, but I just wanted to confirm if that was the case. And then also maybe get some commentary on what you're seeing in the lease rate market in terms of lease rates.

Yes, the 2% to 5% is effectively based on the contracted level of CapEx that we have. So yes, you're correct, there is activity more in the second half of 2012, so the full year benefit is not there. Obviously the 2% to 5%, if we did additional transactions, as Gus has mentioned, that would add to that growth level.

And on lease rates, if you look at the most popular aircraft in the world, number one is the 737-800. And lease rate is that the number to look at. It's lease rate minus the underlying interest rate to give you your margin. Clearly, a $400,000 lease rate in a 7% interest rate environment is nothing nearly as accretive as a $350,000 lease rate in a 1% interest rate environment. So what I would say on the 737-800 is that the net spread, the net interest margin on 737-800 is now above where it was probably in 2007. On the A330, the next most in-demand aircraft in the world, it's flat. On the A320, the new technology A320s which are, say, if you're looking at less than 10 years old, you're at about 90%, 95% of where they were. And 777-300 ERs are a little bit different. They're a very large airplane, and you tend to do those on a sale/leaseback basis with big carriers. And they'd be pretty consistent, too, but they are much more -- they're a much smaller market. So that's where the lease rates are at the moment.

Okay, that's helpful. And then I guess just going back to a question that was asked before, on the committed aircraft sales, I realized that you don't have anything identified in terms of sales right now, and that could change given that we're still in the beginning of 2012. But wanted to get some sense of what you're seeing in the secondary market in terms of sale activity, just to gauge what we could potentially end the year with in terms of sales of secondary [ph] planes.

Well, I mean, as Keith said, we sell for various reasons; one is to make sure we keep the portfolio young, so you must stay disciplined. As I said, there's a low risk tolerance in this business, in AerCap, and we keep the portfolio young. We'll sell older planes, although we have -- don't have that many really anymore, including AeroTurbine's disposition, we sold 31 aircraft in 2011. That's because, as you know, there was a very strong bid in the market for both new aircraft and older aircraft due to the influx of capital. A lot of that capital has been spent now. To the extent there's any left and they're willing to pay a good price, we'll sell it to them. But I think that this year, I would say that we probably be net buyers of assets, as I look around the aviation environment at the moment and the banking environment given our access to funding and our low leverage and the absence of a big order book that requires large PDPs.

And the only thing I would add to that is at the beginning of 2011, we had about 40 aircraft that were 15 years or older. And at the end of 2011, we have around 20. So we got rid of a significant amount of the older aircraft. But again, they're not -- it's not large in terms of the book value, but those were the aircraft that we sold in 2011.

And our next question comes from the line of Michael Linenberg with Deutsche Bank.

Guys, just a couple here. I guess, with respect to the 3 aircraft that you repossessed, you took 2 from Kingfisher, and I did see this morning they had some comments out, how they indicated that there were 2 Kingfisher planes that the permits were canceled on request of the aircraft lessor. Are those your 2 airplanes? And if they're not, do you have more aircraft with Kingfisher at present, or are you completely out?

We can't comment on that specific issues on what we're doing when the aircraft is on lease at the moment, Michael. And we do have aircraft at Kingfisher. We have 4 there. But what you will see, Michael, is that the security package we have on the airplanes we've taken back has covered the exposure we have to Kingfisher.

Okay, very good. My second question, when -- I know earlier, there was a question asked about any other aircraft that were at risk of being, I guess, repossessed, and I think, Gus, you said none. I know in the past you've talked about maybe the number of airplanes or lessees that you're looking at closely, or maybe monitoring more closely given the financial backdrop. Is -- can you give us maybe a number of aircraft that you would say are on that list of being monitored, even rough numbers, just to give us a feel for sort of where things stand?

No, Michael, it's not anything above the norm. As I said, in fact, if I compare the environment to where we were in Q4 of '08, Q1 of '09, Q2 of '09, it's not that type of environment. And we'd be looking at less than 10 airplanes, and really, as I've shown you in the past, for a platform the size of AerCap, even if all of those were to come back, the impact on profits, as you've seen, is not something that would materially move the net income of AerCap. We've shown time and again, there's not an aircraft we can't take back and remarket. And as you can see, the net impact of defaults, when you look at the collateral position that we have, is not material either.

Okay, good. And just one last one. Gus, you did say I think earlier, I think I'm going to know the answer to this question, you talked -- you said a bunch of things about environment, and you also said you'd be net buyers of assets. And so given where we are now, as you look out to 2012 and you look at the sort of size of the opportunities, would you say that the opportunities are similar, worse or greater for 2012, versus 2010 and 2011?

For the buy side, they are better. Michael, we in 2011, there was an off -- say, in the -- from early -- from, say, Q2 2010 through Q4 2011, a lot of new money came into the sector, both for old and new aircraft. And you would -- there was a sale leaseback that will come out every week, request from an airline, and you might have, 20, 30 bids on it. In today's environment, it's very different. There isn't that level of capital still available, and those who do have capital find that the banks are more choosy in who they lend to. So I think that as we've shown AerCap's access to the debt market for aircraft financing is unrivaled. We have a very low debt/equity ratio, so I think we're very well positioned to take advantage of the right transactions for our shareholders. But it has to make sense for our shareholders. It has to increase shareholder value. And if we can replicate transactions, such as what we saw with American, they're the right deals for us, as we look around the world in general at the moment, clearly, there are issues in Europe. But Europe is starting to coalesce around 5 airlines. So it's a couple of years behind the U.S., which has already done that. The U.S. market has -- obviously, the impact of rationalization has been a very healthy thing for the U.S. market. You can see the ability of fare rises to stick, the durability of their profits now and their cash flows. Europe is a few years behind that, but the consolidation is happening. The consolidation does put the brakes on capacity, and it does improve the pricing environment for the airlines. Asia has a lot of growth, so it's not an immediate impact, but Asia, no doubt, will have some big winners and some big losers out there, too. But as you look around the world at the moment, the U.S. market is pretty stable.

And our next question comes from the line of Helane Becker with Dahlman Rose.

Actually most of mine were asked and answered. I just have one clarifying question on the American agreement. I think you said that you're doing it on an aircraft-by-aircraft basis. Does that mean that you renegotiate or you negotiate the lease rate on every aircraft? Or does that mean that you have the option of putting that aircraft in another -- to another airline? Or does the agreement you have with American mean that you do the same lease rate that you would have negotiated last summer?

Yes. Helane, just to be clear on American, it's on their order book, not mine. If it was on mine, I'd have to the PDPs, which, for a leasing company, would probably be about $700 million of dead money. And now, what we do is, as each aircraft delivers from Boeing to American, that was originally under the 35 deal, 35 aircraft deal, we have the right to take the aircraft or not take the aircraft. The terms so far are the same as what we agreed originally in the transaction, and it's our intention to work with American to continue this transaction. We've taken 2 since bankruptcy. I expect to take another 1 in the coming days. This is a transaction that's good for both American and for AerCap, and will provide long-term profitable growth for AerCap through 2014.

Okay. And then I think you said that you'd finished the share repurchase program last year. Did you...

Yes, we had $100 million...

Would you do another share repurchase program or would you consider a dividend?

We are always looking at ways to return capital to shareholders or to deploy capital investing in assets. So the first step was taken last year in the $100 million program, which was executed at $10.50, which was great value. Clearly, a share buyback program, and the lower the share price helps the more accretive it is, of course. Now we will continue, and we do it every board meeting, we analyze what's the best use of our funds. And we will only invest in new aircraft if it's in the best interest of the shareholders and create shareholder value. I've said it numerous times, Helane, we're not here to make growth for the sake of growth headlines with the OEMs, we're here for our shareholders.

And our next question comes from the line of Scott Valentin with FRB (sic) [FBR] Capital Markets.

Just with regard to maturity schedule for 2012, can you give us maybe a kind of a plane count, maybe how many planes do you see coming off lease in 2012?

All that will be in the 20-F when it's filed and you'll see it in detail, but the vast majority of the aircraft are placed.

Okay, so most are placed, okay.

And in fact, our entire order book actually, I should note, through 2015 is placed. And one other thing I should note is that during the quarter, we also got our first NEOs. We didn't order them direct from the OEM. An airline needed our help, and we said we will give you the help but in return, we want a call option over 5 of your NEOs in 2016 at pre-agreed terms, and it's purely our options. So if we don't like the airplane or what's happening with the airline, we have the right to walk away. But it's a long-term lease that we have the call option on at good prices and without any PDPs.

Okay. And then earlier, I think, Keith, you mentioned, as part of the freighter termination program, there was an impairment. I think there's $4 million of total impairment during the quarter. Is all that associated with the freighter program?

There was about $1 million of that related to an engine, but the rest of it was the program, yes.

And then in terms of -- with higher fuel prices, have you noticed -- and again, it's not -- at least, you guys mentioned you have 20 planes that are over 15 years. It's not a big impact for you. But have you noticed the rate of depreciation accelerating at all on the older aircraft, maybe if you compare that with the newer generation of aircraft?

On the depreciation side, let me give you kind of how we look at it. When an aircraft that we have reaches 15 years, we will evaluate it for additional depreciation, if needed. And typically, when we do have an aircraft that hit that particular age level, we do accelerate the depreciation. Our standard depreciation policy is around 3.5%. We may increase it to 3.8%, 3.9%. But there's very -- there's only about 25% of our aircraft that actually reach the 15-year mark. The other 75% is sold well earlier in its life. And we look at the sales and the results that we had on our sales effectively, and we adjusted the depreciation schedule based on our sale results. We should be recording depreciation at a rate of 2.8% annually. So 75% of our aircraft is going out on a depreciation schedule of 2.8%, and 25% is going out at 3.8%. So the standard policy that we use, which is about 3.5%, continues to make sense to us.

I think the best example I can give of this is, is over the course of the last 7 years, we sold an aircraft every 3 weeks. On average, we've made over $2 million gain on sale. And why have we done that? Because we bought the aircraft at the right price, we depreciate them appropriately and we get out of them before the big maintenance issues happen and you have a declining customer base as they age. And if I look at the percentage in terms of value that over 15-year-old aircraft make up of our portfolio, it's only a few percent. It's not a material part of the portfolio. The vast, vast majority of our portfolio, over 90%, is concentrated on the most in-demand aircraft in the world, the 800, the 320, the 330.

Just one more comment. When people think about depreciation, they also think about whether the residual value is right at 20-year mark, the 25-year mark. I mean, the depreciation schedule really should be based on effectively how you manage your portfolio, when the aircraft exit the portfolio and also what the input price is to your portfolio. So you're buying aircraft at the right price. If you're buying aircraft at below current market value and you're exiting the portfolio of the aircraft at the right time, your depreciation, your required depreciation is a lot less.

Okay. And just one final comment. I notice you took a provision for doubtful accounts about $1 million, not a material amount. Was that just a general provision or was there specific assets that you had in mind when you took that provision?

It was specific to a potential termination.

And our next question comes from the line of Glenn Engel with Bank of America.

You restated some earnings and cash flow, and can you talk about the nature of the restatement?

Sorry, a reclassification?

That's right. So the cash flow doesn't really add up, the quarters and what changed? It's all AeroTurbine?

Exactly. We had to restate for the AeroTurbine piece. I mean, if you want -- I can provide you more details on that, if you can give me your specifics off-line.

What's the right level of cash and why?

Well, the cash that we have now, the $400 million plus of free cash, as well as restricted cash, a lot of that cash is still earmarked for the CapEx that we have this year and next year. So we have about $1 billion of purchases this year, $1 billion of purchases next year. We'd like to probably maintain a free cash balance not earmarked for CapEx of probably around $100 million in terms of just being able to have the right level of cushion right level of liquidity to run the business.

But as well as the cash balance, look at our debt/equity ratio, it's so low, 2.7x, as we are paying down the debt very rapidly. That also gives us the ability to generate cash as we refinance that, as I mentioned. And we are in the market in Asia for a small ticket for refinancing of 2 airplanes, but the deal is 3x oversubscribed.

Finally, can you talk about secured versus unsecured debt? Your competitors, a bunch of them, like the unsecured market, why don't you seem to like to tap that one?

Well, no one has issued a non-secured bond so far. Nobody. Not one of our competitors. And what they are issuing is what's called senior unsecured paper. And what it is, is secured debt, really. So you would take -- you would raise $100 million of senior unsecured paper, and in the loan documentation, you would pledge that you would not encumber $150 million of assets or whatever the number is agreed with the lenders. So it is purely secured funding. It's just called senior unsecured. A true unsecured loan, which is for -- without any negative pledge covenants or encumbering any assets, or agreeing not to encumber the assets in the future, no one has done that yet. We have done quasi deals like that on a private basis, and we are certainly monitoring that. But this senior unsecured stuff is really quite expensive secured funding.

[Operator Instructions] And our next question comes from the line of Rich Fitzgerald with Jefferies Investment Advisors.

I just wanted to clarify the guidance around EPS growth. Is the expectation of EPS growth in 2012 versus 2011, is that on x maintenance contribution basis?

Say that again, on an active x maintenance contribution?

No, no. I'm sorry, excluding maintenance contribution, is that the context in which you're saying EPS growth will be positive? So in other words...

Yes, yes. Absolutely

Adjusted EPS were $2.07?

Yes, absolutely. When you pull the maintenance piece out and you pull the sale activity out and when you put the CapEx growth in, that's where you're going to see the earnings per share growth.

Okay. And so just to clarify then, on an x maintenance contribution basis, you guys did $1.83 last year and you're expecting a $0.16 drag this year. So you think you'll do more than $1.83 on an x maintenance contribution basis and more than $1.67 kind of all in. Is that how you're thinking about it?

I mean, we laid out the numbers, so you guys could do the math effectively, yes. So we don't actually give earnings per share guidance, so to speak. But because these things are so unique and very unlevel year-over-year, we provided a maintenance contribution, so you can do your adjustments for your modeling, as well as the sales activity.

Okay. And then just versus the last quarter in particular, am I correctly picking up on a change in tone with regard to the attractiveness of doing additional aircraft acquisitions in this current market, versus returning capital as an alternative use of capital?

Well, like I said, we've been extremely disciplined over the last 18 months when it came to aircraft acquisitions. There were sale/leasebacks transactions out there every week, and it will be the same next year. We only executed one where we felt the risk reward balance was the right thing to do, and that was the American deal. Now as you go into 2012, I think the fact that a lot of the new money has been spent in the sector, and the ability of some -- of other players in the sector to access debt capital is probably more restricted than it is for AerCap, and some others have tied up themselves very large orders and predelivery payments, I think that we will see opportunities, but the opportunity has to be accretive to our shareholders. And the threshold it has to meet is what's a better use of our funds? Is it to return it to the shareholders or is it to use it to buy aircraft?

Okay. And then just finally, and I apologize if I missed this, but what's the update with regard to ALS II and any thoughts about potentially refinancing that facility?

Well, ALS II, it continues to pay down quite rapidly as well. I mean, the vehicle is performing quite nicely just as ALS I has. ALS II is an opportunity for us to lever the E note effectively and use the cash for CapEx or return to capital, what have you. Until we find a particular use for it, we'll probably keep that as is. And then once there's an identified purpose for the funds, then we would go through the refinancing activity. We wouldn't refinance the vehicle itself, more than likely. We would do that as we did with ALS I and also with the Genesis securitization where we use the E note as collateral and extracted, and basically levered up the vehicle through that.

And management, there are no further questions in the queue at this time. Please continue with any closing remarks.

Well, thank you very much everybody for joining the call, and we look forward to talking to you in 3 months time for the first quarter earnings.