Fly Leasing — Babcock & Brown Air — Next Generation Airline Conference 2009
20 slides from Fly Leasing's conference presentation, Dec 9, 2009
Slide 1: B&B Air Next Generation Airline Conference
B&B Air (NYSE: FLY) Next Generation Airline Conference December 9, 2009
Slide 2: Caution Concerning Forward-looking Statements
Caution Concerning Forward-looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "anticipates," "intends," "plans," "believes," "s
Slide 3: About B&B Air
About B&B Air Global lessor of commercial jet aircraft 62 modern, fuel-efficient, high demand aircraft 7.2 year average aircraft age Diversified group of lessees 36 airlines in 19 countries 4.9 year remaining average lease term Focused on maximizing shareholder value Grown annualized revenues by 42%
Slide 4: Modern Fleet, Diversified Customer Base, Long Lease Maturities
Geographic Diversity - 36 Lessees (3) Modern Fleet, Diversified Customer Base, Long Lease Maturities Notes: The B737 Classic and the B757 count each include one freighter. One A330, one B747, one B767 and one B777. Based upon percent of the book value of aircraft and geographic location of lessees.
Slide 5: Growth and Investments since IPO in September 2007
Grown contracted annualized rentals by 42%, from $153 million to $218 million Acquired 17 aircraft for nearly $700 million Remarketed lease expiries at higher rentals than previous contracts Sold two aircraft, generating surpluses to net book value, free cash and debt reduction Increased number of l
Slide 6: YTD 2009 Financial Results
YTD 2009 Financial Results SG&A largely fixed and scalable, 6.6% of total revenue in 2009 Servicing fees predictable - largely based on a fixed percentage of lease revenues Interest rates hedged, margins fixed
Slide 7: Available Cash Flow definition and reconciliation
B&B Air defines Available Cash Flow ("ACF") as net income plus depreciation, amortization of lease incentives and debt issue costs, and deferred income taxes. In addition, gain on purchases of notes payable is excluded from ACF. B&B Air's definition of ACF may not be consistent with similar definiti
Slide 8: Selected Balance Sheet Information
Selected Balance Sheet Information Cash has increased by $21.1 million YTD and continues to grow monthly Credit facility put in place to leverage the bond repurchases
Slide 9: Shareholder Enhancement Initiatives
Shareholder Enhancement Initiatives Equity Repurchase Program Repurchased 3.3 million shares (~10% of shares outstanding at IPO) for $15.6 million since June 2008 $4.68 average price paid per share $14.4 million remains available in a share repurchase program Debt Repurchases Repurchased $169.4 mill
Slide 10: Strategy for Success
Strategy for Success Buy Well Manage Actively Focus on Shareholder Value 94% modern, fuel-efficient, narrow body aircraft Focus on aircraft with global user base Follow airline users on standardized models, don't gamble on new types Don't overpay B&B Air only purchases aircraft meeting these criteri
Slide 11: Current Financing and Financing Outlook
Current Financing and Financing Outlook Committed Financing Outlook BBAM has 17 years of experience and relationships in aircraft finance community B&B Air's debt has no near-term bullet maturities Aircraft finance markets beginning to show signs of recovery Capital markets conditions have improved
Slide 12: Aircraft Leasing Industry Update
Aircraft Leasing Industry Update Preliminary signs that the sector is in the very early stages of a recovery Airlines focusing less on retirements and more on growing capacity Increased interest from lessees in renewing their existing leases Lease rates have stabilized and in some instances have inc
Slide 13: Worldwide Demand for Air Travel
Worldwide Demand for Air Travel Source: The Airline Monitor, July 2009. Historical and Forecast World Traffic (RPMs) Average Annual Percent Rate of Change: 1991-2000 5.6% 2001-2010 3.1% 2011-2020 6.2% 2021-2030 5.8% Market recovery expected in 2011 Demands remains soft for international and business
Slide 14: Impact of Industry Dynamics
Impact of Industry Dynamics Strong aircraft lessors have prospered during previous downturns B&B Air's strengths Strong balance sheet and relatively low leverage No near term principal repayments and no unfunded capital commitments Popular, efficient, modern aircraft fleet Strong revenue base from w
Slide 15: BBAM - Overview
BBAM - Overview BBAM is the world's fifth-largest manager of leased commercial jet aircraft Established in 1991 to provide management and remarketing services to global aircraft investors Leading Aircraft Lessors Source: AirFinance Journal, August 2009. Fleet Value ($bn) ILFC GECAS CIT RBS BBAM ACG
Slide 16: BBAM - Global, Full Service Platform
BBAM - Global, Full Service Platform More than 80 employees in nine offices with coverage of all our target regions Dedicated in-house professional staff providing a comprehensive platform: Origination & Re-Marketing Technical Services Finance, Contracts & Investor Reporting Corporate Finance & Capi
Slide 17: BBAM - Deep and Broad Industry Relationships
BBAM - Deep and Broad Industry Relationships Relationships at every level with airlines, manufacturers and other lessors 85 current lessees Active relationships with most airlines worldwide Has also been an advisor to major airlines and manufacturers (Singapore Airlines, United, Delta, American, Air
Slide 18: Summary of Investment Highlights
B&B Air - Summary of Investment Highlights Shareholder Value Enhancement Shareholder enhancement activities supported by strong cash flow Repurchased ~10% of shares outstanding at an average of $4.68 / share Repurchased $169.4 million of debt at less than 50% of par value with the option to purchase
Slide 19: Summary of Investment Highlights (continued)
B&B Air - Summary of Investment Highlights (continued) Potential for Growth 17 aircraft acquired since IPO for ~$700 million $77.9 million unrestricted cash at September 30, 2009 Aircraft finance markets are showing signs of recovery BBAM has contacts, experience and skills to arrange financing and
Slide 20: Investor Relations Contact
B&B Air (NYSE: FLY) Investor Relations Contact: Matt Dallas +1 212-796-3918 Matt.Dallas@babcockbrown.com
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