Fly Leasing — Investor Presentation (December 2017)
17 slides from Fly Leasing's investor presentation, Dec 5, 2017
Slide 1: Fly Leasing
FLY LEASING December 2017 “FLY Leasing
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements:This presentation contains certain “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,” “intends,” “anticipates,” “plans,” “believes,” “s
Slide 3: FLY at a Glance
Conservative Financing6.4 years weighted average debt maturity(1), rates hedged 84 aircraft$3.1 billion net book value Lower Debt and SG&A CostsRecent financings at very competitive rates Managed by BBAMIndustry leader with nearly 30 year track record Significant Insider Ownership15% owned by BBAM s
Slide 4: Favorable industry fundamentals
Favorable industry fundamentals Passenger traffic growth is robust • 7.4% forecast in 2017, 7.2% actual through Aug-2017 Strong Global Air Traffic Growth Airline industry results are positive • Forecast global net profit of $31 billion in 2017 Continued Airline Profitability Strong demand for aircra
Slide 5: Significant accomplishments
Significant accomplishments Sold 72 older, less profitable aircraft since start of 2015(1) Selling Older and Under-Performing Aircraft Invested $1.6 billion in 30 younger aircraft since start of 2015(1) Reinvesting in Newer, Higher Yielding Aircraft Repurchased 32% of shares at a 31% discount to Q3
Slide 6: Meaningful fleet transformation
Meaningful FLEET transformation Transformed fleet—Younger, more profitableSecond youngest fleet among public lessors Average Fleet Age (years) Average Lease Term (years) (23%) 25%
Slide 7: Significant improvement in asset mix
September 30, 2017 June 30, 2015 Aircraft Type # Average Age(years) % NBV # Average Age(years) % NBV A320 Family 25 8.8 20% 35 8.7 31% A330 / 340 5 5.7 8% 6 5.9 15% B737 Family 44 7.3 43% 41 7.4 45% B747 / 757 / 767 3(1) 21.2 1% 13 17.5 6% B777 2 2.0 10% - - - B787 5 2.4 18% 1 1.9 3% Total 84 6.2 10
Slide 8: Acquisition strategy
Annual growth target of $750 millionPrincipally through sale and leasebacksBBAM’s area of expertise for nearly 30 yearsBBAM’s global reach provides advantageOpportunistic secondary market purchasesEach transaction can be evaluated prior to commitment Actual aircraft cost, lessee credit, lease termsA
Slide 9: Fleet growth results
Fleet Growth results ACQUISITIONS RESULTS Accretive to ROE and EPSAcquired and identified aircraft for 2017 and 2018:Attractive ROEExpected to contribute $51 million in additional rental revenue and $16 million in pre-tax income annually $456 million of acquired aircraft for 2017 YTD and additional
Slide 10: Historic sales track record
Historic Sales track record Historical Aircraft Sales 2013 2014 2015 2016 Aircraft Sold 10 8 44 27 Average Age (years) 14 13 13 14 Total Gains (in millions) $5.4 $14.8 $29.0 $24.5 2016 Sales: 27 aircraft, average age of 14 years Average remaining lease term of three years Principally older, less pro
Slide 11: Share repurchases
Share repurchases Year-To-Date Repurchased 4.0 million shares for $52.9 million12% of FLY’s shares repurchased in 2017Average price per share of $13.3430% discount to Q3-17 NBV per share$14 million remaining in share repurchase program Cumulative Shares Repurchased (in millions) 0.1 2.1 3.6 4.0 Q1-1
Slide 12: Optimizing capital structure
Optimizing capital structure FLY has a weighted average debt maturity of 6.4 years(1) Repriced $437 million Term Loan from L + 2.25% to L + 2.00%, in November$1 million of annual cash interest expense savingsFLY’s largest debt facility Term Loan Issued $300 million 5.25% 2024 Notes to discharge 6.75
Slide 13: Well positioned to add value
Young Fleet: 6.2 Year Average Age Long Leases: 6.5 Year Average Remaining Lease Term Fleet 100% Utilized: Minimal Remarketing Exposure in 2018 Long-Dated Fixed Debt: 6.4 Year Average Debt Maturity(1) Ample Buying Power: $2 billion Capacity to Grow Fleet $750 million Annual Growth Target for 2018 Gro
Slide 14: Appendices
appendices
Slide 15: Capital structure & liquidity summary
Capital structure & liquidity summary Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.In November, FLY re-priced its 2012 Term Loan reducing the margin by 0.25%. In October, FLY issued $300 million
Slide 16: Diverse group of global lessees
Diverse group of global lessees Note: Sums may not foot due to rounding. Lessee Country % of NBV India 12% Ethiopia 11% Philippines 9% India 4% Spain 4% India 4% France 4% Indonesia 3% Malaysia 3% Chile 3% Top 10 Lessees 55% Region % of NBV Asia & South Pacific 48% Europe 27% Middle East & Africa 13
Slide 17: Historic acquisition track record
2013 2014 2015 2016 YTD 2017 Aircraft Acquired 14 22 10 10 10 Average Age when Acquired (years) 2 3 2 3 2 Total Acquisition Costs (in millions) $642 $952 $615 $559 $456 Historic ACQUISITION track Record Historical Aircraft Acquisitions Ample liquidity as of September 30, 2017:$838 million in cash an