Fly Leasing — Babcock & Brown Air — Investor Presentation (November 2008)
25 slides from Fly Leasing's investor presentation, Nov 18, 2008
Slide 1: Babcock & Brown Air Limited (NYSE: FLY) November 2008
Babcock & Brown Air Limited (NYSE: FLY) November 2008
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 NYSE listing in September 2007: "FLY" Global lessor of commercial jet aircraft Fleet of 62 modern, fuel-efficient, high demand aircraft 94% popular narrow body types 6.3 year average aircraft age Diversified group of lessees 35 airlines in 19 countries 5.5 year remaining weighted avera
Slide 4: Modern Fleet, Diversified Customer Base, Long Lease Maturities
Geographic Diversity - 35 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 appraised value of aircraft and geographic location of less
Slide 5: Acquisitions and Investments since IPO in September 2007
Grew contracted annualized rentals by ~43%, from $153 to $219 million Acquired 17 aircraft for nearly $700 million Remarketed 2007 and 2008 lease expiries at higher rentals than previous contracts Sold two aircraft at premiums to net book value Increased number of lessees by 21% to 35 airlines Furth
Slide 6: Well-Diversified Group of Lessees
Globally diversified base of lessees 35 airlines in 19 countries Well-Diversified Group of Lessees
Slide 7: Strong Q3 2008 Results
Strong Q3 2008 Results Revenue was $66.3 million Lease revenues of $60.5 million Gain of sale of aircraft of $5.0 million; (second aircraft sold for a similar gain in Q4) Expenses were $47.9 million SG&A largely fixed and scalable Management / servicing fees predictable - largely based on a fixed pe
Slide 8: Management Structure and Alignment of Interests
Management Structure and Alignment of Interests Management Organization Chart BBAM has long-term servicing and management agreements with B&B Air Babcock & Brown owns 14% of B&B Air Employees purchased shares in the IPO with personal after-tax funds No concessionary or free shares Executive compensa
Slide 9: Current Financing and Outlook
Current Financing and Outlook Flexible and Committed Financing Outlook B&B Air has debt and equity financing capacity to continue its growth into 2009 Minimal near term principal payments, no near-term need to tap the capital markets BBAM has 17 years of experience and relationships in aircraft fina
Slide 10: Aircraft Leasing Industry Update
Aircraft Leasing Industry Update Near-term industry fundamentals have deteriorated Despite the recent drop in oil prices, conditions are expected to be challenging in the short-term The softening global macro-economic environment has now spilled over to emerging markets as well Lease rates expected
Slide 11: Impact of Industry Dynamics on B&B Air
Impact of Industry Dynamics on B&B Air Strong aircraft lessors have survived and prospered during previous downturns via through strategic management B&B Air strengths Strong balance sheet and no unfunded commitments Popular, efficient, modern aircraft portfolios Opportunity to pick-up aircraft at a
Slide 12: Strategy for Success
Strategy for Success Buy Well Manage Actively Keep Assets Moving Focus on Shareholder Value Target 90%+ modern, fuel-efficient, narrow body aircraft Focus on aircraft with wide and global user base Follow airline users on standardized models, don't gamble on new types Don't overpay B&B Air is select
Slide 13: BBAM - Overview
BBAM - Overview BBAM is the world's fourth-largest manager of leased commercial jet aircraft Established in 1991 to provide management and remarketing services to global aircraft investors Leading Aircraft Lessors Source: CASE aircraft database (May 2008); Data on BBAM fleet provided by BBAM. Fleet
Slide 14: BBAM - Global, Full Service Platform
BBAM Office Planned BBAM Office BBAM - Global, Full Service Platform More than 100 employees in nine offices with coverage of all our target regions Dedicated in-house professional staff of transaction originators, attorneys, contract administrators, accountants, airframe, engine, corporate finance
Slide 15: BBAM strengths
Strength Description Experienced Team Core team has been together for over a decade; average 15 yrs industry experience Highly developed operation evolved from managing through several industry cycles BBAM has over 17 years of experience in aviation finance Proven Track Record BBAM has re-marketed m
Slide 16: BBAM - Deep and Broad Industry Relationships
BBAM - Deep and Broad Industry Relationships Relationships at every level with airlines, manufacturers and other lessors 77 current lessees globally Active relationships with most airlines worldwide BBAM has also advised several major airlines Note: Current lessees are highlighted in ochre. Aer Ling
Slide 17: B&B Air - Investment Highlights
B&B Air - Investment Highlights Young High Quality Fleet 62 modern, fuel-efficient and popular aircraft 6.3 year weighted average fleet age 94% narrow body Fuel-efficient aircraft likely to remain in strong demand Stable, Diversified Revenues Stable rentals from 35 lessees in 19 countries 5.5 year w
Slide 18: B&B Air - Investment Highlights (continued)
B&B Air - Investment Highlights (continued) Well Positioned for Growth / Funding Capacity Available 17 aircraft acquired since IPO for almost $700 million Financing opportunities in banking sector Opportunities for acquisitions from liquidity driven sellers BBAM has a track record of acquiring aircr
Slide 19: Appendix I Aircraft Leasing Industry Environment
Appendix I Aircraft Leasing Industry Environment
Slide 20: Worldwide Demand for Air Travel Drives Industry Growth
Worldwide Demand for Air Travel Drives Industry Growth Source: The Airline Monitor, July 2008. Historical and Forecast World Traffic (RPMs) Since 1959 World airline traffic has grown year-on-year in every year but three. 1990-2008E CAGR 5.1% CAGR 2008E-2030E CAGR 5.4% CAGR
Slide 21: Developed Market Airlines Require Refleeting
Greater than 21 year 11 to 20 years Less than 11 years North America 1338 1807 2421 922 Europe 350 1539 2371 Passenger Jets Average 10.6 yrs Average 14.7 yrs North America Europe Backlog 16% Backlog 27% Developed Market Airlines Require Refleeting Source: Fleet age data from CASE July 2007; backlog
Slide 22: Leasing to Play a Greater Role in Aircraft Ownership
Source: Ascend, March 2008 SH&E estimates Leasing to Play a Greater Role in Aircraft Ownership Over 60% of airlines use operating leases Proportion of leased aircraft has grown from 17% in 1990 to 32% of total world fleet in 2007 Expected to grow to 40% over next ten years (1) 1990 2007 Airline/Othe
Slide 23: Appendix II Available Cash Flow ("ACF")
Appendix II Available Cash Flow ("ACF")
Slide 24: Available Cash Flow definition and reconciliation
B&B Air defines Available Cash Flow ("ACF") as net income plus depreciation, amortization of debt issue costs and provision for deferred income taxes. B&B Air's definition of ACF may not be consistent with similar definitions used by other companies. The reconciliation above compares ACF to net inco
Slide 25: Investor Relations Contact
Babcock & Brown Air (NYSE: FLY) Investor Relations Contact: Matt Dallas +1 212-796-3918 Matt.Dallas@babcockbrown.com
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