Fly Leasing — Investor Presentation (September 2012)
24 slides from Fly Leasing's investor presentation, Sep 5, 2012
Slide 1: FLY Leasing Limited New York September 2012
FLY Leasing Limited New York September 2012
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: FLY Leasing - Overview
FLY Leasing - Overview FLY (NYSE: FLY) - a leading lessor of commercial aircraft Completed IPO in Oct 2007 Completed transformational portfolio acquisition in late 2011 ~80% increase in fleet and revenues Portfolio of 110 aircraft on lease to 53 airlines in 29 countries (as of September 1, 2012) In-
Slide 4: FLY - Financial Highlights
FLY - Financial Highlights (In millions, except per share amounts) Total Revenues $215.4 Total Assets $3,199.5 Net Income $46.1 Total Liabilities $2,713.1 Earnings per Share $1.77 Total Equity $486.5 Adjusted Net Income $57.7 Unrestricted Cash $189.3 Adjusted Net Income per Share (1) $2.23 Total Deb
Slide 5: FLY Leasing - Investment Highlights
Strong Cash Flow from Portfolio of Modern In-Demand Aircraft Fuel-efficient narrow body, high demand aircraft Recurring income from contracted leases 3.3 year average remaining term Diversified customer base by geography and lessee Grown portfolio from 47 aircraft at IPO to 110 aircraft today (+134%
Slide 6: Record of Enhancing Shareholder Value
Record of Enhancing Shareholder Value Sold 11 aircraft - all at premiums to net book value 19 consecutive quarterly dividends ($5.02 cumulative) Recently increased by 10% to 22 cents per share per quarter Repurchased 24% of IPO shares at an average price of $7.91 per share Repurchased $169m of debt
Slide 7: Aircraft Leasing - Increasingly Important for Airlines
Leased fleets have grown from under 100 aircraft in the 1970s to more than 5,500 today Over 56% of airlines (~400 carriers) have aircraft on operating lease Expected that by 2020, ~50% of airlines' fleets will be leased Why Airlines Lease Why Airlines Lease Fleet Flexibility Ability to quickly addre
Slide 8: Corporate Strategy
Corporate Strategy Provide secure and attractive returns to stakeholders by growing long term profitability and cash flow Maximize the benefits of FLY's association with BBAM - scope, scale and predictable costs Manage liabilities using long-term, secured financing with limited refinancing and coven
Slide 9: Execution of FLY's Core Business Principles
IPO completed in October 2007 with a portfolio of 47 aircraft Grew portfolio by acquiring 17 more aircraft shortly after the IPO The global financial crisis in 2008 caused significant dislocation in many markets FLY capitalized on market dislocations by focusing on the capital structure: Debt Buybac
Slide 10: 2010-2012: Portfolio acquisition and Term Loan
Beginning in 2010, an influx of "new" money quickly inflated aircraft prices FLY was a net seller of aircraft in this period of time Built unrestricted cash balanced In 2011, completed the exclusively negotiated acquisition of 49 aircraft portfolio Attractive, narrow-body fleet financed with $1.2 bi
Slide 11: FLY's Aircraft Sales All at Gains to Net Book Value
Sales of a range of aircraft - type, age and lessees - all at premiums to Net Book Value Strategy to manage fleet age, credit and jurisdictional diversification and/or achieve premium pricing Aircraft Type DOM Lessee Date of Sale Aircraft Age on Sale Date Sales Price Gain A320-200 1996 Swiss Sept. 2
Slide 12: FLY's 2011 Portfolio Acquisition was Transformational
FLY's 2011 Portfolio Acquisition was Transformational Grew contracted annualized rentals by ~80% Increased number of aircraft in the portfolio by 82% The acquired portfolio is predominantly in-demand, narrow body aircraft on long-term leases Expanded number of lessees by 56%, from 34 to 53 airlines
Slide 13: FLY's Record of Enhancing Shareholder Value
FLY's Record of Enhancing Shareholder Value Constant Quarterly Dividend since IPO 19 consecutive dividends Cumulative dividends paid of $5.02 per share Recently announced 10% increase to $0.22 per share per quarter Dividend policy reviewed quarterly Repurchased Shares at Attractive Prices Repurchase
Slide 14: The next months will likely be an attractive time to acquire aircraft
The next 24 months will likely be an attractive time to acquire aircraft New lessor entrants are less active in the SLB market Bank debt for airlines is scarce so SLBs are more attractive to airlines Export credit finance is more expensive Avoid forward orders with manufacturers: Pre-delivery paymen
Slide 15: FLY's Attractive Portfolio of Leased Aircraft
Long Leases-3.3 Yr Average Remaining Lease Term (1) (2) Footnotes: Data as of June 30,2012. Does not include the 2 B737-800 acquisitions announced August 28, 2012 as well as aircraft acquired in JVs. Includes two B737-500 aircraft scheduled to be parted out in 2012. Each includes one freighter. One
Slide 16: Strong, Diversified Credits Generate Robust Cash Flow
Lessee % of Contracted Revenue 7.2% 5.2% 5.1% 4.7% 4.3% 4.1% 3.9% 3.7% 3.5% 2.7% TOP TEN LESSEES 44.4% Note: As of June 30, 2012. Strong, Diversified Credits Generate Robust Cash Flow Annualized rentals of $342.8m Strong, predictable cash flow performance Triple net leases; lessee is responsible for
Slide 17: FLY - Attractive, Long-Dated Capital Structure
(1) Face amount of debt excluding debt discounts. Three aircraft from B&B Air Funding were sold before June 30th, however, the related debt payments did not occur until July 15th and thus is not reflected in the above schedule. Beginning in August 2012, all excess cash flow used to repay principal.
Slide 18: Overview of BBAM - FLY's Manager and Servicer
Overview of BBAM - FLY's Manager and Servicer Founded in 1989 Third largest aircraft lease manager 450 aircraft under management Full service platform 114 employees in nine locations around the World The core management team has been together throughout several cycles BBAM does not own any aircraft
Slide 19: FLY's Differentiated Approach
FLY's Differentiated Approach Commentary Dividend X X FLY's dividend has helped shareholders achieve the industry's highest total return since the debt crisis Forward Orders X SLBs produce better returns - PDPs are inefficient and airlines get better pricing Limited visibility on financing, lease ra
Slide 20: Appendix: Historical Results and Adjusted Net Income Definition
Appendix: Historical Results and Adjusted Net Income Definition
Slide 21: FLY's Summary Income Statements
FLY's Summary Income Statements All figures in thousands of dollars except the per share data All figures in thousands of dollars except the per share data Revenues Revenues Six months ended June 30, 2012 Six months ended June 30, 2011 Year ended December 31, 2011 Year ended December 31, 2010 Year e
Slide 22: FLY's Summary Cash Flow Statements
FLY's Summary Cash Flow Statements All figures in thousands of dollars except the per share data All figures in thousands of dollars except the per share data Six months ended June 30, 2012 Six months ended June 30, 2011 Year ended December 31, 2011 Year ended December 31, 2010 Year ended December 3
Slide 23: FLY's Summary Balance Sheets
FLY's Summary Balance Sheets All figures in thousands of dollars All figures in thousands of dollars June 30, 2012 December 31, 2011 December 31, 2010 Assets Assets Cash & cash equivalents 189,336 82,105 164,107 Restricted cash 290,686 298,404 164,935 Investment in unconsolitated joint ventures 16,7
Slide 24: Definition of Adjusted Net Income
Definition of Adjusted Net Income FLY defines Adjusted Net Income as net income plus or minus the ineffective portion of cash flow hedges, aircraft impairment, non-cash share-based compensation and adjustments related to the GAAM portfolio acquisition comprised of amortization of fair value adjustme