Fly Leasing — Babcock & Brown Air — Investor Presentation (September 2008)
25 slides from Fly Leasing's investor presentation, Sep 16, 2008
Slide 1: Babcock & Brown Air Limited (NYSE: FLY) September 2008
Babcock & Brown Air Limited (NYSE: FLY) September 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 64 modern, fuel efficient, high demand aircraft 94% popular narrow body types 6.2 year average aircraft age Diversified group of lessees 35 airlines in 19 countries 5.6 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 ~49%, from $153 to $228 million Acquired 17 aircraft for nearly $700 million Remarketed 2007 and 2008 lease expirees at higher rentals than previous contracts Increased lessees by 21% to 35 airlines Further diversified global footprint of lessee base Actively pu
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 Q2 2008 Results
Strong Q2 2008 Results Revenue was $57.2 million Lease revenues of $56.3 million Annualized revenues are higher as new acquisitions were delivered throughout the quarter Expenses were $44.9 million SG&A largely fixed and scalable Management / servicing fees predictable - largely based on a fixed per
Slide 8: Management Structure and Alignment of Interests
Management Structure and Alignment of Interests Management Organization Chart Babcock & Brown owns 14% of B&B Air BBAM has long-term servicing and management agreements with 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 Bank debt is still available, albeit on a more limited basis and o
Slide 10: Aircraft Leasing Industry Update
Aircraft Leasing Industry Update Near-term industry fundamentals remain balanced despite slowing economies and high fuel prices Aircraft demand remains strong in select developing markets Significant order backlog renders aircraft supply tight Lease rates for aircraft types in B&B Air's portfolio ar
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 past difficult periods via strategic management Strong balance sheet and no unfunded commitments Popular, efficient, modern and flexible portfolios Opportunity to pick-up aircraft at attractive prices I
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 Only 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 will be selec
Slide 13: BBAM - Overview
BBAM - Overview BBAM is the world's fourth-largest lease manager of commercial jet aircraft Established in 1991 to provide management and remarketing services to aircraft investors around the world Leading Aircraft Lessors Source: CASE aircraft database (May 2008); Data on BBAM fleet provided by BBA
Slide 14: BBAM - Global, Full Service Platform
BBAM Office Planned BBAM Office BBAM - Global, Full Service Platform More than 100 employees in 8 offices (soon to be expanded to 10) with coverage of all our target regions Dedicated in-house professional staff of transaction originators, attorneys, contract administrators, accountants, airframe, e
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 78 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 64 modern, fuel efficient and popular aircraft 6.2 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 5.6 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 Global air travel demand has been growing at a robust rate Approximately 43% of our lessees operate in emerging markets that are growing between 5 -8% per annum Source: The Airline Monitor, July 2008. Source: Airbus Global Market Forecast 2007 -
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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