Fly Leasing — Investor Presentation (May 2018)
19 slides from Fly Leasing's investor presentation, May 7, 2018
Slide 1: Fly Leasing
FLY LEASING May 2018 a 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
FLY AT A GLANCE 86aircraft$3.1 billion net book valueYoung Fleet6.5 years average age Second youngest of public peers Long Leases6.2 years average lease termDiversified Lesseesleased to 45 airlines in 28 countries 55 Aircraft contractedwith options on 20 additional aircraft$2.1 billionIdentified pip
Slide 4: Favorable industry fundamentals
Positive airline industry results $38.4 billion Forecast 2018 profits Attractive markets for aircraft financing AMPLE CAPACITY AT ATTRACTIVE RATES Strong demand for aircraft UNDERPINNED BY PASSENGER GROWTH Passenger traffic growth is robust 6.0% forecast in 2018, on track YTD Strong Global Air Traff
Slide 5: Strategy Driving Higher ROE and EPS
Strategy Driving Higher ROE and Eps Selling Older and Under-Performing Aircraft Reducing SG&A Reducing Financing Costs Reinvesting in Newer, More Profitable Aircraft Repurchasing Shares at a Discount to Book Value
Slide 6: AirAsia Portfolio acquisition update
Strong pipeline of new technology aircraft driving EPS and ROE growth AirAsia Portfolio acquisition Update Q2 / Q3 2018 Initial Portfolio34 A320ceo aircraft7 CFM engines leased to AirAsia Group airlines(1)Anticipated to close in Q2/Q3 2018 Future Sale-Leasebacks21 new A320neo family aircraft will be
Slide 7: Strategic rationale for acquisition
Significant Value in OrderbookFavorable pricing of newest-generation narrowbodies with lengthy manufacturer backlogNo pre-delivery payment requirement enhances returns and liquidity Access to the Newest Technology33% of assets are newest generationtechnology(1) COMPELLING investment ReturnsStable lo
Slide 8: Proforma fleet overview
Proforma fleet overview High-quality, young portfolio expected to be acquired in Q2 / Q3Sale-leaseback NEO portfolio will provide growth at attractive prices The options offer further growth and potential lessee diversification Catalyst for FLY’s transition to newest technology equipment 33% Next Ge
Slide 9: Proforma fleet overview (continued)
Proforma fleet overview (continued) Proforma Portfolio Overview(1) (Assumes No Sales) FLY Initial Portfolio Future Sale-leasebacks Proforma Size (NBV, bn) $3.1 $1.0 $1.1 $5.2 Age (yrs) 6.5 6.6 0.0 5.2 Lease Term (yrs) 6.2 6.2 12.0 7.4 % Airbus 27% 100% 100% 56% % Narrowbody 65% 100% 100% 79% Countri
Slide 10: 2018 full year financial guidance
2018 full year financial guidance (In millions) FY 2018(1) Operating Lease Revenue $405 – 410 Finance Lease Revenue and Other Income $3 Gain on Sale of Aircraft $3 Total Revenue $410 – 415 Total Expenses $335 – 340 Pre-tax Net Income $75 – 80 Weighted Average Shares 30.3 Note: Sums may not foot due
Slide 11: Projected leverage and financing strategy
FLY’s Projected Debt / Equity Ratio Impact on Leverage Projected leverage and financing strategy Onex and BBAM’s management team will each acquire 666,667 newly-issued FLY shares for total consideration of $20 million and AAB will acquire 3,333,333 newly-issued FLY shares for a consideration of $50
Slide 12: Aircraft acquisitions and sales
2Aircraft salesclosed in AprilSales reduce leverage, generate cash, and produce a 16% premium to net book value(1)Further sales anticipated for 2018 Aircraft acquisitions and sales 10.3 yearsAVERAGE AGE 1New aircraftacquired in Q1 Acquisitions SALES 12.0 yearLEASE TERM Premium includes gain on sale
Slide 13: Appendices
appendices
Slide 14: Capital structure & liquidity overview
Capital structure & liquidity overview Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.Represents the ratio of total debt, less unrestricted cash and cash equivalents, divided by shareholders’ equi
Slide 15: Diverse group of global lessees
DIVERSE GROUP OF GLOBAL LESSEES FLY Top 10 Lessees # Lessee % of Value 1 11% 2 10% 3 9% 4 4% 5 4% 6 4% 7 4% 8 3% 9 3% 10 3% Top 10 Lessees 55% Initial Portfolio # Lessee % of Value 1 AirAsia 43% 2 Thai AirAsia 22% 3 Indonesia AirAsia 14% 4 AirAsia India 12% 5 Philippines AirAsia 7% 6 Pakistan Int. A
Slide 16: AirAsia Group Overview
AirAsia Group Overview Initial AirAsia Group Exposure AirAsia Group is the largest low-cost carrier in Asia and fourth largest airline in Asia in terms of passengers carried. The group is diversified across five countries and has access to independent capital—three of the entities are listed on loca
Slide 17: Asset allocation snapshot
Asset allocation snapshot Initial Portfolio Future Sale-leasebacks Orderbook Option Opportunity FLY Asset Allocation Aircraft Types 34 A320-200 and 7 engines 21 A320neo/A321neo 20 A320neo/A321neo Base Purchase Price $1.1 billion $1.1 billion $1.1 billion Asset Age 6.7 years 0 years 0 years Average R
Slide 18: Historic acquisition track record
2013 2014 2015 2016 2017 Aircraft Acquired 14 22 10 10 10 Average Age when Acquired (years) 2 3 2 3 2 Purchase Price (in millions) $642 $952 $615 $559 $456 Historic ACQUISITION track Record Historical Aircraft Acquisitions Ample liquidity as of March 31, 2018:$636 million in cash and unencumbered as
Slide 19: Historic sales track record
Historic Sales track record Historical Aircraft Sales 2013 2014 2015 2016 2017 Aircraft Sold 10 8 44 27 1 Average Age (years) 14 13 13 14 12 Total Gains (in millions) $5.4 $14.8 $29.0 $24.5 $3.9 2016 Sales: 27 aircraft, average age of 14 years Average remaining lease term of three years Principally