Fly Leasing — Investor Presentation (July 2017)
17 slides from Fly Leasing's investor presentation, Jul 27, 2017
Slide 1: Fly Leasing
FLY LEASING July 2017 “FLY Leasing
Slide 2: Disclaimer: Forward-Looking Statements
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 Financing6.5 years(2) weighted average debt maturity, rates hedged 76 aircraft$2.8 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 Ownership13% owned by BBAM s
Slide 4: Favorable industry fundamentals
Passenger traffic growth is robust – 5.1% forecast in 2017, 7.0% actual through March Strong Global Air Traffic Growth Airline industry results are positive – Forecast profits of $30 billion in 2017 Continued Airline Profitability Strong demand for aircraft – Created by continuing strong passenger d
Slide 5: Strategy for Driving Improved Returns
Sold 71 older aircraft since start of 2015 Strategy for DRIVING IMPROVED RETURNS Reduced cost of secured debt to <4%, reduced management fees Invested over $1.2 billion in 20 newer aircraft since start of 2015 Acquired 24% of shares at discount of 30% to book value since September 2015
Slide 6: Meaningful Two Year Fleet Transformation
Meaningful TWO YEAR FLEET transformation Transformed Fleet—Younger, More Profitable Average Fleet Age (years) Average Lease Term (years) Q1 2017 Q2 2015 (20%) Q1 2017 Q2 2015 27%
Slide 7: Significant Improvement in Asset Mix
December 31, 2014 March 31, 2017 Aircraft Type # Average Age(years) % NBV # Average Age(years) % NBV A320 Family 48 9 30% 24 9 21% A330 / 340 7 5 14% 5 6 10% B737 Family 57 7 44% 38 8 40% B747 / 757 / 767 13 17 5% 3(1) 21 1% B777 1 1 4% 2 2 12% B787 1 1 3% 4 3 16% Total 127 8 100% 76 6 100% Signific
Slide 8: General 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: Historical Acquisition Track Record
2013 2014 2015 2016 Aircraft Acquired 14 22 10 10 Average Age when Acquired (years) 2 3 2 3 Total Acquisition Costs (in millions) $642 $952 $615 $559 Historical ACQUISITION track Record Historical Aircraft Acquisitions Ample liquidity:~$900 million in cash and unencumbered assets to invest in younge
Slide 10: Attractive Acquisition Pipeline
Attractive Acquisition Pipeline $412 millionAcquired or identified Young, Popular Aircraft1.0 year average age Projected to contribute $41 million of rental revenue and approximately $13 million of pre-tax income annually Long Leases10.9 year average lease term Attractive Aircraft TypesEight aircraf
Slide 11: General Sales Strategy
General SALES STRATEGY Sell older aircraft to improve fleet metricsFleet ageLease termDispose of out of production aircraft and older modelsManage lessee credit exposuresAvail of cycles and market conditions to lock in gainsTook advantage of strong market conditions in 2015 and 2016
Slide 12: Historical Sales Track Record
Historical 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(1) $14.8(1) $29.0 $24.5 2016 Sales: 27 aircraft, average age of 14 years Average remaining lease term of three years Principally older,
Slide 13: Share Repurchase Program Update
Share repurchase program update Repurchased 660,382 shares through May 10, 2017 for $8.5 million2% of FLY’s shares repurchased in 2017Average price per share of $12.85 Substantial discount to NBV per share$58 million remaining in current repurchase programShare repurchase program will continue to dr
Slide 14: Proactive Liability Management
Proactive Liability Management Continued improvement of cost of secured debtDebt is long-dated – liability structure matches asset characteristics Weighted average debt maturity is 6.5 years(2)No significant debt maturities until 2020 Cost of Secured Debt(1) Represents the contractual interest rates
Slide 15: Appendices
appendices
Slide 16: Capital Structure & Liquidity Summary
Capital structure & liquidity summary Weighted average debt maturity of 6.5 years(2) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.In April 2017, FLY completed an amendment of its Term Loan to re
Slide 17: Diverse group of global lessees
Note: Sums may not foot due to rounding.As of March 31, 2017. Lessee Country % of NBV India 13% Ethiopia 12% Philippines 10% India 4% France 4% Chile 3% China 3% Germany 3% Turkey 3% India 3% Top 10 Lessees 57% Diverse group of global lessees Region % of NBV Asia & South Pacific 46% Europe 26% Middl