FLY LEASING Ja January 2017
DISCLAIMER Forward-Lookin ing St 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,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for FLY’s future business and financial performance. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks. Further information on the factors and risks that may affect FLY’s business is included in filings FLY makes with the Securities and Exchange Commission (the “SEC”) from time to time, including its Annual Report on Form 20-F and its Reports on Form 6-K. FLY expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise. No Notes: 1. Data is as of September 30, 2016, unless otherwise indicated. 2. Fleet age and lease term are calculated using the weighted net book value of flight equipment held for operating lease, including maintenance rights, at period end. Other fleet information excludes aircraft held for sale. 3. YTD 2013, YTD 2014, Q2 2015 and Q3 2015 figures are as restated. 4. Industry data per IATA (December 2016) and Ascend (January 2017). PAGE 1
FLY AT A GLANCE 81 aircraft Young Fleet ~$3 billion net book value 6.2 years average age – second youngest of public peers 📋 Long Leases Diversified Lessees 6.7 years average lease term Leased to 43 airlines in 28 countries Conservative Financing Prudent Acquisition Strategy 7.0 years weighted average debt maturity, rates hedged Known parameters, non-speculative orders Share Repurchases Lower Debt and SG&A Costs Repurchased 22% of shares since September 2015 Recent financings at very competitive rates Managed by BBAM Significant Insider Ownership Industry leader with nearly 30 year record 13% owned by BBAM shareholders PAGE 2
STRONG AIRLINE PERFORMANCE IN 2016 Growth, Improving Efficiency and Highest Profitability Passenger Airline Load Utilization Parked Strong Traffic Profits: Factors: remains at Fleet: market for Growth: $36 or near ~80% Low at aircraft 5.9% record billion ~4% sales globally levels 2015 & 2016 were outstanding years for airlines globally. Performance against key metrics improved across the board, and these trends are expected to continue in 2017 PAGE 3
DRIVING IMPROVED RETURNS Acquired 22% of Selling Older Sold 63 older and Under- shares at aircraft since start Performing discount of 34% of 2015 Aircraft to book value since September 2015 Reinvesting Improving Repurchasing in Newer, Shares at a EPS & Higher Discount to Yielding ROE Book Value Aircraft Invested over Reduced cost of $1.1 billion in secured debt to 18 newer <4%, reduced Actively aircraft since management fees Managing start of 2015 Liabilities and Costs PAGE 4
TWO YEAR FLEET TRANSFORMATION Average Fle leet Age (y (years) Average Lease Term (y (years) (21%) 7.8 6.7 26% 6.2 5.3 12/31/2014 8/31/2016 31-Dec-14 8/31/2016 December 31, 2014 September 30, 2016 December 31, 2014 September 30, 2016 Transformed fl fleet — Younger, more profit itable le Second youngest fl fleet among publi lic le lessors PAGE 5
ACQUISITION STRATEGY Principally through sale and leasebacks ● BBAM’s area of expertise for nearly 30 years ● BBAM’s global reach provides advantage Opportunistic secondary market purchases Each transaction can be evaluated prior to commitment ● Actual aircraft cost, lessee credit, lease terms ● Availability and terms of financing Avoid cyclical risks inherent in future orders from OEMs Avoid significant capital commitments to PDPs Retain financial resources to maximize benefits from cycles ● Purchase distressed assets ● Repurchase shares PAGE 6
ACQUISITION RECORD 2016 Acquisitions through Q3 2016: ● Eight aircraft acquired ● Average age of two years ● Average remaining lease term of 11 years ● 0.89% monthly Lease Rate Factor on purchase price ● Contributing $19 million in pre-tax income annually Historical Acquisitions 2013 2013 2014 2014 2015 2015 9M 2016 Aircraft Acquired 14 22 10 8 Average Age when Acquired (years) 2 3 2 2 Total Acquisition Costs (in millions) $642 $952 $615 $510 PAGE 7
SALES STRATEGY Sell older aircraft to improve fleet metrics ● Fleet age ● Lease term Dispose of out of production aircraft and older models Manage lessee credit exposures Avail of cycles and market conditions to lock in gains ● Took advantage of strong market conditions in 2015 and 2016 PAGE 8
SALES RECORD 2016 Sales through Q3 2016: • 19 aircraft sold • Average age of 15 years • Average remaining lease term of three years • Principally older, less profitable Historical Sales 2013 2013 2014 2014 2015 2015 9M 2016 Aircraft Sold 10 8 44 19 Average Age (years) 14 13 13 15 Total Gains (in millions) $5.4 $14.8 $29.0 $9.7 PAGE 9
Q4 ACQUISITIONS AND SALES UPDATE Q4 2016 Acquisitions: ● Two aircraft – $49 million investment ● 1.10% monthly Lease Rate Factor on purchase price Q4 2016 Sales: ● Eight aircraft sold ● Average age of 12 years ● Average remaining lease term of three years ● Aggregate sale prices exceed NBV PAGE 10
SHARE REPURCHASES Repurchased 22% of FLY’s shares since September 2015 Discount of 34% to net book value ● BBAM shareholders own 13% of FLY Largest insider holding of any public aircraft lessor ● $75 million repurchase program for 2016 and 2017 $67 million remaining ● Contin inuin ing posit itiv ive im impact on ROE and EPS PAGE 11
IMPROVED SHAREHOLDER VALUE Book Value Per Share (in millions, except for book value per share) $19.99 $18.97 $18.83 $18.42 $17.49 $17.19 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Total Shareholders’ Equity $712.9 $722.8 $657.0 $632.7 $632.6 $648.6 Shares Outstanding 41.5 41.3 35.7 33.6 33.3 32.5 PAGE 12
PROACTIVE LIABILITY MANAGEMENT In October 2016, FLY extended the maturity date of its Term Loan • The Term Loan is FLY’s largest debt facility • $410 million outstanding at September 30, 2016 • Maturity date extended from August 2019 to February 2022 • Extension was oversubscribed Weighted average debt maturity of 7.0 years Average remaining lease term of 6.7 years PAGE 13
APPENDICES
CAPITAL STRUCTURE & LIQUIDITY SUMMARY September 30, 2016 December 31, 2015 ($ in millions) Unrestricted cash and cash equivalents $325 $276 Restricted cash available to purchase aircraft - 11 Rate 1 Rate 1 O / S O / S Maturity Securitization $145 3.39% $296 3.38% 2033 2012 Term Loan 2 410 4.39% 428 4.39% 2022 Nord LB Facility 176 3.85% 255 4.04% 2018 CBA Debt 58 5.43% 88 5.02% 2020 Other Bank Debt Facilities 923 3.42% 663 3.63% 2016-2028 Aircraft Acquisition Facility 66 2.95% - - 2022 Unamortized Discounts and Loan Costs (35) (34) Total Secured Debt $1,743 3.73% $1,696 3.91% 2020 Notes 375 6.75% 375 6.75% 2020 2021 Notes 325 6.38% 325 6.38% 2021 Unamortized Discounts and Loan Costs (9) (11) Total Unsecured Debt $691 6.58% $689 6.58% Total Debt 2,434 4.53% 2,385 4.68% Shareholders' Equity 639 657 Total Capitalization $3,073 $3,042 Net Debt to Equity 3 3.3x 3.2x Secured Debt to Total Debt 72% 71% Total Debt to Total Capitalization 79% 78% Weighted average debt maturity of 7.0 years (1) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (2) In October 2016, FLY extended the maturity date of its Term Loan from August 2019 to February 2022. (3) Represents the ratio of total debt, less unrestricted cash and cash equivalents, divided by shareholders’ equity. PAGE 15
REMARKETING OVERVIEW Aircraft Remarketing Requirements 2016 2017 2018 2019 2020 Original Remarketing Requirements 23 20 20 20 15 Remarketed Aircraft Sold or to be Sold 12 10 11 9 9 Lease Extensions with Existing Lessee 7 4 - - - Re-leased to New Lessee 4 - - - - Remaining Remarketing Requirements - 6 9 11 6 Next remarketing requirement is in November 2017 PAGE 16
DIVERSE GROUP OF GLOBAL LESSEES Lessee Country % of NBV Region % of NBV Asia & South Pacific India 12% 46% Europe Ethiopia 11% 25% Middle East & Africa Philippines 9% 14% North America UK 4% 9% Mexico, Central & South America India 4% 6% India 3% Total 100% Germany 3% Thailand 3% Chile 3% China 3% Top 10 Lessees 56% Note: Sums may not foot due to rounding. PAGE 17
PORTFOLIO OVERVIEW September 30, 2016 Age Aircraft Type # % of NBV (years) A320 Family 27 21% 9 A330 3 8% 5 A340 2 4% 10 B737 Family 40 40% 7 B757 3 1% 20 B777F 2 11% 1 B787 4 15% 2 Total 81 100% 6 PAGE 18
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