Second Quarter 2020 Earnings August 13, 2020
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,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for FLY’s future business, operations 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, and the risk that FLY may be unable to achieve its portfolio growth expectations, or to reap the benefits of such growth. Additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these 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 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. Notes: 1. All period end figures are as of June 30, 2020 except as otherwise noted. Any 2020 year-to-date data is as of August 12, 2020. 2. Fleet age and lease term are calculated using the weighted net book value of flight equipment held for operating lease, including maintenance rights and investment in finance lease, at period end. 3. Rent collections as a percentage of rent due in the quarter ended June 30, 2020, are calculated as (i) the sum of cash collected from operating and finance lease rentals for the quarter as a percentage of (ii) the total operating and finance lease rentals expected to be collected during the period after giving effect to lease deferral arrangements made or expected to be made as of August 12, 2020. 4. In addition to U.S. GAAP financials, this presentation includes certain non-GAAP operating and financial measures. These non-GAAP operating and financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. We have provided a reconciliation of those measures to the most directly comparable GAAP measures in the Appendix. For further information, please refer to FLY’s earnings press release dated August 13, 2020. 5. Flag carriers are international airlines, which may be wholly or partly owned by the national government, that have a strong association with their home country or represent their home country internationally. 2
Colm Barrington CEO
Continued Severe Impact on Global Aviation − Reductions in traffic, operations, profitability and liquidity − Sharp reductions in aircraft production COVID Update − Expectation that COVID-19 impact will linger for several years Progress Towards Recovery − Significant government support for airlines worldwide − Increase in domestic traffic in many major markets (1) − China traffic returning towards normal (1) (1) IATA data as of July 2020 4
Robust Business Model − Most popular aircraft types, primarily narrowbody − Good weighting of financially sound lessees FLY’s Robust − Strong balance sheet Business Model − Long-dated financing − No aircraft order commitments Situation Report − Collected 84% of rent due in Q2 − Two aircraft returned early since March − Four extensions and two new leases since March − Five aircraft representing 3% of NBV to remarket in 2020 − Market open for selected aircraft sales 5
Active Management − Focusing on enhancing liquidity Active Management − Managing rent deferral requests and Experienced − Maintaining asset values Manager − Sustaining industry relationships Experienced BBAM team − Third-largest aircraft lease manager − Long-term manager with 30+ years experience − Seasoned team managed through several industry crises − Full-service global platform with longstanding relationships − BBAM shareholders own 23% of FLY shares 6
Working Closely with Airline Customers Deferral Process − Broad range of requests reflecting variety of airline responses to crisis − Lessees representing 65% of the fleet are receiving at least partial deferral of their rent − Average deferral period of seven months; Majority to be repaid by end of 2021 7
$80 M $11 M TOTAL REVENUES ADJUSTED NET INCOME Second Quarter Highlights $29.46 $0.37 BOOK VALUE ADJUSTED EPS PER SHARE 8
CASH & UNTAPPED RESOURCES ALL-TIME LOW LEVERAGE $887 M 2.1x Strong Financial Position UNRESTRICTED CASH + NET DEBT TO EQUITY UNENCUMBERED ASSETS UNRESTRICTED CASH NET DEBT TO EQUITY AND UNENCUMBERED ASSETS $925 $887 3.1x 2.3x $640 2.1x $639 $598 $288 $352 $289 $286 Q2 2019 Q4 2019 Q2 2020 Q2 2019 Q4 2019 Q2 2020 Unrestricted Cash Unencumbered Assets (in millions) 9
LONG-TERM DEBT No FLY is Well NEAR-TERM REFINANCING NEEDS Positioned NO 2020 ORDERS Zero MANUFACTURER OR CAPEX COMMITMENTS FINANCING FLEXIBILITY Proven TRACK RECORD OF DIVERSIFIED FINANCING SOURCES 10
Julie Ruehl CFO
Q2 Financial Highlights Q2 2020 Q2 2019 ($ in millions, except EPS) $45M EOL and Gain on Sale $54.1 Net Income $9.6 $54.1 in Q2 2019 Earnings Per Share $0.32 $1.68 Net Spread (1) 7.1% 7.5% 12 (1) See appendix for definition of Net Spread.
Revenue Comparison Q2 2020 Q2 2019 (in millions) 41 aircraft Operating Lease Rental Revenue $79.8 $101.1 $79.8 sold from Q1 2019 to End of Lease Income 0.2 28.8 Q2 2020 Amortization of Lease Incentives and Other (1.0) (1.3) Operating Lease Revenue $79.1 $128.6 Finance Lease Income 0.1 0.2 Gain on Sale of Aircraft – 16.1 Other Income 0.7 2.2 Total Revenue $80.0 $147.0 13 Note: Sums may not foot due torounding.
Expense Comparison Q2 2020 Q2 2019 (in millions) Decreased Depreciation $32.0 $37.3 leverage and lower cost of 25.3 Interest Expense 25.3 35.4 debt Selling, General and Administrative 7.1 9.4 Provision for Uncollectible Operating Lease Receivables 2.0 – Loss on Derivatives 0.1 0.3 Fair Value Loss on Marketable Securities 1.1 – Loss on Extinguishment of Debt – 1.5 Maintenance and Other Costs 1.0 1.6 Total Expenses $68.5 $85.6 14 Note: Sums may not foot due torounding.
Rent Deferral Summary − Collected 84% of rent due in Q2, taking deferrals into account − Collected 47% of pre-deferral contracted rent in Q2 − Approximately $40M of deferrals included in rent receivables as of June 30 − Estimated deferrals of $30-35M, or 20% of revenue, in the 2nd half of 2020 Rent Deferral Deferral and Repayment Profile Repayments (1) Deferrals (in millions) $ $ 39 – Through Q2 2020 21 7 Q3 2020 12 7 Q4 2020 Year ending December 31, 2021 37 11 Thereafter – 32 $ $ Total 83 83 15 (1) Does not include interest component of repayments.
Long-Dated Ample Liquidity Financing and $289M Unrestricted Cash + $598M Unencumbered Assets Low Leverage Summary No Near-Term Strong Customer Base CapEx Requirements 50% flag carriers and US majors Modern Fleet, World-Leading Predominantly BBAM Management Narrowbodies 16
Appendices
Fleet of 86 Modern Aircraft 28% 37% AIRBUS A320ceo BOEING 737NG 33 40 FAMILY NBV NBV AIRBUS A320neo BOEING 787 2% 14% 4 1 FAMILY 6% 10% AIRBUS A330 BOEING 777-LRF 3 2 BOEING 737 MAX 3% CFM ENGINES 7 2 Leased Separately BOEING 757-SF <1% 4.9 8.0 1 YEARS AVG. LEASE TERM YEARS AVG. AGE 18 Note: Percentages represent weighted average net book value.
Diversified Customer Base 41 Airlines in 25 Countries Top 10 Lessees Geographic Diversity Malaysia SpiceJet Sp AirAsi sia 18% Thai hai AirAsi sia 2% 2% Berhad Oth ther 3% 3% 11% 23% Lion Air Li 3% 3% Transavia 3% 3% Ind ndia (1) Air Ind ndia USA USA Air Euro uropa 16% 11% 3% 3% 4% 4% France 3% 3% Malaysia Sp Spain Airlines 5% 5% 7% 7% Chin hina Eth thiopia 6% 6% 10% Ind ndonesia Phil hilippine Phil hilippines Eth thiopian 7% 7% Airlines 9% 9% Airlines 8% % 10% Note: Percentages by net book value. Sums may not foot due to rounding. 19 (1) Air India leases are guaranteed by the Indian government.
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