FLY Leasing Limited March 2015 Caution Concerning Forward-Looking - - PowerPoint PPT Presentation

FLY Leasing Limited

March 2015

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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," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for Fly Leasing Limited’s (FLY) future business and financial performance, and for the aviation industry. 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 from time to time, including its Annual Report on Form 20-F and Reports on Form 6-K. FLY undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.

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Total Revenues $392m Total Assets $3,741m Net Income $54m Cash and Cash Equivalents $81m Earnings Per Share $1.27 Total Borrowings $2,550m Dividends Per Share $1.00 Total Equity $758m

FLY at a Glance

Note: As of December 31, 2014 except for the financials. (1) Weighted by net book value as of December 31, 2014.

As of and for the Last Twelve Months Ended September 30, 2014 (Unaudited) Portfolio 127 127 aircraft, 7. 7.8 years average age (1) Customers 64 64 airlines in 36 36 countries Lease Profile Net, Net Leases, 5. 5.3 3 years average remaining lease term (1) Insider Ownership 8%+ %+ with market value of $45m $45m+ Managed by BBAM World’s 3rd

rd largest lease manager with long, established track record

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Attractive Portfolio of Leased Aircraft

(1) Note: As of December 31, 2014. FLY has subsequently acquired one A321-211 and two A320-200s. (2) All Next Generation except for one B737-300 freighter. (3) FLY has signed purchase agreements to sell eight B757s.

Aircraft Ty Type # of A f Aircraft ft % of NBV BV A320 Family 48 30% A330 4 10% A340 3 4% B737 Family (2) 57 44% B747/757/767 (3) 13 5% B777/B787 2 7% To Total 127 127 100% 100%

Modern Fleet (1)

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Diversified, Global Customer Base

Lesse ssee Country % of R Rev even enue e (1) Philippines 10% Chile 7% China 4% UK 4% USA 4% USA 3% Turkey 3% India 3% Turkey 3% Thailand 3% Top 1 10 Lessees ees 44% 44%

(1) Percentage of total annualized contracted revenue as of December 31, 2014. (2) 1% is associated with two B757s expected to be sold as previously announced.

Diversified Lessees – 64 Airlines in 36 Countries

Re Region % of R Rev even enue e (1) Europe 37% India, Asia & South Pacific 35% North America 11% Central & South America 11% Middle East & Africa 3% Russia (2) 3%

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Savvy Aircraft Investor with a Disciplined Approach

• Primary growth driver
• Large, established
• perating base
• Liquid assets for trading
• Predictable returns and

residual values

• Will acquire MAX and

NEO aircraft as they deliver

Young Narrowbodies

Focus: A320s & B737-800s

• Quality credits and long-

term leases

• Attractive financing
• ptions
• Marginally higher yields

and returns

Select Widebodies

Focus: A330s, A350s, B777s & B787s

• 8 – 12 years old; will sell

prior to part-out

• BBAM origination

advantage

• Higher cash flow and

returns

Used Aircraft

Focus: A320s & B737-800s Multiple origination channels with focus on sale and leasebacks with airlines No speculative, unplaced orders with manufacturers

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FLY is Executing its Growth Strategy…

(1) Average age and average remaining lease term weighted based on aircraft acquisition cost and calculated as of the time of acquisition.

FLY beat at its 2014 growth target, growing its portfolio by 22 22% % and investing close to $1 $1 billio ion FLY will acquire new or nearly new aircraft to profitably grow its business FLY will continue the growth momentum into 2015 Number of Aircraft 22 Total Acquisition Costs $952m

• Avg. Age

2.6 yrs

• Avg. Remaining Lease Term

8.9 yrs Number of Lessees 12 Number of Countries 9

2014 Acquisitions (1)

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Proven track record of selling older aircraft at gains throughout the cycle

• FLY has sold 30

30 aircra raft

• Average age of aircraft sold: 12.

12.5 5 years

• Achieved sales gains of $68m

$68m or 14% 14% above the NBVs Summary of Annual Disposition Activity

…And Consistently and Profitably Monetizing Aircraft…

2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 Annual Gains $11.4m

• $13.4m

$9.1m $8.4m $6.3m $18.9m # of A/C Sold 2

• 4

2 4 10 8

• Avg. Age of A/C Sold

12.9

• 11.0

6.8 13.7 13.6 12.6 Premium to NBV 39%

• 16%

9% 12% 11% 16%

Page 8 $2. $2.6 $3. $3.0 $3. $3.7 $2.0 $2.5 $3.0 $3.5 $4.0 2012 2013 2014

…Which is Transforming Portfolio Metrics…

Book Value of Flight Equipment Contracted Annualized Revenue Weighted Average Remaining Lease Term (1) Weighted Average Age (1)

9.4 .4 8.6 .6 7.8 .8 5 6 7 8 9 10 2012 2013 2014

Years

3.2 .2 4.3 .3 5.3 .3 1 2 3 4 5 6 2012 2013 2014

Years

$326 326 $371 371 $420 420 $200 $250 $300 $350 $400 $450 2012 2013 2014

$ in millions $ in billions Note: As of December 31, 2012, 2013, and 2014.

(1) Weighted by net book value.

17% 17% 66% 66% 29% 29% 42% 42%

Page 9 $2.20 $3.00 $3.80 $4.60 $5.46 $6.37 $7.37 2008 2009 2010 2011 2012 2013 2014

Fly has declared a total of 29 29 consecutive quarterly dividends, totaling $7. $7.37 37 per share FLY declared a dividend of $0. $0.25 25 per share in respect of the fourth quarter of 2014 Current annual dividend of $1. $1.00 00 per share

… And Supporting an Attractive Dividend

Cumulative Dividends Declared Per Share Since Inception

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Nimble and Proactive Approach to Capital Structure Management

FLY issued $700 million in unsecured bonds in 2013 and 2014 Continued to drive improvement in cost of secured debt Flexible use of recourse and non-recourse financing Debt is long-dated – liability structure matches asset characteristics No significant debt maturities until 2018

(1) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (2) FLY had no unencumbered aircraft prior to Q4 2013.

Cost of Secured Debt (1)

5.12% 4.67% 4.26% 4.20% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 2011 2012 2013 Q3 2014 $75 $121 $246 $403 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q4 Q1 Q2 Q3

Unencumbered Aircraft By Quarter (2)

$ in Millions 2013 2014 2014 2014

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Stakeholder Highlights

Execution of fleet growth strategy is boosting revenues and bottom line Consistent sales of older aircraft at gains supports book values Portfolio metrics are significantly improved by fleet rejuvenation Strategic approach to liability management Focus on creating value for stakeholders – supported by attractive dividend

Appendix 1—BBAM Overview

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Source: AirFinance Journal, 2014.

Leading Aircraft Lessors

Founded in 1989 1989 World’s thir ird l larges est lease manager of aircraft with 400+ 400+ aircraft under management Acquired by management team in April 2010 Onex purchased a 50% 50% interest in BBAM in December 2012 120 120 + + employees in nine offices worldwide The core management team has been together through several cycles (including 9/11, SARS and financial crisis) BBAM is an asset management company,

• riginating and managing aircraft for two

primary pools of capital:

• FLY Leasing Limited (“NYSE: FLY”)
• Nomura Babcock & Brown (“NBB”), a

wholly-owned subsidiary of Nomura Securities

$33.9 $33.6 $12.3 $9.4 $8.9 $7.4 $7.3 $6.9 $5.9 $4.8 $0 $5 $10 $15 $20 $25 $30 $35 $40

GECAS AerCap BBAM SMBC BOC AWAS CIT Air Lease ACG Avolon

Fleet Value in $ Billions

BBAM Overview

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BBAM — Global, Full Service Platform

No outsourcing – each driver of aircraft investment returns led by senior BBAM personnel with dedicated teams 120+ professionals in nine offices covering all target regions Dedicated in-house professional staff providing a comprehensive platform

DRIVERS OF AIRCRAFT INVESTMENT RETURN

Origination & Re-Marketing Technical & Asset Management Corporate Finance & Capital Markets Finance, Accounting, Tax, Contracts & Investor Reporting Legal Steve Zissis Declan Cotter Wesley Dick Rob Tomczak Vince Cannon 17 Professionals 20 Professionals 6 Professionals 62 Professionals 15 Professionals

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Representative Global Reach Americas Asia-Pacific Africa / Middle East Europe

A Sample of BBAM’s Airline Relationships

Appendix 2 – FLY’s Capital Structure

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Capital Structure

FLY’s Capital Structure

Total unencumbered aircraft assets of approximately $403 million (1) Does not include $400m of unsecured debt raised in October 2014

(1)

As of September 30, 2014.

(2)

Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.

(3)

The availability period was terminated under this facility in January 2015. ($ in millions)

September 30, 2014 December 31, 2013 Unrestricted cash and cash equivalents $81 $404 Debt O / S Rate (2) O / S Rate (2) Maturity Securitization $556 3.36% $593 3.63% 2033 2012 Term Loan 457 5.19% 475 4.50% 2019 Nord LB Facility 425 4.15% 452 4.15% 2018 CBA Debt 118 4.62% 162 4.91% 2018-2020 Bank Debt Facilities 617 4.19% 490 4.71% 2015-2025 Aircraft Acquisition Facility (3) 123 4.15% 127 4.16% 2018 Unamortized Discounts (38) (45) Total Secured Debt $2,258 4.20% $2,254 4.26% 2020 Senior Notes 300 6.75% 300 6.75% 2020 Unamortized Discounts (8) (8) Total Unsecured Debt $292 6.75% $292 6.75% Total Debt 2,550 4.49% 2,546 4.55% Shareholders' Equity 758 748 Total Capitalization $3,308 $3,294 Net Debt to Equity 3.3x 2.9x Secured Debt to Total Debt 89% 89% Total Debt to Total Capitalization 77% 77%