FLY LEASING Ja January 2017 DISCLAIMER Forward-Lookin ing St - - PowerPoint PPT Presentation

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FLY LEASING Ja January 2017 DISCLAIMER Forward-Lookin ing St - - PowerPoint PPT Presentation

Dec 16, 2022 159 likes •357 views

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

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FLY LEASING

Ja January 2017

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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

  • utlook 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).
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Conservative Financing

7.0 years weighted average debt maturity, rates hedged

81 aircraft

~$3 billion net book value

Lower Debt and SG&A Costs

Recent financings at very competitive rates

Managed by BBAM

Industry leader with nearly 30 year record

Significant Insider Ownership

13% owned by BBAM shareholders

Young Fleet

6.2 years average age – second youngest of public peers

FLY AT A GLANCE

Share Repurchases

Repurchased 22% of shares since September 2015

Prudent Acquisition Strategy

Known parameters, non-speculative orders

📋

Long Leases

6.7 years average lease term

Diversified Lessees

Leased to 43 airlines in 28 countries

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STRONG AIRLINE PERFORMANCE IN 2016

Passenger Traffic Growth:

5.9%

Load Factors:

~80%

globally Parked Fleet: Low at

~4%

Strong market for aircraft sales Airline Profits:

$36 billion

Utilization remains at

  • r near

record levels

Growth, Improving Efficiency and Highest Profitability

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

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Improving EPS & ROE

Selling Older and Under- Performing Aircraft Repurchasing Shares at a Discount to Book Value Actively Managing Liabilities and Costs Reinvesting in Newer, Higher Yielding Aircraft Sold 63 older aircraft since start

  • f 2015

DRIVING IMPROVED RETURNS

Reduced cost of secured debt to <4%, reduced management fees Invested over $1.1 billion in 18 newer aircraft since start of 2015 Acquired 22% of shares at discount of 34% to book value since September 2015

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TWO YEAR FLEET TRANSFORMATION

Transformed fl fleet—Younger, more profit itable le Second youngest fl fleet among publi lic le lessors Average Fle leet Age (y (years) Average Lease Term (y (years)

5.3 6.7 12/31/2014 8/31/2016 7.8 6.2 31-Dec-14 8/31/2016 September 30, 2016 December 31, 2014 (21%) September 30, 2016 December 31, 2014 26%

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  • 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

ACQUISITION STRATEGY

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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

  • 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

ACQUISITION RECORD

Historical Acquisitions

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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
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SALES RECORD

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

  • 2016 Sales through Q3 2016:
  • 19 aircraft sold
  • Average age of 15 years
  • Average remaining lease term of three years
  • Principally older, less profitable
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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
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SHARE REPURCHASES

Contin inuin ing posit itiv ive im impact on ROE and EPS

  • 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
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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 $17.19 $17.49 $18.42 $18.83 $18.97 $19.99 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

Book Value Per Share

(in millions, except for book value per share)

IMPROVED SHAREHOLDER VALUE

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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

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APPENDICES

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CAPITAL STRUCTURE & LIQUIDITY SUMMARY

($ in millions)

September 30, 2016 December 31, 2015 Unrestricted cash and cash equivalents $325 $276 Restricted cash available to purchase aircraft

  • 11

O / S Rate1 O / S Rate1 Maturity Securitization $145 3.39% $296 3.38% 2033 2012 Term Loan2 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 Equity3 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.

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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

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Lessee Country % of NBV India 12% Ethiopia 11% Philippines 9% UK 4% India 4% India 3% Germany 3% Thailand 3% Chile 3% China 3% Top 10 Lessees 56%

DIVERSE GROUP OF GLOBAL LESSEES

Region % of NBV

Asia & South Pacific

46%

Europe

25%

Middle East & Africa

14%

North America

9%

Mexico, Central & South America

6% Total 100%

Note: Sums may not foot due to rounding.

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September 30, 2016 Aircraft Type # % of NBV Age (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

PORTFOLIO OVERVIEW