FLY LEASING July 2017 DISCLAIMER ForwardLooking Statements: This - - PowerPoint PPT Presentation

July 2017

FLY LEASING

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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,” “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, including FLY’s inability to achieve its portfolio growth expectations or its failure to achieve the benefits of such growth. 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. Notes:

• 1. All period end figures are as of March 31, 2017 except as otherwise noted. Share repurchase data is as of May 10, 2017.
• 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. Industry data per IATA.

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Conservative Financing

6.5 years(2) weighted average debt maturity, rates hedged

76 aircraft

$2.8 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 track record

Significant Insider Ownership

13% owned by BBAM shareholders

Young Fleet

6.4 year average age – second youngest of public peers

FLY AT A GLANCE

Prudent Acquisition Strategy

Known parameters, no speculative orders

Long Leases

6.6 year average lease term

Diversified Lessees

Leased to 42 airlines in 28 countries

$412 Million Pipeline(1)

1.0 year average age and 10.9 year average lease term(1)

(1) Reflects acquisition pipeline through June 30, 2017. (2) Reflects Term Loan amendment completed in April 2017.

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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 demand Healthy Demand for Aircraft Attractive markets for aircraft financing – Ample capacity and attractive rates

Positive Financial Markets

FAVORABLE INDUSTRY FUNDAMENTALS

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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 71 older aircraft since start

• f 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

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MEANINGFUL TWO YEAR FLEET TRANSFORMATION

Transformed Fleet—Younger, More Profitable Average Fleet Age (years) Average Lease Term (years)

5.2 6.6 12/31/2014 8/31/2016 8.0 6.4 31‐Dec‐14 8/31/2016 Q1 2017 Q2 2015 (20%) Q1 2017 Q2 2015 27%

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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%

SIGNIFICANT IMPROVEMENT IN ASSET MIX

(1) Only 757s remaining.

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• Annual growth target of $750 million
• 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

GENERAL ACQUISITION STRATEGY

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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 younger aircraft
• ~$274 million of remaining capacity in warehouse facility

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Attractive Acquisition Pipeline

$412 million

Acquired or identified

Young, Popular Aircraft

1.0 year average age

Projected to contribute $41 million of rental revenue and approximately $13 million of pre‐tax income annually

Long Leases

10.9 year average lease term

Attractive Aircraft Types

Eight aircraft including two B737 MAXs

2017 ACQUISITION ACTIVITY

FLY has $2.5 billion of additional buying power

Note: All data based on acquisition pipeline through June 30, 2017.

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GENERAL 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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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, less profitable
• Gain of $24.5 million (4.5% premium to net book value)
• Additional $2.7 million gain on conversion to finance lease

(1) As restated.

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SHARE REPURCHASE PROGRAM UPDATE

• Repurchased 660,382 shares through May 10, 2017 for $8.5 million
• 2% of FLY’s shares repurchased in 2017
• Average price per share of $12.85
• Substantial discount to NBV per share
• $58 million remaining in current repurchase program
• Share repurchase program will continue to drive shareholder benefits
• When fully deployed, program will generate: (1)
• 19% EPS improvement
• 6% NBV per share improvement

(1) Pro forma based on 32.2 million shares outstanding at March 31, 2017. Assumes full deployment of $65.4 million remaining in share repurchase program at March 31, 2017 at an average price of $12.85 per share.

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PROACTIVE LIABILITY MANAGEMENT

• Continued improvement of cost of

secured debt

• Debt 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)

(1) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (2) Reflects Term Loan amendment completed in April 2017.

5.12% 4.67% 4.26% 4.04% 3.91% 3.77%

2011 2012 2013 2014 2015 2016

Actively Managing Liabilities

APPENDICES

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CAPITAL STRUCTURE & LIQUIDITY SUMMARY

Weighted average debt maturity of 6.5 years(2)

(1) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (2) In April 2017, FLY completed an amendment of its Term Loan to reduce the margin by 50 bps and extend the maturity by one year. (3) Represents the ratio of total debt, less unrestricted cash and cash equivalents, divided by shareholders’ equity. ($ in millions)

March 31, 2017 December 31, 2016 Unrestricted cash and cash equivalents $537 $518 O / S Rate(1) O / S Rate(1) Maturity Securitization $113 3.33% $140 3.36% 2033 2012 Term Loan(2) 398 4.43% 404 4.41% 2022 Nord LB Facility 167 4.26% 172 4.14% 2018 CBA Debt 54 5.47% 56 5.45% 2020 Other Bank Debt Facilities 962 3.58% 981 3.50% 2019‐2028 Aircraft Acquisition Facility 111 3.34% 113 2.88% 2022 Unamortized Discounts and Loan Costs (31) (34) Total Secured Debt $1,774 3.86% $1,832 3.77% 2020 Notes 375 6.75% 375 6.75% 2020 2021 Notes 325 6.38% 325 6.38% 2021 Unamortized Discounts and Loan Costs (8) (9) Total Unsecured Debt $692 6.58% $691 6.58% Total Debt 2,466 4.62% 2,523 4.53% Shareholders' Equity 599 593 Total Capitalization $3,065 $3,116 Net Debt to Equity(3) 3.2x 3.4x Secured Debt to Total Debt 72% 73% Total Debt to Total Capitalization 80% 81%

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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%

Middle East & Africa

14%

North America

8%

Mexico, Central & South America

6% Total 100%