FLY LEASING. January 2017

Transcription

1 FLY LEASING January 2017

2 DISCLAIMER Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 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. 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, Q and Q figures are as restated. 4. Industry data per IATA (December 2016) and Ascend (January 2017). PAGE 1

3 FLY AT A GLANCE 81 aircraft ~$3 billion net book value Long Leases 6.7 years average lease term Prudent Acquisition Strategy Known parameters, non-speculative orders Young Fleet 6.2 years average age second youngest of public peers Diversified Lessees Leased to 43 airlines in 28 countries Conservative Financing 7.0 years weighted average debt maturity, rates hedged Share Repurchases Repurchased 22% of shares since September 2015 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 PAGE 2

4 STRONG AIRLINE PERFORMANCE IN 2016 Growth, Improving Efficiency and Highest Profitability Passenger Traffic Growth: 5.9% Load Factors: ~80% globally Utilization remains at or near record levels Parked Fleet: Low at ~4% Strong market for aircraft sales Airline Profits: $36 billion 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

5 DRIVING IMPROVED RETURNS Sold 63 older aircraft since start of 2015 Selling Older and Under- Performing Aircraft Acquired 22% of shares at discount of 34% to book value since September 2015 Reinvesting in Newer, Higher Yielding Aircraft Improving EPS & ROE Repurchasing Shares at a Discount to Book Value Invested over $1.1 billion in 18 newer aircraft since start of 2015 PAGE 4 Actively Managing Liabilities and Costs Reduced cost of secured debt to <4%, reduced management fees

6 TWO YEAR FLEET TRANSFORMATION Average Fleet Age (years) Average Lease Term (years) 7.8 (21%) % 6.7 December 31-Dec-14 31, 2014 September 8/31/ , 2016 December 12/31/ , 2014 September 8/31/ , 2016 Transformed fleet Younger, more profitable Second youngest fleet among public lessors PAGE 5

7 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

8 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 M 2016 Aircraft Acquired Average Age when Acquired (years) Total Acquisition Costs (in millions) $642 $952 $615 $510 PAGE 7

9 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

10 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 M 2016 Aircraft Sold Average Age (years) Total Gains (in millions) $5.4 $14.8 $29.0 $9.7 PAGE 9

11 Q4 ACQUISITIONS AND SALES UPDATE Q Acquisitions: Two aircraft $49 million investment 1.10% monthly Lease Rate Factor on purchase price Q Sales: Eight aircraft sold Average age of 12 years Average remaining lease term of three years Aggregate sale prices exceed NBV PAGE 10

12 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 Continuing positive impact on ROE and EPS PAGE 11

13 IMPROVED SHAREHOLDER VALUE (in millions, except for book value per share) Book Value Per Share $19.99 $18.42 $18.83 $18.97 $17.19 $17.49 Q Q Q Q Q Q Total Shareholders Equity $712.9 $722.8 $657.0 $632.7 $632.6 $648.6 Shares Outstanding PAGE 12

14 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

15 APPENDICES

16 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 Rate 1 O / S Rate 1 Maturity Securitization $ % $ % Term Loan % % 2022 Nord LB Facility % % 2018 CBA Debt % % 2020 Other Bank Debt Facilities % % Aircraft Acquisition Facility % Unamortized Discounts and Loan Costs (35) (34) Total Secured Debt $1, % $1, % 2020 Notes % % Notes % % 2021 Unamortized Discounts and Loan Costs (9) (11) Total Unsecured Debt $ % $ % Total Debt 2, % 2, % Shareholders' Equity 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 (3) Represents the ratio of total debt, less unrestricted cash and cash equivalents, divided by shareholders equity. PAGE 15

17 REMARKETING OVERVIEW Aircraft Remarketing Requirements Original Remarketing Requirements Remarketed Aircraft Sold or to be Sold Lease Extensions with Existing Lessee Re-leased to New Lessee Remaining Remarketing Requirements Next remarketing requirement is in November 2017 PAGE 16

18 DIVERSE GROUP OF GLOBAL LESSEES Lessee Country % of NBV Region % of NBV India 12% Ethiopia 11% Philippines 9% UK 4% India 4% India 3% Germany 3% Asia & South Pacific 46% Europe 25% Middle East & Africa 14% North America 9% Mexico, Central & South America 6% Total 100% Thailand 3% Chile 3% China 3% Top 10 Lessees 56% Note: Sums may not foot due to rounding. PAGE 17

19 PORTFOLIO OVERVIEW September 30, 2016 Aircraft Type # % of NBV Age (years) A320 Family 27 21% 9 A % 5 A % 10 B737 Family 40 40% 7 B % 20 B777F 2 11% 1 B % 2 Total % 6 PAGE 18