Deutsche Bank Aircraft Finance & Leasing Conference - September 2019 - Fly Leasing
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Deutsche Bank Aircraft Finance & Leasing Conference September 2019
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. 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, 2019 except as otherwise noted. Any 2019 year-to-date data is as of August 20, 2019.
2. Fleet age and lease term are calculated using the weighted net book value of flight equipment held for operating lease and flight equipment held for
sale, including maintenance rights and investment in finance lease, at period end.
3. 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 22, 2019.
2
Colm Barrington CEO
FLY at a Glance
DIVERSIFIED $2B+ LONG-DATED MANAGED BY TRADING AT
98 LESSEES(1) GROWTH FINANCING BBAM DISCOUNT TO
NET BOOK
AIRCRAFT CAPACITY World’s third VALUE OF
YOUNG FLEET 40 21 4.7 Years largest aircraft
lease manager
Average life,
7.4Years
Airlines in New A320/ scheduled $24.28
average age 21 A321neos on
committed leases
amortization
per share
Countries
LONG LEASES
8 17%
5.3 Years Options exercised
of FLY owned
by BBAM
average lease for new A320neo
term Shareholders
family aircraft
Note: Figures as of June 30, 2019
(1) Excludes aircraft held for sale. 4
FLY’s Fleet of 98 Modern Aircraft
AIRBUS A320 33% BOEING 737NG 35%
Net Book Value
$3.4B
42 FAMILY NBV
42 NBV
AIRBUS A330 5% BOEING 737 MAX 3%
$3.0B
3 2
Q2 2018 Q2 2019 AIRBUS A340 1% BOEING 757-SF 0%
2 1
Total Aircraft
98
CFM ENGINES BOEING 777-LRF 9%
7 Owned & Leased Separately 2
85
BOEING 787 14%
5.3 7.4
YEARS AVG. AGE
4
Q2 2018 Q2 2019 YEARS AVG. LEASE TERM
5
Note: Percentages represent weighted average net book value.
Strong leasing Industry Conditions Continue
Airlines Aircraft Leasing
ROBUST GLOBAL STRONG DEMAND
AIR TRAFFIC GROWTH FOR LEASED AIRCRAFT
Passenger Growth + Record load
5.0% 2019 Growth
Forecast(1) factors + Manufacturer Backlogs
CONTINUED AIRLINE ROBUST SECONDARY
PROFITABILITY MARKET FOR
AIRCRAFT SALES
$28B 2019 Global Airline
Profit Forecast(1)
(1) Source: IATA, as of June 2019. 6
DISCIPLINED • Rigor on pricing
• Limited financing risk
ACQUISITIONS • Pipeline of leased A320/A321neos
FLY’s Strategy
CONSERVATIVE • Focus on secured markets
• Long-dated and amortizing
FINANCING • Limited balloon repayments
• Consistently sell at gains
ACTIVE FLEET • Acquire new aircraft
MANAGEMENT • Maintain a young fleet
ENHANCING • Delivering double-digit ROE
SHAREHOLDER • Share repurchases at discount to book value
VALUE • Steadily growing book value per share
7
DELIVERING RECORD RESULTS
Q2 Highlights
$61.9M
ADJUSTED NET INCOME
KEY
NUMBERS
AT A $1.92 33%
GLANCE ADJUSTED EPS ADJUSTED ROE
$24.28
BOOK VALUE PER SHARE
8Strong & Steady Growth in Book Value Per Share
$24.28 Share Repurchases
+16% at below book value
• Strong value in FLY shares, which trade at a
$22.74 significant discount to book value
• Repurchased 2 million shares (~6%) YTD
at >30% discount to book value
$21.50
• New $50 million share repurchase program
$20.89
Selling aircraft
at above book value
Q3 2018 Q4 2018 Q1 2019 Q2 2019
9Aircraft Sales Continue to Generate Healthy Gains
Aircraft Sales
• 95 aircraft sold since 2015 (~$2.4B gross proceeds)
8%
• Aggregate 8% premium to net book value PREMIUM TO NET BOOK VALUE ON 95
AIRCRAFT SALES SINCE JANUARY 2015
• 14 more aircraft contracted for sale this year, since 6/30
Reduced Leverage following $1B 2018
Portfolio Acquisition 3.1x
• Reduced to 3.1x from 4.0x at December 31, 2018 NET DEBT-TO-EQUITY RATIO
AT JUNE 30
• Achieved target leverage ahead of expectations
Note: Figures as of June 30, 2019 unless noted otherwise.
10Solid Growth Pipeline & Ample Capacity
Leased A320/A321neo Deliveries
Actively Targeting Acquisitions 9 9
• Six aircraft acquired & contracted in 2019
• Pipeline of 21 new A320/A321neos 2
1
– All leased, first delivery in Q4 2019
• Eight NEO options exercised for 2020/2021 deliveries Q4 2019 2020 2021 2022
Strong Liquidity, Long-Dated Financing
• $352 million unrestricted cash
• $288 million NBV of unencumbered aircraft
• 4.7 year average debt life
• No significant debt maturities until Q4 2021
$2B+
GROWTH CAPACITY
Note: Figures as of June 30, 2019.
11$70M Q3 Pre-Tax Income Guidance
FLY’s Value
Proposition Growing Book Value Per Share
Committed Significant
Growth Pipeline Buying Power
A320NEO FAMILY DELIVERIES $2B+ OF CAPACITY
STARTING IN Q4 2019
Shares Trading at Discount to
Book Value
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