Deutsche Bank Aircraft Finance & Leasing Conference/media/Files/F/Fly-Leasing... · 2019-09-04 · Strong leasing Industry Conditions Continue ROBUST GLOBAL AIR TRAFFIC GROWTH 5.0%

Deutsche Bank Aircraft Finance & Leasing ConferenceSeptember 2019

Forward-Looking Statements

2

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 ofsimilar 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 andchanges 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 thebenefits 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 andExchange 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 toupdate or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, orotherwise.

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 forsale, 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 andfinancial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Wehave provided a reconciliation of those measures to the most directly comparable GAAP measures in the Appendix. For further information, pleaserefer to FLY’s earnings press release dated August 22, 2019.

Colm BarringtonCEO

DIVERSIFIED LESSEES(1)

40 Airlines in

21 Countries

MANAGED BY BBAM

World’s third largest aircraft lease manager

17% of FLY owned

by BBAM Shareholders

LONG-DATED FINANCING

4.7 Years Average life,scheduled

amortization

$2B+ GROWTH CAPACITY

21New A320/

A321neos on committed leases

8Options exercised for new A320neo

family aircraft

FLY at a Glance

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98AIRCRAFT

YOUNG FLEET

7.4 Years average age

LONG LEASES

5.3 Years average lease

term

TRADING AT DISCOUNT TO

NET BOOK VALUE OF

$24.28 per share

Note: Figures as of June 30, 2019(1) Excludes aircraft held for sale.

$3.0B

$3.4B

Q2 2018 Q2 2019 BOEING 757-SF

BOEING 737 MAX

AIRBUS A340

BOEING 737NG

BOEING 777-LRF

BOEING 787

AIRBUS A330

1

2

4

AIRBUS A320 FAMILY

3

2

42

FLY’s Fleet of 98 Modern Aircraft

5

5.3YEARS AVG. LEASE TERM

7.4YEARS AVG. AGE

42

85

98

Q2 2018 Q2 2019

Total Aircraft

Note: Percentages represent weighted average net book value.

33%NBV

14%

9%

0%

23%5%

35%NBV

1%

Net Book Value

CFM ENGINES

Owned & Leased Separately7

Strong leasing Industry Conditions Continue

ROBUST GLOBAL AIR TRAFFIC GROWTH

5.0% 2019 Growth Forecast(1)

CONTINUED AIRLINE PROFITABILITY

$28B 2019 Global Airline Profit Forecast(1)

(1) Source: IATA, as of June 2019.

STRONG DEMAND FOR LEASED AIRCRAFTPassenger Growth + Record load factors + Manufacturer Backlogs

ROBUST SECONDARY MARKET FOR AIRCRAFT SALES

Airlines Aircraft Leasing

6

7

FLY’s Strategy

DISCIPLINEDACQUISITIONS

CONSERVATIVE FINANCING

ACTIVE FLEET MANAGEMENT

ENHANCING SHAREHOLDER

VALUE

• Rigor on pricing• Limited financing risk• Pipeline of leased A320/A321neos

• Focus on secured markets• Long-dated and amortizing• Limited balloon repayments

• Consistently sell at gains• Acquire new aircraft• Maintain a young fleet

• Delivering double-digit ROE• Share repurchases at discount to book value• Steadily growing book value per share

DELIVERING RECORD RESULTS

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$61.9MADJUSTED NET INCOME

$24.28BOOK VALUE PER SHARE

$1.92ADJUSTED EPS

33%ADJUSTED ROE

Q2 Highlights

KEY NUMBERS

AT A GLANCE

Strong & Steady Growth in Book Value Per Share

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$20.89

$21.50

$22.74

$24.28

Q3 2018 Q4 2018 Q1 2019 Q2 2019

+16%Share Repurchases

at below book value

• Strong value in FLY shares, which trade at a

significant discount to book value

• Repurchased 2 million shares (~6%) YTD

at >30% discount to book value

• New $50 million share repurchase program

Selling aircraft at above book value

Aircraft Sales Continue to Generate Healthy Gains

Aircraft Sales

• 95 aircraft sold since 2015 (~$2.4B gross proceeds)

• Aggregate 8% premium to net book value

• 14 more aircraft contracted for sale this year, since 6/30

10

3.1xNET DEBT-TO-EQUITY RATIO

AT JUNE 30

Reduced Leverage following $1B 2018 Portfolio Acquisition

• Reduced to 3.1x from 4.0x at December 31, 2018

• Achieved target leverage ahead of expectations

8%PREMIUM TO NET BOOK VALUE ON 95 AIRCRAFT SALES SINCE JANUARY 2015

Note: Figures as of June 30, 2019 unless noted otherwise.

Solid Growth Pipeline & Ample Capacity

Actively Targeting Acquisitions• Six aircraft acquired & contracted in 2019

• Pipeline of 21 new A320/A321neos

–All leased, first delivery in Q4 2019

• Eight NEO options exercised for 2020/2021 deliveries

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

1

9 9

2

Q4 2019 2020 2021 2022

Leased A320/A321neo Deliveries

11Note: Figures as of June 30, 2019.

Growing Book Value Per Share

12

FLY’s Value Proposition

Shares Trading at Discount to Book Value

Committed Growth Pipeline

A320NEO FAMILY DELIVERIES STARTING IN Q4 2019

$70M Q3 Pre-Tax Income Guidance

Significant Buying Power

$2B+ OF CAPACITY