Goldman Sachs Aircraft Leasing Conference December 3, 2019 - - PowerPoint PPT Presentation

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Goldman Sachs Aircraft Leasing Conference December 3, 2019 - - PowerPoint PPT Presentation

Goldman Sachs Aircraft Leasing Conference December 3, 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


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SLIDE 1

Goldman Sachs Aircraft Leasing Conference

December 3, 2019

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SLIDE 2

Forward-Looking Statements

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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 benefit from 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

  • therwise.

Notes:

  • 1. All period end figures are as of September 30, 2019. Any 2019 year-to-date data is as of September 30, 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 November 8, 2019.

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SLIDE 3

DIVERSIFIED LESSEES 43

Airlines

24

Countries

MANAGED BY BBAM

World’s third largest aircraft lease manager Global platform Provides FLY with scale of larger players

LONG- DATED FINANCING 4.5 Year

  • Avg. life,

scheduled amortization Term Loan re-pricing equal to best in class

$1.3B / 30 AIRCRAFT PIPELINE

21 new A320/321neos

  • n committed

long leases 8 B737-800s 1 A320ceo

FLY at a Glance

3

92 AIRCRAFT 7.7 Years

average age

5.0 Years

average lease term

ROBUST FINANCIAL RESULTS

Strong growth in 2019 Net Income, EPS, ROE and NBV per Share

Note: Figures as of September 30, 2019

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SLIDE 4

AIRBUS A340

SOLD

AIRBUS A330 AIRBUS A320 FAMILY BOEING 787 BOEING 777-LRF BOEING 757-SF BOEING 737 MAX BOEING 737NG

1 2 4 3 2 39

FLY’s Fleet of 92 Modern Aircraft

4

5.0

YEARS AVERAGE LEASE TERM

7.7

YEARS AVERAGE. AGE

39

(1) Percentages are weighted average net book value. .

31%

NBV

14% 10% <1%

2

3% 6% 35%

NBV

1%

CFM56 ENGINES

Owned & Leased Separately

7

NOV 2019

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SLIDE 5

– A Strong Partner for FLY

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➢ FLY benefits from BBAM’s full-service platform

  • 500+ aircraft managed
  • 200+ airline relationships
  • 150 buying, leasing, technical professionals
  • 8 offices world-wide

Buying & Selling Advantage Purely an Aircraft Manager

BBAM does not own any aircraft

A Global Leader in Aircraft & Lease Management Strong Alignment of Interests

BBAM shareholders own 17% of FLY stock ➢ BBAM provides access to larger deals & stronger returns

  • $27+ billion assets under management
  • Access to several pools of public and private

capital

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SLIDE 6

6

FLY’s Strategy

DISCIPLINED ACQUISITIONS CONSERVATIVE FINANCING ACTIVE FLEET MANAGEMENT ENHANCING STAKEHOLDER VALUE

  • Pipeline of new technology aircraft
  • Rigor on pricing
  • Limited financing risk
  • Long-dated and amortizing
  • Limited balloon repayments
  • Reduced leverage to 2.6x
  • Selling at gains
  • Acquiring new aircraft
  • Maintaining young fleet
  • Consistently growing book value
  • Delivering double-digit ROE
  • Opportunistic share repurchases
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SLIDE 7

DELIVERING ROBUST RESULTS

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$168.9 M

ADJUSTED NET INCOME

20% Increase

in Book Value Per Share to $25.85

$5.28

ADJUSTED EPS

30%

ADJUSTED ROE

KEY 2019 YTD NUMBERS

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SLIDE 8

Strong & Steady Growth in Book Value Per Share

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$20.89 $21.50 $22.74 $24.28 $25.85

Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

+24%

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SLIDE 9

$1.3B Growth Pipeline

2019 Acquisitions Completed

  • 4 B737-800s acquired through Sept 30

– 2 acquired in Q3

1 7 11 2 Q4 2019 2020 2021 2022

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A320neo Family Delivery Schedule

Committed Pipeline

  • 21 new A320neo family aircraft
  • 8 B737-800s / 1 A320ceo

– 6 expected to close in Q4 2019 – 3 expected to close in H1 2020

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SLIDE 10

Aircraft Sales Generating Benefits

Aircraft Sold YTD 2019

➢ 25 sold through Q3

  • $86.4 million economic gain
  • 13% premium to book value

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2.6x

NET DEBT-TO- EQUITY RATIO AT SEPTEMBER 30

13%

PREMIUM TO NET BOOK VALUE ON YTD SALES

Sales Benefits

➢ Demonstrates value in balance sheet ➢ Reduces leverage and concentration ➢ Generates free cash

Flexibility for Capital Allocation & Debt Refinancing

➢ Low leverage ➢ Significant cash balance ➢ Rating upgrade to BB from Standard & Poor’s ➢ Repriced and extended $385 million Term Loan at L+1.75%

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SLIDE 11

FLY’s Value Proposition

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Low Leverage and Significant Cash Consistent Sales of Aircraft at Gains Attractive Portfolio of Aircraft and Leases Committed $1.3B Pipeline of Leased Aircraft Growing Book Value Per Share ✓ Limited Refinancing Risk ✓ Positive Outlook ✓ Valuable Portfolio ✓ Robust Liquidity ✓ Low Refinancing Risk ✓ Attractive Growth Pipeline

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SLIDE 12

Appendices

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SLIDE 13

Well-Diversified Customer Base

43 Airlines in 24 Countries Geographic Diversity

Ind ndia 21% Malaysia 16% Eth thiopia 10% Phil hilippines 9% 9% Ind ndonesia 7% 7% Chin hina 6% 6% Sp Spain 5% 5% UK UK 5% 5% USA USA 4% 4% France 3% 3% Oth ther 13%

(1) Percentages by net book value. (2) Air India leases are guaranteed by the Indian government. 13

Top 10 Lessees

AirAsi sia Berhad 11% Air Ind ndia 10% Eth thiopian Airlines 10% Phil hilippine Airlines 8% % Malaysia Airlines 6% 6% Air Euro uropa 4% 4% Sp Spiceje jet 4% 4% Li Lion Air 3% 3% Transavia 3% 3% AirAsi sia Ind ndia 3% 3%

(2)

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(1) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (2) The Aircraft Acquisition Facility was repaid in October 2019. (3) Represents the ratio of total debt, less unrestricted cash and cash equivalents, divided by shareholders’ equity.

Capital Structure & Liquidity Overview

(in millions) September 30, 2019 December 31, 2018 Unrestricted cash and cash equivalents $433 $180 Unencumbered assets $318 $332 O /S Rate(1) O /S Rate(1) Maturity Securitization — — $86 3.08% — 2012 Term Loan $391 4.51% 408 5.17% 2023 Nord LB Facility 98 3.88% 109 4.29% 2020 Other Bank DebtFacilities 716 4.28% 808 4.44% 2020-2028 Aircraft Acquisition Facility 100 4.45% 190 4.10% —(2) Magellan Acquisition Facility 285 4.14% 305 4.18% 2025 Fly Aladdin Acquisition Facility 308 4.78% 467 4.59% 2023 Fly Aladdin Engine Funding Facility 43 4.95% 44 4.95% 2021-2022 Unamortized Discounts and LoanCosts (26) (37) Total Secured Debt $1,915 4.39% $2,380 4.49% 2021 Notes 325 6.38% 325 6.38% 2021 2024 Notes 300 5.25% 300 5.25% 2024 Unamortized Discounts and LoanCosts (6) (7) Total UnsecuredDebt $619 5.84% $618 5.84% TotalDebt 2,534 4.74% 2,998 4.76% Shareholders' Equity 799 702 TotalCapitalization $3,333 $3,700 Debt to Equity Net Debt to Equity(3) Secured Debt to TotalDebt 3.2x 2.6x 76% 4.3x 4.0x 79% Total Debt to TotalCapitalization 76% 81%

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