EX-99.1 2 ex99_1.htm EXHIBIT 99.1

Exhibit 99.1

 2018 Aircraft Leasing Conference 
 

 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 of similar meaning and include, but are not limited to, statements regarding the outlook for FLY’s future business, operations and financial performance, including the expected timing and benefits of the AirAsia portfolio transactions (the "AirAsia Transactions”). 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; the risk that expected benefits of the AirAsia Transactions may not be fully realized or may take longer to realize than expected; the risk that business disruption resulting from the AirAsia Transactions may be greater than expected; 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:All period end figures are as September 30, 2018 except as otherwise noted. Any 2018 year-to-date data is as of November 30, 2018.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.In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP 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.  
 

   Diversified Lessees48 Airlines in 27 Countries  Significant Insider Ownership17% Owned by BBAM shareholders    LONG-DATED Financing5.5 Years average life,scheduled amortization          $2+ BILLIONpipeline50%Committed and Leased50%Options    FLY at a Glance  3  112aircraftYoung Fleet7.1 Years average age LONG LEASES5.9 Years average lease term                                                                                                                                                                                                                                                 TRADING AT~40% Discountto Net BookValue of $20.89 per share    Note: Figures as of September 30, 2018 except discount to net book value calculated using share price on November 30, 2018. 
 

 Strong Industry Fundamentals  4            Robust Global Air Traffic Growth  7.0%  2018 Growth Forecast            Healthy Demand for LEASED Aircraft  Passenger Growth + Manufacturer Backlogs          Continued Airline Profitability  $34B  Global Airline 2018 Profit Forecast     POSITIVEFINANCIAL MARKETS  Ample Capacity at Attractive Rates          Source: IATA forecast data. 
 

 BBAM – A Strong Partner for FLY  5  30 years of experience150 professionals8 offices worldwide500+ aircraft managed200+ airline relationships $20 billion of financing sourced1,250+ aircraft remarketedPartners with Onex and GIC  Buying/Selling Power AdvantageProvides FLY access to larger deals  Purely an Aircraft ManagerBBAM does not own any aircraft  3rd Largest Aircraft Manager*FLY benefits from BBAM’s comprehensive global platform  San Francisco  New York  Dublin    Zurich  Puerto Rico  Santiago  Tokyo  Singapore                  *Source: FlightGlobal rankings, September 2018.  Strong Alignment of InterestsBBAM shareholders own 17% of FLY stock 
 

 Strategy Driving Higher EPS and ROE            Selling Older and Under-Performing Aircraft  Reducing SG&A  Reducing Financing MARGINs  Reinvesting in Newer, More Profitable Aircraft  Repurchased Shares at a Discount to Book Value              6 
 

 Significant YOY Growth – 9 Months 2018  7  GAAP  9M 2017  9M 2018  EPS  ($0.15)  $1.90  Adjusted Net Income  Adjusted EPS  Note: Dollars in millions, except EPS  GAAP  9M 2017  9M 2018  Net Income (Loss)  ($4.6)   $54.7  Adjusted ROE  9M 2017 9M 2018  GAAP  9M 2017  9M 2018  ROE  (1.1%)  12.3% 
 

   33A320 aircraft  7CFM56Engines     2018  Portfolio Acquisition  8      PURCHASE-LEASEBACKS  4  6  11  21NEW A320 NEO familyaircraft  COMPLETED ACQUISITIONS YTD  Initial Phase Complete  $2+ BNPipeline      NEO OPTIONS  20NEW A320 NEO FAMILY aircraft  Delivering2019-2025     
 

  Boeing 777-LRF   Boeing 787    Boeing 757   Boeing 737  FLY’s Modern Fleet  9  7.1 YEARS AVG. AGE98% In-production  73% Narrowbody27% widebody   Airbus a319  8  45   Airbus a320  42   Airbus a321  3   Airbus a330  3   Airbus a340  2  3  2  4  Note: Percentages represent weighted average net book value as of September 30, 2018.  3%  31%  4%  5%  1%  12%  8%  1%  35%  112 aircraft $3.7B NBV   Total Airbus   58  44%   Total Boeing   54  56% 
 

   Well Diversified Lessees  10    Lessee  % Value  1  AirAsia  12%  2    9%  3    8%  4    7%  5  Thai AirAsia  4%  6    3%  7  Indonesia AirAsia  3%  8    3%  9    3%  10    3%  Top 10 Lessees    56%  5.9 years average lease term  Top 10 Lessees  48 Airlines in 27 Countries  Note: Sums may not foot due to rounding. Percentages based on net book value as of September 30, 2018.Leases associated with 9% of NBV are fully guaranteed by the Indian government.   
 

     Aircraft Sales  Three Aircraft Sold as of Q3$21 million economic gain19% premium to NBV   11  19%Premium to net book value of 3 Aircraft sold as of q3  Contracted to sell12 Aircraft  $150M Of sales TargetedAnnually    AirAsia Portfolio SalesTarget to sell $150 million annuallyReduces concentration and debt-to-equity ratio  Contracted to Sell 12 Aircraft10.6 years average age and 3.2 years average lease termGenerates ~$125 million free cash after expenses and repayment of debt 
 

 FLY’s Value Proposition  12  Sales at Premiums to Net Book Value  Strong 9M 2018Earnings and ROE  Long-Dated Financing5.5 year average life, scheduled amortization  Trading at ~40% Discount(1) to Net Book Value  $2+ Billion Acquisition Pipeline50% committed and leased; 50% options  Attractive Industry ConditionsStrong Financial ResultsValuable PortfolioPositive Sales Market Committed Acquisitions Limited Financial RiskShare Price Upside  Share price as of November 30, 2018. 
 

 Appendices  13 
 

 Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.Represents the ratio of total debt, less unrestricted cash and cash equivalents, divided by shareholders’ equity.In November 2018, FLY extended the facility maturity date to January 2020.  Capital Structure & Liquidity Overview   (in millions)  September 30, 2018    December 31, 2017      Unrestricted cash and cash equivalents  $180    $329      Unencumbered assets  $270    $331        O / S  Rate(1)  O / S  Rate(1)  Maturity  Securitization  $94  2.97%  $102  3.06%  2033  2012 Term Loan  413  5.15%  431  4.25%  2023  Nord LB Facility  117  4.97%  153  4.47%  2018  CBA Debt  —  —  49  5.53%  N/A  Other Bank Debt Facilities  836  4.30%  906  3.83%  2019-2028  Aircraft Acquisition Facility  129  3.69%  86  3.41%  2022  Magellan Acquisition Facility  312  4.15%  332  3.15%  2025  Fly Aladdin Acquisition Facility  548  4.06%  —  —  2020/2023  Unamortized Discounts and Loan Costs  (39)    (29)      Total Secured Debt  $2,410  4.32%  $2,030  3.84%    2021 Notes  325  6.38%  325  6.38%  2021  2024 Notes  300  5.25%  300  5.25%  2024  Unamortized Discounts and Loan Costs  (8)    (9)      Total Unsecured Debt  $617  5.84%  $616  5.84%    Total Debt  3,027  4.63%  2,646  4.30%    Shareholders' Equity  682  544        Total Capitalization  $3,709    $3,190      Debt to EquityNet Debt to Equity(2)Secured Debt to Total Debt  4.4x4.2x80%    4.9x4.3x77%      Total Debt to Total Capitalization  82%    83%      14  (3) 
 

 Remarketing Overview  15  All 2018 remarketing requirements have been completedNext remarketing requirement not until April 2019Market remains robust for remarketing aircraft  Aircraft Remarketing Requirements  (# of aircraft)  5.9 years average lease term  % of NBV  0%  3.3%  7.6% 
 

 Adjusted Net Income & Adjusted ROE  Revised to conform to current period presentation.Percentages have been annualized.   (In thousands)  Q3 2018  Q3 2017(1)  9M 2018  9M 2017 ( 1 )  Net Income (Loss)  $ 20,740  $ (12,504)  $ 54,714  $ (4,572)  Plus: Unrealized foreign exchange (gain) loss  (25)  476  (481)  2,004   Deferred income taxes  3,310  2,469  9,637  4,457   Fair value changes on undesignated derivatives   (1,206)   (449)    (3,446)   (944)  Adjusted Net Income (Loss)  $ 22,819  $ (10,008)  $ 60,424  $ 945  Average Shareholders' Equity  $ 635,193  $ 559,679  $ 592,402  $ 577,875  Adjusted ROE(2)  14.4%  (7.2)%  13.6%  0.2%  16