FLY Leasing Reports Fourth Quarter and Full Year 2012 Financial Results

   FLY Leasing Reports Fourth Quarter and Full Year 2012 Financial Results

PR Newswire

DUBLIN, March 7, 2013

DUBLIN, March 7, 2013 /PRNewswire/ -- FLY Leasing Limited (NYSE: FLY) ("FLY"),
a global lessor of modern, fuel-efficient commercial jet aircraft, today
announced its financial results for the fourth quarter and full year of 2012.

Fourth Quarter 2012 Highlights

  oAdjusted net income of $53.2 million, $2.04 per share
  oNet income of $31.0 million, $1.17 per share
  oRaised a $250 million revolving Acquisition Facility to fund growth
  oRe-priced $395 million Term Loan, reducing annual cash interest payments
    by approximately $4 million
  oDeclared 21^st consecutive quarterly dividend on January 15^th ($0.22 per
    share)

Additional 2012 Full Year Highlights

  oAdjusted net income of $116.3 million, $4.48 per share
  oNet income of $47.7 million, $1.80 per share
  oSourced $1.3 billion of new secured debt financing
  oReduced total secured borrowings by $274 million, reducing net leverage to
    3.6x
  oSold four aircraft with an average age of 13 years for a pre-tax gain of
    $8.4 million
  oPaid $0.84 per share in dividends

"FLY had another strong year in 2012, increasing our core operating lease
revenues by 63% compared to 2011. Adjusted Net Income was $116.3 million
($4.48 per share), and Net Income was $47.7 million ($1.80 per share)," said
Colm Barrington, Chief Executive Officer of FLY. "Our increased earnings in
2012 reflect the growth in our aircraft portfolio which has doubled in size
over the last two years. Our earnings also reflect significant contributions
from our opportunistic sale of four aircraft in 2012 and the sale of our 15%
interest in BBAM. During 2012, we raised the quarterly dividend by 10% to 22
cents per share, for total dividends of 84 cents per share in the year."

"We also completed several significant financial objectives in 2012, including
reducing our net leverage from 5.1x at the start of the year to 3.6x at year
end," said Barrington. "We are now well on our way to reducing our leverage
to less than 3.5x. In addition, we refinanced substantially all of our
near-term debt maturities with a new $395 million senior secured term loan
that matures in 2018, extended a $600 million bank facility from 2012 to 2018
and added a new and attractive $250 million acquisition facility. In addition
to lowering our financial leverage, our financing activities have also lowered
our weighted-average contractual interest rate on our secured borrowings to
4.7% at December 31, 2012."

"Looking ahead, we are excited about the opportunities for FLY in 2013," added
Barrington. "We have significant firepower to grow the Company with a new $250
million revolving Acquisition Facility and $163 million of unrestricted cash.
We expect to take advantage of positive industry dynamics, including
strengthening air traffic and continued robust demand for the modern,
fuel-efficient aircraft that make up FLY's fleet. Aircraft leasing continues
to grow in importance, becoming an increasingly important tool for airlines
around the world. Against this backdrop, we are well positioned to meet our
growth targets both in terms of fleet and earnings."

Financial Results

FLY grew operating lease revenue by $145.7 million for a total of $376.4
million in 2012 compared to 2011, an increase of 63%. This increase reflects
the growth in our aircraft portfolio.

FLY is reporting net income for the fourth quarter of 2012 of $31.0 million or
$1.17 per diluted share. This compares to a net loss of $9.2 million or $0.37
per share for the same period of 2011. In addition to the $36.9 million
pre-tax gain on the sale of FLY's 15% ownership interest in BBAM, the fourth
quarter results include an $11.4 million impairment charge on three aircraft.
We recovered approximately $9.7 million of this $11.4 million from end of
lease compensation payments, retained maintenance reserves and disposition
proceeds in the first quarter of 2013 in respect of the impaired aircraft.
The fourth quarter results also include a $7.6 million charge associated with
the early repayment of debt, $4.2 million of which was related to the
re-pricing of our term loan.

Net income for the year ended December 31, 2012 was $47.7 million or $1.80 per
diluted share compared to $1.1 million or $0.03 per diluted share for 2011.
In addition to the 4^th quarter items, the 2012 results include a one-time,
pre-tax charge of $32.3 million to terminate interest rate swaps associated
with a credit facility that was fully repaid during 2012.

Adjusted Net Income

Adjusted Net Income was $53.2 million or $2.04 per share for the fourth
quarter of 2012 compared to $20.7 million or $0.80 for the fourth quarter of
the previous year.

For the year ended December 31, 2012, Adjusted Net Income was $116.3 million
or $4.48 per share compared to $35.8 million or $1.38 per share for the year
ended December 31, 2011, an increase of 225%.

A reconciliation of Adjusted Net Income to net income determined in accordance
with GAAP is shown below.

Dividend

On January 15, 2013, FLY declared a dividend of $0.22 per share in respect of
the fourth quarter of 2012. This dividend was paid on February 20, 2013 to
shareholders of record on January 31, 2013. This dividend is FLY's 21^st
consecutive quarterly dividend.

Financial Position

At December 31, 2012, FLY's total assets were $3.0 billion, including flight
equipment with a net book value of $2.6 billion. Total cash at December 31,
2012 was $300.6 million, of which $163.1 million was unrestricted. These
amounts compare to total cash of $380.5 million and unrestricted cash of $82.1
million at December 31, 2011.

FLY's net leverage, defined as the ratio of net debt to total shareholders'
equity was 3.6x at December 31, 2012 compared to 5.1x at December 31, 2011.
Net debt is defined as book value of secured borrowings, less unrestricted
cash and cash equivalents.

Aircraft Portfolio

At December 31, 2012, FLY's 109 aircraft were on lease to 55 lessees in 32
countries. The table below shows the aircraft in FLY's portfolio on December
31, 2012. The table does not include the four B767 aircraft owned by a joint
venture in which FLY has a 57% interest.

Portfolio at Dec. 31, 2012
Airbus A319  19
Airbus A320  27
Airbus A330  1
Airbus A340  3
Boeing 717   6
Boeing 737   40
Boeing 747   1
Boeing 757   11
Boeing 767   1
 Total  109

At December 31, 2012, the average age of FLY's fleet was 9.4 years, weighted
by the net book value of each aircraft. The average remaining lease term was
3.2 years, also weighted by net book value. At December 31, 2012, the leases
were generating annualized revenues of approximately $326 million. For the
fourth quarter of 2012, FLY's lease utilization factor was 93% and for the
year ended December 31, 2012 the lease utilization factor was 95%.

Conference Call and Webcast

FLY's senior management will host a conference call and webcast to discuss
these results at 9:00 a.m. U.S. Eastern Time on Thursday, March 7, 2013.
Participants should call +1-706-758-4339 (International) or 877-309-0213
(North America) and enter confirmation code 97063366 or ask an operator for
the FLY Leasing earnings call. A replay will be available shortly after the
call. To access the replay, please dial +1-404-537-3406 (International) or
855-859-2056 (North America) and enter confirmation code 97063366. The
telephone replay will be available for one week. A live webcast of the
conference call will be also available in the investor section of FLY's
website at www.flyleasing.com. An archived webcast will be available for one
year.

About FLY

FLY acquires and leases modern, high-demand and fuel-efficient commercial jet
aircraft under multi-year operating lease contracts to a diverse group of
airlines throughout the world. FLY is managed and serviced by BBAM LP, one of
the world's leading aircraft lease managers with more than 20 years of
experience. For more information about FLY, please visit our website at
www.flyleasing.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release 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 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. 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.

Contact:

Matt Dallas
FLY Leasing Limited
+1 203-769-5916
ir@flyleasing.com



FLY Leasing Limited
Consolidated Statements of Income
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                       Year ended Year ended
                                          Three months
                          Three months    ended         Dec. 31,  Dec. 31,
                          ended                         2012       2011
                                          Dec. 31, 2011
                          Dec. 31, 2012 (Unaudited)   (Audited)  (Audited)
                          (Unaudited)


Revenues
 Operating lease        $ 90,637       $  81,567    $ 376,437 $  230,716
revenue
 Equity earnings from
unconsolidated joint      3,403           3,021         9,383      5,647
ventures
 Gain on sale of
investment in            36,882          -             36,882     -
unconsolidated joint
venture
 Gain (loss) on sale of (129)           9,137         8,360      9,137
aircraft
 Interest and other     78              787           1,634      3,289
income
Total revenues            130,871         94,512        432,696    248,789


Expenses
 Depreciation           33,838          32,995        136,633    95,718
 Aircraft impairment    11,382          7,500         11,382     7,500
 Interest expense       32,796          35,373        142,491    90,547
 Debt extinguishment    7,628           -             7,628      -
costs
 Selling, general and   9,979           9,341         40,192     27,064
administrative
 Ineffective,
dedesignated and          518             184           31,871     184
terminated derivatives
 Transaction fees and   -               16,108        -          18,038
expenses
 Maintenance and other  4,830           297           10,968     4,400
costs
Total expenses            100,971         101,798       381,165    243,451
Net income (loss) before
provision for income      29,900          (7,286)       51,531     5,338
taxes
 Provision (benefit)    (1,092)         1,895         3,862      4,242
for income taxes
Net income (loss)         $  30,992     $  (9,181)   $ 47,669  $  1,096
Weighted average number
of shares
- Basic                  25,918,379      25,660,661    25,792,932 25,843,348
- Diluted                26,086,467      25,660,661    25,961,605 25,992,062
Earnings per share
- Basic                 $  1.18        $  (0.37)    $  1.81   $  0.03
- Diluted               $ 1.17         $ (0.37)     $ 1.80    $ 0.03
Dividends declared and    $  0.22        $  0.20      $  0.84   $  0.80
paid per share



FLY Leasing Limited
Consolidated Balance Sheets
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                  Dec. 31,
                                                              Dec. 31, 2011
                                                  2012
                                                              (Audited)
                                                  (Audited)


Assets
 Cash and cash equivalents                      $ 163,124  $  82,105
 Restricted cash and cash equivalents           137,457     298,404
 Rent receivables                               3,124       3,186
 Investment in unconsolidated joint ventures    6,308       15,141
 Flight equipment held for operating leases,    2,616,864   2,762,289
net
 Deferred tax asset, net                        9,450       5,329
 Fair market value of derivative asset          319         4,023
 Other assets, net                              32,026      28,021
Total assets                                      $ 2,968,672 $ 3,198,498
Liabilities
 Accounts payable and accrued liabilities       $  15,662  $  10,429
 Rentals received in advance                    14,402      15,297
 Payable to related parties                     2,789       4,863
 Security deposits                              47,474      50,672
 Maintenance payment liabilities                225,733     231,793
 Secured borrowings, net                        2,052,412   2,326,110
 Fair market value of derivative liabilities    48,967      98,487
 Other liabilities                              29,231      17,814
Total liabilities                                 2,436,670   2,755,465
Shareholders' equity
Common shares, $0.001 par value, 499,999,900
shares authorized; 28,040,305 and 25,685,527      28          26
shares issued and outstanding at December 31,
2012 and 2011, respectively
 Manager shares, $0.001 par value; 100 shares   −           −
authorized, issued and outstanding
 Additional paid in capital                     482,733     455,186
 Retained earnings                              83,138      57,982
 Accumulated other comprehensive loss, net      (33,897)    (70,161)
Total shareholders' equity                        532,002     443,033
Total liabilities and shareholders' equity        $ 2,968,672 $ 3,198,498



FLY Leasing Limited
Reconciliation of Adjusted Net Income, a Non-GAAP
Financial Measure, to Net Income
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                           Three months  Three months  Year ended  Year ended
                           ended         ended
                                                       Dec. 31,   Dec. 31,
                           Dec. 31, 2012 Dec. 31, 2011 2012        2011
                           (Unaudited)   (Unaudited)
                                                       (Unaudited) (Unaudited)
Net Income (loss)          $  30,992    $  (9,181)   $  47,669  $  1,096
Add (less):
 Ineffective,
dedesignated and           518           184           31,871      184
terminated derivatives
 Debt extinguishment     7,628         -             7,628       -
costs
 Aircraft impairment     11,382        7,500         11,382      7,500
 Non-cash share based    531           1,672         3,635       4,768
compensation
 Adjustments related to
GAAM Portfolio
acquisition:
   Amortization of fair
   value adjustments       5,453         5,838         23,611      5,838
   recorded in purchase
   accounting
   Acquisition
   transaction fees and    -             16,108        -           18,038
   expenses
 Income tax effects      (3,262)       (1,412)       (9,484)     (1,654)
Adjusted Net Income        $ 53,242     $  20,709    $ 116,312  $  35,770
Weighted average diluted   26,086,467    25,798,377    25,961,605  25,992,062
shares outstanding
Adjusted Net Income per    $  2.04      $  0.80      $  4.48    $  1.38
share



Adjusted Net Income Plus Depreciation and Amortization, a
Non-GAAP Financial Measure, to Net Income
(DOLLARS IN THOUSANDS)
                           Three months  Three months  Year ended  Year ended
                           ended         ended
                                                       Dec. 31,   Dec. 31,
                           Dec. 31, 2012 Dec. 31, 2011 2012        2011
                           (Unaudited)   (Unaudited)
                                                       (Unaudited) (Unaudited)
Adjusted Net Income        $  53,242    $  20,709    $  116,312 $  35,770
Add:
 Depreciation            33,838        32,995        136,633     95,718
 Other amortization      4,551         4,410         19,423      15,342
 Provision for deferred  (8,068)       2,556         1,303       4,216
income taxes
Adjusted Net Income Plus
Depreciation and           $  83,563    $  60,670    $  273,671 $  151,046
Amortization

FLY defines Adjusted Net Income as net income plus or minus the after-tax
impacts of ineffective, dedesignated or terminated cash flow hedges, swap
termination costs, non-cash share-based compensation, debt extinguishment
costs, impairment, and adjustments related to the GAAM portfolio acquisition
comprised of amortization of fair value adjustments recorded in purchase
accounting and acquisition transaction fees and expenses. FLY believes that
Adjusted Net Income provides useful information about operating performance
and period over period comparisons. It also provides additional information
that is useful for evaluating the underlying operating performance of our
business without regard to the impacts of fair-value adjustments of debt that
the company has assumed, acquired leases and derivative instruments and other
non-recurring items of income and expense affecting current period results.
Adjusted Net Income should be used as a supplement to and not as a substitute
for financial measures determined in accordance with Generally Accepted
Accounting Principles in the United States.

Adjusted Net Income Plus Depreciation and Amortization is a cash flow measure
that provides investors with an additional measure for evaluating FLY's
ongoing cash earnings, from which capital investments are made, debt is
serviced and dividends are paid. However, adjusted net income plus
depreciation and amortization excludes certain positive and negative cash
items, including principal payments, and has certain important limitations as
an indicator of FLY's ability to pay dividends and reinvest in its business.
Management uses Adjusted Net Income and Adjusted Net Income Plus Depreciation
and Amortization as a measure for assessing FLY's performance. These measures
should be considered in addition to, not as a substitute for net income or
other financial measures determined in accordance with GAAP. Finally, FLY's
definitions may be different than those used by other companies.

SOURCE FLY Leasing Limited

Website: http://www.flyleasing.com
 
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