FLY Leasing Reports Second Quarter 2012 Financial Results

DUBLIN, July 25, 2012 /PRNewswire/ — FLY Leasing Limited (NYSE: FLY) (“FLY”), a global lessor of modern, fuel-efficient commercial jet aircraft, today announced its financial results for the second quarter of 2012.

Second Quarter 2012 Highlights

Adjusted net income of $30.9 million, $1.19 per share
Net income of $25.7 million, EPS of $0.99
Sold three aircraft for a pre-tax gain of $8.5 million
Launched a $395 million term loan to refinance near-term debt maturities
Q2 dividend increased to $0.22 per share, $0.88 annually
“FLY is reporting a very strong second quarter, following an equally positive March quarter result,” said Colm Barrington, CEO of FLY. “The acquisition of a portfolio of 49 aircraft which was completed in late 2011 is now being reflected in increased operating income from our leasing activities. Our second quarter EPS of $0.99 brings our six month earnings to $1.77 per share, as compared to $0.26 per share in the same period last year. Due to these strong results, FLY has increased its quarterly dividend to $0.22 per share.”

“We were particularly pleased to have sold three older aircraft from our larger portfolio for a pre-tax gain of $8.5 million,” added Barrington. “These sales demonstrate the inherent value in FLY’s fleet and the strong investor interest in aviation assets.”

“FLY has also launched a $395 million term loan which we expect to complete in early August. Proceeds from the term loan will be used to repay our warehouse facility and other debt, and we will not have any material debt repayment obligations until 2018. This refinancing will reduce our leverage and is the first step towards our goal of reducing the overall leverage on our portfolio over the next two to three years.”

Second Quarter Financial Results

FLY’s net income and diluted earnings per share for the second quarter of 2012 were $25.7 million and $0.99 per share compared to $4.1 million and $0.16 per share in the same period of 2011. The increases in operating lease revenue and net income is primarily due to the growth in the aircraft portfolio following the aircraft acquisitions completed in late 2011. End of lease income and gains on the sale of three aircraft also contributed to the increase in net income as compared to the second quarter of 2011.

Net income and diluted earnings per share for the six months ended June 30, 2012 were $46.1 million and $1.77 per share compared to $6.9 million and $0.26 per share in the same period in 2011.

FLY’s net debt to total shareholders’ equity ratio was 4.4x at June 30, 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.

Adjusted Net Income

Adjusted Net Income was $30.9 million for the second quarter of 2012 compared to $7.3 million in the same period in the previous year. On a per share basis, Adjusted Net Income was $1.19 in the second quarter of 2012 compared to $0.28 for the same period in the previous year. For the six-months ended June 30, 2012, Adjusted Net Income was $57.7 million, or $2.23 per share compared to $11.0 million and $0.42 per share for the same period in the previous year.

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

Dividends

On July 13, 2012, FLY declared a dividend of $0.22 per share in respect of the second quarter of 2012, a 10% increase from the quarterly dividend of $0.20 that FLY has paid since 2009. This dividend will be paid on August 20, 2012 to shareholders of record on July 30, 2012.

Financial Position

At June 30, 2012, FLY’s total assets were $3.2 billion, including flight equipment with a net book value of $2.7 billion. Restricted and unrestricted cash at June 30, 2012 totaled $480.0 million, of which $189.3 million was unrestricted. These amounts compare to total cash of $380.5 million and unrestricted cash of $82.1 million at December 31, 2011. During the first quarter of 2012, FLY sold securitization notes with a face value of $106.7 million, generating net cash proceeds of $52.8 million after repayment of associated debt.

Aircraft Portfolio

At June 30, 2012, FLY’s 108 aircraft were on lease to 53 lessees in 29 countries. The table below shows the aircraft in FLY’s portfolio on June 30, 2012 and December 31, 2011. The table does not include the four B767 aircraft owned by a joint venture in which FLY has a 57% interest.

At June 30, 2012, the average age of FLY’s portfolio was 8.9 years weighted by the net book value of each aircraft. The average remaining lease term was 3.3 years, also weighted by net book value. At June 30, 2012, the leases were generating annualized revenues of approximately $345 million. For the second quarter of 2012, FLY’s lease utilization factor was 97% and for the six months ended June 30, 2012 the lease utilization factor was 98%.