DUBLIN, March 9, 2017 /PRNewswire/ -- FLY Leasing Limited
(NYSE: FLY), a global leader in aircraft leasing, today announced
its financial results for the fourth quarter and full year of
2016.
Fourth Quarter 2016 Highlights
- Net loss of $63.8 million,
$1.98 per share, including a non-cash
impairment charge of $92 million
- Adjusted Net Income of $30.6
million, $0.95 per share
- Sold eight aircraft for gains of $14.8
million
- Acquired two aircraft
2016 Full Year Highlights
- Net loss $29.1 million,
$0.88 per share
- Adjusted Net Income of $79.3
million, $2.38 per share
- Completed $559 million of
acquisitions
- Sold 27 aircraft at a premium to book value
- Repurchased 3.4 million shares, nearly 10% of shares
outstanding
"In 2016 we continued to transform FLY's fleet, which is now the
youngest in the company's history and among the youngest in the
industry, at an average age of 6.2 years," said Colm Barrington, CEO of FLY. "We sold 27
aircraft during the year – primarily mid-life models – at a premium
to book value. We invested in newer equipment, acquiring ten
aircraft during the year. In addition, we continued to repurchase
shares, buying back a total of 3.4 million shares or approximately
ten percent of outstanding shares at the beginning of the
year."
"We entered 2017 with ample liquidity that provides us with the
opportunity to grow our portfolio and to continue our share buyback
program," added Barrington. "We set a target of acquiring
$750 million of new aircraft in 2017
and have the financial firepower to exceed this level if we find
the right opportunities to enhance our portfolio and shareholder
value."
"We are encouraged by the resilience of global air traffic and
the continued profitability of the airline sector," added
Barrington. "There is a continuing strong market for leased
aircraft, evidenced by the fact that our fleet is fully utilized
and that we have no aircraft available for lease until the end of
the year."
Financial Results
FLY is reporting a net loss of $63.8
million or $1.98 per share for
the fourth quarter of 2016. The loss is primarily driven by a
$92 million non-cash impairment
charge taken on three older, out-of-production wide-body
aircraft. In the fourth quarter of 2015, FLY reported net
income of $19.1 million, or
$0.47 per share.
The net loss for the year ended December
31, 2016 was $29.1 million, or
$0.88 per share, compared to net
income of $22.8 million, or
$0.52 per share for the year ended
December 31, 2015.
Adjusted Net Income
Adjusted Net Income was $30.6
million for the fourth quarter of 2016 compared to
$48.3 million in the same period in
the previous year. On a per share basis, Adjusted Net Income
was $0.95 per share for the fourth
quarter of 2016 and $1.19 per share
for the fourth quarter of 2015. Adjusted Net Income excludes
the non-cash impairment charge and other charges not considered
core to our operations.
For the year ended December 31,
2016, Adjusted Net Income was $79.3
million, or $2.38 per share
compared to $132.0 million, or
$3.19 per share for the year ended
December 31, 2015.
A reconciliation of Adjusted Net Income to net income determined
in accordance with GAAP is shown below.
Asset Impairments
In the fourth quarter of 2016, FLY recorded a non-cash
impairment charge of $92
million. FLY wrote down two 2006 vintage Airbus
A340-600s and one 2001 vintage Airbus A330-200 to their current
market values. These aircraft are FLY's oldest wide-body
aircraft and the only aircraft of their type in FLY's portfolio.
FLY also evaluated the remainder of its fleet on an
aircraft-by-aircraft basis for impairment.
Share Repurchases
During the year ended December 31,
2016, FLY repurchased 3.4 million shares for approximately
$40 million, or $11.73 per share. At December 31, 2016, approximately $67 million remains available under the current
share repurchase program. At December
31, 2016, there were 32.3 million shares outstanding.
Financial Position
At December 31, 2016, FLY's total
assets were $3.4 billion, including
$2.8 billion of investment in flight
equipment. Total cash at December 31,
2016 was $612.1 million, of
which $518.0 million was
unrestricted.
Total shareholders' equity per share at December 31, 2016 was $18.39.
Aircraft Portfolio
At December 31, 2016, FLY's 76
aircraft were on lease to 42 lessees in 27 countries. The
table below does not include 13 aircraft that were held for sale at
December 31, 2015 or the two B767
aircraft owned by a joint venture in which FLY has a 57%
interest. There were no aircraft held for sale at
December 31, 2016.
Portfolio
at
|
Dec. 31,
2016
|
Dec 31,
2015
|
Airbus
A319
|
9
|
10
|
Airbus
A320
|
12
|
14
|
Airbus
A321
|
3
|
3
|
Airbus
A330
|
3
|
4
|
Airbus
A340
|
2
|
3
|
Boeing 737
|
38
|
39
|
Boeing 757
|
3
|
3
|
Boeing 767
|
-
|
1
|
Boeing 777
|
2
|
2
|
Boeing 787
|
4
|
1
|
Total
|
76
|
80
|
At December 31, 2016, the average
age of FLY's fleet, weighted by the net book value of each
aircraft, was 6.2 years. The average remaining lease term, also
weighted by net book value, was 6.8 years as of December 31, 2016. At December 31, 2016, the portfolio of 76 aircraft
was generating annualized rents of approximately $325 million. FLY's lease utilization
factor was 100% for the fourth quarter of 2016 and for the
year.
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
9, 2017. Participants should call +1-253-237-1145
(International) or 800-535-7056 (North
America) and enter confirmation code 60244748 or ask an
operator for the FLY Leasing earnings call. 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 on the company's website for one year.
About FLY
FLY is a global aircraft leasing company with a fleet of modern,
high-demand and fuel-efficient commercial jet aircraft. FLY
acquires and leases its aircraft under multi-year operating lease
contracts to a diverse group of airlines throughout the world. FLY
is managed and serviced by BBAM LP, a worldwide leader in aircraft
lease management and financing. 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.
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.
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)
|
|
Three months
ended
Dec. 31, 2016
(Unaudited)
|
Three months
ended
Dec. 31, 2015
(Unaudited)
|
Year
ended
Dec.
31, 2016
(Audited)
|
Year
ended
Dec. 31,
2015
(Audited)
|
Revenues
|
|
|
|
|
Operating lease revenue
|
$ 81,613
|
$ 109,584
|
$
313,582
|
$
429,691
|
Finance
lease income
|
64
|
299
|
2,066
|
299
|
Equity
earnings from unconsolidated subsidiary
|
126
|
125
|
530
|
1,159
|
Gain on
sale of aircraft
|
17,506
|
12,718
|
27,195
|
28,959
|
Interest
and other income
|
1,291
|
908
|
1,666
|
2,289
|
Total
revenues
|
100,600
|
123,634
|
345,039
|
462,397
|
Expenses
|
|
|
|
|
Depreciation
|
31,562
|
35,645
|
120,452
|
159,732
|
Aircraft
impairment
|
92,000
|
14,268
|
96,122
|
66,093
|
Interest
expense
|
31,774
|
32,724
|
123,161
|
145,448
|
Net loss
on debt modification and extinguishment
|
4,100
|
8,116
|
9,246
|
17,491
|
Selling,
general and administrative
|
6,055
|
7,042
|
30,077
|
33,674
|
Ineffective, dedesignated and terminated derivatives
|
(252)
|
(548)
|
91
|
4,134
|
Maintenance and other costs
|
351
|
3,228
|
2,279
|
7,628
|
Total
expenses
|
165,590
|
100,475
|
381,428
|
434,200
|
Net income (loss)
before provision for income taxes
|
(64,990)
|
23,159
|
(36,389)
|
28,197
|
Provision (benefit) for income taxes
|
(1,159)
|
4,014
|
(7,277)
|
5,399
|
Net income
(loss)
|
$
(63,831)
|
$
19,145
|
$
(29,112)
|
$
22,798
|
Weighted average
number of shares
|
|
|
|
|
-
Basic
|
32,277,965
|
40,545,100
|
33,239,001
|
41,222,690
|
-
Diluted
|
32,277,965
|
40,582,169
|
33,239,001
|
41,315,149
|
Earnings (loss)
per share
|
|
|
|
|
-
Basic
|
$
(1.98)
|
$
0.47
|
$
(0.88)
|
$
0.52
|
-
Diluted
|
$
(1.98)
|
$
0.47
|
$
(0.88)
|
$
0.52
|
FLY Leasing
Limited
|
Consolidated
Balance Sheets
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
Dec.
31, 2016
(Audited)
|
Dec. 31,
2015 (Audited)
|
Assets
|
|
|
Cash and
cash equivalents
|
$
517,964
|
$
275,998
|
Restricted cash and cash equivalents
|
94,123
|
174,933
|
Rent receivables
|
419
|
124
|
Investment in unconsolidated subsidiary
|
7,700
|
7,170
|
Flight
equipment held for sale, net
|
—
|
237,262
|
Flight
equipment held for operating lease, net
|
2,693,821
|
2,585,426
|
Maintenance rights, net
|
101,969
|
94,493
|
Investment in finance lease, net
|
15,095
|
34,878
|
Fair
market value of derivative assets
|
1,905
|
241
|
Deferred
tax asset, net
|
7,445
|
7,505
|
Other
assets, net
|
6,568
|
6,450
|
Total
assets
|
$
3,447,009
|
$
3,424,480
|
Liabilities
|
|
|
Accounts
payable and accrued liabilities
|
$
13,786
|
$
17,548
|
Rentals
received in advance
|
13,123
|
14,560
|
Payable
to related parties
|
5,042
|
7,170
|
Security
deposits
|
42,495
|
48,876
|
Maintenance payment liability
|
182,571
|
194,543
|
Unsecured borrowings, net
|
691,390
|
689,409
|
Secured
borrowings, net
|
1,831,985
|
1,695,711
|
Fair
market value of derivative liabilities
|
13,281
|
19,327
|
Deferred
tax liability, net
|
19,847
|
28,246
|
Other
liabilities
|
40,254
|
52,126
|
Total
liabilities
|
2,853,774
|
2,767,516
|
Shareholders'
equity
|
|
|
Common
shares, $0.001 par value, 499,999,900 shares authorized; 32,256,440
and 35,671,400 shares issued and
outstanding at December 31, 2016 and 2015, respectively
|
32
|
36
|
Manager
shares, $0.001 par value; 100 shares authorized, issued and
outstanding
|
—
|
—
|
Additional paid-in capital
|
536,922
|
577,290
|
Retained
earnings
|
66,026
|
95,138
|
Accumulated other comprehensive loss, net
|
(9,745)
|
(15,500)
|
Total
shareholders' equity
|
593,235
|
656,964
|
Total liabilities
and shareholders' equity
|
$
3,447,009
|
$
3,424,480
|
FLY Leasing
Limited
|
Consolidated
Statements of Cash Flows
|
(DOLLARS IN
THOUSANDS)
|
|
|
Year
ended
|
|
Year
ended
|
|
|
|
Dec. 31,
2016(Audited)
|
|
Dec. 31,
2015(Audited)
|
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
(29,112)
|
|
$
|
22,798
|
|
Adjustments to
reconcile net income to net cash flows provided by operating
activities:
|
|
|
|
|
|
|
|
Equity earnings from
unconsolidated subsidiary
|
|
|
(530)
|
|
|
(1,159)
|
|
Finance lease
income
|
|
|
(2,066)
|
|
|
(299)
|
|
Gain on sale of
aircraft
|
|
|
(27,195)
|
|
|
(28,959)
|
|
Depreciation
|
|
|
120,452
|
|
|
159,732
|
|
Aircraft
impairment
|
|
|
96,122
|
|
|
66,093
|
|
Amortization of debt
discounts and issuance costs
|
|
|
9,375
|
|
|
11,922
|
|
Amortization of lease
incentives
|
|
|
8,898
|
|
|
20,527
|
|
Amortization of lease
discounts, premiums and other items
|
|
|
388
|
|
|
2,046
|
|
Amortization of fair
market value adjustments associated with the GAAM
acquisition
|
|
|
1,621
|
|
|
3,650
|
|
Net loss on debt
modification and extinguishment
|
|
|
6,094
|
|
|
13,868
|
|
Share-based
compensation
|
|
|
—
|
|
|
195
|
|
Unrealized foreign
exchange gain
|
|
|
(437)
|
|
|
(1,247)
|
|
Provision for deferred
income taxes
|
|
|
(9,158)
|
|
|
4,919
|
|
Unrealized loss on
derivative instruments
|
|
|
76
|
|
|
4,134
|
|
Security deposits and
maintenance payment liability relieved
|
|
|
(3,450)
|
|
|
(48,658)
|
|
Security deposits and
maintenance payment claims applied towards operating lease
revenues
|
|
|
(684)
|
|
|
—
|
|
Cash receipts in
settlement of maintenance rights
|
|
|
9,513
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Rent
receivables
|
|
|
(1,034)
|
|
|
6,814
|
|
Other
assets
|
|
|
(1,134)
|
|
|
137
|
|
Payable to related
parties
|
|
|
(17,163)
|
|
|
(19,407)
|
|
Accounts payable,
accrued liabilities and other
|
|
|
(10,965)
|
|
|
(2,183)
|
|
Net cash flows
provided by operating activities
|
|
|
149,611
|
|
|
214,923
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
Investment in
unconsolidated subsidiary
|
|
|
—
|
|
|
(2,009)
|
|
Rent received from
finance lease
|
|
|
2,970
|
|
|
424
|
|
Investment in finance
lease
|
|
|
—
|
|
|
(33,596)
|
|
Purchase of additional
aircraft
|
|
|
(552,166)
|
|
|
(567,523)
|
|
Proceeds from sale of
aircraft
|
|
|
430,867
|
|
|
1,110,046
|
|
Payment for aircraft
improvement
|
|
|
(2,230)
|
|
|
(8,196)
|
|
Lessor contribution to
maintenance
|
|
|
(2,712)
|
|
|
(18,609)
|
|
Net cash flows
provided by (used in) investing activities
|
|
|
(123,271)
|
|
|
480,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
Year
ended
|
|
|
|
Dec. 31, 2016
(Audited)
|
|
Dec. 31, 2015
(Audited)
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
Restricted cash and
cash equivalents
|
|
|
80,828
|
|
|
(35,794)
|
|
Security deposits
received
|
|
|
920
|
|
|
13,914
|
|
Security deposits
returned
|
|
|
(7,438)
|
|
|
(7,788)
|
|
Maintenance payment
liability receipts
|
|
|
71,514
|
|
|
84,491
|
|
Maintenance payment
liability disbursements
|
|
|
(10,951)
|
|
|
(38,768)
|
|
Swap termination
payments, net
|
|
|
(709)
|
|
|
(3,737)
|
|
Debt issuance
costs
|
|
|
(2,552)
|
|
|
(933)
|
|
Proceeds from secured
borrowings
|
|
|
572,719
|
|
|
147,276
|
|
Repayment of secured
borrowings
|
|
|
(448,346)
|
|
|
(791,385)
|
|
Repurchase of common
shares
|
|
|
(40,257)
|
|
|
(81,432)
|
|
Dividends
|
|
|
—
|
|
|
(41,388)
|
|
Dividend
equivalents
|
|
|
—
|
|
|
(1,054)
|
|
Net cash flows
provided by (used in) financing activities
|
|
|
215,728
|
|
|
(756,598)
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
|
(102)
|
|
|
(424)
|
|
Net increase
(decrease) in cash
|
|
|
241,966
|
|
|
(61,562)
|
|
Cash at beginning of
period
|
|
|
275,998
|
|
|
337,560
|
|
Cash at end of
period
|
|
$
|
517,964
|
|
$
|
275,998
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure:
|
|
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
|
|
|
|
Interest
|
|
$
|
110,351
|
|
$
|
132,780
|
|
Taxes
|
|
|
460
|
|
|
384
|
|
Noncash
Activities:
|
|
|
|
|
|
|
|
Security deposits
applied to maintenance payment liability, rent receivables, rentals
received in advance, and other assets
|
|
|
—
|
|
|
3,292
|
|
Maintenance payment
liability applied to rent receivables and rentals received in
advance
|
|
|
—
|
|
|
2,523
|
|
Other liabilities
applied to maintenance payment liability and rent
receivables
|
|
|
2,250
|
|
|
240
|
|
Noncash investing
activities:
|
|
|
|
|
|
|
|
Aircraft
improvement
|
|
|
5,245
|
|
|
1,587
|
|
Noncash activities in
connection with the purchase of aircraft
|
|
|
6,388
|
|
|
19,382
|
|
Noncash activities in
connection with sale of aircraft
|
|
|
78,722
|
|
|
93,819
|
|
|
|
|
|
|
|
|
|
|
|
FLY Leasing
Limited
|
Reconciliation of
Non-GAAP Measures
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
Three months
ended
Dec. 31, 2016
(Unaudited)
|
Three months
ended
Dec. 31, 2015
(Unaudited)
|
Year
ended
Dec. 31,
2016
(Unaudited)
|
Year
ended
Dec. 31,
2015
(Unaudited)
|
Net income
(loss)
|
$
(63,831)
|
$
19,145
|
$
(29,112)
|
$
22,798
|
Adjustments:
|
|
|
|
|
Aircraft
impairment
|
92,000
|
14,268
|
96,122
|
66,093
|
Amortization of debt discounts and loan issue costs
|
2,170
|
2,842
|
9,375
|
11,922
|
Amortization of lease premiums, discounts and other
|
88
|
246
|
388
|
2,046
|
Amortization of fair value adjustments recorded in purchase
accounting
|
316
|
766
|
1,621
|
3,650
|
Net loss
on debt modification and extinguishment
|
4,100
|
8,116
|
9,246
|
17,491
|
Non-cash
share based compensation
|
—
|
—
|
—
|
195
|
Professional fees related to restatement
|
—
|
—
|
1,134
|
—
|
Unrealized foreign exchange gain
|
(1,187)
|
(554)
|
(437)
|
(1,247)
|
Deferred
income taxes
|
(2,854)
|
4,027
|
(9,158)
|
4,919
|
Ineffective, dedesignated and terminated derivatives
|
(252)
|
(548)
|
91
|
4,134
|
Adjusted Net
Income
|
$
30,550
|
$
48,308
|
$
79,270
|
$
132,001
|
Average
Shareholders' Equity
|
$
620,937
|
$
689,869
|
$
632,818
|
$
721,715
|
Adjusted Return on
Equity
|
19.7%
|
28.0%
|
12.5%
|
18.3%
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
32,277,965
|
40,582,169
|
33,239,001
|
41,315,149
|
Adjusted Net
Income per share
|
$
0.95
|
$
1.19
|
$
2.38
|
$
3.19
|
|
|
|
|
|
FLY defines Adjusted Net Income as net income plus or minus (i)
non-cash impairment charges; (ii) non-cash amortization of debt
discounts, loan issuance costs, lease premiums and discounts, and
other items; (iii) adjustments related to the GAAM portfolio
acquisition comprised primarily of amortization of fair value
adjustments recorded in purchase accounting; (iv) net losses from
debt modification and extinguishment; (v) non-cash share-based
compensation; (vi) legal and accounting expenses related to the
restatement of our financial statements in 2016; (vii) unrealized
foreign exchange gains; (viii) deferred income taxes; (ix) the
ineffective portion and charges associated with cash flow
hedges. The adjustments included within Adjusted Net Income
are primarily non-cash items, one-time or non-recurring items that
are not expected to continue in the future, and certain other items
that we consider unrelated to the ongoing performance of our
operations. Adjusted return on equity is calculated by dividing
Adjusted Net Income by the average shareholders' equity for the
periods presented. For periods of less than one year, the
resulting return is annualized.
FLY uses Adjusted Net Income and Adjusted Return on Equity, in
addition to GAAP net income and earnings per share, to assess our
core operating performance on a consistent basis from period to
period. Management believes these measures are helpful in
evaluating the operating performance of our ongoing operations and
identifying trends in our performance, because they remove the
effects of certain non-cash, one-time or non-recurring items that
are not expected to continue in the future, and certain other items
that are not indicative of our overall operating trends. In
addition, Adjusted Net Income and Adjusted Return on Equity help us
compare our performance to our competitors. These measures
should be considered in addition to, and not as a substitute for
net income or other financial measures determined in accordance
with Accounting Principles Generally Accepted in the United States. FLY's definitions may be
different than those used by other companies.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/fly-leasing-reports-fourth-quarter-and-full-year-2016-financial-results-300421068.html
SOURCE FLY Leasing Limited