DUBLIN, Feb. 25, 2021 /PRNewswire/ -- Fly Leasing
Limited (NYSE: FLY) ("FLY"), a global leader in aircraft leasing,
today announced its financial results for
the fourth quarter and full year of 2020.
Fourth Quarter 2020 Highlights
- Net loss of $107 million,
$3.51 per share
- Non-cash impairment charge of $115
million
- Sold two aircraft and one engine;17% premium to book value
- Raised $180 million five-year
Term Loan
- Repaid FLY's $325 million 2021
Notes
2020 Full Year Highlights
- Net loss of $67 million,
$2.21 per share
- Sold eight aircraft and three engines; 19% premium to book
value
- $25.88 book value per share
- 2.3x net debt to equity
- $132 million of unrestricted cash
and cash equivalents
- Unencumbered assets of $180
million
"FLY's financial performance continues to be impacted by the
COVID pandemic which has
had an unprecedented impact on global air traffic,"
said Colm Barrington, FLY's Chief Executive Officer. "In the
fourth quarter global airline passenger traffic was 70% less than
in the same quarter a year ago. Fortunately, as COVID vaccines
reach the majority of populations and border testing becomes more
efficient, we expect to see a lifting of government restrictions on
travel and pent up demand returning passenger numbers towards
pre-pandemic levels later in the year."
"At year end, FLY's book value was $25.88 per share, our net debt to equity
ratio was 2.3 times and our unrestricted cash was
$132 million," Barrington added. "FLY has now
redeemed its 2021 unsecured notes, has no capital
commitments in 2021 and no significant debt
maturities until 2023. We remain in a strong position to
weather the current difficult, but improving, market
conditions."
Financial Results
FLY is reporting a net loss of $107.0 million, or $3.51 per share, for
the fourth quarter of 2020. This compares to net
income of $75.2 million, or
$2.43 per share, for the same
period in 2019. The decrease in net income is primarily due to
flight equipment impairment of $115.0 million.
Net loss for the year ended December 31,
2020 was $67.4 million, or $2.21 per
share, compared to net income of $225.9 million,
or $7.12 per share, for the year ended December
31, 2019.
Adjusted Net Income (Loss)
Adjusted Net Loss was $115.2 million for
the fourth quarter of 2020, compared to Adjusted Net
Income of $77.0 million for the
same period in the previous year. On a per share basis, Adjusted
Net Loss was $3.78 in
the fourth quarter of 2020, compared to Adjusted
Net Income of $2.49 for the
fourth quarter of 2019.
For the year ended December 31, 2020, Adjusted Net
Loss was $69.4 million, or
$2.27 per share, compared
to Adjusted Net Income of $245.9 million, or
$7.75 per share, for the same
period last year.
A reconciliation of Adjusted Net Income (Loss) to net
income (loss) determined in accordance with GAAP is shown
below.
Financial Position
At December 31, 2020, FLY's total
assets were $3.2 billion,
including investment in flight equipment totaling $2.8 billion. Total cash at December 31, 2020 was $161.5 million, of which $132.1 million was unrestricted. The book
value per share at December 31,
2020 was $25.88. Compared
to the prior year, FLY's net debt to equity ratio at December 31, 2020 remained at 2.3x.
Flight Equipment Impairment
FLY recognized flight equipment impairment of $115.0 million in the fourth quarter of
2020, of which $106.0 million is
related to two Airbus A330-300 aircraft expected to
be returned by the lessee in 2021. These widebody
aircraft are the only aircraft of their type in FLY's portfolio.
The balance of the impairment charge is related to seven narrowbody
aircraft that FLY expects to sell in 2021.
Aircraft Portfolio
At December 31, 2020, FLY had
84 aircraft and seven engines in its portfolio. FLY's aircraft
and engines are on lease to 37 airlines in
23 countries. The table below does not
include the engines.
Portfolio
at
|
Dec. 31,
2020
|
Dec. 31,
2019
|
|
Number
|
% of Net
Book Value
|
Number
|
% of Net
Book Value
|
Airbus A320ceo
Family
|
32
|
28%
|
34
|
28%
|
|
Airbus A320neo
Family
|
1
|
2%
|
1
|
2%
|
|
Airbus
A330
|
3
|
2%
|
3
|
6%
|
|
Boeing
737NG
|
40
|
39%
|
42
|
37%
|
|
Boeing 737
MAX
|
2
|
3%
|
2
|
3%
|
|
Boeing
757-SF
|
—
|
—
|
1
|
<1%
|
|
Boeing
777-LRF
|
2
|
11%
|
2
|
10%
|
|
Boeing 787
|
4
|
15%
|
4
|
14%
|
|
Total(1)
|
84
|
100%
|
89
|
100%
|
|
(1)
Includes six aircraft classified as held for sale as of December
31, 2019. No aircraft were classified as held for sale as of
December 31, 2020.
|
At December 31, 2020, the average
age of the portfolio, weighted by net book value of each
aircraft and engine, was 8.4 years. The average remaining
lease term was 4.7 years, also weighted by net book value. At
December 31, 2020, FLY's portfolio
had contracted annualized rental revenue of approximately
$307 million.
Conference Call and Webcast
FLY's senior management will host a conference call and webcast
to discuss these results at 4:30 p.m.
U.S. Eastern Time on Thursday, February 25,
2021. Participants should call +1 (409) 220-9381
(International) or (866) 438-0730 (North
America) and enter confirmation code 2325318. A live
webcast with slide presentation will be available on the Events and
Presentations page in the Investor Relations section of FLY's
website at www.flyleasing.com. A webcast replay 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
and fuel efficient commercial jet aircraft. FLY leases its aircraft
under multi-year 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.
Non-GAAP Financial Measures
FLY provides all financial information in accordance with
Generally Accepted Accounting Principles in the United States (GAAP). To supplement our
consolidated financial statements presented in accordance with
GAAP, we are also providing with this press release, and on our
conference call, certain non-GAAP financial measures, including
Adjusted Net Income (Loss) and Adjusted Return on
Equity. In calculating these non-GAAP financial measures, we
have excluded certain amounts, as detailed in the reconciliation
below.
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, 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 benefits of such growth. Additional or
unforeseen effects from the COVID-19 pandemic and the global
economic climate may give rise to or amplify many of these risks.
The extent to which the COVID-19 pandemic ultimately impacts FLY's
business, results of operations and financial condition will depend
on future developments, which are highly uncertain and cannot be
predicted. 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 (Loss)
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Three months
ended Dec. 31,
|
Year ended Dec.
31,
|
|
2020 (Unaudited)
|
2019
(Unaudited)
|
2020
(Audited)
|
2019
(Audited)
|
Revenues
|
|
|
|
|
Operating lease
rental revenue
|
$
64,295
|
$
88,622
|
$
283,926
|
$
391,142
|
End of lease
income
|
5,150
|
48,394
|
14,124
|
78,781
|
Amortization of lease
incentives
|
(1,244)
|
(1,237)
|
(3,578)
|
(5,590)
|
Amortization of
lease premiums, discounts and other
|
(274)
|
39
|
(729)
|
66
|
Operating lease
revenue
|
67,927
|
135,818
|
293,743
|
464,399
|
Finance lease
revenue
|
134
|
149
|
557
|
618
|
Gain on sale of
aircraft
|
4,286
|
14,691
|
36,003
|
97,323
|
Interest and other
income
|
407
|
3,596
|
4,052
|
12,684
|
Total
revenues
|
72,754
|
154,254
|
334,355
|
575,024
|
Expenses
|
|
|
|
|
Depreciation
|
33,364
|
32,029
|
129,561
|
140,798
|
Flight equipment
impairment
|
115,000
|
—
|
115,000
|
—
|
Interest
expense
|
26,472
|
29,935
|
103,292
|
137,133
|
Selling, general and
administrative
|
8,489
|
9,131
|
30,902
|
35,304
|
Provision for
uncollectible operating lease receivables
|
1,000
|
—
|
4,000
|
—
|
Loss (gain) on
derivatives
|
1,714
|
(89)
|
1,648
|
2,720
|
Fair value loss on
marketable securities
|
185
|
—
|
13,025
|
—
|
Loss on modification
and extinguishment of debt
|
1,012
|
4,260
|
1,862
|
9,590
|
Maintenance and other
costs
|
3,218
|
229
|
6,622
|
3,075
|
Total
expenses
|
190,454
|
75,495
|
405,912
|
328,620
|
Net
income (loss) before provision (benefit)
for income taxes
|
(117,700)
|
78,759
|
(71,557)
|
246,404
|
Provision (benefit)
for income taxes
|
(10,664)
|
3,601
|
(4,132)
|
20,527
|
Net
income (loss)
|
$
(107,036)
|
$
75,158
|
$
(67,425)
|
$
225,877
|
Weighted average
number of shares
|
|
|
|
|
-
Basic
|
30,481,069
|
30,898,410
|
30,551,873
|
31,607,781
|
-
Diluted
|
30,481,069
|
30,903,313
|
30,551,873
|
31,715,469
|
Earnings
(loss) per share
|
|
|
|
|
-
Basic
|
$
(3.51)
|
$
2.43
|
$
(2.21)
|
$
7.15
|
-
Diluted
|
$
(3.51)
|
$
2.43
|
$
(2.21)
|
$
7.12
|
Fly Leasing
Limited
|
|
Consolidated
Balance Sheets
|
(DOLLARS IN
THOUSANDS, EXCEPT PAR VALUE DATA)
|
|
|
Dec.
31,
2020
(Audited)
|
Dec.
31, 2019 (Audited)
|
Assets
|
|
|
Cash and cash
equivalents
|
$
132,097
|
$
285,565
|
Restricted cash and
cash equivalents
|
29,432
|
52,738
|
Rent receivables,
net
|
57,015
|
14,264
|
Investment in finance
lease, net
|
10,396
|
11,639
|
Flight equipment held
for sale, net
|
—
|
144,119
|
Flight equipment held
for operating lease, net
|
2,529,428
|
2,720,000
|
Maintenance
rights
|
279,124
|
290,958
|
Deferred tax asset,
net
|
11,753
|
11,675
|
Fair value of
derivative assets
|
2,085
|
4,824
|
Other assets,
net
|
116,255
|
129,377
|
Total
assets
|
$
3,167,585
|
$
3,665,159
|
Liabilities
|
|
|
Accounts payable and
accrued liabilities
|
$
18,135
|
$
22,746
|
Rentals received in
advance
|
8,724
|
16,391
|
Payable to related
parties
|
4,058
|
10,077
|
Security
deposits
|
36,439
|
40,726
|
Maintenance payment
liability, net
|
203,684
|
219,371
|
Unsecured borrowings,
net
|
296,876
|
619,407
|
Secured borrowings,
net
|
1,642,242
|
1,695,525
|
Deferred tax
liability, net
|
51,366
|
57,935
|
Fair value of
derivative liabilities
|
46,169
|
27,943
|
Other
liabilities
|
70,896
|
76,761
|
Total
liabilities
|
2,378,589
|
2,786,882
|
Shareholders'
equity
|
|
|
Common shares, $0.001
par value, 499,999,900 shares authorized; 30,481,069 and
30,898,410 shares issued and outstanding at December 31,
2020 and 2019, respectively
|
31
|
31
|
Manager shares, $0.001
par value; 100 shares authorized, issued and outstanding
|
—
|
—
|
Additional paid-in
capital
|
509,738
|
516,254
|
Retained
earnings
|
312,967
|
380,392
|
Accumulated other
comprehensive loss, net
|
(33,740)
|
(18,400)
|
Total
shareholders' equity
|
788,996
|
878,277
|
Total liabilities
and shareholders' equity
|
$
3,167,585
|
$
3,665,159
|
Fly Leasing
Limited
|
|
Consolidated
Statements of Cash Flows
|
(DOLLARS IN
THOUSANDS)
|
|
|
Year
ended Dec. 31,
|
|
2020
(Audited)
|
2019 (Audited)
|
Cash Flows from
Operating Activities
|
|
|
Net
income (loss)
|
$
(67,425)
|
$
225,877
|
Adjustments to
reconcile net income (loss) to net cash flows provided
by
operating
activities:
|
|
|
Gain on sale of
aircraft
|
(36,003)
|
(97,323)
|
Depreciation
|
129,561
|
140,798
|
Flight equipment
impairment
|
115,000
|
—
|
Amortization of debt
discounts and debt issuance costs
|
7,717
|
9,906
|
Amortization of lease
incentives and other items
|
4,621
|
6,152
|
Provision for
uncollectible operating lease receivables
|
4,000
|
—
|
Fair value loss on
marketable securities
|
13,025
|
—
|
Loss on modification
and extinguishment of debt
|
1,862
|
9,590
|
Provision (benefit)
for deferred income taxes
|
(4,296)
|
20,449
|
Security deposits and
maintenance payment liability recognized into earnings
|
(12,650)
|
(47,890)
|
Cash receipts from
maintenance rights
|
2,725
|
4,637
|
Other
|
6,864
|
2,345
|
Changes in operating
assets and liabilities:
|
|
|
Rent
receivables
|
(54,170)
|
(10,668)
|
Other
assets
|
3,073
|
(2,160)
|
Payable to related
parties
|
(6,019)
|
5,615
|
Accounts payable,
accrued liabilities and other liabilities
|
2,285
|
4,842
|
Net cash flows
provided by operating activities
|
110,170
|
272,170
|
Cash Flows from
Investing Activities
|
|
|
Purchase of flight
equipment
|
(74,940)
|
(319,995)
|
Proceeds from sale of
aircraft, net
|
187,154
|
824,116
|
Payments for aircraft
improvement
|
(17,362)
|
(8,085)
|
Payments for lessor
maintenance obligations
|
(521)
|
(2,110)
|
Purchase of marketable
securities
|
—
|
(10,481)
|
Other
|
(536)
|
(2,059)
|
Net cash flows
provided by investing activities
|
93,795
|
481,386
|
|
|
|
Year ended Dec.
31,
|
|
2020 (Audited)
|
2019 (Audited)
|
Cash Flows from
Financing Activities
|
|
|
Security deposits
received
|
4,009
|
4,369
|
Security deposits
returned
|
(349)
|
(4,617)
|
Maintenance payment
liability receipts
|
21,593
|
60,744
|
Maintenance payment
liability disbursements
|
(13,196)
|
(22,567)
|
Debt modification and
extinguishment costs
|
(230)
|
(2,052)
|
Debt issuance
costs
|
(3,312)
|
(342)
|
Repayment of unsecured
borrowings
|
(325,000)
|
—
|
Proceeds from secured
borrowings
|
171,900
|
—
|
Repayment of secured
borrowings
|
(229,786)
|
(698,989)
|
Shares
repurchased
|
(6,516)
|
(32,871)
|
Net cash
flows used in financing
activities
|
(380,887)
|
(696,325)
|
Effect of exchange
rate changes on unrestricted and restricted cash
and cash
equivalents
|
148
|
(8)
|
Net
(decrease) increase in unrestricted
and restricted cash and cash
equivalents
|
(176,774)
|
57,223
|
Unrestricted and
restricted cash and cash equivalents at beginning of
period
|
338,303
|
281,080
|
Unrestricted
and restricted cash and cash equivalents at end of
period
|
$
161,529
|
$
338,303
|
|
|
|
Reconciliation to
Consolidated Balance Sheets:
|
|
|
Cash and cash
equivalents
|
$
132,097
|
$
285,565
|
Restricted cash and
cash equivalents
|
29,432
|
52,738
|
Unrestricted and
restricted cash and cash equivalents
|
$
161,529
|
$
338,303
|
|
|
|
|
|
|
|
|
Fly Leasing
Limited
|
|
Reconciliation of
Non-GAAP Measures
|
(DOLLARS IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Three months ended Dec.
31,
|
Year ended Dec.
31,
|
|
2020
(Unaudited)
|
2019
(Unaudited)
|
2020
(Unaudited)
|
2019
(Unaudited)
|
Net
income (loss)
|
$
(107,036)
|
$
75,158
|
$
(67,425)
|
$
225,877
|
Adjustments:
|
|
|
|
|
Unrealized foreign
exchange loss (gain)
|
337
|
178
|
714
|
(271)
|
Deferred income
taxes
|
(10,417)
|
4,486
|
(4,296)
|
20,449
|
Fair value changes on
undesignated derivatives
|
1,871
|
(2,794)
|
1,643
|
(176)
|
Adjusted Net
Income (Loss)
|
$
(115,245)
|
$
77,028
|
$
(69,364)
|
$
245,879
|
Average
Shareholders' Equity
|
$
840,813
|
$
838,525
|
869,649
|
774,145
|
Adjusted Return on
Equity
|
(54.8%)
|
36.7%
|
(8.0%)
|
31.8%
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
30,481,069
|
30,903,313
|
30,551,873
|
31,715,149
|
Adjusted Net
Income (Loss) per diluted share
|
$
(3.78)
|
$
2.49
|
$
(2.27)
|
$
7.75
|
FLY defines Adjusted Net Income (Loss) as net
income (loss) plus or minus (i) unrealized foreign
exchange gains and losses; (ii) deferred income taxes; (iii) the
fair value changes associated with interest rate derivative
contracts that are not accounted for as cash flow hedges; and (iv)
non-recurring expenses. The adjustments included within Adjusted
Net Income (Loss) are primarily non-cash or non-recurring items
that we consider unrelated to the ongoing performance of our
operations. Adjusted Return on Equity is calculated by dividing
Adjusted Net Income (Loss) by average shareholders' equity for each
period presented. For periods of less than one year, the resulting
return is annualized.
FLY uses Adjusted Net Income (Loss) and Adjusted
Return on Equity, in addition to GAAP net income (loss) and
earnings (loss) 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 or
non-recurring items and certain other items that are not indicative
of our overall operating trends. In addition, Adjusted Net
Income (Loss) and Adjusted Return on Equity help us
compare our performance to our competitors. These measures should
be considered in addition to, and not as substitutes for, net
income or other financial measures determined in accordance with
GAAP. FLY's definitions may be different from those used by
other companies.
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SOURCE Fly Leasing Limited