FLY Leasing Limited
March 2015
Caution Concerning Forward-Looking Statements
This presentation contains "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," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will," or words of similar meaning and include, but are not limited to, statements regarding the outlook for Fly Leasing Limited’s (FLY) future business and financial performance, and for the aviation industry. 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 Reports on Form 6-K. FLY undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.
Page 1 FLY at a Glance
Portfolio 127 aircraft, 7.8 years average age (1)
Customers 64 airlines in 36 countries
Lease Profile Net, Net Leases, 5.3 years average remaining lease term (1)
Managed by BBAM World’s 3rd largest lease manager with long, established track record
Insider Ownership 8%+ with market value of $45m+
As of and for the Last Twelve Months Ended September 30, 2014 (Unaudited)
Total Revenues $392m Total Assets $3,741m Net Income $54m Cash and Cash Equivalents $81m Earnings Per Share $1.27 Total Borrowings $2,550m Dividends Per Share $1.00 Total Equity $758m
Note: As of December 31, 2014 except for the financials. (1) Weighted by net book value as of December 31, 2014.
Page 2 Attractive Portfolio of Leased Aircraft
Modern Fleet (1)
Aircraft Type # of Aircraft % of NBV A320 Family 48 30%
A330 4 10%
A340 3 4%
B737 Family (2) 57 44%
B747/757/767 (3) 13 5%
B777/B787 2 7%
Total 127 100%
(1) Note: As of December 31, 2014. FLY has subsequently acquired one A321-211 and two A320-200s. (2) All Next Generation except for one B737-300 freighter. (3) FLY has signed purchase agreements to sell eight B757s.
Page 3 Diversified, Global Customer Base
Diversified Lessees – 64 Airlines in 36 Countries
Lessee Country % of Revenue (1)
Philippines 10%
Chile 7%
China 4%
UK 4%
USA 4%
USA 3% Region % of Revenue (1) Turkey 3% Europe 37% India 3% India, Asia & South Pacific 35% Turkey 3% North America 11%
Thailand 3% Central & South America 11% Middle East & Africa 3% Top 10 Lessees 44% Russia (2) 3% (1) Percentage of total annualized contracted revenue as of December 31, 2014. (2) 1% is associated with two B757s expected to be sold as previously announced.
Page 4 Savvy Aircraft Investor with a Disciplined Approach
Multiple origination channels with focus on sale and leasebacks with airlines No speculative, unplaced orders with manufacturers
Young Narrowbodies Select Widebodies Used Aircraft • Primary growth driver • Quality credits and long- • 8 – 12 years old; will sell term leases prior to part-out • Large, established operating base • Attractive financing • BBAM origination options advantage • Liquid assets for trading • Marginally higher yields • Higher cash flow and Predictable returns and • and returns returns residual values
• Will acquire MAX and NEO aircraft as they deliver
Focus: A320s & B737-800s Focus: A330s, A350s, Focus: A320s & B737-800s B777s & B787s
Page 5 FLY is Executing its Growth Strategy…
FLY beat its 2014 growth target, growing its portfolio by 22% and investing close to $1 billion FLY will acquire new or nearly new aircraft to profitably grow its business FLY will continue the growth momentum into 2015
2014 Acquisitions (1)
Number of Aircraft 22 Total Acquisition Costs $952m Avg. Age 2.6 yrs Avg. Remaining Lease Term 8.9 yrs Number of Lessees 12 Number of Countries 9
(1) Average age and average remaining lease term weighted based on aircraft acquisition cost and calculated as of the time of acquisition.
Page 6 …And Consistently and Profitably Monetizing Aircraft…
Proven track record of selling older aircraft at gains throughout the cycle • FLY has sold 30 aircraft • Average age of aircraft sold: 12.5 years • Achieved sales gains of $68m or 14% above the NBVs
Summary of Annual Disposition Activity 2008 2009 2010 2011 2012 2013 2014
Annual Gains $11.4m -- $13.4m $9.1m $8.4m $6.3m $18.9m
# of A/C Sold 2 -- 4 2 4 10 8
Avg. Age of A/C Sold 12.9 -- 11.0 6.8 13.7 13.6 12.6
Premium to NBV 39% -- 16% 9% 12% 11% 16%
Page 7 …Which is Transforming Portfolio Metrics…
Weighted Average Age (1) Weighted Average Remaining Lease Term (1)
10 9.4 17% 6 66% 5.3 9 8.6 5 4.3 4 7.8 3.2 8 3 Years 7 Years 2 6 1 5 0 2012 2013 2014 2012 2013 2014
Contracted Annualized Revenue Book Value of Flight Equipment
$4.0 $450 29% $420 $3.7 42% $400 $371 $3.5
$3.0 $350 $326 $3.0 $2.6 $300 $ $ billions in $ $ millions in $2.5 $250 $2.0 $200 2012 2013 2014 2012 2013 2014 Note: As of December 31, 2012, 2013, and 2014. (1) Weighted by net book value.
Page 8 … And Supporting an Attractive Dividend
Cumulative Dividends Declared Per Share Since Inception
$7.37 $6.37 $5.46 $4.60 $3.80 $3.00 $2.20
2008 2009 2010 2011 2012 2013 2014
Fly has declared a total of 29 consecutive quarterly dividends, totaling $7.37 per share FLY declared a dividend of $0.25 per share in respect of the fourth quarter of 2014 Current annual dividend of $1.00 per share
Page 9 Nimble and Proactive Approach to Capital Structure Management
Cost of Secured Debt (1) Unencumbered Aircraft By Quarter (2)
6.00% $450 $403 $400
5.50% 5.12% $350 $300 5.00% $246 4.67% $250 in Millions
4.26% $ $200 4.50% 4.20% $150 $121 4.00% $100 $75 $50 3.50% $- 2011 2012 2013 Q3 2014 Q4 Q1 Q2 Q3 2013 2014 2014 2014
FLY issued $700 million in unsecured bonds in 2013 and 2014 Continued to drive improvement in cost of secured debt Flexible use of recourse and non-recourse financing Debt is long-dated – liability structure matches asset characteristics No significant debt maturities until 2018
(1) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (2) FLY had no unencumbered aircraft prior to Q4 2013.
Page 10 Stakeholder Highlights
Execution of fleet growth strategy is boosting revenues and bottom line
Consistent sales of older aircraft at gains supports book values
Portfolio metrics are significantly improved by fleet rejuvenation
Strategic approach to liability management
Focus on creating value for stakeholders – supported by attractive dividend
Page 11 Appendix 1—BBAM Overview BBAM Overview
Founded in 1989 World’s third largest lease manager of aircraft with 400+ aircraft under management Acquired by management team in April 2010 Onex purchased a 50% interest in BBAM in December 2012 120 + employees in nine offices worldwide The core management team has been together through several cycles (including 9/11, SARS and financial crisis) BBAM is an asset management company, Leading Aircraft Lessors originating and managing aircraft for two $40 $33.9 $33.6 primary pools of capital: $35
$30
• FLY Leasing Limited (“NYSE: FLY”) $25 • Nomura Babcock & Brown (“NBB”), a $20 wholly-owned subsidiary of Nomura $15 $12.3 $9.4 $8.9 $10 $7.4 $7.3 $6.9 Securities $5.9 $4.8 Fleet Value in $ Billions $ in Value Fleet $5
$0 GECAS AerCap BBAM SMBC BOC AWAS CIT Air Lease ACG Avolon
Source: AirFinance Journal, 2014.
Page 13 BBAM — Global, Full Service Platform
No outsourcing – each driver of aircraft investment returns led by senior BBAM personnel with dedicated teams 120+ professionals in nine offices covering all target regions Dedicated in-house professional staff providing a comprehensive platform
DRIVERS OF AIRCRAFT INVESTMENT RETURN Finance, Accounting, Origination & Technical & Asset Corporate Finance Tax, Contracts Legal Re-Marketing Management & Capital Markets & Investor Reporting
Steve Zissis Declan Cotter Wesley Dick Rob Tomczak Vince Cannon
17 Professionals 20 Professionals 6 Professionals 62 Professionals 15 Professionals
Page 14 A Sample of BBAM’s Airline Relationships
Representative Global Reach Americas Asia-Pacific Africa / Middle East Europe
Page 15 Appendix 2 – FLY’s Capital Structure Capital Structure Total unencumbered aircraft assets of approximately $403 million (1) Does not include $400m of unsecured debt raised in October 2014 FLY’s Capital Structure
($ in millions) September 30, 2014 December 31, 2013 Unrestricted cash and cash equivalents $81 $404 Debt O / S Rate (2) O / S Rate (2) Maturity Securitization $556 3.36% $593 3.63% 2033 2012 Term Loan 457 5.19% 475 4.50% 2019 Nord LB Facility 425 4.15% 452 4.15% 2018 CBA Debt 118 4.62% 162 4.91% 2018-2020 Bank Debt Facilities 617 4.19% 490 4.71% 2015-2025 Aircraft Acquisition Facility (3) 123 4.15% 127 4.16% 2018 Unamortized Discounts (38) (45) Total Secured Debt $2,258 4.20% $2,254 4.26%
2020 Senior Notes 300 6.75% 300 6.75% 2020 Unamortized Discounts (8) (8) Total Unsecured Debt $292 6.75% $292 6.75% Total Debt 2,550 4.49% 2,546 4.55% Shareholders' Equity 758 748 Total Capitalization $3,308 $3,294 Net Debt to Equity 3.3x 2.9x Secured Debt to Total Debt 89% 89% Total Debt to Total Capitalization 77% 77% (1) As of September 30, 2014. (2) Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs. (3) The availability period was terminated under this facility in January 2015.
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