Fly Leasing reports fourth quarter and full year 2017 results

Eleanor Steed
By Eleanor Steed March 9, 2018 17:09

Fly Leasing reports fourth quarter and full year 2017 results

Fly Leasing’s net income for the fourth quarter of 2017 was $7.2 million, or $0.25 per share – on an adjusted basis net income was $30.9 million, $1.09 per share. During this period, Fly also refinanced and extended $375.0 million of unsecured notes, completed a new $332 million secured debt facility and repurchased 715,934 shares.

For the full year 2017, Fly’s net income reached $2.6 million or $0.09 per share ($66.6 million on an adjusted basis) – this compares to a net loss of $63.8 million, or $1.98 per share, for the same period in 2016. The financial results for the fourth quarter of 2017 include $20.8 million of debt extinguishment costs, primarily relating to the discharge of FLY’s 6.75% Senior Notes due 2020. Also during 2017, Fly acquired ten aircraft for $456 million and repurchased 4.3 million shares.

“We continue to take initiatives at FLY that are producing solid core earnings and enhancing shareholder value,” said Colm Barrington, CEO of FLY. “In 2017 we increased our fleet size, fleet value and operating lease revenue, each by more than 10%. The quality and youth of our fleet now rank us an industry leader. We repurchased more than 13% of our shares at a significant discount to book value, raised a new $332 million secured facility at a very attractive margin, and refinanced and extended $375 million of unsecured notes at a significantly reduced interest rate. This was a good investment in our future earnings despite the debt extinguishment charge in the fourth quarter.”

“Last week we announced an exciting deal with AirAsia in which FLY will acquire a total of 55 aircraft, seven engines, and options to acquire 20 new A320neo family aircraft,” added Barrington. “This landmark acquisition grows FLY’s fleet with the most attractive and newest generation of narrowbody aircraft and will drive high levels of stable, long-term profitability and cash flows for the benefit of our stakeholders.”

On October 16, 2017, FLY completed its offering of $300 million of unsecured 5.25% Senior Notes due 2024. The net proceeds were approximately $294.2 million, which FLY used, together with cash on hand, to discharge the $375 million of its outstanding 2020 Notes.

On December 8, 2017, FLY closed a new $332 million secured debt facility. The facility has an eight-year term and bears interest at a rate of LIBOR plus 1.65%.

At December 31, 2017, FLY’s total assets were $3.6 billion, including investment in flight equipment totaling $3.1 billion. Total cash at December 31, 2017 was $456.8million, of which $329.1 million was unrestricted. The book value per share at December 31, 2017 was $19.43.

At December 31, 2017, FLY had 85 aircraft in its portfolio, with leases to 44 airlines in 28 countries. The table below does not include the two B767 aircraft owned by a joint venture in which FLY has a 57% interest.

At December 31, 2017, the average age of the portfolio, weighted by net book value of each aircraft, was 6.4 years. The average remaining lease term was 6.3 years, also weighted by net book value. At December 31, 2017, FLY’s 83 aircraft on lease were generating annualized rental revenue of approximately $359 million. Two aircraft were off-lease at year end, one of which was subsequently delivered to a new lessee in January 2018, and the other aircraft is expected to be delivered to a new lessee in the first quarter of 2018. FLY’s lease utilization factor was 98.3% for the fourth quarter of 2017 and 99.6% for the year.

Eleanor Steed
By Eleanor Steed March 9, 2018 17:09