FLY Leasing reports Q3 results

Dino D'Amore
By Dino D'Amore November 7, 2013 12:57

FLY Leasing reports Q3 results

During the third quarter 2013, Fly Leasing’s income and diluted earnings per share for the third quarter of 2013 were $304,000 and $0.00 per share compared to a loss of $29.4 million and a loss of $1.15 per share in the same period of 2012. Operating lease revenue decreased from $84.4 million for the third quarter of 2012 to $78.4 million for the third quarter of 2013, primarily due to a decrease in end of lease income from $5.8 million in 2012 to $0 in 2013. The loss in the third quarter of 2012 included expenses of $32.3 million associated with termination of interest rate swaps in connection with refinancing FLY’s original Acquisition Facility. Net income and diluted earnings per share for the nine months ended September 30, 2013 were $39.1 million and $1.20 per share compared to $16.7 million and $0.63 per share for the nine months ended September 30, 2012. Adjusted Net Income was $2.7 million for the third quarter of 2013 compared to $5.4 million in the same period in the previous year. On a per share basis, Adjusted Net Income was $0.07 in the third quarter of 2013 compared to $0.21 for the same period in the previous year. For the nine months ended September 30, 2013, Adjusted Net Income was $52.5 million, or $1.65 per share compared to $63.1 million and $2.43 per share for the same period in the previous year. “During the third quarter we added five aircraft, increasing our portfolio to 107 aircraft at quarter end,” said Colm Barrington, CEO of FLY. “So far in the fourth quarter we have added two more aircraft, including a new Boeing 787 on a long-term lease to a top credit airline. This year we have added aircraft worth more than $560 million to our fleet, achieving our growth target for the year and putting us on track to add more than $600 million worth of aircraft by year end. FLY has the capital to maintain this strong growth in 2014 and we continue to see attractive acquisition opportunities.”

“All of our aircraft are now on lease or committed to leases,” added Barrington. “The global airline industry is strong with air traffic and airline load factors at or near all-time highs. Demand for leased aircraft remains strong and we are seeing improvements in lease rates. As we look ahead to 2014, FLY is well positioned to benefit from its strong financial position, its growing fleet and improving industry conditions. As a result, FLY’s board has authorized a 14% increase in the dividend to be declared in respect of the fourth quarter of 2013. FLY remains committed to returning capital to shareholders.”

On October 14, 2013, FLY declared a dividend of $0.22 per share in respect of the third quarter of 2013. This dividend will be paid on November 19, 2013 to shareholders of record on October 30, 2013. FLY’s board has authorized an increase in the dividend to be declared in respect of the fourth quarter of 2013 to $0.25.

At September 30, 2013, FLY’s total assets were $3.3 billion, including flight equipment with a net book value of $2.9 billion. Total cash at September 30, 2013 was $362.9 million, of which $207.0 million was unrestricted. This compares to total cash of $300.6 million at December 31, 2012, of which $163.1 million was unrestricted.

In July, FLY completed an underwritten public offering of 13,142,856 common shares in the form of ADSs at a price of $14.00 per ADS, generating net proceeds of approximately $172.6 million.

FLY’s net leverage ratio, defined as the ratio of net debt to total shareholders’ equity was 2.7x at September 30, 2013 compared to 3.6x at December 31, 2012. Net debt is defined as book value of secured borrowings, less unrestricted cash and cash equivalents.

At September 30, 2013, FLY’s 107 aircraft were on lease to 56 airlines in 32 countries. The table below shows the aircraft in FLY’s portfolio on September 30, 2013 and December 31, 2012. The table does not include the four B767 aircraft owned by a joint venture in which FLY has a 57% interest.

At September 30, 2013, the average age of FLY’s portfolio was 8.8 years weighted by the net book value of each aircraft. The average remaining lease term was 4.0 years, also weighted by net book value. At September 30, 2013, the leases were generating annualized revenues of approximately $345 million. FLY’s lease utilization factor was 97% for the third quarter of 2013 and was 95% for the nine months ended September 30, 2013.

Dino D'Amore
By Dino D'Amore November 7, 2013 12:57
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