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Press release from PR Newswire

FLY Leasing Reports First Quarter 2012 Financial Results

Thursday, May 03, 2012

FLY Leasing Reports First Quarter 2012 Financial Results07:00 EDT Thursday, May 03, 2012DUBLIN, May 3, 2012 /PRNewswire/ -- FLY Leasing Limited (NYSE: FLY) ("FLY"), a global lessor of modern, fuel-efficient commercial jet aircraft, today announced its financial results for the first quarter of 2012.First Quarter 2012 HighlightsAdjusted net income of $26.8 million, $1.04 per share Net income of $20.4 million, $0.78 per share Acquired two aircraft, bringing fleet total to 111 Extended $600 million debt facility through 2018 Declared 18th consecutive quarterly dividend Second quarter dividend to be increased by 10%"FLY is reporting very strong first quarter earnings, reflecting our significantly larger portfolio following last year's aircraft acquisitions," said Colm Barrington, CEO of FLY Leasing. "Our first quarter revenue increased by more than 100% from the same period last year. Our EPS and Adjusted Net Income per share have each grown by over 600% as compared to a year ago.  We ended the quarter with $159 million of unrestricted cash.""In April, FLY announced a dividend of $0.20 per share for the first quarter. This is our 18th consecutive quarterly dividend since we listed on the NYSE in 2007," added Barrington.  "FLY's board has authorized a 10% increase in the dividend to be declared in respect of the second quarter.  FLY remains committed to returning capital to shareholders in the form of a dividend.""During the first quarter we extended the term of a $600 million financing facility from 2012 until 2018 on attractive terms. This underscores the quality of FLY's fleet and the strength of our banking relationships," added Barrington. Financial Results FLY's net income and basic and diluted earnings per share for the first quarter of 2012 were $20.4 million and $0.78, respectively, compared to net income of $2.8 million and earnings per share of $0.10 for the same period in 2011. Contributing to the increase in earnings was $15.9 million of end of lease revenue.  Total revenues for the first quarter of 2012 were $104.5 million and include $86.5 million of rental revenue.  This 115% increase in revenue reflects the increased size of the fleet and end of lease revenue.  Likewise, operating expenses for the first quarter of 2012 were $81.5 million, a 76% increase over the same period in the previous year.  Adjusted Net IncomeAdjusted Net Income was $26.8 million for the first quarter of 2012 compared to $3.7 million in the same period in the previous year.  On a per share basis, Adjusted Net Income was $1.04 in the first quarter of 2012 compared to $0.14 for the same period in the previous year.Please see the reconciliation of Adjusted Net Income to net income determined in accordance with GAAP below.Dividends and Share Repurchases  On April 13, 2012, FLY declared a dividend of $0.20 per share in respect of the first quarter of 2012. This dividend will be paid on May 21, 2012 to shareholders of record on April 30, 2012.  FLY's board has authorized a 10% increase in the dividend to be declared in respect of the second quarter.  On May 2, 2012, the Company's Board of Directors approved a $25 million share repurchase program expiring in May 2013 to replace the previous program.  Under this program, FLY may make share repurchases from time to time in the open market or in privately negotiated transactions.  The timing of the repurchases under this program will depend upon a variety of factors, including market conditions, and the program may be suspended or discontinued at any time. Financial PositionAt March 31, 2012, FLY's total assets were $3.2 billion, including flight equipment with a net book value of $2.8 billion. Cash and cash equivalents at March 31, 2012 totaled $408.5 million, of which $158.6 million was unrestricted.  This compares to total cash and cash equivalents of $380.5 million at December 31, 2011, of which $82.1 million was unrestricted.  During the first quarter of 2012, FLY sold securitization notes with a face value of $106.7 million, generating net cash proceeds of $52.8 million after repayment of associated debt. Aircraft PortfolioAt March 31, 2012, FLY's 111 aircraft were on lease to 53 airlines in 29 countries.  Three aircraft were off lease.  Of these, we have entered into letters of intent with respect to two of these aircraft for delivery to new lessees in the second quarter. The table below shows the aircraft in FLY's portfolio as of March 31, 2012 and December 31, 2011. The table does not include four B767 aircraft owned by a joint venture in which FLY has a 57% interest.Portfolio atMar 31,2012Dec 31,2011Airbus A3192020Airbus A3202929Airbus A33011Airbus A34033Boeing 71766Boeing 7373937Boeing 74711Boeing 7571111Boeing 76711    Total111109At March 31, 2012, the average age of the portfolio was 8.7 years weighted by the net book value of each aircraft. The average remaining lease term was 3.3 years, also weighted by net book value. At March 31, 2012, FLY's leases were generating annualized rental revenues of approximately $360 million.Conference Call and WebcastFLY'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, May 3, 2012. Participants should call +1-706-758-4339 (International) or 877-309-0213 (North America) and enter confirmation code 68658978 or ask an operator for the FLY Leasing earnings call. A replay will be available shortly after the call. To access the replay, please dial +1-404-537-3406 (International) or 855-859-2056 (North America) and enter confirmation code 68658978. The replay recording will be available until May 10, 2012.A live webcast of the conference call will be also available in the investor section of FLY's website at An archived webcast will be available for one year.About FLY FLY acquires and leases modern, high-demand and fuel-efficient commercial jet aircraft under multi-year operating lease contracts to a diverse group of airlines throughout the world. FLY is managed and serviced by BBAM LP, one of the world's leading aircraft lease managers with more than 20 years of experience. For more information about FLY, please visit our website at Cautionary Statement Regarding Forward-Looking StatementsThis 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. 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 FLY Leasing LimitedConsolidated Statements of Income(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)Three monthperiod endedMar. 31, 2012(Unaudited)Three monthperiod endedMar. 31, 2011(Unaudited)Revenues   Operating lease revenue$  102,422$   47,568   Equity earnings from unconsolidated subsidiaries1,8551,216   Lease termination settlement-549   Interest and other income230336Total revenues104,50749,669Expenses   Depreciation34,17520,641   Interest expense37,02218,569   Selling, general and administrative9,3985,685   Maintenance and other costs8781,313Total expenses81,47346,208Net income before provision for income taxes23,0343,461   Provision for income taxes2,647698Net income$  20,387$   2,763Weighted average number of shares-  Basic25,714,00226,427,004-  Diluted25,838,62126,505,488Earnings per share-  Basic and diluted$   0.78$   0.10Dividends declared and paid per share$   0.20$   0.20FLY Leasing LimitedConsolidated Balance Sheets(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)Mar. 31,2012(Unaudited)Dec. 31,2011(Audited)Assets   Cash and cash equivalents$   158,550$   82,105   Restricted cash and cash equivalents.249,911298,404   Rent receivables1,1343,186   Investment in unconsolidated joint ventures16,81415,141   Flight equipment held for operating lease, net2,755,5492,762,289   Deferred tax asset, net2,3875,329   Fair market value of derivative asset2,7454,023   Other assets, net23,83828,021Total assets3,210,9283,198,498Liabilities   Accounts payable and accrued liabilities10,79510,429   Rentals received in advance14,93715,297   Payable to related parties1,0924,863   Security deposits48,03550,672   Maintenance payment liabilities223,231231,793   Secured borrowings, net2,337,9512,326,110   Fair market value of derivative liabilities91,39198,487   Other liabilities19,65717,814Total liabilities2,747,0892,755,465Shareholders' equityCommon shares, $0.001 par value, 499,999,900 shares authorized; 25,769,115 and 25,685,527 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively2626   Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding??   Additional paid in capital456,029455,186   Retained earnings73,02357,982   Accumulated other comprehensive loss, net(65,239)(70,161)Total shareholders' equity463,839443,033Total liabilities and shareholders' equity$3,210,928$3,198,498FLY Leasing LimitedReconciliation of Adjusted Net Income, a Non-GAAP Financial Measure, to Net Income(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)Three monthperiod endedMar. 31, 2012(Unaudited)Three monthperiod ended Mar. 31, 2011(Unaudited)Net Income$   20,387$   2,763Add (less):   Ineffective portion of cash flow hedges(19)-   Non-cash share-based compensation842952   Adjustments related to GAAM Portfolio acquisition:Amortization of fair value adjustments recorded in purchase accounting6,422-Acquisition transaction fees and expenses--   Income tax effects(840)-Adjusted Net Income$  26,792$   3,715Weighted average diluted shares outstanding25,838,62126,505,488Adjusted Net Income per share$      1.04$    0.14Adjusted Net Income Plus Depreciation and Amortization, a Non-GAAP Financial Measure(DOLLARS IN THOUSANDS)Three monthperiod ended Mar. 31, 2012(Unaudited)Three monthperiod endedMar. 31, 2011(Unaudited)Adjusted Net Income $ 26,792$   3,715Add:   Depreciation34,17520,641   Other amortization3,7843,720   Deferred income taxes3,020336Adjusted net income plus depreciation and amortization$ 67,771$  28,412FLY defines Adjusted Net Income as net income plus or minus the ineffective portion of cash flow hedges, aircraft impairment charges, non-cash share-based compensation and adjustments related to the GAAM portfolio acquisition comprised of amortization of fair value adjustments recorded in purchase accounting and acquisition transaction fees and expenses. Management believes that Adjusted Net Income provides useful information about operating performance and period-over-period comparisons. It also provides additional information that is useful in evaluating the underlying operating performance of our business without regard to the impact of items such as fair value adjustments of debt that the company has assumed, acquired leases and derivative instruments and some non-recurring items of income and expense affecting current period results. Adjusted Net Income should be used as a supplement to and not as a substitute for financial measures determined in accordance with Accounting Principles Generally Accepted in the United States (GAAP).  Adjusted Net Income Plus Depreciation and Amortization is a cash flow measure that provides investors with an additional measure for evaluating FLY's ongoing cash earnings, from which capital investments are made, debt is serviced and dividends are paid.  However, adjusted net income plus depreciation and amortization excludes certain positive and negative cash items, including principal payments, and has certain important limitations as an indicator of FLY's ability to pay dividends and reinvest in its business.  Management uses Adjusted Net Income and Adjusted Net Income Plus Depreciation and Amortization as a measure for assessing FLY's performance.  These measures should be considered in addition to, not as a substitute for net income or other financial measures determined in accordance with GAAP.  Finally, FLY's definitions may be different than those used by other companies. SOURCE FLY Leasing Limited