FLY Leasing Reports Fourth Quarter and Full Year 2014 Financial Results
DUBLIN, March 11, 2015 /PRNewswire/ -- FLY Leasing Limited (NYSE: FLY), a global leader in aircraft leasing, today announced its financial results for the fourth quarter and full year of 2014.
Fourth Quarter 2014 Highlights
- Net income of $15.5 million, $0.37 per share
- Total revenues of $120.3 million, 40% up on Q4 2013
- Acquired six aircraft for $275.7 million, increasing portfolio to 127 aircraft
- Raised $400 million in unsecured debt to finance aircraft acquisitions
- Declared 29th consecutive quarterly dividend
2014 Full Year Highlights
- Net income of $56.1 million, $1.32 per share
- Total revenues of $426.7 million, 15% up on prior year
- Grew portfolio value by 22% to $3.7 billion
- Invested $951.5 million in 22 aircraft
- Sold eight aircraft for a net gain of $18.9 million
- Unrestricted cash of $337.6 million at year end
- Paid four quarterly dividends totaling $1.00 per share
"FLY is reporting strong fourth quarter and full year results," said Colm Barrington, FLY's CEO. "Our fourth quarter and full year revenues are up 40% and 15%, respectively, driven by the successful rejuvenation of our fleet through the acquisition of newer aircraft and the sale of older models. This strategy has lowered the average age of our fleet to 7.8 years and increased our average lease term to over five years. We grew our book value per share to $18.32."
"This is the second successive year in which we have grown our fleet substantially," added Barrington. "In 2014, we bought 22 aircraft, mainly through sale and leaseback transactions with airlines, increasing our fleet value by 22% to more than $3.7 billion. In addition, we have continued to monetize older aircraft at premiums to book value, demonstrating the strong inherent value in our fleet. And we have continued to pay attractive quarterly dividends of 25 cents per share."
"The global airline industry is in a healthy state, spurred by increasing passenger traffic and lower fuel prices. Airline profits reached record levels in 2014, with further improvements forecast for 2015. This industry health has stimulated demand from our airline customers to grow their fleets, and with aircraft manufacturers sold out for many years ahead, leasing is a key source of additional capacity. With ample capital and a nimble strategy that allows us to act quickly to take advantage of opportunities in the market, FLY is in an excellent position to continue its growth and deliver value to its shareholders," said Barrington.
Financial Results
FLY is reporting Net income of $15.5 million or $0.37 per diluted share for the fourth quarter of 2014. This compares to Net income of $13.4 million or $0.32 per diluted share for the same period of 2013. The fourth quarter 2014 results include $21.7 million of end of lease income compared to the fourth quarter of 2013 in which there was none. However, the fourth quarter 2013 results included $18.6 million in net gains associated with refinancing transactions.
Total revenues for the fourth quarter of 2014 were $120.3 million, compared to $85.5 million for the same period in the previous year, an increase of 40.7%.
Net income for the year ended December 31, 2014 was $56.1 million or $1.32 per diluted share compared to $52.5 million or $1.50 per diluted share for 2013. For 2014, end of lease income was $39.8 million and gains on aircraft sales totaled $18.9 million. The 2013 results included $47.6 million in end of lease income and $6.3 million in gains on aircraft sales.
Total revenues for 2014 were $426.7 million, compared to $369.5 million in 2013, an increase of 15.5%.
Adjusted Net Income
Adjusted Net Income was $16.9 million for the fourth quarter of 2014 compared to $4.9 million in the same period in the previous year. On a per share basis, Adjusted Net Income was $0.41 in the fourth quarter of 2014 compared to $0.12 in the fourth quarter of 2013.
For each of the years ended December 31, 2014 and 2013, Adjusted Net Income was $57.4 million. On a per share basis, Adjusted Net Income was $1.38 in 2014 and $1.68 in 2013.
A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.
Dividend
On February 20, 2015, FLY paid a dividend of $0.25 per share in respect of the fourth quarter of 2014 to shareholders of record on January 30, 2015. This dividend is FLY's 29th consecutive quarterly dividend and brought the total dividend in respect of 2014 to $1.00 per share. Dividends paid since FLY was listed in September 2007 total $7.37 per share.
Financial Position
At December 31, 2014, FLY's total assets were $4.2 billion, including flight equipment with a net book value of $3.7 billion. Total cash at December 31, 2014 was $476.7 million, of which $337.6 million was unrestricted.
Aircraft Portfolio
At December 31, 2014, FLY's 127 aircraft, shown in the table below, were on lease to 64 lessees in 36 countries.
|
Portfolio(1) at |
Dec. 31, |
Dec 31, |
|
Airbus A319 |
18 |
19 |
|
Airbus A320 |
27 |
27 |
|
Airbus A321 |
3 |
- |
|
Airbus A330 |
4 |
1 |
|
Airbus A340 |
3 |
3 |
|
Boeing 737 |
57 |
48 |
|
Boeing 747 |
1 |
1 |
|
Boeing 757 |
11 |
11 |
|
Boeing 767 |
1 |
1 |
|
Boeing 777 |
1 |
1 |
|
Boeing 787 |
1 |
1 |
|
Total |
127 |
113 |
|
(1) The table does not include the four B767 aircraft owned by a joint venture in which FLY has a 57% interest |
At December 31, 2014, the average age of FLY's fleet, weighted by the net book value of each aircraft, was 7.8 years compared to 8.6 years at December 31, 2013. The average remaining lease term, also weighted by net book value, was 5.3 years as of December 31, 2014, an increase of approximately 12 months from the prior year. At December 31, 2014, FLY's leases were generating annualized revenues of approximately $420 million. FLY's lease utilization factor was 99% for the fourth quarter of 2014 and for the year ended December 31, 2014. At December 31, 2014, there were three aircraft off-lease.
Conference Call and Webcast
FLY's senior management will host a conference call and webcast to discuss these results at 9:00 a.m. U.S. Eastern Time on Wednesday, March 11, 2015. Participants should call +1-253-237-1145 (International) or 800-535-7056 (North America) and enter confirmation code 67575239 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 67575239. The telephone replay will be available for one week. A live webcast of the conference call will be also available in the investor section of FLY's website at www.flyleasing.com. An archived webcast will be available for one year.
About FLY
FLY is a global aircraft leasing company with a fleet of modern, high-demand and fuel-efficient commercial jet aircraft. FLY acquires and leases its aircraft under multi-year operating 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.
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 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. 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
[email protected]
|
FLY Leasing Limited | ||||
|
Consolidated Statements of Income | ||||
|
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||
|
Three months |
Three months |
Year ended |
Year ended | |
|
Revenues |
||||
|
Operating lease revenue |
$ 119,993 |
$ 84,826 |
$ 404,668 |
$ 359,409 |
|
Equity earnings from unconsolidated subsidiary |
351 |
494 |
2,456 |
1,871 |
|
Gain on sale of aircraft |
— |
— |
18,878 |
6,277 |
|
Interest and other income |
(56) |
149 |
662 |
1,930 |
|
Total revenues |
120,288 |
85,469 |
426,664 |
369,487 |
|
Expenses |
||||
|
Depreciation |
49,059 |
39,749 |
175,547 |
146,400 |
|
Aircraft impairment |
— |
8,825 |
— |
8,825 |
|
Interest expense |
40,392 |
30,198 |
142,519 |
120,399 |
|
Net (gain) loss on extinguishment of debt |
88 |
(18,585) |
(3,922) |
(15,881) |
|
Selling, general and administrative |
10,313 |
10,055 |
41,148 |
37,418 |
|
Ineffective, dedesignated and terminated derivatives |
189 |
(243) |
72 |
(1,263) |
|
Maintenance and other costs |
2,286 |
2,967 |
6,960 |
15,454 |
|
Total expenses |
102,327 |
72,966 |
362,324 |
311,352 |
|
Net income before provision for income taxes |
17,961 |
12,503 |
64,340 |
58,135 |
|
Provision (benefit) for income taxes |
2,482 |
(909) |
8,263 |
5,659 |
|
Net income |
$ 15,479 |
$ 13,412 |
$ 56,077 |
$ 52,476 |
|
Weighted average number of shares |
||||
|
- Basic |
41,432,998 |
41,306,338 |
41,405,211 |
34,129,880 |
|
- Diluted |
41,479,349 |
41,431,486 |
41,527,584 |
34,243,456 |
|
Earnings per share |
||||
|
- Basic |
$ 0.37 |
$ 0.32 |
$ 1.32 |
$ 1.51 |
|
- Diluted |
$ 0.37 |
$ 0.32 |
$ 1.32 |
$ 1.50 |
|
Dividends declared and paid per share |
$ 0.25 |
$ 0.22 |
$ 1.00 |
$ 0.88 |
|
FLY Leasing Limited | ||
|
Consolidated Balance Sheets | ||
|
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) | ||
|
Dec. 31, |
Dec. 31, | |
|
Assets |
||
|
Cash and cash equivalents |
$ 337,560 |
$ 404,472 |
|
Restricted cash and cash equivalents |
139,139 |
174,829 |
|
Rent receivables |
4,887 |
2,922 |
|
Investment in unconsolidated subsidiary |
4,002 |
8,179 |
|
Flight equipment held for operating lease, net |
3,705,407 |
3,034,912 |
|
Fair market value of derivative assets |
2,067 |
7,395 |
|
Other assets, net |
31,608 |
39,650 |
|
Total assets |
$ 4,224,670 |
$ 3,672,359 |
|
Liabilities |
||
|
Accounts payable and accrued liabilities |
$ 18,431 |
$ 16,592 |
|
Rentals received in advance |
19,751 |
17,422 |
|
Payable to related parties |
2,772 |
3,756 |
|
Security deposits |
64,058 |
52,837 |
|
Maintenance payment liability |
254,514 |
233,811 |
|
Unsecured borrowings, net |
689,452 |
291,567 |
|
Secured borrowings, net |
2,335,328 |
2,254,705 |
|
Fair market value of derivative liabilities |
23,311 |
24,577 |
|
Deferred tax liability, net |
16,289 |
7,746 |
|
Other liabilities |
41,890 |
20,523 |
|
Total liabilities |
3,465,796 |
2,923,536 |
|
Shareholders' equity |
||
|
Common shares, $0.001 par value, 499,999,900 shares authorized; 41,432,998 and 41,306,338 shares issued and outstanding at December 31, 2014 and 2013, respectively |
41 |
41 |
|
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding |
— |
— |
|
Additional paid-in capital |
658,522 |
658,492 |
|
Retained earnings |
117,402 |
104,143 |
|
Accumulated other comprehensive loss, net |
(17,091) |
(13,853) |
|
Total shareholders' equity |
758,874 |
748,823 |
|
Total liabilities and shareholders' equity |
$ 4,224,670 |
$ 3,672,359 |
|
FLY Leasing Limited | ||||||||||
|
Consolidated Statements of Cash Flows | ||||||||||
|
(DOLLARS IN THOUSANDS) | ||||||||||
|
Year ended |
Year ended | |||||||||
|
Dec. 31, 2014 |
Dec. 31, 2013 | |||||||||
|
Cash Flows from Operating Activities |
||||||||||
|
Net Income |
$ |
56,077 |
$ |
52,476 | ||||||
|
Adjustments to reconcile net income to net cash flows provided by operating activities: |
||||||||||
|
Equity earnings from unconsolidated subsidiary |
(2,456) |
(1,871) | ||||||||
|
Gain on sale of aircraft |
(18,878) |
(6,277) | ||||||||
|
Depreciation |
175,547 |
146,400 | ||||||||
|
Aircraft impairment |
— |
8,825 | ||||||||
|
Amortization of debt issuance costs |
5,380 |
5,735 | ||||||||
|
Amortization of lease incentives |
18,934 |
9,019 | ||||||||
|
Amortization of lease discounts/premiums and other items |
9,977 |
8,173 | ||||||||
|
Amortization of fair market value adjustments associated with the GAAM acquisition |
6,260 |
12,602 | ||||||||
|
Net gain on extinguishment of debt |
(3,960) |
(15,881) | ||||||||
|
Share-based compensation |
30 |
3,177 | ||||||||
|
Provision for deferred income taxes |
6,169 |
6,195 | ||||||||
|
Unrealized loss (gain) on derivative instruments |
38 |
(1,263) | ||||||||
|
Security deposits and maintenance payment liability relieved |
(30,376) |
(31,360) | ||||||||
|
Security deposits and maintenance payment claims applied towards operating lease revenues |
— |
(2,596) | ||||||||
|
Distributions from unconsolidated subsidiary |
5,501 |
— | ||||||||
|
Changes in operating assets and liabilities: |
||||||||||
|
Rent receivables |
(4,767) |
(4,982) | ||||||||
|
Other assets |
(1,589) |
(1,969) | ||||||||
|
Payable to related parties |
(12,848) |
(10,544) | ||||||||
|
Accounts payable and accrued liabilities |
7,407 |
(1,305) | ||||||||
|
Rentals received in advance |
2,699 |
2,344 | ||||||||
|
Other liabilities |
8,020 |
4,576 | ||||||||
|
Net cash flows provided by operating activities |
227,165 |
181,474 | ||||||||
|
Cash Flows from Investing Activities |
||||||||||
|
Distributions from unconsolidated subsidiary |
1,132 |
— | ||||||||
|
Purchase of additional aircraft |
(915,450) |
(632,944) | ||||||||
|
Proceeds from sale of aircraft |
88,617 |
48,539 | ||||||||
|
Payment for aircraft improvement |
(9,841) |
— | ||||||||
|
Lessor contribution to maintenance |
(5,017) |
(24,185) | ||||||||
|
Net cash flows used in investing activities |
(840,559) |
(608,590) | ||||||||
|
Year ended |
Year ended | |||||||||
|
Dec. 31, 2014 |
Dec. 31, 2013 | |||||||||
|
Cash Flows from Financing Activities |
||||||||||
|
Restricted cash and cash equivalents |
35,690 |
(39,731) | ||||||||
|
Security deposits received |
18,134 |
13,910 | ||||||||
|
Security deposits returned |
(4,728) |
(7,271) | ||||||||
|
Maintenance payment liability receipts |
85,172 |
56,968 | ||||||||
|
Maintenance payment liability disbursements |
(45,412) |
(16,612) | ||||||||
|
Debt extinguishment costs |
— |
(3,856) | ||||||||
|
Proceeds from unsecured borrowings |
396,563 |
291,389 | ||||||||
|
Proceeds from secured borrowings |
298,658 |
587,083 | ||||||||
|
Proceeds from Term Loan upsizing |
— |
101,892 | ||||||||
|
Debt issuance costs |
(1,803) |
(11,825) | ||||||||
|
Repayment of secured borrowings |
(192,974) |
(444,607) | ||||||||
|
Proceeds from issuance of shares, net of fees paid |
— |
172,595 | ||||||||
|
Dividends |
(41,392) |
(30,531) | ||||||||
|
Dividend equivalents |
(1,426) |
(940) | ||||||||
|
Net cash flows provided by financing activities |
546,482 |
668,464 | ||||||||
|
Net increase (decrease) in cash |
(66,912) |
241,348 | ||||||||
|
Cash at beginning of period |
404,472 |
163,124 | ||||||||
|
Cash at end of period |
$ |
337,560 |
$ |
404,472 | ||||||
|
Supplemental Disclosure: |
||||||||||
|
Cash paid during the period for: |
||||||||||
|
Interest |
$ |
119,745 |
$ |
97,451 | ||||||
|
Taxes |
188 |
84 | ||||||||
|
Noncash Activities: |
||||||||||
|
Other liabilities applied to maintenance payment liability and rent receivables |
979 |
— | ||||||||
|
Security deposits applied to maintenance payment liability, rent receivables, rentals received in advance, and other assets |
1,938 |
1,414 | ||||||||
|
Maintenance payment liability applied to rent receivables and rentals received in advance |
-- |
4,446 | ||||||||
|
Noncash activities in connection with purchase of aircraft: |
||||||||||
|
Security deposits and maintenance payment liability assumed |
16,559 |
1,774 | ||||||||
|
Other liabilities applied to purchase of aircraft |
6,885 |
— | ||||||||
|
Rent receivable applied to purchase of aircraft |
1,567 |
— | ||||||||
|
Deposits applied to purchase of aircraft |
991 |
— | ||||||||
|
Noncash activities in connection with sale of aircraft: |
||||||||||
|
Security deposits and maintenance payment liability applied |
8,678 |
— | ||||||||
|
Refundable deposits applied to sale of aircraft |
3,376 |
— | ||||||||
|
Rent receivable applied to sale of aircraft |
425 |
— | ||||||||
|
Secured borrowings assumed by buyer |
— |
38,500 | ||||||||
|
Derivative liabilities assumed by buyer |
— |
5,000 | ||||||||
|
FLY Leasing Limited | |||||
|
Reconciliation of Adjusted Net Income, a Non-GAAP Financial Measure, to Net Income | |||||
|
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||
|
Three months Dec. 31, 2014 |
Three months |
Year ended |
Year ended | ||
|
Net Income |
$ 15,479 |
$ 13,412 |
$ 56,077 |
$ 52,476 | |
|
Add (less): |
|||||
|
Ineffective, dedesignated and terminated derivatives |
189 |
(243) |
72 |
(1,263) | |
|
Net (gain) loss on extinguishment of debt |
88 |
(18,585) |
(3,922) |
(15,881) | |
|
Aircraft impairment |
— |
8,825 |
— |
8,825 | |
|
Non-cash share based compensation |
80 |
892 |
30 |
3,177 | |
|
Adjustments related to GAAM Portfolio acquisition: |
|||||
|
Amortization of fair value adjustments recorded in purchase accounting |
1,307 |
1,647 |
6,260 |
12,602 | |
|
Income tax effects |
(202) |
(1,045) |
(1,148) |
(2,553) | |
|
Adjusted Net Income |
$ 16,941 |
$ 4,903 |
$ 57,369 |
$ 57,383 | |
|
Weighted average diluted shares outstanding |
41,479,349 |
41,431,486 |
41,527,584 |
34,243,456 | |
|
Adjusted Net Income per share |
$ 0.41 |
$ 0.12 |
$ 1.38 |
$ 1.68 | |
|
Adjusted Net Income Plus Depreciation and Amortization, a Non-GAAP Financial Measure, to Net Income | |||||
|
(DOLLARS IN THOUSANDS) | |||||
|
Three months |
Three months |
Year ended |
Year ended | ||
|
Adjusted Net Income |
$ 16,941 |
$ 4,903 |
$ 57,369 |
$ 57,383 | |
|
Add: |
|||||
|
Depreciation |
49,059 |
39,749 |
175,547 |
146,400 | |
|
Other amortization |
9,209 |
4,784 |
33,320 |
21,676 | |
|
Provision for deferred income taxes |
829 |
194 |
7,317 |
8,748 | |
|
Adjusted Net Income Plus Depreciation and Amortization |
$ 76,038 |
$ 49,630 |
$ 273,553 |
$ 234,207 | |
FLY defines Adjusted Net Income as net income plus or minus the after-tax impacts of ineffective, dedesignated or terminated cash flow hedges, non-cash share-based compensation, gains and losses on extinguishment of debt, impairment charges, and adjustments related to the GAAM portfolio acquisition comprised of amortization of fair value adjustments recorded in purchase accounting. FLY believes that Adjusted Net Income provides information that is useful in evaluating the operating performance of FLY's business and facilitates period over period comparisons. It also provides additional information that is useful for evaluating the underlying operating performance of FLY's business without regard to gains and losses related to refinancing activity, impairment charges, share based compensation, changes in the fair value of ineffective cash flow hedges, and the impacts of fair-value adjustments of debt and leases that FLY assumed in connection with the GAAM portfolio.
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, this measure excludes certain positive and negative cash items, including principal payments on debt, and therefore 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 measures for assessing FLY's performance.
Adjusted Net Income and Adjusted Net Income Plus Depreciation and Amortization should be considered as supplements to, and not as a substitute for net income or other financial measures determined in accordance with U.S. generally accepted accounting principles. FLY's definitions may be different than those used by other companies.
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SOURCE FLY Leasing Limited
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