Fly Leasing : Q1 2021 Earnings Release

Fly Leasing Reports First Quarter 2021 Financial Results

Dublin, Ireland, May 13, 2021 - Fly Leasing Limited (NYSE: FLY) ("FLY"), a global leader in aircraft leasing, today announced its financial results for the first quarter of 2021.

Highlights

• Signed merger agreement to be acquired by Carlyle Aviation for $17.05 per share
• Total revenues of $80.9 million
• Net loss of $3.4 million, $0.11 per share
• Unrestricted cash and cash equivalents of $117.2 million
• $157 million net book value of unencumbered assets

"The pending acquisition of FLY by an affiliate of Carlyle Aviation Partners is on track and is expected to close in the third quarter," said Colm Barrington, CEO of FLY. "We believe that this transaction represents strong value for FLY shareholders with the per share cash consideration representing a premium of nearly 30% to FLY's closing price on March 26, 2021, the last trading day prior to the merger announcement."

"In the quarter, FLY's revenues and net income were again adversely impacted by the global pandemic," added Barrington. "While we are seeing improvements in some sectors of the global airline industry, particularly in U.S. and Chinese domestic traffic, there are still large parts of the world where COVID-19 is surging and both domestic and international air traffic is at a virtual standstill due to continuing travel restrictions. It now appears likely that it will be well into 2022 before global air traffic returns towards 2019 levels."

Financial Results

FLY is reporting a net loss of $3.4 million, or $0.11 per share, for the first quarter of 2021. This compares to net income of $38.1 million, or $1.24 per share, for the same period in 2020. During the first quarter of 2021, FLY recognized $5.9 million of costs associated with the pending transaction with Carlyle Aviation (see below under "Merger").

Adjusted Net Income (Loss)

Adjusted Net Loss was $1.4 million for the first quarter of 2021, compared to Adjusted Net Income of $43.6 million for the same period in the previous year. On a per share basis, Adjusted Net Loss was $0.04 in the first quarter of 2021, compared to Adjusted Net Income of $1.42 for the first quarter of 2020.

A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.

Financial Position

At March 31, 2021, FLY's total assets were $3.1 billion, including investment in flight equipment totaling $2.8 billion. Total cash at March 31, 2021 was $151.2 million, of which $117.2 million was unrestricted. At March 31, 2021, FLY's net debt to equity ratio was 2.2x, reduced from 2.3x as of December 31, 2020.

Merger

FLY announced on March 29, 2021 that it had entered into a definitive agreement to be acquired by an affiliate of Carlyle Aviation Partners ("Carlyle Aviation"), the commercial aviation investment and servicing arm within The Carlyle Group's $56 billion Global Credit platform. Under the terms of the Merger Agreement, FLY shareholders will receive $17.05 per share in cash, representing a total equity valuation of approximately $520 million. The total enterprise value of the transaction is approximately $2.36 billion. The transaction is expected to close in the third quarter of 2021 and is subject to customary closing conditions, including applicable regulatory clearance and the approval of FLY's shareholders. Given the pending transaction, FLY will not host a first quarter earnings call.

Aircraft Portfolio

At March 31, 2021, FLY had 84 aircraft and seven engines in its portfolio. FLY's aircraft and engines are on lease to 36 airlines in 22 countries. The table below does not include the engines.

Portfolio at		Mar. 31, 2021	Dec. 31, 2020
			% of Net Book		% of Net Book
		Number	Value	Number	Value
Airbus A320ceo Family	32	28%	32	28%
Airbus A320neo Family	1	2%	1	2%
Airbus A330	3	2%	3	2%
Boeing 737NG	40	39%	40	39%
Boeing 737 MAX	2	3%	2	3%
Boeing 777-LRF	2	11%	2	11%
Boeing 787	4	15%	4	15%
Total(1)	84	100%	84	100%

1. Includes six aircraft classified as held for sale as of March 31, 2021. No aircraft were classified as held for sale as of December 31, 2020.

At March 31, 2021, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 8.6 years. The average remaining lease term was 4.7 years, also weighted by net book value.

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About FLY

FLY is a global aircraft leasing company with a fleet of modern and fuel efficient commercial jet aircraft. FLY leases its aircraft under multi-year 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.

Non-GAAP Financial Measures

FLY provides all financial information in accordance with Generally Accepted Accounting Principles in the United States (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release certain non-GAAP financial measures, including Adjusted Net Income (Loss) and Adjusted Return on Equity. In calculating these non-GAAP financial measures, we have excluded certain amounts, as detailed in the reconciliation below.

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, operations 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, risks and uncertainties related to the merger transaction with Carlyle Aviation, and the risk that FLY may be unable to achieve its portfolio growth expectations, or to reap the benefits of such growth. Additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks. The extent to which the COVID-19 pandemic ultimately impacts FLY's business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. 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.

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Contact:

Matt Dallas

Fly Leasing Limited [phone]

[e-mail]

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Fly Leasing Limited

Consolidated Statements of Income (Loss)

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

			Three months ended Mar. 31,
			2021		2020
			(Unaudited)		(Unaudited)
Revenues
	Operating lease rental revenue	$	55,376	$	85,535
	End of lease income		25,811		2,427
	Amortization of lease incentives		(1,082)		(614)
	Amortization of lease discounts and other		(261)		92
	Operating lease revenue		79,844		87,440
	Finance lease revenue		129		145
	Gain on sale of aircraft		-		31,717
	Interest and other income		884		2,253
Total revenues		80,857		121,555
Expenses
	Depreciation		29,967		31,631
	Aircraft impairment		22,546		-
	Interest expense		22,066		27,155
	Selling, general and administrative		12,500		7,664
	Provision for uncollectible operating receivables		1,000		-
	(Gain) loss on derivatives		(2,724)		507
	Fair value (gain) loss on marketable securities		(1,839)		9,412
	Loss on extinguishment of debt		-		850
	Maintenance and other costs		1,104		1,184
Total expenses		84,620		78,403
	Net income (loss) before provision (benefit) for income taxes		(3,763)		43,152
	Provision (benefit) for income taxes		(370)		5,080
Net income (loss)	$	(3,393)	$	38,072
Weighted average number of shares
-	Basic		30,481,069		30,765,840
-	Diluted		30,481,069		30,768,029
Earnings (loss) per share
-	Basic and Diluted	$	(0.11)	$	1.24

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Fly Leasing Limited

Consolidated Balance Sheets

(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

		Mar. 31,		Dec. 31,
		2021		2020
		(Unaudited)		(Audited)
Assets
Cash and cash equivalents	$	117,231	$	132,097
Restricted cash and cash equivalents		34,000		29,432
Rent receivables, net		65,516		57,015
Investment in finance lease, net		10,075		10,396
Flight equipment held for sale, net		40,454		-
Flight equipment held for operating lease, net		2,438,666		2,529,428
Maintenance rights		279,124		279,124
Deferred tax asset, net		10,941		11,753
Fair value of derivative assets		3,570		2,085
Other assets, net		136,581		116,255
Total assets	$	3,136,158	$	3,167,585
Liabilities
Accounts payable and accrued liabilities	$	27,391	$	18,135
Rentals received in advance		6,620		8,724
Payable to related parties		4,362		4,058
Security deposits		36,226		36,439
Maintenance payment liability, net		201,820		203,684
Unsecured borrowings, net		297,082		296,876
Secured borrowings, net		1,603,986		1,642,242
Deferred tax liability, net		51,420		51,366
Fair value of derivative liabilities		35,648		46,169
Other liabilities		78,182		70,896
Total liabilities		2,342,737		2,378,589
Shareholders' equity
Common shares, $0.001 par value, 499,999,900 shares authorized;
30,481,069 shares issued and outstanding at March 31, 2021 and
December 31, 2020		31		31
Manager shares, $0.001 par value; 100 shares authorized, issued and				-
outstanding		-
Additional paid-in capital		509,738		509,738
Retained earnings		309,574		312,967
Accumulated other comprehensive loss, net		(25,922)		(33,740)
Total shareholders' equity		793,421		788,996
Total liabilities and shareholders' equity	$	3,136,158	$	3,167,585

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