(Exact Name of registrant as specified in its charter)
|
(Address of principal executive office)
|
Form 20-F ☑
|
Form 40-F ☐
|
Exhibit
|
Title
|
|
99.1
|
Unaudited pro forma financial statements
|
Fly Leasing Limited
|
||||
(Registrant)
|
||||
Date:
|
October 2, 2015
|
By:
|
/s/ Gary Dales
|
|
Gary Dales
Chief Financial Officer |
Exhibit
|
Title
|
|
99.1
|
Unaudited pro forma financial statements
|
Aircraft Type
|
||||
Airbus A319
|
5
|
|||
Airbus A321
|
2
|
|||
Airbus A320
|
10
|
|||
Airbus A330-300
|
1
|
|||
Boeing 737-800
|
14
|
|||
Boeing 777-300ER
|
1
|
|||
Total
|
33
|
Fly
Historical |
Pro forma
Adjustments |
Note
|
Pro forma
Balance |
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$
|
350,220
|
$
|
424,953
|
(1
|
)
|
$
|
775,173
|
||||||||
Restricted cash and cash equivalents
|
111,897
|
(20,199
|
)
|
(2
|
)
|
91,698
|
||||||||||
Rent receivables
|
1,633
|
─
|
1,633
|
|||||||||||||
Investment in unconsolidated subsidiary
|
4,683
|
─
|
4,683
|
|||||||||||||
Flight equipment held for sale
|
933,662
|
(933,662
|
)
|
(3
|
)
|
─
|
||||||||||
Flight equipment held for operating leases, net
|
2,660,638
|
─
|
2,660,638
|
|||||||||||||
Fair value of derivative assets
|
487
|
(149
|
)
|
(4
|
)
|
338
|
||||||||||
Other assets
|
23,511
|
(4,573
|
)
|
(5
|
)
|
18,938
|
||||||||||
Total assets
|
$
|
4,086,731
|
$
|
(533,630
|
)
|
$
|
3,553,101
|
|||||||||
Liabilities
|
||||||||||||||||
Accounts payable and accrued liabilities
|
$
|
19,903
|
$
|
─ | $ |
19,903
|
||||||||||
Rentals received in advance
|
17,781
|
(5,137
|
)
|
(6
|
)
|
12,644
|
||||||||||
Payable to related parties
|
3,328
|
─
|
3,328
|
|||||||||||||
Security deposits
|
59,153
|
(17,437
|
)
|
(7
|
)
|
41,716
|
||||||||||
Maintenance payment liabilities
|
250,425
|
(57,218
|
)
|
(7
|
)
|
193,207
|
||||||||||
Unsecured borrowings, net
|
690,280
|
─
|
690,280
|
|||||||||||||
Secured borrowings, net
|
2,268,900
|
(480,624
|
)
|
(8
|
)
|
1,788,276
|
||||||||||
Deferred tax liability, net
|
11,946
|
3,991
|
(9
|
)
|
15,937
|
|||||||||||
Fair value of derivative liabilities
|
21,100
|
(1,570
|
)
|
(10
|
)
|
19,530
|
||||||||||
Other liabilities
|
45,536
|
(3,574
|
)
|
(11
|
)
|
41,962
|
||||||||||
Total liabilities
|
3,388,352
|
(561,569
|
)
|
2,826,783
|
||||||||||||
Total shareholders’ equity
|
698,379
|
27,939
|
(12
|
)
|
726,318
|
|||||||||||
Total liabilities and shareholders’ equity
|
$
|
4,086,731
|
$
|
(533,630
|
)
|
$
|
3,553,101
|
Fly
Historical |
Pro forma
Adjustments
|
Note
|
Pro forma
Balance
|
|||||||||||||
Revenues
|
||||||||||||||||
Operating lease revenue
|
$
|
404,668
|
$
|
(94,804
|
)
|
(13
|
)
|
$
|
309,864
|
|||||||
Equity earnings from unconsolidated subsidiary
|
2,456
|
─
|
2,456
|
|||||||||||||
Gain on sale of aircraft
|
18,878
|
─
|
(14
|
)
|
18,878
|
|||||||||||
Interest and other income
|
662
|
─
|
662
|
|||||||||||||
Total revenues
|
426,664
|
(94,804
|
)
|
331,860
|
||||||||||||
Expenses
|
||||||||||||||||
Depreciation
|
175,547
|
(45,918
|
)
|
(15
|
)
|
129,629
|
||||||||||
Interest expense
|
142,519
|
(17,542
|
)
|
(16
|
)
|
124,977
|
||||||||||
Selling, general and administrative
|
41,148
|
(7,976
|
)
|
(17
|
)
|
33,172
|
||||||||||
Ineffective, dedesignated and terminated derivatives
|
72
|
─
|
(18
|
)
|
72
|
|||||||||||
Net gain on extinguishment of debt
|
(3,922
|
)
|
─
|
(19
|
)
|
(3,922
|
)
|
|||||||||
Maintenance and other costs
|
6,960
|
(2,885
|
)
|
(20
|
)
|
4,075
|
||||||||||
Total expenses
|
362,324
|
(74,321
|
)
|
288,003
|
||||||||||||
Net income (loss) before provision for income taxes
|
64,340
|
(20,483
|
)
|
43,857
|
||||||||||||
Provision (benefit) for income taxes
|
8,263
|
(2,560
|
)
|
(21
|
)
|
5,703
|
||||||||||
Net income (loss)
|
$
|
56,077
|
$
|
(17,923
|
)
|
$
|
38,154
|
|||||||||
Weighted average number of shares:
|
||||||||||||||||
Basic
|
41,405,211
|
41,405,211
|
||||||||||||||
Diluted
|
41,527,584
|
41,527,584
|
||||||||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$
|
1.32
|
$
|
0.89
|
||||||||||||
Diluted
|
$
|
1.32
|
$
|
0.88
|
Fly
Historical |
Pro forma
Adjustments
|
Note
|
Pro forma
Balance
|
|||||||||||||
Revenues
|
||||||||||||||||
Operating lease revenue
|
$
|
221,787
|
$
|
(48,707
|
)
|
(13
|
)
|
$
|
173,080
|
|||||||
Equity earnings from unconsolidated subsidiary
|
681
|
─
|
681
|
|||||||||||||
Gain on sale of aircraft
|
1,897
|
─
|
(14
|
)
|
1,897
|
|||||||||||
Interest and other income
|
1,003
|
─
|
1,003
|
|||||||||||||
Total revenues
|
225,368
|
(48,707
|
)
|
176,661
|
||||||||||||
Expenses
|
||||||||||||||||
Depreciation
|
99,736
|
(25,586
|
)
|
(15
|
)
|
74,150
|
||||||||||
Aircraft impairment
|
65,398
|
─
|
65,398
|
|||||||||||||
Interest expense
|
76,529
|
(7,959
|
)
|
(16
|
)
|
68,570
|
||||||||||
Selling, general and administrative
|
18,837
|
(4,239
|
)
|
(17
|
)
|
14,598
|
||||||||||
Ineffective, dedesignated and terminated derivatives
|
1,492
|
─
|
(18
|
)
|
1,492
|
|||||||||||
Net loss on debt modification and extinguishment
|
6,169
|
─
|
(19
|
)
|
6,169
|
|||||||||||
Maintenance and other costs
|
2,663
|
(758
|
)
|
(20
|
)
|
1,905
|
||||||||||
Total expenses
|
270,824
|
(38,542
|
)
|
232,282
|
||||||||||||
Net loss before benefit for income taxes
|
(45,456
|
)
|
(10,165
|
)
|
(55,621
|
)
|
||||||||||
Benefit for income taxes
|
(4,467
|
)
|
(1,271
|
)
|
(21
|
)
|
(5,738
|
)
|
||||||||
Net loss
|
$
|
(40,989
|
)
|
$ |
(8,894
|
)
|
$
|
(49,883
|
)
|
|||||||
Weighted average number of shares:
|
||||||||||||||||
Basic
|
41,444,957
|
41,444,957
|
||||||||||||||
Diluted
|
41,444,957
|
41,444,957
|
||||||||||||||
Loss per share:
|
||||||||||||||||
Basic and diluted
|
$
|
(1.00
|
)
|
$
|
(1.22
|
)
|
(1) | Represents the net cash proceeds from the Transaction after estimated: (i) selling fees and expenses, (ii) repayment of borrowings secured by aircraft in the Portfolio, (iii) loan prepayment penalties, (iv) swap breakage fees, and (v) remittance of maintenance reserve liabilities and security deposits to the Purchaser, assuming the Transaction closed on June 30, 2015. |
(in thousands)
|
||||
Selling price
|
$
|
985,223
|
||
Selling fees and expenses
|
(14,108
|
)
|
||
Principal balance of secured borrowings repaid with sale proceeds
|
(487,708
|
)
|
||
Prepayment penalties on secured borrowings
|
(1,455
|
)
|
||
Swap breakage fees
|
(1,544
|
)
|
||
Maintenance payment liabilities remitted to Purchaser funded by unrestricted cash
|
(48,845
|
)
|
||
Security deposits remitted to Purchaser funded by unrestricted cash
|
(6,610
|
)
|
||
Estimated cash proceeds
|
$
|
424,953
|
(2) | Represents the remittance to the Purchaser of an additional $20.2 million of security deposits and maintenance payment liabilities from restricted cash accounts held by Fly. |
(3) | Represents the aggregate net book value of aircraft in the Portfolio as of June 30, 2015. |
(4) | Represents the fair value of derivative assets anticipated to be terminated upon repayment of certain secured borrowings. |
(5) | Represents the write-off of (i) unamortized lease costs and lease premiums on aircraft in the Portfolio and (ii) unamortized loan fees associated with secured borrowings, which are expected to be extinguished: |
(in thousands)
|
||||
Lease costs, net
|
$
|
1,253
|
||
Unamortized lease premiums
|
417
|
|||
Loan issuance costs, net
|
2,903
|
|||
Total pro forma adjustment to other assets
|
$
|
4,573
|
(6) | Represents rentals received in advance on leases of aircraft in the Portfolio. |
(7) | Represents the security deposits and maintenance payment liabilities to be transferred to the Purchaser: |
Security Deposits
|
Maintenance
Payment Liabilities |
|||||||
(in thousands)
|
||||||||
Funded from unrestricted cash accounts
|
$
|
6,610
|
$
|
48,845
|
||||
Funded from restricted cash accounts
|
10,827
|
9,372
|
||||||
Total cash transferred to Purchaser
|
17,437
|
$
|
58,217
|
|||||
Maintenance payment liabilities – fair value adjustment
|
─
|
(999
|
)
|
|||||
Total pro forma adjustment
|
$
|
17,437
|
$
|
57,218
|
(8) | Represents the repayment of secured borrowings, net of unamortized debt discount: |
(in thousands)
|
||||
Securitization Notes
|
$
|
221,084
|
||
Nord LB Facility
|
78,027
|
|||
CBA Facility
|
32,659
|
|||
Other Aircraft Secured Borrowings
|
155,938
|
|||
Total principal repayments
|
487,708
|
|||
Unamortized debt discount
|
(7,084
|
)
|
||
Pro forma adjustment to secured borrowings, net
|
$
|
480,624
|
|
(9) | Represents the net effect on Fly’s deferred tax liability resulting from the Transaction. An effective tax rate of 12.5% was used, as Fly and the majority of its subsidiaries are tax residents of Ireland and therefore subject to a corporate tax rate of 12.5% on its trading income. |
(10) | Represents the fair market value of derivative liabilities anticipated to be terminated upon repayment of certain secured borrowings. |
(11) | Represents the write-off of other liabilities associated with the Portfolio: |
(in thousands)
|
||||
Lease incentives, net
|
$
|
2,974
|
|
|
Deferred rents payable
|
600
|
|
||
Total pro forma adjustment to other liabilities
|
$
|
3,574
|
|
(12) | Represents the after tax impact of the Transaction to Fly’s retained earnings assuming a 12.5% effective tax rate. |
(13) | Represents the operating lease revenues associated with the Portfolio, including end of lease income of $11.3 million and $2.4 million for the year ended December 31, 2014 and for the six month period ended June 30, 2015, respectively. |
(14) | Excludes gain on sale of aircraft resulting from the Transaction because such gain will not have a continuing impact on Fly’s results of operations. |
(15) | Represents the depreciation associated with the Portfolio. |
(16) | Represents the interest expense and amortization of debt discounts and loan issuance costs associated with certain secured borrowings that will be extinguished with a portion of the sale proceeds. |
(17) | Represents the management and servicing fees associated with the Portfolio. |
(in thousands)
|
||||
Rent fee
|
$
|
2,793
|
||
Administrative fee
|
183
|
|||
Reduction in management expense amount
|
5,000
|
|||
Total pro forma adjustment
|
$
|
7,976
|
(in thousands)
|
||||
Rent fee
|
$
|
1,631
|
||
Administrative fee
|
108
|
|||
Reduction in management expense amount
|
2,500
|
|||
Total pro forma adjustment
|
$
|
4,239
|
(18) | In instances where Fly has entered into interest rate swap agreements to hedge its interest rate exposure, extinguishment of the borrowings secured by aircraft in the Portfolio could result in swap ineffectiveness and dedesignations of hedge accounting. The potential impact from such event has not been included in the pro forma statements of income. |
(19) | Fly will extinguish certain secured borrowing associated with aircraft in the Portfolio which will result in non-cash write-offs of unamortized debt discounts and loan fees and certain prepayment penalties and breakage costs. Such amounts have not been included in the pro forma statements of income. |
(20) | Represents the historical maintenance related expenses incurred on aircraft in the Portfolio. |
(21) | Fly and the majority of its subsidiaries are tax residents of Ireland, subject to a corporate tax rate of 12.5% on its trading income. An effective tax rate of 12.5% was used for the pro forma statements of income. |