Exhibit
|
Title
|
99.1
|
Fly Leasing Limited’s interim report for the three months ended March 31, 2020.
|
Fly Leasing Limited
(Registrant)
|
|||
Date: May 8, 2020
|
By:
|
/s/ Colm Barrington
|
|
Colm Barrington
|
|||
Chief Executive Officer and Director
|
Exhibit
|
Title
|
Fly Leasing Limited’s interim report for the three months ended March 31, 2020.
|
Page
|
|
PART I FINANCIAL INFORMATION
|
|
3
|
|
26 | |
34
|
|
35
|
|
PART II OTHER INFORMATION
|
|
35
|
|
35
|
|
36 | |
36 | |
36 |
|
36 | |
36 |
Item 1. |
March 31, 2020
|
December 31, 2019
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
361,151
|
$
|
285,565
|
||||
Restricted cash and cash equivalents
|
30,593
|
52,738
|
||||||
Rent receivables
|
19,688
|
14,264
|
||||||
Investment in finance lease, net
|
11,334
|
11,639
|
||||||
Flight equipment held for sale, net
|
—
|
144,119
|
||||||
Flight equipment held for operating lease, net
|
2,716,757
|
2,720,000
|
||||||
Maintenance rights
|
280,152
|
290,958
|
||||||
Deferred tax asset, net
|
15,166
|
11,675
|
||||||
Fair value of derivative assets
|
7,152
|
4,824
|
||||||
Other assets, net
|
120,123
|
129,377
|
||||||
Total assets
|
$
|
3,562,116
|
$
|
3,665,159
|
||||
Liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
31,706
|
$
|
22,746
|
||||
Rentals received in advance
|
13,910
|
16,391
|
||||||
Payable to related parties
|
4,270
|
10,077
|
||||||
Security deposits
|
40,140
|
40,726
|
||||||
Maintenance payment liability, net
|
195,665
|
219,371
|
||||||
Unsecured borrowings, net
|
619,842
|
619,407
|
||||||
Secured borrowings, net
|
1,579,273
|
1,695,525
|
||||||
Deferred tax liability, net
|
63,030
|
57,935
|
||||||
Fair value of derivative liabilities
|
54,102
|
27,943
|
||||||
Other liabilities
|
69,942
|
76,761
|
||||||
Total liabilities
|
2,671,880
|
2,786,882
|
||||||
Shareholders’ equity
|
||||||||
Common shares, $0.001 par value; 499,999,900 shares authorized; 30,481,069 and 30,898,410 shares issued and outstanding at March 31, 2020 and December 31, 2019,
respectively
|
31
|
31
|
||||||
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding
|
—
|
—
|
||||||
Additional paid-in capital
|
509,738
|
516,254
|
||||||
Retained earnings
|
418,464
|
380,392
|
||||||
Accumulated other comprehensive loss, net
|
(37,997
|
)
|
(18,400
|
)
|
||||
Total shareholders’ equity
|
890,236
|
878,277
|
||||||
Total liabilities and shareholders’ equity
|
$
|
3,562,116
|
$
|
3,665,159
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Revenues
|
||||||||
Operating lease revenue
|
$
|
87,440
|
$
|
105,252
|
||||
Finance lease revenue
|
145
|
160
|
||||||
Gain on sale of aircraft
|
31,717
|
27,620
|
||||||
Interest and other income
|
2,253
|
1,671
|
||||||
Total revenues
|
121,555
|
134,703
|
||||||
Expenses
|
||||||||
Depreciation
|
31,631
|
37,585
|
||||||
Interest expense
|
27,155
|
38,179
|
||||||
Selling, general and administrative
|
7,664
|
8,722
|
||||||
Loss on derivatives
|
507
|
17
|
||||||
Fair value loss on marketable securities
|
9,412
|
—
|
||||||
Loss on extinguishment of debt
|
850
|
2,169
|
||||||
Maintenance and other costs
|
1,184
|
598
|
||||||
Total expenses
|
78,403
|
87,270
|
||||||
Net income before provision for income taxes
|
43,152
|
47,433
|
||||||
Provision for income taxes
|
5,080
|
2,468
|
||||||
Net income
|
$
|
38,072
|
$
|
44,965
|
||||
Weighted average number of shares:
|
||||||||
Basic
|
30,765,840
|
32,632,715
|
||||||
Diluted
|
30,768,029
|
32,632,715
|
||||||
Earnings per share:
|
||||||||
Basic and Diluted
|
$
|
1.24
|
$
|
1.38
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Net income
|
$
|
38,072
|
$
|
44,965
|
||||
Other comprehensive income, net of tax
|
||||||||
Change in fair value of derivatives, net of deferred tax(1)
|
(19,598
|
)
|
(6,938
|
)
|
||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment, net of deferred tax(2)
|
1
|
461
|
||||||
Comprehensive income
|
$
|
18,475
|
$
|
38,488
|
(1) |
The associated deferred tax benefit was $3,578 and $1,333 for the three months ended March 31, 2020 and 2019, respectively.
|
(2) |
The associated deferred tax expense was $37 for the three months ended March 31, 2019.
|
Manager
Shares
|
Common Shares
|
Additional |
Accumulated
Other
|
Total
|
||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount |
Paid-in
Capital
|
Retained
Earnings
|
Comprehensive
Loss, net
|
Shareholders’
Equity
|
|||||||||||||||||||||||||
Balance December 31, 2019
|
100
|
$
|
—
|
30,898,410
|
$
|
31
|
$
|
516,254
|
$
|
380,392
|
$
|
(18,400
|
)
|
$
|
878,277
|
|||||||||||||||||
Shares repurchased
|
—
|
—
|
(417,341
|
)
|
—
|
(6,516
|
)
|
—
|
—
|
(6,516
|
)
|
|||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
38,072
|
—
|
38,072
|
||||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $3,578(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(19,598
|
)
|
(19,598
|
)
|
||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment
|
—
|
—
|
—
|
—
|
—
|
—
|
1
|
1
|
||||||||||||||||||||||||
Balance March 31, 2020
|
100
|
$
|
—
|
30,481,069
|
$
|
31
|
$
|
509,738
|
$
|
418,464
|
$
|
(37,997
|
)
|
$
|
890,236
|
(1) |
See Note 10 to Notes to Consolidated Financial Statements.
|
Manager
Shares
|
Common Shares
|
Additional
|
Accumulated
Other
|
Total
|
||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount |
Paid-in
Capital
|
Retained
Earnings
|
Comprehensive
Loss, net
|
Shareholders’
Equity
|
|||||||||||||||||||||||||
Balance December 31, 2018
|
100
|
$
|
—
|
32,650,019
|
$
|
33
|
$
|
549,123
|
$
|
154,347
|
$
|
(1,393
|
)
|
$
|
702,110
|
|||||||||||||||||
Reclassification from prior period losses into other comprehensive loss due to adoption of new accounting guidance, net of deferred tax of $52(1)
|
—
|
—
|
—
|
—
|
—
|
168
|
(168
|
)
|
—
|
|||||||||||||||||||||||
Adjusted balance January 1, 2019
|
100
|
—
|
32,650,019
|
33
|
549,123
|
154,515
|
(1,561
|
)
|
702,110
|
|||||||||||||||||||||||
Shares repurchased
|
—
|
—
|
(197,592
|
)
|
(1
|
)
|
(2,694
|
)
|
—
|
—
|
(2,695
|
)
|
||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
44,965
|
—
|
44,965
|
||||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $1,333(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(6,938
|
)
|
(6,938
|
)
|
||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment, net of deferred tax of $37(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
461
|
461
|
||||||||||||||||||||||||
Balance March 31, 2019
|
100
|
$
|
—
|
32,452,427
|
$
|
32
|
$
|
546,429
|
$
|
199,480
|
$
|
(8,038
|
)
|
$
|
737,903
|
(1) |
See Note 10 to Notes to Consolidated Financial Statements.
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
38,072
|
$
|
44,965
|
||||
Adjustments to reconcile net income to net cash flows provided by operating activities:
|
||||||||
Gain on sale of aircraft
|
(31,717
|
)
|
(27,620
|
)
|
||||
Depreciation
|
31,631
|
37,585
|
||||||
Amortization of debt discounts and debt issuance costs
|
1,875
|
2,796
|
||||||
Amortization of lease incentives and other items
|
604
|
1,839
|
||||||
Fair value loss on marketable securities
|
9,412
|
—
|
||||||
Loss on extinguishment of debt
|
850
|
2,169
|
||||||
Provision for deferred income taxes
|
5,181
|
2,472
|
||||||
Maintenance payment liability recognized into earnings
|
(2,487
|
)
|
—
|
|||||
Other
|
268
|
(333
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Rent receivables
|
(7,036
|
)
|
2,505
|
|||||
Other assets
|
230
|
(742
|
)
|
|||||
Payable to related parties
|
(5,807
|
)
|
(393
|
)
|
||||
Accounts payable, accrued liabilities and other liabilities
|
9,957
|
7,348
|
||||||
Net cash flows provided by operating activities
|
51,033
|
72,591
|
||||||
Cash Flows from Investing Activities
|
||||||||
Purchase of flight equipment
|
(27,282
|
)
|
—
|
|||||
Proceeds from sale of aircraft, net
|
160,271
|
235,770
|
||||||
Payments for aircraft improvement
|
(6,294
|
)
|
(1,365
|
)
|
||||
Payments for lessor maintenance obligations
|
(347
|
)
|
(584
|
)
|
||||
Other
|
(231
|
)
|
(335
|
)
|
||||
Net cash flows provided by investing activities
|
126,117
|
233,486
|
||||||
Cash Flows from Financing Activities
|
||||||||
Security deposits received
|
3,305
|
—
|
||||||
Security deposits returned
|
—
|
(1,546
|
)
|
|||||
Maintenance payment liability receipts
|
7,848
|
17,016
|
||||||
Maintenance payment liability disbursements
|
(10,109
|
)
|
(8,604
|
)
|
||||
Debt extinguishment costs
|
(20
|
)
|
(54
|
)
|
||||
Debt issuance costs
|
—
|
(342
|
)
|
|||||
Repayment of secured borrowings
|
(118,211
|
)
|
(155,184
|
)
|
||||
Shares repurchased
|
(6,504
|
)
|
(2,117
|
)
|
||||
Net cash flows used in financing activities
|
(123,691
|
)
|
(150,831
|
)
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
|
$
|
(18
|
)
|
$
|
(59
|
)
|
||
Net increase in unrestricted and restricted cash and cash equivalents
|
53,441
|
155,187
|
||||||
Unrestricted and restricted cash and cash equivalents at beginning of period
|
338,303
|
281,080
|
||||||
Unrestricted and restricted cash and cash equivalents at end of period
|
$
|
391,744
|
$
|
436,267
|
||||
Reconciliation to Consolidated Balance Sheets:
|
||||||||
Cash and cash equivalents
|
$
|
361,151
|
$
|
363,930
|
||||
Restricted cash and cash equivalents
|
30,593
|
72,337
|
||||||
Unrestricted and restricted cash and cash equivalents
|
$
|
391,744
|
$
|
436,267
|
• |
The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;
|
• |
The policy for timing of transfers between levels; and
|
• |
The valuation processes for Level 3 fair value measurements.
|
• |
The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements at the end of the reporting period; and
|
• |
The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
(Dollars in thousands)
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
16,530
|
$
|
27,115
|
||||
Taxes
|
47
|
52
|
||||||
Noncash Activities:
|
||||||||
Security deposits applied to rent receivables, other liabilities and maintenance payment liability
|
1,120
|
—
|
||||||
Maintenance payment liability applied to rent receivables and other liabilities
|
6,661
|
2,404
|
||||||
Other liabilities applied to maintenance payment liability, security deposits and rent receivables
|
2,243
|
677
|
||||||
Noncash investing activities:
|
||||||||
Aircraft improvement
|
2,063
|
—
|
||||||
Noncash activities in connection with purchase of flight equipment
|
155
|
—
|
||||||
Noncash activities in connection with sale of flight equipment
|
6,162
|
4,627
|
March 31, 2020
|
December 31, 2019
|
|||||||
Total minimum lease payments receivable
|
$
|
9,150
|
$
|
9,600
|
||||
Estimated unguaranteed residual value of leased asset
|
4,227
|
4,227
|
||||||
Unearned finance income
|
(2,043
|
)
|
(2,188
|
)
|
||||
Net Investment in Finance Lease
|
$
|
11,334
|
$
|
11,639
|
(Dollars in thousands)
|
||||
April 1 through December 31, 2020
|
$
|
1,350
|
||
Year ending December 31,
|
||||
2021
|
1,800
|
|||
2022
|
1,800
|
|||
2023
|
1,800
|
|||
2024
|
1,800
|
|||
2025
|
600
|
|||
Future minimum rental payments under finance lease
|
$
|
9,150
|
Year ending December 31,
|
(Dollars in thousands)
|
|||
2020
|
$
|
1,800
|
||
2021
|
1,800
|
|||
2022
|
1,800
|
|||
2023
|
1,800
|
|||
2024
|
1,800
|
|||
Thereafter
|
600
|
|||
Future minimum rental payments under finance lease
|
$
|
9,600
|
March 31, 2020
|
December 31, 2019
|
|||||||
Cost
|
$
|
3,363,214
|
$
|
3,334,996
|
||||
Accumulated depreciation
|
(646,457
|
)
|
(614,996
|
)
|
||||
Flight equipment held for operating lease, net
|
2,716,757
|
2,720,000
|
March 31, 2020
|
December 31, 2019
|
|||||||||||||||
Europe:
|
||||||||||||||||
Spain
|
$
|
159,718
|
6
|
%
|
$
|
161,474
|
6
|
%
|
||||||||
United Kingdom
|
51,093
|
2
|
%
|
52,212
|
2
|
%
|
||||||||||
Other
|
254,964
|
9
|
%
|
259,176
|
9
|
%
|
||||||||||
Europe — Total
|
465,775
|
17
|
%
|
472,862
|
17
|
%
|
||||||||||
Asia and South Pacific:
|
||||||||||||||||
India
|
464,548
|
17
|
%
|
542,312
|
20
|
%
|
||||||||||
Malaysia
|
402,722
|
15
|
%
|
406,777
|
15
|
%
|
||||||||||
Philippines
|
263,042
|
10
|
%
|
264,814
|
10
|
%
|
||||||||||
Indonesia
|
218,130
|
8
|
%
|
220,304
|
8
|
%
|
||||||||||
China
|
166,542
|
6
|
%
|
168,703
|
6
|
%
|
||||||||||
Thailand
|
77,374
|
3
|
%
|
78,064
|
3
|
%
|
||||||||||
Other
|
35,281
|
1
|
%
|
35,649
|
1
|
%
|
||||||||||
Asia and South Pacific — Total
|
1,627,639
|
60
|
%
|
1,716,623
|
63
|
%
|
||||||||||
Mexico, South and Central America — Total
|
36,966
|
1
|
%
|
37,618
|
1
|
%
|
||||||||||
North America — Total
|
94,393
|
4
|
%
|
95,910
|
4
|
%
|
||||||||||
Middle East and Africa:
|
||||||||||||||||
Ethiopia
|
300,590
|
11
|
%
|
303,057
|
11
|
%
|
||||||||||
Other
|
114,374
|
4
|
%
|
51,815
|
2
|
%
|
||||||||||
Middle East and Africa — Total
|
414,964
|
15
|
%
|
354,872
|
13
|
%
|
||||||||||
Off-Lease — Total
|
77,020
|
3
|
%
|
42,115
|
2
|
%
|
||||||||||
Total flight equipment held for operating lease, net
|
$
|
2,716,757
|
100
|
%
|
$
|
2,720,000
|
100
|
%
|
Three months ended
|
||||||||||||||||
March 31, 2020
|
March 31, 2019
|
|||||||||||||||
Europe:
|
||||||||||||||||
Spain
|
$
|
4,346
|
5
|
%
|
$
|
4,345
|
4
|
%
|
||||||||
United Kingdom
|
1,942
|
2
|
%
|
9,429
|
9
|
%
|
||||||||||
Other
|
7,559
|
9
|
%
|
8,969
|
9
|
%
|
||||||||||
Europe — Total
|
13,847
|
16
|
%
|
22,743
|
22
|
%
|
||||||||||
Asia and South Pacific:
|
||||||||||||||||
India
|
19,223
|
22
|
%
|
21,109
|
20
|
%
|
||||||||||
Malaysia
|
14,224
|
16
|
%
|
13,876
|
13
|
%
|
||||||||||
Philippines
|
8,308
|
10
|
%
|
8,700
|
8
|
%
|
||||||||||
Indonesia
|
6,771
|
8
|
%
|
9,993
|
9
|
%
|
||||||||||
China
|
5,650
|
6
|
%
|
5,071
|
5
|
%
|
||||||||||
Thailand
|
2,523
|
3
|
%
|
5,277
|
5
|
%
|
||||||||||
Other
|
918
|
1
|
%
|
965
|
2
|
%
|
||||||||||
Asia and South Pacific — Total
|
57,617
|
66
|
%
|
64,991
|
62
|
%
|
||||||||||
Mexico, South and Central America — Total
|
960
|
1
|
%
|
1,579
|
1
|
%
|
||||||||||
North America — Total
|
3,626
|
4
|
%
|
5,638
|
5
|
%
|
||||||||||
Middle East and Africa:
|
||||||||||||||||
Ethiopia
|
7,505
|
9
|
%
|
7,505
|
7
|
%
|
||||||||||
Other
|
3,885
|
4
|
%
|
2,796
|
3
|
%
|
||||||||||
Middle East and Africa — Total
|
11,390
|
13
|
%
|
10,301
|
10
|
%
|
||||||||||
Total Operating Lease Revenue
|
$
|
87,440
|
100
|
%
|
$
|
105,252
|
100
|
%
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Operating lease revenue:
|
||||||||
Operating lease rental revenue
|
$
|
85,535
|
$
|
105,328
|
||||
End of lease income
|
2,427
|
1,564
|
||||||
Amortization of lease incentives
|
(614
|
)
|
(1,632
|
)
|
||||
Amortization of lease discounts and other
|
92
|
(8
|
)
|
|||||
Total operating lease revenue
|
$
|
87,440
|
$
|
105,252
|
(Dollars in
thousands)
|
||||
April 1 through December 31, 2020
|
$
|
242,407
|
||
Year ending December 31,
|
||||
2021
|
291,164
|
|||
2022
|
246,423
|
|||
2023
|
203,844
|
|||
2024
|
189,218
|
|||
2025
|
173,084
|
|||
Thereafter
|
309,881
|
|||
Future minimum rental payments under operating leases
|
$
|
1,656,021
|
Year ending December 31,
|
(Dollars in
thousands)
|
|||
2020
|
$
|
321,993
|
||
2021
|
288,459
|
|||
2022
|
244,007
|
|||
2023
|
201,380
|
|||
2024
|
186,707
|
|||
Thereafter
|
480,878
|
|||
Future minimum rental payments under operating leases
|
$
|
1,723,424
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Maintenance rights, beginning balance
|
$
|
290,958
|
$
|
298,207
|
||||
Acquisitions
|
6,088
|
—
|
||||||
Capitalized to aircraft improvements
|
(1,954
|
)
|
—
|
|||||
Maintenance rights associated with aircraft sold
|
(14,940
|
)
|
(31,014
|
)
|
||||
Maintenance rights, ending balance
|
$
|
280,152
|
$
|
267,193
|
Balance as of
|
||||||||
March 31, 2020
|
December 31, 2019
|
|||||||
(dollars in thousands)
|
||||||||
Outstanding principal balance:
|
||||||||
2021 Notes
|
$
|
325,000
|
$
|
325,000
|
||||
2024 Notes
|
300,000
|
300,000
|
||||||
Total outstanding principal balance
|
625,000
|
625,000
|
||||||
Unamortized debt discounts and loan costs
|
(5,158
|
)
|
(5,593
|
)
|
||||
Unsecured borrowings, net
|
$
|
619,842
|
$
|
619,407
|
Outstanding principal balance
as of
|
Weighted average
interest rate(1) as of
|
||||||||||||||||
March 31,
2020(2)
|
December 31,
2019(2)
|
March 31,
2020
|
December 31,
2019
|
Maturity
date
|
|||||||||||||
Nord LB Facility
|
$
|
63,993
|
$
|
65,290
|
2.55
|
%
|
3.59
|
%
|
May 2021
|
||||||||
Term Loan
|
379,763
|
385,364
|
4.02
|
%
|
4.15
|
%
|
August 2025
|
||||||||||
Magellan Acquisition Limited Facility
|
272,049
|
278,684
|
4.01
|
%
|
4.11
|
%
|
December 2025
|
||||||||||
Fly Aladdin Acquisition Facility
|
246,431
|
272,343
|
4.83
|
%
|
4.85
|
%
|
June 2023
|
||||||||||
Fly Aladdin Engine Funding Facility
|
41,955
|
42,339
|
4.95
|
%
|
4.95
|
%
|
December 2021 – April 2022
|
||||||||||
Other Aircraft Secured Borrowings
|
594,830
|
673,463
|
3.96
|
%
|
4.07
|
%
|
December 2020 – June 2028
|
||||||||||
Total outstanding principal balance
|
1,599,021
|
1,717,483
|
|||||||||||||||
Unamortized debt discounts and loan costs
|
(19,748
|
)
|
(21,958
|
)
|
|||||||||||||
Total secured borrowings, net
|
$
|
1,579,273
|
$
|
1,695,525
|
(1) |
Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.
|
(2) |
As of March 31, 2020 and December 31, 2019, accrued interest on secured borrowings totaled $8.6 million and $9.2 million, respectively.
|
Type
|
Quantity
|
Maturity Date
|
Contracted
Fixed
Conversion
Rate to U.S.
Dollar
|
Total
Contracted
USD to be
Received
|
Credit Risk
Adjusted
Fair Value
|
Gain Recognized in
Accumulated
Comprehensive
Loss
|
||||||||||||
Cross currency swap contract
|
1
|
11/26/25
|
1 EURO to $1.3068
|
$
|
56,116
|
$
|
7,130
|
$
|
6,239
|
|||||||||
Accrued rent
|
—
|
22
|
—
|
|||||||||||||||
Sub-total
|
1
|
56,116
|
7,152
|
6,239
|
||||||||||||||
Total - designated derivative asset
|
1
|
$
|
7,152
|
$
|
6,239
|
Type
|
Quantity
|
Maturity Date
|
Hedge
Interest
Rate
|
Swap
Contract
Notional
Amount
|
Credit Risk
Adjusted Fair
Value
|
Loss Recognized
in Accumulated
Comprehensive
Loss
|
|||||||||||||||
Interest rate swap contracts
|
30
|
2/9/23-12/8/25
|
2.28%-3.13
|
%
|
$
|
745,955
|
$
|
(52,060
|
)
|
$
|
(44,608
|
)
|
|||||||||
Accrued interest
|
—
|
(1,107
|
)
|
—
|
|||||||||||||||||
Total – designated derivative liabilities
|
30
|
$
|
745,955
|
$
|
(53,167
|
)
|
$
|
(44,608
|
)
|
Type
|
Quantity
|
Maturity Date
|
Hedge
Interest
Rate
|
Swap
Contract
Notional
Amount
|
Credit Risk
Adjusted Fair
Value
|
Loss Recognized
in Accumulated
Comprehensive
Loss
|
|||||||||||||||
Interest rate swap contracts
|
3
|
6/15/23
|
2.66%-2.68
|
%
|
$
|
11,990
|
$
|
(915
|
)
|
$
|
(244
|
)
|
|||||||||
Accrued interest
|
—
|
(20
|
)
|
—
|
|||||||||||||||||
Total – dedesignated derivative liabilities
|
3
|
$
|
11,990
|
$
|
(935
|
)
|
$
|
(244
|
)
|
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
Numerator
|
||||||||
Net income attributable to common shareholders
|
$
|
38,072
|
$
|
44,965
|
||||
Denominator
|
||||||||
Weighted average shares outstanding-Basic
|
30,765,840
|
32,632,715
|
||||||
Dilutive common equivalent shares:
|
SARs
|
2,189
|
—
|
||||||
Weighted average shares outstanding-Diluted
|
30,768,029
|
32,632,715
|
||||||
Earnings per share:
|
||||||||
Basic
|
||||||||
Distributed earnings
|
$
|
—
|
$
|
—
|
||||
Undistributed income
|
$
|
1.24
|
$
|
1.38
|
||||
Basic earnings per share
|
$
|
1.24
|
$
|
1.38
|
||||
Diluted
|
||||||||
Distributed earnings
|
$
|
—
|
$
|
—
|
||||
Undistributed income
|
$
|
1.24
|
$
|
1.38
|
||||
Diluted earnings per share
|
$
|
1.24
|
$
|
1.38
|
As of March 31, 2020
|
As of December 31, 2019
|
|||||||||||||||
Principal
Amount
Outstanding
|
Fair Value
|
Principal
Amount
Outstanding
|
Fair Value
|
|||||||||||||
Term Loan
|
$
|
379,763
|
$
|
288,620
|
$
|
385,364
|
$
|
385,364
|
||||||||
2021 Notes
|
325,000
|
324,188
|
325,000
|
331,207
|
||||||||||||
2024 Notes
|
300,000
|
264,000
|
300,000
|
314,070
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
March 31, 2020:
|
||||||||||||||||
Derivative assets
|
—
|
$
|
7,152
|
—
|
$
|
7,152
|
||||||||||
Derivative liabilities
|
—
|
54,102
|
—
|
54,102
|
||||||||||||
Investment in equity certificates
|
—
|
6,636
|
—
|
6,636
|
||||||||||||
December 31, 2019:
|
||||||||||||||||
Derivative assets
|
—
|
$
|
4,824
|
—
|
$
|
4,824
|
||||||||||
Derivative liabilities
|
—
|
27,943
|
—
|
27,943
|
||||||||||||
Investment in equity certificates
|
—
|
16,048
|
—
|
16,048
|
Item 2. |
Three months ended
|
||||||||
March 31, 2020
|
March 31, 2019
|
|||||||
(Dollars in thousands)
|
||||||||
Revenues
|
||||||||
Operating lease revenue
|
$
|
87,440
|
$
|
105,252
|
||||
Finance lease revenue
|
145
|
160
|
||||||
Gain on sale of aircraft
|
31,717
|
27,620
|
||||||
Interest and other income
|
2,253
|
1,671
|
||||||
Total revenues
|
121,555
|
134,703
|
||||||
Expenses
|
||||||||
Depreciation
|
31,631
|
37,585
|
||||||
Interest expense
|
27,155
|
38,179
|
||||||
Selling, general and administrative
|
7,664
|
8,722
|
||||||
Loss on derivatives
|
507
|
17
|
||||||
Fair value loss on marketable securities
|
9,412
|
—
|
||||||
Loss on extinguishment of debt
|
850
|
2,169
|
||||||
Maintenance and other costs
|
1,184
|
598
|
||||||
Total expenses
|
78,403
|
87,270
|
||||||
Net income before provision for income taxes
|
43,152
|
47,433
|
||||||
Provision for income taxes
|
5,080
|
2,468
|
||||||
Net income
|
$
|
38,072
|
$
|
44,965
|
Three months ended
|
Increase/
|
|||||||||||
March 31, 2020
|
March 31, 2019
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Operating lease revenue:
|
||||||||||||
Operating lease rental revenue
|
$
|
85,535
|
$
|
105,328
|
$
|
(19,793
|
)
|
|||||
End of lease income
|
2,427
|
1,564
|
863
|
|||||||||
Amortization of lease incentives
|
(614
|
)
|
(1,632
|
)
|
1,018
|
|||||||
Amortization of lease discounts and other
|
92
|
(8
|
)
|
100
|
||||||||
Total operating lease revenue
|
$
|
87,440
|
$
|
105,252
|
$
|
(17,812
|
)
|
Item 3. |
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid Per Share
|
Total Number of Shares
Purchased as Part of a
Publicly Announced
Repurchased Plan
|
Approximate Dollar
Value of Shares that
may yet be Purchased
Under the Plans or
Programs(1)
|
|||||||||||
January 1-31, 2020
|
10,654
|
$
|
17.00
|
10,654
|
$
|
49.8 million
|
|||||||||
February 1-29, 2020
|
103,700
|
$
|
16.83
|
103,700
|
$
|
48.1 million
|
|||||||||
March 1-31, 2020
|
302,987
|
$
|
15.08
|
302,987
|
$
|
43.5 million
|
(1) |
In August 2019, our board of directors approved a $50.0 million share repurchase program, expiring in September 2020. Under this program, Fly may make share repurchases from time to time in the open market or in privately negotiated
transactions.
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|