UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the Securities
Exchange Act of 1934

Date of Report: May 9, 2019

Commission File Number: 001-33701

Fly Leasing Limited
(Exact Name of registrant as specified in its charter)

West Pier Business Campus
Dun Laoghaire
County Dublin, A96 N6T7
 
Ireland
  
(Address of principal executive office)

Indicate by check mark whether registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F
 ☒
Form 40-F
 ☐  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

The following document, which is attached as an exhibit hereto, is incorporated by reference herein.

Exhibit Title
 
 
99.1 Press release of Fly Leasing Limited, dated May 9, 2019.

2
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
Fly Leasing Limited
 
 
(Registrant)
       
Date:
May 9, 2019
  

By:
/s/ Colm Barrington
       
Colm Barrington
       
Chief Executive Officer and Director

3
EXHIBIT INDEX

Exhibit Title
 
 
99.1 Press release of Fly Leasing Limited, dated May 9, 2019.


4
Exhibit 99.1


Fly Leasing Reports First Quarter 2019 Financial Results

Dublin, Ireland, May 9, 2019 – Fly Leasing Limited (NYSE: FLY) (“FLY”), a global leader in aircraft leasing, today announced its financial results for the first quarter of 2019.

Highlights


 •
Net income of $45.0 million, $1.38 per share

•
Adjusted Net Income of $47.2 million, $1.44 per share

•
Sold ten aircraft for a gain of $27.6 million, a 12% premium to book value

•
$22.74 book value per share, a 15% increase since March 31, 2018

“FLY has started the year with a very strong first quarter,” said Colm Barrington, FLY’s Chief Executive Officer. “Our renewed and larger fleet contributed to an 18% increase in operating lease rental revenue. Gains of over $27 million from the sale of ten aircraft helped us to achieve record Adjusted Net Income of $47.2 million and Adjusted EPS of $1.44. Looking ahead, we expect another strong result in Q2.”

“Our strong results have also added significantly to shareholders’ equity, which is now nearly $23 per share and 15% above the level of a year ago,” added Barrington. “Sales of ten aircraft in the quarter, completed at a 12% premium to book value, have again demonstrated the value embedded in FLY’s fleet. These sales have also contributed to our accelerated deleveraging. We are on track to meet our debt-to-equity targets more than a year ahead of our schedule.”

“We continue to see great value in FLY shares, which are trading at more than a 35% discount to book value. Following our successful deleveraging, we have begun repurchasing stock under our share repurchase program. FLY is also well positioned to add more aircraft assets as opportunities arise.”

Financial Results

FLY is reporting net income of $45.0 million, or $1.38 per share, for the first quarter of 2019. This compares to net income of $9.6 million, or $0.34 per share, for the same period in 2018.

Adjusted Net Income

Adjusted Net Income was $47.2 million for the first quarter of 2019, compared to Adjusted Net Income of $12.4 million for the same period in the previous year. On a per share basis, Adjusted Net Income was $1.44 in the first quarter of 2019, compared to Adjusted Net Income of $0.44 for the first quarter of 2018.

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

Financial Position

At March 31, 2019, FLY’s total assets were $4.1 billion, including investment in flight equipment totaling $3.5 billion. Total cash at March 31, 2019 was $436.3 million, of which $363.9 million was unrestricted. The book value per share at March 31, 2019 was $22.74, a 15% increase since March 31, 2018. At March 31, 2019, FLY’s net debt to equity ratio was 3.4x, reduced from 4.0x as of December 31, 2018.

Aircraft Portfolio

At March 31, 2019, FLY had 103 aircraft and seven engines in its portfolio. Of the 103 aircraft, 99 were held for operating lease, one was classified as an investment in finance lease and three were classified as held for sale. FLY’s aircraft and engines are on lease to 44 airlines in 25 countries. The table below does not include one B767 aircraft owned by a joint venture in which FLY has a 57% interest, nor the seven engines.


Portfolio at
  
Mar. 31, 2019
    
Dec. 31, 2018
  
   
Number
    
% of Net
Book Value
    
Number
    
% of Net
Book Value
  
Airbus A320 Family(1)
    
47
      
36
%
    
55
      
38
%
Airbus A330
    
3
      
5
%
    
3
      
5
%
Airbus A340
    
2
      
1
%
    
2
      
1
%
Boeing 737NG(2)
    
41
      
33
%
    
42
      
32
%
Boeing 737 MAX
    
2
      
3
%
    
2
      
3
%
Boeing 757(3)
    
2
      
0
%
    
3
      
1
%
Boeing 777-LRF
    
2
      
9
%
    
2
      
8
%
Boeing 787
    
4
      
13
%
    
4
      
12
 %
Total
    
103
      
100
%
    
113
      
100
 %
(1) Includes two and ten Airbus A320 aircraft classified as held for sale at March 31, 2019 and December 31, 2018, respectively.
  
(2) Includes one and two aircraft classified as held for sale at March 31, 2019 and December 31, 2018, respectively.
  
(3) Includes one freighter.
  

At March 31, 2019, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 7.2 years. The average remaining lease term was 5.7 years, also weighted by net book value. At March 31, 2019, FLY’s portfolio, excluding aircraft held for sale, was generating annualized rental revenue of approximately $411.2 million.

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Conference Call and Webcast

FLY’s senior management will host a conference call and webcast to discuss these results at 4:30 p.m. U.S. Eastern Time on Thursday, May 9, 2019. Participants should call +1 (409) 220-9381 (International) or (866) 438-0730 (North America) and enter confirmation code 6078423. A live webcast with slide presentation will be available on the Events and Presentations page in the Investor Relations section of FLY’s website at www.flyleasing.com. A webcast replay will be available on the company’s website 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 leases its aircraft under multi-year lease contracts to a diverse group of airlines throughout the world. FLY is managed and serviced by BBAM, 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, and on our conference call, certain non-GAAP financial measures, including Adjusted Net Income 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, and the risk that FLY may be unable to achieve its portfolio growth expectations, or to reap the benefits of such growth. 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

ir@flyleasing.com

3
Fly Leasing Limited

Consolidated Statements of Income
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three months ended Mar. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
  
Revenues
            
Operating lease rental revenue
  
$
105,328
    
$
89,113
  
End of lease income
    
1,564
      
385
  
Amortization of lease incentives
    
(1,632
)
    
(2,283
)
Amortization of lease discounts and other
    
(8
)
    
(139
)
Operating lease revenue
    
105,252
      
87,076
  
Finance lease revenue
    
160
      
174
  
Equity earnings from unconsolidated subsidiary
    
56
      
112
  
Gain on sale of aircraft
    
27,620
      
—
  
Interest and other income
    
1,615
      
1,393
  
Total revenues
    
134,703
      
88,755
  
Expenses
                
Depreciation
    
37,585
      
33,733
  
Interest expense
    
38,179
      
32,923
  
Selling, general and administrative
    
8,722
      
8,610
  
Loss on derivatives
    
17
      
789
  
Loss on extinguishment of debt
    
2,169
      
—
  
Maintenance and other costs
    
598
      
778
  
Total expenses
    
87,270
      
76,833
  
Net income before provision for income taxes
    
47,433
      
11,922
  
Provision for income taxes
    
2,468
      
2,292
  
Net income
  
$
44,965
    
$
9,630
  
Weighted average number of shares
                
-  Basic
    
32,632,715
      
27,983,352
  
-  Diluted
    
32,632,715
      
28,006,572
  
Earnings per share
                
-  Basic
  
$
1.38
    
$
0.34
  
-  Diluted
  
$
1.38
    
$
0.34
  

4
Fly Leasing Limited

Consolidated Balance Sheets
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

 
 
Mar. 31,
2019
(Unaudited)
 
 
Dec. 31,
2018
(Audited)
  
Assets
            
Cash and cash equivalents
  
$
363,930
    
$
180,211
  
Restricted cash and cash equivalents
    
72,337
      
100,869
  
Rent receivables
    
5,927
      
9,307
  
Investment in finance lease, net
    
12,532
      
12,822
  
Flight equipment held for sale, net
    
76,024
      
259,644
  
Flight equipment held for operating lease, net
    
3,181,107
      
3,228,018
  
Maintenance rights
    
267,193
      
298,207
  
Deferred tax asset, net
    
15,975
      
6,505
  
Fair value of derivative assets
    
5,948
      
5,929
  
Other assets, net
    
126,115
      
124,960
  
Total assets
  
$
4,127,088
    
$
4,226,472
  
Liabilities
                
Accounts payable and accrued liabilities
  
$
32,900
    
$
23,146
  
Rentals received in advance
    
18,043
      
21,322
  
Payable to related parties
    
4,069
      
4,462
  
Security deposits
    
53,196
      
60,097
  
Maintenance payment liability, net
    
292,605
      
292,586
  
Unsecured borrowings, net
    
618,100
      
617,664
  
Secured borrowings, net
    
2,228,268
      
2,379,869
  
Deferred tax liability, net
    
46,915
      
36,256
  
Fair value of derivative liabilities
    
16,206
      
8,558
  
Other liabilities
    
78,883
      
80,402
  
Total liabilities
    
3,389,185
      
3,524,362
  
Shareholders’ equity
                
Common shares, $0.001 par value, 499,999,900 shares authorized; 32,452,427 and 32,650,019 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
    
32
      
33
  
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding
    
—
      
—
  
Additional paid-in capital
    
546,429
      
549,123
  
Retained earnings
    
199,480
      
154,347
  
Accumulated other comprehensive loss, net
    
(8,038
)
    
(1,393
)
Total shareholders’ equity
    
737,903
      
702,110
  
Total liabilities and shareholders’ equity
  
$
4,127,088
    
$
4,226,472
  

5
Fly Leasing Limited
Consolidated Statements of Cash Flows
(DOLLARS IN THOUSANDS)

   
Three months ended Mar. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
  
Cash Flows from Operating Activities
            
Net income
  
$
44,965
    
$
9,630
  
Adjustments to reconcile net income to net cash flows provided by operating activities:
                
Finance lease revenue
    
(160
)
    
(174
)
Equity in earnings from unconsolidated subsidiary
    
(56
)
    
(112
)
Gain on sale of aircraft
    
(27,620
)
    
—
  
Depreciation
    
37,585
      
33,733
  
Amortization of debt discounts and debt issuance costs
    
2,796
      
1,999
  
Amortization of lease incentives and other items
    
1,839
      
2,702
  
Loss on extinguishment of debt
    
2,169
      
—
  
Unrealized foreign exchange (gain) loss
    
(172
)
    
408
  
Provision for deferred income taxes
    
2,472
      
2,353
  
(Gain) loss on derivative instruments
    
(57
)
    
1,251
  
Distributions from unconsolidated subsidiary
    
56
      
—
  
Cash receipts from maintenance rights
    
—
      
3,013
  
Changes in operating assets and liabilities:
                
Rent receivables
    
2,505
      
(1,244
)
Other assets
    
(686
)
    
(526
)
Payable to related parties
    
(393
)
    
(330
)
Accounts payable, accrued liabilities and other liabilities
    
7,348
      
13,372
  
Net cash flows provided by operating activities
    
72,591
      
66,075
  
Cash Flows from Investing Activities
                
Distributions from unconsolidated subsidiary
    
29
      
—
  
Rent received from finance lease
    
450
      
450
  
Swap termination proceeds
    
114
      
—
  
Investment income from Horizon I Limited equity certificates
    
273
      
—
  
Purchase of flight equipment
    
—
      
(42,000
)
Deposit on aircraft purchases
    
—
      
(30,000
)
Proceeds from sale of aircraft, net
    
235,770
      
—
  
Capitalized interest on Portfolio B orderbook
    
(1,201
)
    
—
  
Payments for aircraft improvement
    
(1,365
)
    
—
  
Payments for lessor maintenance obligations
    
(584
)
    
—
  
Net cash flows provided by (used in) investing activities
    
233,486
      
(71,550
)

6
   
Three months ended Mar. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
  
Cash Flows from Financing Activities
            
Security deposits received
    
—
      
775
  
Security deposits returned
    
(1,546
)
    
(2,310
)
Maintenance payment liability receipts
    
17,016
      
19,358
  
Maintenance payment liability disbursements
    
(8,604
)
    
(258
)
Debt extinguishment costs
    
(54
)
    
—
  
Debt issuance costs
    
(342
)
    
(243
)
Proceeds from secured borrowings
    
—
      
33,014
  
Repayment of secured borrowings
    
(155,184
)
    
(45,834
)
Shares repurchased
    
(2,117
)
    
—
  
Net cash flows provided by (used in) financing activities
    
(150,831
)
    
4,502
  
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
    
(59
)
    
85
  
Net increase (decrease) in unrestricted and restricted cash and cash equivalents
    
155,187
      
(888
)
Unrestricted and restricted cash and cash equivalents at beginning of period
    
281,080
      
456,815
  
Unrestricted and restricted cash and cash equivalents at end of period
  
$
436,267
    
$
455,927
  
                 
Reconciliation to Consolidated Balance Sheets:
                
Cash and cash equivalents
  
$
363,930
    
$
384,345
  
Restricted cash and cash equivalents
    
72,337
      
71,582
  
Unrestricted and restricted cash and cash equivalents
  
$
436,267
    
$
455,927
  

7
Fly Leasing Limited
Reconciliation of Non-GAAP Measures
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three months ended Mar. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
  
Net income
  
$
44,965
    
$
9,630
  
Adjustments:
                
Unrealized foreign exchange (gain) loss
    
(172
)
    
408
  
Deferred income taxes
    
2,472
      
2,353
  
Fair value changes on undesignated derivatives
    
(112
)
    
(2
)
Adjusted Net Income
  
$
47,153
    
$
12,389
  
Average Shareholders’ Equity
  
$
720,007
    
$
549,611
  
Adjusted Return on Equity
    
26.2
%
    
9.0
%
                 
Weighted average diluted shares outstanding
    
32,632,715
      
28,006,572
  
Adjusted Net Income per diluted share
  
$
1.44
    
$
0.44
  

FLY defines Adjusted Net Income as net income plus or minus (i) unrealized foreign exchange gains and losses; (ii) deferred income taxes; (iii) the fair value changes associated with interest rate derivative contracts that are not accounted for as cash flow hedges; and (iv) non-recurring expenses. The adjustments included within Adjusted Net Income are primarily non-cash or non-recurring items that we consider unrelated to the ongoing performance of our operations. Adjusted Return on Equity is calculated by dividing Adjusted Net Income by average shareholders’ equity for each period presented. For periods of less than one year, the resulting return is annualized.

FLY uses Adjusted Net Income and Adjusted Return on Equity, in addition to GAAP net income and earnings per share, to assess our core operating performance on a consistent basis from period to period. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash or non-recurring items and certain other items that are not indicative of our overall operating trends. In addition, Adjusted Net Income and Adjusted Return on Equity help us compare our performance to our competitors. These measures should be considered in addition to, and not as substitutes for, net income or other financial measures determined in accordance with GAAP. FLY’s definitions may be different than those used by other companies.


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